Apimeds Pharmaceuticals US, Inc. 10-Q

Item 1. Financial Statements. INDEX TO FINANCIAL STATEMENTS Contents Page Unaudited Condensed Balance Sheets as of March 31, 2025 and December 31, 2024 2 Unaudited Condensed Statements of Operations for the Three Months Ended March 31, 2025 and 2024 3 Unaudited Condensed Statements of Changes in Shareholders’(Deficit) Equity for the Three Months Ended March 31, 2025 and 2024 4 Unaudited Condensed Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 5 Notes to Unaudited Condensed Financial Statements 6 1 Apimeds Pharmaceuticals US, Inc. Unaudited Condensed Balance Sheets March 31, 2025 December 31, 2024 Assets Current assets: Cash $ 250,342 $ 3,455 Prepaid expenses and other current assets 9,562 9,602 Total current assets 259,904 13,057 Total assets $ 259,904 $ 13,057 Liabilities and shareholders’ (deficit) equity Current liabilities: Accounts payable and accrued expenses $ 935,203 $ 591,191 Accrued interest – related party 117,899 106,643 Advance payable to related party 93,700 76,500 Notes payable – related party 250,000 250,000 Convertible note – related party 373,620 — Total current liabilities 1,770,422 1,024,334 Long term portion of notes payable – related party 250,000 — Long term portion of convertible notes payable – related party — 346,844 Total liabilities 2,020,422 1,371,178 Commitments and contingencies (Note 6) Shareholders’ (deficit) equity: Preferred stock, par value $ 0.01 , 10,000,000 shares authorized; none issued and outstanding as of March 31, 2025 and December 31, 2024 — — Common stock, par value $ 0.01 , 100,000,000 shares authorized; 7,903,850 issued and outstanding as of March 31, 2025 and December 31, 2024 79,039 79,039 Additional paid-in capital 2,954,764 2,954,764 Accumulated deficit ( 4,794,321 ) ( 4,391,924 ) Total shareholders’ (deficit) equity ( 1,760,518 ) ( 1,358,121 ) Total liabilities and shareholders’ (deficit) equity $ 259,904 $ 13,057 The accompanying notes are an integral part of these unaudited condensed financial statements. 2 Apimeds Pharmaceuticals US, Inc. Unaudited Condensed Statements of Operations For the three months ended March 31, 2025 2024 Operating expenses: Research and development expenses $ — $ — General and administrative expenses 364,368 271,726 Loss from operations ( 364,368 ) ( 271,726 ) Other (expenses) income Interest income 3 2,161 Interest expense ( 38,032 ) ( 26,908 ) Total other expense, net ( 38,029 ) ( 24,747 ) Net loss $ ( 402,397 ) $ ( 296,473 ) Weighted average shares outstanding 7,903,850 7,903,850 Basic and diluted loss per share $ ( 0.05 ) $ ( 0.04 ) The accompanying notes are an integral part of these unaudited condensed financial statements. 3 Apimeds Pharmaceuticals US, Inc. Unaudited Condensed Statement of Changes in Shareholders’ (Deficit) Equity Preferred Stock Common Stock Additional Number of Shares Amount Number of Shares Amount Paid-In Capital Accumulated Deficit Total Balance at December 31, 2024 — $ — 7,903,850 $ 79,039 $ 2,954,764 $ ( 4,391,924 ) $ ( 1,358,121 ) Net loss — — — — — ( 402,397 ) ( 402,397 ) Balance at March 31, 2025 — $ — 7,903,850 $ 79,039 $ 2,954,764 $ ( 4,794,321 ) $ ( 1,760,518 ) Balance at December 31, 2023 — $ — 7,903,850 $ 79,039 $ 2,954,764 $ ( 3,001,934 ) $ 31,869 Net loss — — — — — ( 296,473 ) ( 296,473 ) Balance at March 31, 2024 — $ — 7,903,850 $ 79,039 $ 2,954,764 $ ( 3,298,407 ) $ ( 264,604 ) The accompanying notes are an integral part of these unaudited condensed financial statements. 4 Apimeds Pharmaceuticals US, Inc. Unaudited Condensed Statements of Cash Flows For the Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 402,397 ) $ ( 296,473 ) Adjustments to reconcile net loss to net cash used in operating activities: Accrued interest expense – related parties 11,256 7,956 Accretion expense 26,776 18,952 Changes in operating assets and liabilities: Prepaid expenses and other current assets 40 1,258 Accounts payable and accrued expenses 344,012 5,207 Net cash used in operating activities ( 20,313 ) ( 263,100 ) Cash flows from investing activities: Net cash provided by investing activities — — Cash flows from financing activities: Proceeds from notes payable – related parties 250,000 — Cash advances from related parties 17,200 — Net cash provided by financing activities 267,200 — Net increase (decrease) in cash 246,887 ( 263,100 ) Cash, beginning of period 3,455 410,481 Cash, end of period $ 250,342 $ 147,381 The accompanying notes are an integral part of these unaudited condensed financial statements. 5 Apimeds Pharmaceuticals US, Inc. Notes to the Unaudited Condensed Financial Statements 1. DESCRIPTION OF BUSINESS Business Description Apimeds Pharmaceuticals US, Inc. (the “Company” or “Apimeds”) was formed as a corporation in May 2020 and was incorporated in the State of Delaware. On August 21, 2021, Apimeds Inc., the shareholder of the Company (“Apimeds Korea”), and Apimeds Pharmaceuticals US Inc. entered into the business agreement, under which the Company was designated to operate a pharmaceutical business which provides the biological drug named Apitox™ to clients in the biological drug commercial transaction area. Apimeds is a clinical stage company that is in the process of developing Apitox™, a proprietary intradermally administered bee venom-based toxin which completed a positive Phase 3 trial for the treatment of pain associated with Osteoarthritis in 2018 and is now proceeding with FDA discussions on next steps in approval. In the future, the Company plans to investigate potential uses for Apitox™ for in treating multiple sclerosis (“MS”), and intends to conduct non-registered corporate sponsorship studies to identify appropriate MS patient populations. Apitox™ is currently marketed and sold by Apimeds Korea in South Korea (Republic of Korea) as “Apitoxin” for the treatment of osteoarthritis. Apimeds Inc. holds the majority of the Company’s outstanding common stock and is a subsidiary of Inscobee Inc. (“Inscobee”). The success of the Company is dependent on obtaining the necessary regulatory approvals of its product candidates, marketing its products and achieving profitable operations. The continuation of the research and development activities and the commercialization of its products, if approved, are dependent on the Company’s ability to successfully complete these activities and to obtain additional financing through a combination of financing activities and operations. It is not possible to predict either the outcome of future research and development or commercialization programs, or the Company’s ability to fund these programs. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company has prepared these unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board. Except (“FASB”) as disclosed herein, there have been no material changes in the information disclosed in the Notes to the Financial Statements included in the Annual Report for the years ended December 31, 2024 and 2023. Accordingly, the unaudited condensed financial statements and related disclosures herein should be read in conjunction with our 2024 Annual Report on Form 10-K. 6 Liquidity As of March 31, 2025, the Company had accumulated deficit amount to $ 4,794,321 . The Company incurred net losses of $ 402,397 for the three months ended March 31, 2025, and expects to continue to incur substantial losses in the future. On May 12, 2025, the Company consummated its initial public offering (the “IPO”) of 3,375,000 shares of its common stock at a price of $ 4.00 per share, generating net proceeds to the Company of $ 11.9 million. Based on cash that is available for Company operations, together with the proceeds from the IPO, and projections of future Company operations, the Company believes that its cash will be sufficient to fund the Company’s current operating plan through at least the next twelve months from the date of issuance of the accompanying condensed financial statements. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgements 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 and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying unaudited condensed financial statements include, but are not limited to, stock-based compensation and estimates that are related to convertible instruments. Actual results could differ from those estimates, and such differences could be material to the financial statements. Fair Value Measurement The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1 — Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3 — Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Common Stock Reverse Stock Split On February 7,2025 , the Board approved and implemented a reverse stock split ratio of 1-for-2.6, which provided that every 2.6 shares of its issued and outstanding Common Stock was automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. All share and per share amounts in the accompanying unaudited condensed financial statements and footnotes have been retrospectively adjusted for the reverse split. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in financial institutions which, at times, may exceed the federal depository insurance corporation limit of $ 250,000 . As of March 31, 2025, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Segment Information The Company operates as a single operating and reportable segment, which aligns with the way the Chief Executive Officer, designated as the Chief Operating Decision Maker (CODM), evaluates performance and allocates resources. The Company is a clinical-stage entity focused on the development of a proprietary intradermally administered bee venom-based therapeutic. As of March 31, 2025, the Company has not generated any revenue and does not have any long-lived assets. The CODM assesses the Company’s performance primarily through the analysis of operating expenses, specifically within key categories such as research and development and general and administrative expenses. Given the Company is in a pre-revenue stage, these expense categories serve as the primary financial drivers. 7 Financial information provided to and utilized by the CODM is consistent with the Company’s GAAP financial statements, including the Statements of Operations, which reflect the loss. A single management team reports directly to the CODM and oversees the entire business comprehensively. Resource allocation, performance evaluation, incentive setting, and forecasting activities are conducted at the corporate level using the financial statements and a unified budget. Accordingly, the Company does not evaluate performance by geographic area or product line, as it has not yet commenced commercial operations and has limited activity due to current liquidity and funding constraints. All operations are based in the United States of America, and all assets and operating expenses — including those related to research and development and general and administrative functions — are attributed to the Company’s single reportable segment. Cash The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of March 31, 2025 and December 31, 2024, the Company had no cash equivalents. Accrued Expenses Accrued expenses consist of accrued interest for the convertible and promissory notes held with related parties, monies owed to vendors, as well as others, such as the taxing authority and employees. As March 31, 2025, and December 31, 2024, the accounts payable and accrued expenses balance consists of the following: March 31, December 31, 2025 2024 Professional fees payable $ 648,153 $ 410,641 Accrued compensation 287,050 180,550 Total accounts payable and accrued expenses $ 935,203 $ 591,191 Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other U.S. GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are accreted over the term of the related debt to their stated date of redemption. If a security or instrument becomes convertible only upon the occurrence of a future event outside the control of the Company, or, is convertible from inception, but contains conversion terms that change upon the occurrence of a future event, then any contingent beneficial conversion feature is measured and recognized when the triggering event occurs and contingency has been resolved. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statements of operations. 8 Leases The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use assets (“ROU”) and lease liabilities at the lease commencement date and thereafter if modified. ROU assets and liabilities are to be represented on the balance sheet at the present value of future minimum lease payments to be made over the lease term. The Company has elected as an accounting policy not to apply the recognition requirements in ASC 2016-02, Leases (“ASC 842”) to short-term leases. Short-term leases are leases that have a term of 12 months or less and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease payments for short-term leases on a straight-line basis over the lease term. As of March 31, 2025 and December 31, 2024, the Company did not have leases that qualified as ROU assets. Related Parties The Company follows ASC 850, “ Related Party Disclosures” for the identification of related parties and disclosure of related party transactions. General and Administrative General and administrative expenses consist primarily of management personnel costs, professional service fees, and other general overhead and facility costs, including rent and insurance, which relate to the Company’s general and administrative functions. Research and Development Research and development expenses consist primarily of consulting, regulatory and manufacturing related costs, third-party license fees and external costs of vendors engaged to conduct preclinical development activities. These costs are expensed as incurred and non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized in prepaid expenses and other current assets. The Company enters into arrangements with contract research organizations in connection with pre-clinical and clinical trials. Such arrangements often provide for payment prior to commencing the project or based upon predetermined milestones throughout the period during which services are expected to be performed. As part of the process of preparing the Company’s financial statements, management is required to estimate prepaid and accrued clinical trial expenses. The date on which services commence, the level of services performed on or before a given date, and the cost of such services are often determined based on subjective judgments informed by the facts and circumstances known to management from the terms of the contract and the Company’s ongoing monitoring of service performance. The Company makes these judgments based upon the facts and circumstances known to management based on the terms of the contract and the Company’s ongoing monitoring of service performance. In line with the guidance suggested under ASC 450, Contingencies and ASC 730, Research and Development, all research and development costs will be expensed as incurred. Development and regulatory milestone payments are accounted for by estimating the probability of milestone achievement. Stock Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation — Stock Compensation (“ASC 718”), which prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the unaudited condensed financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company accounts for forfeitures as they occur. The Company classifies share-based compensation expense in its statements of operations in the same manner in which the award recipient’s cash compensation costs are classified. Given the absence of an active market for the Company’s equity, the Company and the board of directors were required to estimate the fair value of the Company’s common stock and equity awards at the time of each grant. The Company and the board of directors determined the estimated fair value of the Company’s equity instruments based on a number of factors, including external market conditions affecting the pharmaceutical industry sector. The Company and the board of directors utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, to estimate the fair value of its equity instrument. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. 9 Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes and for operating loss and tax credit carryforwards. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company’s deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which these temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce deferred tax assets if it is determined that it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results, expectations of future taxable income, carryforward periods available and other relevant factors. The Company records changes in the required valuation allowance in the period that the determination is made. The Company assesses its income tax position and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 % likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in the financial statements. The Company records interest and penalties related to uncertain tax positions, if applicable, as a component of income tax expense. Basic and Diluted Loss per share Basic loss per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted net loss per share is computed by giving effect to all potential shares of common stock to the extent they are dilutive. The following table sets forth the number of potential shares of common stock that have been excluded from basic net loss per share because their effect was anti-dilutive: For the three months ended March 31, 2025 2024 Employee stock options 213,693 213,693 Convertible notes and interest 295,672 283,397 509,365 497,090 Emerging Growth Company The Company intends to elect as an Emerging Growth Company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited condensed financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standard Updates. ASUs not discussed in these unaudited condensed financial statements were assessed and determined to be either not applicable or are expected to have minimal impact on the financial statements. In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Disaggregation of Income Statement Expenses . This guidance will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting period beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of this new guidance to our financial statements. 10 3. LICENSE AGREEMENTS On August 2, 2021, the Company entered into a business agreement with Apimeds Korea. Under the agreement, the Company received the right to continue any clinical trial and acquire the permits and approval necessary from the U.S. Food and Drug Administration. The Company will pay Apimeds Korea a royalty of 5 % of the earnings before interest and taxes, delivered from the sale or license of Apitox less any credits and charges, however, the royalty terms shall not apply when shares of the Company are transferred or sold through merger, acquisition, or share transfer agreement to a third party. On October 12, 2021, the Company entered into an exclusive patent license agreement with Apimeds Korea, a shareholder of the Company. Under the agreement, the Company was granted the exclusive right and license under the licensed patents to make and sell the licensed products in the United States of America. The agreement shall commence on the effective date and shall remain in force for each licensed product on a licensed-product-by-licensed-product basis for rights and obligations concerning the licensed patent, until the expiration of the last to expire valid claim of a licensed patent. The total consideration exchanged for the exclusive license agreement was $ 1 . 4. DEBT 2022 Convertible notes (amended from notes payable) — related parties On March 21, 2022, the Company entered into a promissory note agreement in the amount of $ 160,000 with Inscobee, one of its shareholders. On June 3, 2022, the Company received an additional $ 100,000 from Inscobee, as part of another promissory note agreement (together as “2022 Convertible Notes ”). The 2022 Convertible Notes bear interest at 5 % per annum and mature on the earlier of (a) the closing of an equity financing with proceeds to the Company of at least $ 3 million, or (b) July 15, 2022. On December 5, 2023, the Company amended their promissory notes to be convertible and extended the maturity date of the convertible notes with the related parties to be the earlier of (i) December 31, 2026 or (ii) consummation of a qualified offering. The notes are convertible at a price of $ 1 per share. The purchase of convertible notes and cancellation of the old promissory notes was accounted for as a debt extinguishment that did not result in a gain/loss on extinguishment due to related party treatment. The conversion option was valued utilizing the Black-Scholes model, with the following inputs: volatility of 92.22 %, current stock price of $ 1.96 , expected dividend yield of 0 % and a risk-free rate of return of 4.33 %. The resulting value of the convertible option of $ 158,099 based on the allocation of relative fair value to cash proceeds, was applied towards additional paid-in capital and added as a discount on the convertible note. The note will be accreted over the remaining period through maturity at the calculated effective interest rate of approximately 41.4 %. As of March 31, 2025 and December 31, 2024, there was accrued interest in connection to the 2022 Convertible Notes of $ 37,844 and $ 34,745 , respectively. Interest expenses were $ 3,099 and $ 3,134 for the three months ended March 31, 2025 and 2024, respectively, and are included within accrued interest — related party on the accompanying balance sheet. There was accretion on the note’s debt discount of $ 10,599 and $ 7,471 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31, 2024, the outstanding balance on the 2022 Convertible notes agreement, net of the unamortized debt discounts of $ 113,934 and $ 124,534 , was $ 146,066 and $ 135,466 , respectively. 2021 Convertible note — related party On August 30, 2021, the Company received $ 400,000 in a convertible note agreement (“2021 Convertible Note”) with Apimeds Korea, one of its shareholders. The 2021 Convertible Note bears interest at 5 % per annum and matures on the earlier of (a) the sale of the Company or (b) August 30, 2026. The 2021 Convertible Note is convertible at any time up through the maturity date. The number of shares of common stock shall be determined by dividing (x) the outstanding principal balance hereof plus accrued but unpaid interest by the first closing price on the first day of trading following a Qualified Direct Listing. On December 5, 2023, the Company amended their convertible note to be convertible at $ 1 per share and extended the maturity date to be the earlier of (i) December 31, 2026 or (ii) consummation of a qualified offering. The repurchase and cancellation of the old note was accounted for as a debt extinguishment that did not result in any gain/loss on extinguishment due to related party treatment. The conversion option was valued utilizing the Black-Scholes model, with the following inputs: volatility of 92.22 %, the fair value of the stock of $ 1.96 , expected dividend yield of 0 %, and a risk-free rate of return of 4.33 %. The resulting value of the convertible option of $ 240,079 , based on the allocation of relative fair value to cash proceeds, was applied towards additional paid-in capital and added as a discount on the convertible note. The note will be accreted over the remaining period through maturity at the calculated effective interest rate of approximately 40.6 %. 11 As March 31, 2025 and December 31, 2024, there was accrued interest in connection with the 2021 Convertible Note of $ 70,904 and $ 66,137 , respectively, and is included within accrued interest — related party on the accompanying unaudited condensed balance sheets. Interest expense was $ 4,767 and $ 4,822 for the three months ended March 31, 2025 and 2024, respectively. Accretion on the 2021 Convertible Note discount is included within interest expense on the unaudited condensed statement of operations. There was accretion on the 2021 Convertible Note debt discount of $ 16,177 and $ 11,481 for the three months ended March 31, 2025 and 2024. As of March 31, 2025 and December 31, 2024, the outstanding balance on the 2021 Convertible Note, net of the unamortized debt discounts of $ 172,445 and $ 188,622 , was $ 227,555 and $ 211,378 , respectively. In connection with the closing of its initial public offering (the” IPO’), 2022 Convertible Notes and 2021 Convertible Note automatically converted into shares of common stock. Pursuant to the terms of the 2021 and 2022 Convertible Notes agreements (as emended), all outstanding accrued and unpaid interest owed under the 2021 and 2022 Convertible Notes was to convert into Common Stock simultaneously with the consummation of an offering of Common Stock resulting in the listing of the common stock on the NYSE American, or other national securities exchange. An aggregate of $ 772,545 of outstanding principal and accrued interest under the Notes was converted to common stock, resulting in the issuance of an aggregate of 297,133 shares of Company’s common stock, based on a conversion price of $ 2.60 per share, as set forth in the 2021 and 2022 Convertible Notes. 2024 Promissory Notes — Related Parties On May 20, 2024, the Company received $ 100,000 in a promissory note agreement with Inscobee Inc., one of its shareholders. On August 19, 2024, the Company received an additional $ 150,000 from Inscobee, as part of another promissory note agreement (together as “2024 Promissory Notes ”). The 2024 Promissory Notes bear interest at 5 % per annum and mature on the earlier of (a) the closing of an equity financing by the Company with gross proceeds of at least $ 3,000,000 ; or (b) May 19, 2025. As of March 31, 2025 and December 31, 2024, there was accrued interest in connection with the 2024 Promissory Notes of $ 8,842 and $ 5,760 . Interest expense was $ 3,082 for the three months ended March 31, 2025, and is included within accrued interest — related party on the accompanying unaudited condensed balance sheet. On May 16, 2025, the 2024 Promissory Notes were further amended extending the maturity date of for the outstanding principal and accrued interest payment date to May 19, 2026. 2025 Promissory Note — Related Parties On March 21, 2025, the Company received $ 250,000 in a promissory note agreement with Apimeds, Korea, one of its shareholders (“ 2025 Promissory Note ”). The 2025 Promissory Note bears interest at 5 % per annum and matures on the earlier of (a) December 31, 2026 or (b) consummation of a Qualified Offering. As of March 31, 2025, there was accrued interest in connection with the 2025 Promissory Note of $ 308 . Interest expense was $ 308 for the three months ended March 31, 2025, and is included within accrued interest — related party on the accompanying unaudited condensed balance sheet. On May 16, 2025, the 2025 Promissory Note was further amended extending the maturity date of for the outstanding principal and accrued interest payment date to May 19, 2026. 2024 Short Term Borrowing On July 19, 2024, the Company entered into a non-interest-bearing loan agreement with a private lender for $ 20,000 . The note matured on August 31, 2024 , or may be extended upon mutual agreement. This loan was paid off in full on August 27, 2024. 5. ADVANCE PAYABLE — RELATED PARTY As of March 31, 2025, and December 31, 2024 the Company had an outstanding balance of $ 93,700 and $ 76,500 , respectively, due to funds received from an officer of the Company. These advance payables carry no interest and do not have a maturity date. The cash proceeds from these advance payables were used for operating purposes. 6. COMMITMENTS AND CONTINGENCIES Legal Periodically, the Company reviews the status of any significant matters that exist and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. As of March 31, 2025 and December 31, 2024, there are no pending claims or litigation that are expected to materially affect the Company’s results going forward. 12 Executive employee agreement On September 21, 2023, the Company signed an executive employee agreement with the CEO of the Company. Under the executive employee agreement terms, if the Company closes on a public offering, the CEO will be eligible to receive an incentive stock option to purchase a number of shares of the Company’s common stock equal to 3 % of the post-Public Offering capitalization of the Company. 40 % of the options shall vest immediately upon grant and the remainder will vest in three equal installments on the annual anniversary of the date of grant. On May 12, 2025, the Company consummated its initial public offering (the “IPO”) of 3,375,000 shares of its common stock at a price of $ 4.00 per share, generating gross proceeds to the Company of $ 13.5 million before deducting underwriting discounts and offering expenses. The Company is currently in a process of evaluating of post-IPO capitalization with the grants to be approved by the board of directors. 7. SHAREHOLDERS’ DEFICIT Common Stock As of March 31, 2025 and December 31, 2024, the Company had 100,000,000 authorized shares of common stock, respectively, at a par value of $ 0.01 . The Company had 7,903,850 common shares issued and outstanding, as of March 31, 2025 and December 31, 2024, respectively. Each Common share is entitled to one vote. On February 7, 2025, the Board approved and implemented a reverse stock split ratio of 1-for-2.6 , which provided that every 2.6 shares of its issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. All share and per share amounts in the accompanying unaudited condensed financial statements and footnotes have been retrospectively adjusted for the reverse split Preferred Stock On December 5, 2023, the Company authorized 10,000,000 shares of preferred stock with a par value of $ 0.01 . The rights and preferences of preferred shareholders have not been determined as of the date of filing. The Company had no preferred shares issued or outstanding as of March 31, 2025 and December 31, 2024, respectively. 8. STOCK-BASED COMPENSATION Stock Options On September 18, 2024, the Company adopted an equity incentive plan for its employees, the Apimeds Pharmaceuticals US, Inc. 2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”). 1,000,000 shares of common stock have initially been reserved for the issuance of awards under the 2024 Equity Incentive Plan with no stock options granted or outstanding as of the issuance date of the financial statements. On May 12, 2020, the Company granted one of its executive officers a total of 213,692 nonqualified stock option awards issued outside of the 2024 Equity Incentive Plan. The stock options vested in three equal tranches of 71,231 on the grant anniversary date through May 12, 2023. The shares have an exercise price of $ 7.33 per share and expire in 10 years on May 12, 2030. There were no stock option awards issued, canceled or forfeited during the three months ended March 31, 2025 and 2024. As of March 31, 2025, there were 213,692 stock option awards outstanding and exercisable, with $ 7.33 weighted average exercised price and 5.12 years in weighted average remaining life, and no aggregated intrinsic value. 13 During the three months ended March 31, 2025 and 2024, there was $ 0 of stock-based compensation recognized. The options were valued utilizing the Black-Scholes options pricing model with the following inputs: 0.20 % risk-free rate, 66.8 % volatility, 0 % dividend rate, vesting term of 3 years , and the expected term of 6.5 years. As of March 31, 2025, there were no remaining unrecognized compensation costs related to unvested options. 9. INCOME TAXES The Company recorded no provision or benefit for income tax expense for the three months ended March 31, 2025 and 2024, respectively. For all periods presented, the pretax losses incurred by the Company received no corresponding tax benefit because the Company concluded that it is more likely than not that the Company will be unable to realize the value of any resulting deferred tax assets. The Company will continue to assess its position in future periods to determine if it is appropriate to reduce a portion of its valuation allowance in the future. The Company has no open tax audits with any taxing authority as of March 31, 2025. 10. SUBSEQUENT EVENTS Initial public offering On May 12, 2025, the Company consummated its initial public offering (the “IPO”) of 3,375,000 shares of its common stock at a price of $ 4.00 per share, generating gross proceeds to the Company of $ 13.5 million before deducting underwriting discounts and offering expenses. Conversion of Related Parties 2022 Convertible Notes and 2021 Convertible Note In connection with the closing of its initial public offering (the” IPO’), the Related Parties 2022 Convertible Notes and 2021 Convertible Note automatically converted into shares of common stock. Pursuant to the terms of the 2021 and 2022 Convertible Notes agreements (as emended), all outstanding accrued and unpaid interest owed under the 2021 and 2022 Convertible Notes was to convert into Common Stock simultaneously with the consummation of an offering of Common Stock resulting in the listing of the common stock on the NYSE American, or other national securities exchange. An aggregate of $ 772,545 of outstanding principal and accrued interest under the Notes was converted to common stock, resulting in the issuance of an aggregate of 297,133 shares of Company’s common stock, based on a conversion price of $ 2.60 per share, as set forth in the 2021 and 2022 Convertible Notes. Underwriting Agreement and Representative’s Warrants In connection with the IPO, the Company entered into an underwriting agreement, dated May 8, 2025, between the Company and D. Boral Capital LLC, as representative of the underwriters. In connection with the agreement, the company issued warrants to purchase an aggregate of 168,750 shares of common stock (the “Representative’s Warrants”. The Representative’s Warrants have an exercise price of $ 5.00 per share, are exercisable on or after November 4, 2025, and will expire five years from the date of issuance. Amendments of Related Parties 2024 Promissory Notes and 2025 Promissory Note On May 16, 2025, the Related Parties 2024 Promissory Notes and 2025 Promissory Note were further amended extending the maturity date of for the outstanding principal and accrued interest payment dates for all notes to May 19, 2026. 14