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Item 1. Financial Statements

2025-08-19 compared with 2025-05-20 · 609 added, 447 removed, 157 unchanged (87% of the section changed)

1 unchanged sentence

INDEX TO FINANCIAL STATEMENTS

Unaudited Condensed Balance Sheets as of March 31, 2025 and December 31, 2024

Unaudited Condensed Statements of Operations for the Three Months Ended March 31, 2025 and 2024

Unaudited Condensed Statements of Changes in Shareholders’(Deficit) Equity for the Three Months Ended March 31, 2025 and 2024

Unaudited Condensed Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024

Unaudited Condensed Balance Sheets as of June 30, 2025 and December 31, 2024

Unaudited Condensed Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Condensed Statements of Changes in Shareholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2025 and

Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024

Notes to Unaudited Condensed Financial Statements

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Total current assets

Liabilities and shareholders’ (deficit) equity

Property and equipment, net

Long-term portion of prepaid expenses

Liabilities and shareholders’ equity

Current liabilities:

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Notes payable - related party

Convertible note – related party

Warrant Liability

Total current liabilities

Long term portion of notes payable – related party

Long term portion of convertible notes payable – related party

Long-term liabilities

Long-term convertible notes payable – Related Party

Total liabilities

Commitments and contingencies (note 8)

Shareholders’ (deficit) equity:

Shareholders’ 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

none issued and outstanding as of June 30, 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

12,575,983 and 7,903,850 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

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( 4,391,924 )

Total shareholders’ (deficit) equity

( 1,760,518 )

Total shareholders’ equity (deficit)

( 1,358,121 )

Total liabilities and shareholders’ (deficit) equity

Total liabilities and shareholders’ equity

The accompanying notes are an integral part

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For the three months ended

For the six months ended

Operating expenses:

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General and administrative expenses

Total operating expenses

Loss from operations

Other (expenses) income

( 2,663,904 )

( 3,028,272 )

Other income (expense)

Change in FV of warrant liability

Interest income

Interest expense

Total other expense, net

Other income (expense)

$ ( 2,662,193 )

$ ( 449,363 )

Weighted average shares outstanding

Basic and diluted loss per share

$ ( 3,064,590 )

$ ( 745,836 )

Net loss per common share - basic and diluted

Weighted average common shares outstanding

The accompanying notes are an integral part

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Apimeds Pharmaceuticals US, Inc.

Unaudited Condensed Statement of Changes in Shareholders’ (Deficit) Equity

Unaudited Condensed Statement of Changes in Shareholders’ Equity (Deficit)

Preferred Stock

Number of Shares

Paid-In Capital

Accumulated Deficit

Balance at December 31, 2024

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( 1,760,518 )

Stock-based compensation - stock options

Stock-based compensation – common stock grants

Conversion of convertible debt - related party

Issuance of Representative Warrants in connection with IPO

Issuance of common stock in IPO (net of $1,599,060 in offering costs and warrant liability)

( 2,662,193 )

Balance at June 30, 2025

$ ( 7,456,514 )

Preferred Stock

Balance at December 31, 2023

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( 3,298,407 )

Balance at June 30, 2024

$ ( 3,747,770 )

$ ( 713,967 )

The accompanying notes are an integral part

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Unaudited Condensed Statements of Cash Flows

For the Three Months Ended

For the six months ended

Cash flows from operating activities:

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Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation - common stock grants

Stock-based compensation - stock options

Change in FV of warrant liability

Depreciation expense of property and equipment

Accrued interest expense - related parties

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Changes in operating assets and liabilities

Prepaid expenses and other current assets

Prepaid expenses and other current and non-current assets

( 1,788,619 )

Accounts payable and accrued expenses

Net cash used in operating activities

( 3,381,409 )

Cash flows from investing activities:

Purchase of equipment

Net cash provided by investing activities

Cash flows from financing activities:

Cash proceeds from issuance of common stock in IPO

Proceeds from notes payable - related parties

Cash advances from related parties

Cash advances paid to related parties

Net cash provided by financing activities

Net increase (decrease) in cash

Net decrease in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for taxes

Non-cash investing and financing activities:

Conversion of convertible debt - related party

Conversion of accrued interest expense for convertible debt - related party

Issuance of Representative Warrants in connection with IPO

The accompanying notes are an integral part

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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.

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.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(the “Company”

or “Apimeds”) was formed as a corporation in May 2020 and was incorporated in the State of Delaware.

Apimeds is a clinical

stage company that is in the process of seeking U.S.

Food and Drug Administration (“FDA”) approval for Apitox, a proprietary

intradermally administered bee venom-based toxin.

Apimeds Inc., the majority shareholder of the Company

which is a subsidiary of Inscobee Inc.

(“Apimeds Korea”), and the Company entered into license agreements, under which the

Company was granted the right to continue any clinical trial, acquire the permits and approval necessary from the FDA, and commercially

develop and market Apitox within the United States (see notes 3).

Apimeds completed a positive Phase 3 trial for the treatment of

pain associated with osteoarthritis in 2018 and is now proceeding with the next steps for FDA approval.

In the future, the Company plans

to investigate potential uses for Apitox to treat pain associated with 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.

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

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.

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.

the unaudited condensed financial statements and related disclosures herein should be read in conjunction with our 2024 Annual Report

on Form 10-K.

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.

The Company has prepared these unaudited condensed

financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S.

as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated

by the Financial Accounting Standards Board (“FASB”).

Except 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 year ended December 31,

2024 (the “Annual Report”).

Accordingly, the unaudited condensed financial statements and related disclosures herein should

be read in conjunction with the Annual Report.

As permitted under the SEC requirements for interim

reporting, certain footnotes or other financial information have been condensed or omitted.

These financial statements include all normal

and recurring adjustments that are considered necessary for the fair presentation of results for the interim periods presented.

The information

included in this Form 10-Q should be read in conjunction with the financial statements and accompanying notes included in our 2024 Form

Revenues, expenses, assets and liabilities can vary during each quarter of the year.

Therefore, the results and trends in these

interim financial statements may not be representative of those for the full year.

As of June 30, 2025, the Company had an accumulated deficit of $ 7,456,514 .

The Company incurred net losses of $ 2,662,193 and $ 3,064,590 for the three and six months ended June 30, 2025, respectively, 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.

of 3,375,000 shares of its common stock at a price of $ 4.00 per share, generating net cash proceeds to the Company of $ 11.9 million.

on cash that is available for Company operations, together with the proceeds from the IPO, and projections of future Company operations,

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Use of Estimates

The preparation of financial statements in conformity with U.S.

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.

The preparation of financial statements in conformity

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:

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:

Quoted prices in active markets for identical assets or liabilities.

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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.

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.

A financial asset or liability classification

within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The tables below

summarize the fair values of our financial assets and liabilities as of June 30, 2025, and December 31, 2024:

Fair Value at June 30,

Fair Value Measurement Using

Warrant Liability

Fair Value at December 31,

Fair Value Measurement Using

Warrant Liability

For the Company’s warrant liabilities measured

at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the

beginning and ending balance for each category therein, and gains or losses recognized during the three and six months ended June 30,

Ending balance, December 31, 2024

Advisor warrant liability incurred in connection with the IPO

Re-measurement adjustments:

Change in fair value of warrant liability

Ending balance, June 30, 2025

Warrant Liability

Fair Value $ 174,413

Valuation technique Black-Scholes options pricing model

Significant unobservable unit volatility and risk-free rates

The warrant liability as of May 12, 2025 (IPO

date), was valued utilizing the Black-Scholes options pricing model with the following inputs:

$ 1.81 of stock price, 4.09 % risk-free rate,

78.29 % volatility, 0 % dividend rate, and the expected term of 5 years.

The warrant liability as of June 30, 2025, was valued utilizing

the Black-Scholes options pricing model with the following inputs:

$ 1.76 of stock price, 3.79 % risk-free rate, 77.82 % volatility, 0 % dividend

rate, and the expected term of 5 years.

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.

Company’s board of directors (the “Board”) approved and implemented a reverse stock split at a 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.

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 June 30, 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.

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 June 30, 2025, the Company has not generated any revenue and does not have any material

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.

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.

with the Company’s U.S.

GAAP financial statements, including the Statements of Operations, which reflect the loss.

A single management

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attributed to the Company’s single reportable segment.

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 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 June 30, 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:

Professional fees payable

Accrued compensation

Total accounts payable and accrued expenses

Convertible Instruments

The Company evaluates and accounts for conversion options embedded

in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

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

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.

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.

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.

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

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.

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.

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:

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.

Warrants and Warrant liability

The Company accounts for warrants as either equity-classified or liability-classified

instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480,

Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC Topic 815, Derivatives and Hedging (“ASC

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition

of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including

whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net

cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly

period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity

classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be liability classified

and recorded at their initial fair value on the date of issuance and remeasured at fair value and each balance sheet date thereafter.

Changes in the estimated fair value of the liability classified warrants are recognized as a non-cash gain or loss on the statements of

The fair value of the Representative Warrants and liability related to Advisor Warrant (as defined below) was estimated using

a Black Scholes valuation approach (see Note 9).

On September 5, 2023, the Company entered

into a consulting agreement with certain advisor, under which, upon completion of the IPO, the Company would issue to advisor

warrants to purchase a number of shares of common stock equal to 6 % of the aggregate number of shares sold in the IPO (the “Advisor

The Advisor Warrants were issued on August 5, 2025.

Because the obligation to issue the Advisor Warrants

became unconditional at the IPO close (May 12, 2025) and the warrants had not yet been issued as of June 30,

2025, the Company recorded a warrant liability at the IPO date fair value and remeasured that liability at June

Because the Advisor Warrants were issued as compensation for the IPO-related advisory services, the initial fair value recognized

at the IPO date was recorded as an offering cost that reduced the additional paid-in capital as of May 12, 2025.

For the three and six months ended June 30, 2025,

the Company recognized a gain of $ 9,518 in other income (expense) for the change in fair value.

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.

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

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

As of June 30, 2025 and December 31, 2024, the Company did not have leases that qualified as ROU assets.

Property and Equipment, net

Property and equipment, net is stated at cost

less accumulated depreciation.

These assets are depreciated over their estimated useful lives of three to seven years using the straight-line

The Company adheres to ASC 360 “Property, Plant, and Equipment”

and periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be

held and used may not be recoverable.

If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced

by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists.

If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying

For long-lived assets, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated

future cash flows.

The Company reports an asset to be disposed of at the lower of its carrying value or its fair value less costs to sell.

Related Parties

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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.

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

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.

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.

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.

the process of preparing the Company’s financial statements, management is required to estimate prepaid and accrued clinical trial

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.

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 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

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

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.

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 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.

The fair value of each employee and non-employee

stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model.

The Company is a public company but

has limited company-specific historical and implied volatility information.

Therefore, it estimates its expected stock volatility based

on implied volatility.

The expected term of the Company’s stock options for employees has been determined utilizing the “simplified”

method for awards.

The risk-free interest rate is determined by reference to the U.S.

Treasury yield curve.

Expected dividend yield is zero based

on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable

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

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.

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,

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 six months ended

Employee stock options

Representative Warrants

Advisor Warrants

Convertible notes and interest

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

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.

The Company is an emerging growth company, as defined in Section 2(a) of

the Securities Act of 1993, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012

(“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other

public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, reduced disclosure obligations regarding executive compensation

in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive

compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act allows emerging growth companies

to 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

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.

The Company considers the applicability and impact of all Accounting

Standard Updates (ASUs).

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

7 unchanged sentences

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.

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 .

2022 Convertible notes (amended from notes payable) — related

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 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

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 commenced 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

PREPAID EXPENSE AND OTHER ASSETS

As June 30, 2025, and December 31, 2024, the prepaid expense and other

assets balance consists of the following:

Prepaid Insurance

Prepaid clinical development costs

Other prepaid assets

long-term portion of prepaid insurance

Prepaid expenses and other current assets, current

ACCOUNTS PAYABLE AND ACCRUED EXPENSE

Accounts payable and accrued expenses consist

of balances owed to vendors, as well as others, such as the taxing authority and employees.

As June 30, 2025, and December 31, 2024, the accounts payable and accrued

expense balances consists of the following:

Professional fees payable

Clinical trials payable

Accrued compensation

Total accounts payable and accrued expenses

2022 Convertible notes (amended from notes

payable) — related parties

On March 21, 2022, the Company issued a promissory note in the

amount of $ 160,000 to Inscobee, one of its shareholders.

On June 3, 2022, the Company issued another $ 100,000 promissory note to

Inscobee (together, and as amended, the “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:

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.

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

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 %.

In connection with the closing of the IPO, the

2022 Convertible Notes and 2021 Convertible Note (defined below) automatically converted into shares of Common Stock.

Pursuant to the

terms of the 2021 Convertible Note and 2022 Convertible Notes (as amended), all outstanding accrued and unpaid interest owed under the

2021 Convertible Note 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 (a “Qualified

An aggregate of $ 660,000 outstanding principal together with $ 112,576 and accrued interest under the 2021 Convertible

Note and 2022 Convertible 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 Convertible Note and 2022 Convertible Notes.

of the date of the conversion, the outstanding balances for the 2021 Convertible Note and 2022 Convertible Notes were $ 235,439 and $ 151,237 ,

respectively, net of the unamortized debt discounts of $ 164,561 and $ 108,763 .

The total of unamortized debt discounts for the 2021 Convertible

Note and 2022 Convertible Notes in the aggregate amount of $ 273,324 as of the date of the conversion was reflected within additional paid

in capital, and the carrying aggregate amount of the 2021 Convertible Note and 2022 Convertible Notes of $ 386,676 along with accrued outstanding

interest for the 2021 Convertible Note and 2022 Convertible Notes in the aggregate amount $ 112,576 as of the date of the conversion are

reflected within condensed statement of changes in shareholders’ equity (deficit).

As of December 31, 2024, there was accrued interest

in connection to the 2022 Convertible Notes of $ 34,745 .

Interest expenses were $ 1,498 and $ 4,596 for the three and six months ended

June 30, 2025, respectively.

Interest expenses were $ 3,134 and $ 6,268 for the three and six months ended June 30, 2024, respectively.

There was accretion on the note’s debt discount

in connection to the 2022 Convertible Notes of $ 5,171 and $ 15,771 for the three and six months ended June 30, 2025, respectively.

There was accretion on the note’s debt discount of $ 5,373 and $ 12,844 for the three and six months ended June 30, 2024, respectively.

2021 Convertible note — related

On August 30, 2021, the Company issued a convertible promissory

note in the amount of $ 400,000 (“2021 Convertible Note”) to Apimeds Korea.

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.

On December 5, 2023, the Company amended their convertible note

11 unchanged sentences

over the remaining period through maturity at the calculated effective interest rate of approximately 40.6 %.

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

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 ;

In connection with the closing of the IPO, the 2022 Convertible Notes

and 2021 Convertible Note automatically converted into shares of common stock (see 2022 Convertible notes (amended from notes payable) — related

parties per above).

As of December 31, 2024, there was accrued interest

in connection with the 2021 Convertible Note of $ 66,137 and is included within accrued interest — related party on the

accompanying unaudited condensed balance sheets.

Interest expenses were $ 2,301 and $ 7,068 for the three

and six months ended June 30, 2025, respectively.

Interest expenses were $ 4,822 and $ 9,644 for the three and six months ended June

30, 2024, respectively.

There was accretion on the note’s debt discount

in connection to the 2021 Convertible Notes of $ 7,884 and $ 24,061 for the three and six months ended June 30, 2025, respectively.

There was accretion on the note’s debt discount of $ 8,246 and $ 19,727 for the three and six months ended June 30, 2024, respectively.

2024 Promissory Notes — Related

On May 20, 2024, the Company issued a $ 100,000 promissory note

On August 19, 2024, the Company issued a $ 150,000 promissory note to Inscobee (together, the “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.

On May 16, 2025, the 2024 Promissory Notes were amended

to extend the maturity date of for the outstanding principal and accrued interest payment date to May 19, 2026.

As of June 30, 2025 and December 31, 2024,

there was accrued interest in connection with the 2024 Promissory Notes of $ 11,959 and $ 5,760 .

Interest expenses were $ 3,116 and $ 6,199

for the three and six months ended June 30, 2025, respectively, and are included within accrued interest — related party

on the accompanying unaudited condensed balance sheet.

Interest expenses were $ 548 for the three and six months ended June 30, 2024.

2025 Promissory Note — Related

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.

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

On March 21, 2025, the Company issued a $ 250,000 promissory note to

Apimeds Korea (the “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.

On May 16, 2025, the 2025 Promissory Note was amended

to extend the maturity date of for the outstanding principal and accrued interest payment date to May 19, 2026.

As of June 30, 2025, there was accrued interest

in connection with the 2025 Promissory Note of $ 3,390 .

Interest expenses were $ 3,082 and $ 3,390 for the three and six months ended June

30, 2025, respectively, and are included within accrued interest — related party on the accompanying unaudited condensed

balance sheet.

ADVANCE PAYABLE — RELATED

As of June 30, 2025, and December 31, 2024 the Company had an outstanding

balance of $ 100 and $ 76,500 , respectively, due to funds received from officers 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.

COMMITMENTS AND CONTINGENCIES

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.

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 June 30, 2025 and December 31, 2024, there are no pending claims or litigation that are expected to materially

affect the Company’s results going forward.

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.

SHAREHOLDERS’ DEFICIT

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 September 21, 2023, the Company signed an executive employee

agreement with the Chief Executive Officer (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-IPO 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 the

Immediately following the IPO on May 16, 2025, the Board approved the grant of 347,279 stock options to the CEO, with vesting terms

of 40 % on the grant date and the remaining 60 % vesting in three equal annual installments on each anniversary of the grant date.

to the stock option grant, the Board also granted 750,000 shares of the Company’s Common Stock to the CEO of the Company, which

are fully vested and unrestricted (see Note 7).

SHAREHOLDERS’ EQUITY

As of June 30, 2025 and December 31, 2024, the Company had 100,000,000

authorized shares of common stock.

The Company had 12,575,983 and 7,903,850 shares of common stock issued and outstanding, as of June

30, 2025 and December 31, 2024, respectively.

Each share of common stock 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.

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

retrospectively adjusted for the reverse stock split.

On May 12, 2025, the Company consummated 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 $ 11.6 million after deducting

underwriting discounts, offering expenses and the value of the Advisory Warrant liability.

Out of the total shares issued, 500,000 shares

were purchased by Inscobee,

In connection with the closing of the IPO, the 2022 Convertible Notes

and 2021 Convertible Note automatically converted into shares of common stock.

Pursuant to the terms of the 2021 Convertible Note and

2022 Convertible Notes , all outstanding accrued and unpaid interest owed under the 2021 Convertible Note and 2022 Convertible Notes was

to convert into common stock simultaneously with the consummation of a Qualified Offering.

An aggregate of $ 499,222 of outstanding principal

and accrued interest under the 2022 Convertible Notes and 2021 Convertible Note, net of unamortized debt discount of $ 273,324 , 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 Convertible Note and 2022 Convertible Notes.

Immediately following the IPO on May 16, the board of directors approved

the grant of 750,000 and 250,000 shares of the Company’s common stock to the CEO and Chief Medical Officer of the Company, respectively.

Such stock were issued under the Apimeds Pharmaceuticals US, Inc.

2024 Equity Incentive Plan (the “2024 Equity Incentive Plan”)

and are fully vested and unrestricted.

The value of the fully vested shares granted was determined by the value of the stock on the quoted

trading price of $ 1.70 per share and in aggregate of $ 1,700,000 , and recorded as stock-based compensation - stock grants, with $ 1,275,000

and $ 425,000 allocated to general and administrative Research and development expenses, respectively, for the three and six month periods

ended June 30, 2025.

In connection with the IPO, the Company entered

into an Underwriting Agreement, dated May 8, 2025, between the Company and its underwriter.

The Company also agreed to issue warrants

to purchase an aggregate of 168,750 shares of common stock (the “Representative Warrants”), each dated May 12, 2025, to

underwriter and its designees.

The Placement Agent Warrants have an exercise price of $ 5.00 per share and also feature a cashless exercise

The initial exercise date of the Underwriter Warrants is November 4, 2025.

The Company accounts for Placement Agent Warrants

as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in

FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC Topic 815, Derivatives and Hedging

The measurement of fair value of the Placement Agent Warrants was determined utilizing a Black-Scholes model

considering all relevant assumptions current at the date of issuance (i.e., share price of $ 1.81 , exercise price of $ 5.00 , term of 5 years,

volatility of 78 %, risk-free rate of 4.09 %, and expected dividend rate of 0.0 %).

The grant date fair value of these Placement Agent Warrants

was estimated to be $ 139,388 on May 12, 2025, and was reflected as a reduction to additional paid-in capital as of May 12, 2025.

On August 5, 2025, the Company issued the Advisor

Warrants to purchase 202,500 shares of Company common stock, par value $ 0.01 per share at a purchase price equal to $ 4.00 per share, with

expiration date of October 19, 2032.

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.

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 June 30, 2025, and August 5, 2025.

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”).

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.

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.

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.

On September 18, 2024, the Company adopted the

2024 Equity Incentive Plan.

1,538,462 shares of common stock have initially been reserved for the issuance of awards under the 2024 Equity

Incentive Plan with 42,283 shares available for future issuance as of June 30, 2025.

There were 213,692 nonqualified stock option awards

issued and outstanding outside of the 2024 Equity Incentive Plan as of June 30, 2025 and December 31, 2024.

The Company and its consolidated subsidiaries

calculate stock-based compensation expense in accordance with ASC 718.

The fair value of stock-based awards is amortized over the vesting

period of the award.

There were 496,179 stock options granted under the

2024 Equity Incentive Plan to the Company’s employees and directors during the three and six months ended June 30, 2025, and no

stock options granted for three and six months ended June 30, 2024.

The stock options granted during the three and six

months ended June 30, 2025, were valued utilizing the Black-Scholes options pricing model with the following inputs:

$ 1.70 -$ 1.93 of stock

price, 4.06 % risk-free rate, 78.23 %- 81.85 % volatility, 0 % dividend rate, and the expected term of 5.50 -6.00 years.

The following represents a summary of options:

Stock Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term

Issued and outstanding, December 31, 2024 213,692 $ 7.33 5.12

Granted 496,179 1.82

Forfeited/Expired -

Issued and outstanding, June 30, 2025 709,871 $ 3.48 8.47

Exercisable, June 30, 2025 362,604 $ 5.22 7.01

For the three and six months ended June 30, 2025

the Company had $ 192,053 of stock compensation related to the stock options outstanding, of which $ 178,424 and $ 13,629 were included in

general and administrative expenses and research and development expenses, respectively, on the accompanying condensed statements of operations.

There was no expense related to the stock option grants recognized during the three and six months ended June 30, 2024.

As of June, 2025,

the remaining unamortized expense of $ 415,479 will be recognized over the next 2.77 years.

Such amount does not include the effect of

future grants of equity compensation, if any.

The intrinsic value of options outstanding was $ 867 at June 30, 2025 and the intrinsic value

of options exercisable was $ 0 at December 31, 2024.

The Company recorded no provision or

benefit for income tax expense for the three and six months ended June 30, 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 June 30, 2025.

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

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

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.

The company’s management has evaluated subsequent events occurring after June 30, 2025, the date of our most recent balance sheet,

through the date our financial statements were issued.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements