What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-05-04 compared with 2025-04-15 · 252 added, 198 removed, 12 unchanged (97% of the section changed)

1 unchanged sentence

of Financial Condition and Results of Operations

You should read the following discussion and

analysis of our financial condition and results of operations in conjunction with our financial statements and related notes and other

financial information included elsewhere in this Annual Report.

This discussion and analysis and other parts of this prospectus contain

forward-looking statements based upon our current plans and expectations that involve risks, uncertainties and assumptions, such as statements

regarding our plans, objectives, expectations, intentions and beliefs.

Our actual results and the timing of events could differ materially

from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section

entitled “Risk Factors” and elsewhere in this Annual Report.

Please also see the section entitled “Special Note Regarding

Forward-Looking Statements.

Apimeds Pharmaceuticals US, Inc.

is a clinical

stage biopharmaceutical company that is in the process of developing Apitox, a proprietary intradermally administered bee venom-based

Our primary focus is to advance Apitox in the treatment of inflammatory conditions in the United States, specifically osteoarthritis

(“OA”) and, eventually, multiple sclerosis (“MS”).

Apitox, is currently marketed and sold by Apimeds,

in South Korea (“Apimeds Korea”) as “Apitoxin” for the treatment of inflammation and pain management symptoms

associated with OA.

There is an extensive history of use of bee venom, both in the United States and around the world, to assist with

pain management.

We believe that, in addition to knee OA and MS, Apitox has the potential to help manage difficult to control pain and

inflammation issues, which we will explore in the future.

Our Product Candidate

Our product candidate Apitox is a purified, pharmaceutical

grade venom of the Apis mellifera, or honeybee, which is classified by the U.S Food and Drug Administration (“FDA”) as an

active pharmaceutical ingredient (“API”).

Apimeds Korea has developed a proprietary method and process of turning extracted

bee venom into a lyophilized powder for reconstitution prior to intradermal dose injections, which they sell in Korea as South Apitoxin.

Apimeds Korea has exclusively licensed to us all rights to develop, commercialize, market and sell Apitoxin as “Apitox” in

the United States in exchange for a sales royalty.

See “ Item 13.

Certain Relationships and Related Transactions, and Director

Independence — Certain Relationships and Related Transactions — Business Agreement .”

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.

Financial Results

Since inception, Apimeds has incurred significant

operating losses.

For the years ended December 31, 2024 and 2023, Apimeds Pharmaceuticals US, Inc.

net loss was $1,389,990 and $777,694,

respectively.

As of December 31, 2024, Apimeds Pharmaceuticals US, Inc.

had an accumulated deficit of $4,391,924, a stockholders’

deficit of $1,358,121 and a working capital deficit of $1,011,277.

Going Concern

The Company has evaluated whether there are any conditions and events,

considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year beyond the

issuance date of these financial statements.

As of December 31, 2024, the Company had accumulated deficit amount to $4,391,924.

incurred net losses of $1,389,990 for the year ended December 31, 2024, and expects to continue to incur substantial losses in the future.

Based on such conditions and the Company’s current plans, which are subject to change, management believes that the Company’s

existing cash as of December 31, 2024, is not sufficient to satisfy its operating cash needs for 12 months from the issuance date of the

The accompanying financial statements have been

prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement

of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability

and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability

to continue as a going concern.

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

If the Company is unable to maintain sufficient financial resources, its business, financial condition and results of operations

will be materially and adversely affected.

This could affect future development and business activities and potential future clinical

studies and/or other future ventures.

There can be no assurance that the Company will be able to obtain the needed financing on acceptable

terms or at all.

Results of operations for the years ended December 31, 2024 and

Operating Expense

The following table sets forth the Company’s selected statements

of operations data for the following periods:

Years Ended December 31,

Operating expenses

Research and development expenses

General and administrative expenses

Loss from operations

Other expenses

Interest income

Interest expense

$ (1,389,990 )

For the years ended December 31, 2024 and 2023, the Company had

Research and Development Expenses

The following table summarizes the year-over-year

changes in research and development expenses for the periods presented:

Years Ended December 31,

Research and development expenses

Total research and development expenses

Research and development expenses were $0 for

the year ended December 31, 2024, compared to $98,544 for the same period in 2023, representing a decrease of $98,544.

The decrease in

research and development expenses was primarily attributed to a decrease as the Company was not performing any R&D activities currently

General and administrative expenses

The following table summarizes the year-over-year

changes in general and administrative expenses for the years presented:

Years Ended December 31,

Payroll expenses

Professional services

Office expenses

General administrative

General and administrative expenses were $1,2750,95

for the year ended December 31, 2024, compared to $648,892 for the same period in 2023, representing an increase of $626,203.

increase was mostly attributable to an increase in professional expenses for a total of approximately $329,000 and an increase in payroll

expenses for the officers of the Company for a total of approximately $299,000.

Other Expense

The following table summarizes the year-over-year

changes in general and administrative expenses for the years presented:

Years Ended December 31,

Interest income

Interest expense

Other expense was $114,895 for the year ended

December 31, 2024, compared to $30,258 for the same period in 2023.

Representing an increase of $84,637.

The increase was mainly due to

an increase in interest expense for a total of approximately $80,000.

Net loss was $1,389,990 for the year ended December 31, 2024, compared

to $777,694 in the same period of 2023, representing an increase of $612,296.

The increase was mainly due to the increase in general and

administrative expenses, specifically professional fees associated with the filing of the registration statement on Form S-1 with the

Securities and Exchange Commission (the “SEC”) and pre-IPO expenses as well as an increase in payroll expenses.

the “Company,” “we,” “us,” or “our”) is a development-stage biopharmaceutical company

incorporated in the State of Delaware.

Our primary focus is the clinical development of Apitox, a purified honeybee venom-based drug candidate

being evaluated for the treatment of acute pain and inflammation associated with knee osteoarthritis.

We operate our biopharmaceutical

business through our wholly owned subsidiary, Lokahi Therapeutics Inc.

Fiscal year 2025 was a transformative year for

In addition to advancing our biopharmaceutical pipeline and completing our initial public offering on the New York Stock

Exchange on May 12, 2025, we completed a merger with MindWave Innovations Inc.

(“MindWave”) on December 1, 2025.

of the Merger, the Company became a dual-segment operating company, adding a digital asset operations segment alongside our core biopharmaceutical

MindWave, now a wholly owned subsidiary, operates the MindWaveDAO blockchain ecosystem and holds digital assets consisting of

Bitcoin (“BTC”), Tether (“USDT”), and the MindWaveDAO native utility token (“NILA Tokens”).

fundamentally changed the scale and composition of our balance sheet, adding approximately $145.3 million in identifiable net assets,

primarily digital assets, and was effected through the issuance of 7,477,017 shares of Series A Convertible Preferred Stock.

We have not yet generated revenue from our biopharmaceutical

operations and MindWave operations and do not expect to do so until we have successfully advanced Apitox through clinical development

and commercialization.

Our ability to continue as a going concern depends on our ability to raise additional capital and execute our operational

plans, as discussed further under “Liquidity and Capital Resources” below.

Key Developments in Fiscal Year 2025

Initial Public Offering

On May 12, 2025, we completed our IPO on the New York

Stock Exchange, issuing 3,375,000 shares of common stock and generating net proceeds of approximately $11.6 million after deducting underwriting

discounts, commissions, and offering costs.

Business Combination with MindWave Innovations

On December 1, 2025, we completed the Merger with

MindWave, which became a wholly owned subsidiary of the Company.

The transaction was effected as a non-cash business combination, with

consideration consisting solely of 7,477,017 shares of Series A Convertible Preferred Stock with an aggregate fair value of approximately

$145.4 million, equivalent to the fair value of the net identifiable assets acquired.

No goodwill was recorded.

Through the Merger, we

acquired digital assets with an aggregate fair value of approximately $146.3 million at the acquisition date, consisting of BTC ($90.8

million), USDT ($4.7 million), and NILA Tokens ($50.8 million), as well as the operations of the MindWaveDAO blockchain.

PIPE Convertible Note Financing

In connection with the Merger, on December 1, 2025,

we entered into a Securities Purchase Agreement providing for the issuance of senior secured convertible notes in an aggregate maximum

principal amount of $129 million, to be drawn in tranches at our election.

On December 8, 2025, we executed the first tranche, issuing

a senior secured convertible note with a principal amount of $10.9 million and gross proceeds of $10 million.

Of the proceeds, $8 million

is currently held in a Deposit Account Control Agreement (“DACA”) account, and $1.1 million was disbursed to MindWave to fund

its operations.

Biopharmaceutical Development Activity

During 2025, we significantly increased development

activity related to Apitox, incurring research and development expenses of $1.6 million.

We also entered into an agreement with Prevail

InfoWorks Inc., our Clinical Research Organization (“CRO”), establishing a prepaid balance of approximately $2 million to

be applied against future clinical trial execution.

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended

December 31, 2024

We generated no revenue from biopharmaceutical operations

during the years ended December 31, 2025 or 2024.

Proceeds from the sale of NILA Tokens are recognized as realized gains on digital assets

and are not classified as revenue under ASC 606.

(b) Research and Development Expenses

Research and development expenses were $1.6 million

for the year ended December 31, 2025, compared to zero for the year ended December 31, 2024.

The increase reflects the commencement of

meaningful development activity related to Apitox during 2025, including consulting fees, manufacturing costs, and CRO expenses incurred

in connection with our clinical development program.

General and administrative expenses increased to $10.2 million for

the year ended December 31, 2025, from $1.3 million for the year ended December 31, 2024, an increase of approximately $8.9 million.

increase was driven by a significant expansion of corporate activity and headcount in connection with becoming a public company and completing

Key drivers included increased consulting and professional fees, payroll and benefits, stock-based compensation of approximately

$2.0 million (consisting of option grants, common stock grants, and advisory warrants), merger and acquisition related fees, office rent

and supplies, and travel expenses.

(d) Total Operating Expenses

Total operating expenses were $11.9 million for the year ended December

31, 2025, compared to $1.3 million for the year ended December 31, 2024, reflecting the significant increase in both R&D and G&A

activity described above.

(e) Other Income (Expense)

Total other income was $5.9 million for the year

ended December 31, 2025, compared to other expense of approximately $0.1 million for the year ended December 31, 2024.

The improvement

was driven mostly by the digital asset activities acquired through the MindWave Merger, which closed on December 1, 2025, and was reflected

in our consolidated results for the period December 1 through December 31, 2025 only.

Key components of other income (expense) are as

● Unrealized gain on digital assets of $1.8 million, reflecting fair value increases in BTC and NILA

Token holdings between the acquisition date and December 31, 2025, partially offset by a decline in BTC value during the period.

● Realized gain on sale of digital assets of $4.2 million, reflecting gains recognized on the sale

of approximately 4.3 million NILA Tokens for aggregate proceeds of approximately $1.8 million in USDT during the period December 1 through

December 31, 2025.

These proceeds are noncash, delivered in the form of USDT, described above.

These proceeds are used to maintain liquidity

as well as satisfy operational expenses directly pertaining to blockchain and token management.

● Trading gains, net of approximately $97, representing the net of market-making income and expenses

associated with the maintenance and trading activity of the MindWaveDAO NILA token.

These gains are non-cash in nature.

Change in fair value of derivative liability of $55,146, reflecting the remeasurement of the derivative liability bifurcated

from the PIPE convertible note at issuance on December 8, 2025 through December 31, 2025.

The derivative arises from the variable conversion

terms of the note, which allow conversion at a 20% discount to the minimum volume-weighted average price over a five-day lookback period.

● Change in fair value of warrant liability of $22,377, reflecting the remeasurement of the advisory

warrant liability between issuance and reclassification to equity on August 5, 2025.

● Interest income of $0.1 million, earned primarily on IPO proceeds held in a money market account

● Interest expense of $0.3 million, consisting primarily of accretion of the discount attributable

to the PIPE convertible note issued December 8, 2025, as well as accrued interest on the related party notes payable aggregating $500,100

in principal as of December 31, 2025.

Net loss was $6.0 million for the year ended December 31, 2025, compared

to a net loss of $1.4 million for the year ended December 31, 2024.

The increase reflects the scale-up of operations in connection with

the IPO, Merger, and advancement of the Apitox development program, partially offset by digital asset gains recognized following the MindWave

Net loss per common share, basic and diluted, was $(0.55) for the year

ended December 31, 2025, based on weighted-average shares outstanding of 10,881,907.

All potentially dilutive securities, including 149.5

million common share equivalents underlying the Series A Convertible Preferred Stock, 8.3 million shares underlying the PIPE convertible

note, 1.1 million warrant shares, and 0.5 million stock option shares, were excluded from the diluted calculation as their inclusion would

have been anti-dilutive.

Liquidity and Capital Resources

The Company has generated no revenue, has incurred

operating losses since inception, expects to continue to incur significant operating losses for the foreseeable future and may never become

Until such time as the Company is able to establish a revenue stream, it is dependent upon obtaining necessary equity and/or

debt financing to continue operations.

The Company cannot make any assurances that sales will commence in the near term or that additional

financing will be available to it on acceptable terms or at all.

This could negatively impact our business and operations and could also

lead to the reduction of our operations.

The following table presents selected financial information and statistics

for each of the periods shown below:

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net (decrease) increase in cash

During the year ended December 31, 2024, operating activities used

approximately $734,000 of cash, primarily resulting from a net loss of $1,389,990, partially offset by non-cash interest expense-related

parties of $37,766, accretion expense of $79,953, and changes in operating assets and liabilities of $538,745.

During the year ended December 31, 2023, operating activities used

approximately $628,000 of cash, primarily resulting from a net loss of $777,694, partially offset by stock compensation expense of

$69,993, non-cash interest expense-related parties of $33,000, accretion expense of $5,069, and changes in operating assets and liabilities

During the years ended December 31, 2024 and 2023 investing activities

Financing activities

During the year ended December 31, 2024, financing

activities provided $326,500 of cash resulting from $250,000 in proceeds from notes payable from related parties and cash advances

from related parties of $76,500.

During the year ended December 31, 2023, financing

activities provided $1,032,100 of cash resulting from $1,055,000 in proceeds from issuance of shares, cash advances from related

parties of $9,000, offset by repayments to cash advances from related parties of $31,900.

As of December 31, 2025, we had cash and cash equivalents of $1.6 million

and restricted cash of $8.0 million, for total cash, cash equivalents, and restricted cash of $9.6 million.

We also held short-term investments

of $2.0 million, representing a certificate of deposit established by Lokahi to earn interest on funds not deployed in operations.

capital, excluding the fair value of digital assets (which are subject to price volatility and liquidity risk and therefore excluded from

management’s assessment of near-term operational liquidity), was approximately $3.2 million as of December 31, 2025.

The $8.0 million of restricted cash represents PIPE

convertible note proceeds currently held in a DACA account, pending release upon conversion of the Series A Convertible Preferred Stock

in accordance with the terms of the note agreement.

These funds are not available for general operating purposes until released from the

(a) Operating Activities

Net cash used in operating activities was $8.9

million for the year ended December 31, 2025, compared to $0.7 million for the year ended December 31, 2024.

The increase reflects the

significant expansion of operating activity in connection with the IPO, Merger, and clinical development programs.

Non-cash charges included

in operating activities consisted primarily of stock-based compensation of $3.2 million (inclusive of option grants, common stock grants,

and advisory warrants), accretion of debt discount of $0.3 million, and non-cash digital asset operating expenses of $2.4 million, partially

offset by unrealized and realized gains on digital assets.

(b) Investing Activities

Net cash used in investing activities was $10.0

million for the year ended December 31, 2025, consisting primarily of the $8.0 million deposit into the DACA restricted cash account,

$2.0 million invested in short-term instruments, and $57,333 in purchases of property and equipment (consisting of computer equipment

and furniture), partially offset by $15,345 of cash acquired in the Merger.

Net cash provided by financing activities was

$20.6 million for the year ended December 31, 2025, consisting primarily of $11.6 million in net proceeds from the IPO, $10.0 million

in gross proceeds from the PIPE convertible note, and $250,100 in proceeds from related party promissory notes, partially offset by $946,000

in cash issuance costs and $1.1 million disbursed to MindWave from PIPE proceeds.

Future Capital Requirements and Going Concern

Since inception, we have incurred recurring operating losses and negative

cash flows from operations, and we have not generated revenue from our biopharmaceutical operations.

For the year ended December 31, 2025,

we reported a net loss of $6.0 million and used $8.9 million in cash in operating activities.

As of December 31, 2025, our accumulated

deficit was $10.3 million.

We expect to continue to incur significant operating losses as we advance the clinical development of Apitox

and build our operational infrastructure.

Significant manufacturing costs related to Apitox development are expected to be incurred beginning

in the first quarter of 2026 and throughout the year.

These conditions raise substantial doubt about our ability to continue as a going

Management’s primary plan to address near-term

liquidity needs is the continued execution of additional tranches under the Securities Purchase Agreement, which provides for the issuance

of up to $129.0 million in aggregate principal of senior secured convertible notes.

As of December 31, 2025, only the first tranche of

$10.9 million in principal ($10.0 million gross proceeds) has been drawn, leaving substantial capacity available under the facility.

believes that the remaining available tranches under the Securities Purchase Agreement, combined with continued NILA Token sales for USDT

proceeds and potential additional equity or debt financing, represent the primary sources of capital to fund operations over the next

twelve months.

However, there can be no assurance that future tranches will be drawn, that NILA Token sales will generate sufficient proceeds,

or that additional financing will be available on acceptable terms or at all.

The consolidated financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

Contractual Obligations and Commitments

See Note 4 – Debt, and Note 6 – Commitments and Contingencies,

of the notes to the Company’s financial statements as of and for the year ended December 31, 2024 included elsewhere in this Annual

Report for further discussion of the Company’s commitments and contingencies.

Off-Balance Sheet Arrangements

The Company is not party to any off-balance sheet

transactions.

The Company has no guarantees or obligations other than those which arise out of normal business operations.

Critical Accounting Policies and Significant Judgments and Estimates

The Company’s management’s discussion and

analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance

with generally accepted accounting principles in the United States of America (“GAAP”).

The preparation of these financial

statements requires Apimeds Pharmaceuticals US, Inc.

to make estimates, judgments and assumptions that affect the reported amounts of

assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of

expenses during the reporting period.

In accordance with GAAP, Apimeds Pharmaceuticals US, Inc.

evaluates its estimates and judgments

on an ongoing basis.

The most significant estimates relate to convertible instruments.

Apimeds Pharmaceuticals US, Inc.

bases its estimates

and assumptions on current facts, historical experiences, and various other factors that Apimeds Pharmaceuticals US, Inc.

reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities

that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

The Company defines its critical accounting policies

as those accounting principles that require it to make subjective estimates and judgments about matters that are uncertain and are likely

to have a material impact on its financial condition and results of operations, as well as the specific manner in which the Company applies

those principles.

While its significant accounting policies are more fully described in Note 2 to its financial statements, the Company

believes the following are the critical accounting policies used in the preparation of its financial statements that require significant

estimates and judgments.

The Company evaluates and accounts for conversion

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

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 amortized over the term of the related debt to their

stated date of redemption.

Our material contractual obligations as of December

31, 2025 include:

(i) future minimum lease payments under our San Diego, California office lease of $184,167 in aggregate through December

31, 2028, with $47,527 due in 2026;

(ii) principal and accrued interest on related party notes payable aggregating $500,100 in principal,

maturing May 19, 2026;

and (iii) the PIPE convertible note with a principal amount of $10.9 million maturing December 8, 2026.

also entered into a prepaid services agreement with our CRO, Prevail InfoWorks Inc., with a prepaid balance of approximately $2.0 million

as of December 31, 2025, to be applied against future clinical trial costs.

Segment Information

Following the completion of the MindWave Merger on

December 1, 2025, the Company operates in two segments:

(i) the biopharmaceutical segment, which is focused on the clinical development

of Apitox through Lokahi, and (ii) the digital asset operations segment, which encompasses the holding, sale, and advancement of the MindWaveDAO

blockchain and related digital assets through MindWave.

Critical Accounting Estimates

The preparation of our consolidated financial statements

requires management to make estimates and assumptions that affect reported amounts.

We consider the following estimates to be the most

critical to understanding our financial results and condition:

Fair Value of Digital Assets.

We account for

digital assets, including BTC, USDT, and NILA Tokens, at fair value in accordance with ASU 2023-08.

BTC and USDT are classified within

Level 1 of the fair value hierarchy based on quoted prices in active markets.

NILA Tokens are classified within Level 2, as they trade

on a limited number of centralized exchanges with modest daily trading volume.

Changes in the fair value of digital assets are recognized

in earnings each reporting period.

Given the significant concentration of digital assets on our balance sheet of approximately $149.9

million as of December 31, 2025, changes in the fair value of these assets, particularly BTC and NILA Tokens, could have a material impact

on our reported results.

Fair Value of Stock-Based Compensation.

measure the fair value of stock options using the Black-Scholes option-pricing model, which requires significant estimates including expected

volatility, expected term, and risk-free interest rate.

Changes in these assumptions could materially affect the amount of stock-based

compensation expense recognized.

Fair Value of Derivative Liability.

The derivative

liability bifurcated from the PIPE convertible note is measured at fair value each reporting period.

The variable conversion feature,

which allows the noteholder to convert at a 20% discount to the minimum VWAP over a five-day lookback period, is sensitive to changes

in our stock price and volatility.

Changes in the fair value of the derivative are recognized in earnings and could be material in future

Going Concern Assessment.

assessment of the Company’s ability to continue as a going concern requires significant judgment regarding future capital raises,

the availability of remaining PIPE tranches, and the expected pace of operating expenditures.

Changes in these assumptions could affect

the going concern conclusion and related disclosures.

Purchase Price Allocation.

The allocation

of consideration in the MindWave Merger required management to estimate the fair values of acquired digital assets and assumed liabilities

at the acquisition date.

The fair values of NILA Tokens, in particular, involved the use of Level 2 observable inputs and management judgment

regarding market activity and trading volumes.

Recently Issued Accounting Pronouncements

We adopted ASU 2023-08, Accounting for and Disclosure

of Crypto Assets , effective upon the acquisition of digital assets in connection with the MindWave Merger on December 1, 2025.

ASU 2023-08, in-scope crypto assets that meet the definition of an intangible asset and are fungible are measured at fair value with changes

recognized in earnings each period.

The adoption of ASU 2023-08 did not have a cumulative effect on periods prior to adoption, as the

Company had no digital asset holdings prior to the Merger.

Recent Developments

On April 24, 2026, the Company, MindWave, and Lokahi

Therapeutics, Inc., a Nevada corporation (“ Lokahi ” and, together with the Company and MindWave, the “ Company

Parties ”), together with Erik Emerson, individually and in his capacity as Bio Business Representative under the Merger Agreement,

entered into a Confidential Settlement and Mutual Release Agreement (the “ Settlement Agreement ”) with Inscobee Inc.,

a South Korean corporation (“ Inscobee ”), and Apimeds Inc., a South Korean corporation and wholly owned subsidiary of

Inscobee (“ Apimeds Korea ” and, together with Inscobee, the “ Inscobee Parties ”).

Concurrently with

the Settlement Agreement, the Company Parties and the Inscobee Parties also entered into a Side Letter Agreement (Merger Unwind Conditions)

(the “ Side Letter ”), which is incorporated into and forms part of the Settlement Agreement.

The Settlement Agreement resolves all outstanding

disputes among the parties arising from the Merger Agreement and related transactions.

Also on April 30, 2026,

the Company entered into a Forbearance Agreement (the “ Forbearance Agreement ”) with Alto Opportunity Master Fund, SPC

– Segregated Master Portfolio B (the “ Investor ”), which holds a senior convertible note in the aggregate original

principal amount of $11,000,000 (the “ Existing Note ”), issued pursuant to a Securities Purchase Agreement, dated

December 1, 2025 (the “ Securities Purchase Agreement ”).

Pursuant to the Forbearance Agreement, the Investor

has agreed to forbear from exercising any of its rights or remedies under the Existing Note with respect to certain existing events of

default (collectively, the “ Existing Defaults ”) during the period commencing on the date of the Forbearance Agreement

through and including June 30, 2026 (or such later date as the Investor may elect in its sole discretion) (the “ Forbearance Period ”).

The Settlement Agreement, the Side Letter, and the Forbearance Agreement

are described in the Company’s Current Report on Form 8-K filed with the SEC on May 3, 2026, and are incorporated herein by reference.

Quantitative and Qualitative Disclosures

3 unchanged sentences

Financial Statements and Supplementary Data

The financial statements required pursuant to

this item are included in Part IV, Item 15 of this Annual Report, beginning on page F-1.

This information appears following Item 15 of this

Report and is incorporated herein by reference.

Changes in and Disagreements With Accountants on Accounting

and Financial Disclosure

Not applicable.

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-K

Item 7. Management’s Discussion and Analysis