What changed in this filing

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Item 1. Financial Statements

2026-05-26 compared with 2025-11-12 · 721 added, 789 removed, 91 unchanged (94% of the section changed)

Financial Statements.

INDEX TO FINANCIAL STATEMENTS

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

Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Unaudited Condensed Statements of Changes in Shareholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and 2024

Unaudited Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024

Notes to Unaudited Condensed Financial Statements

Apimeds Pharmaceuticals US, Inc.

Unaudited Condensed Balance Sheets

September 30,

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025

Unaudited Condensed Consolidated Statements of Operations for the Three Ended March 31, 2026 and 2025

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026, and 2025

Notes to Unaudited Condensed Consolidated Financial Statements

Pharmaceuticals US, Inc.

Condensed Consolidated Balance Sheets

Current assets:

Prepaid expenses and other current assets

Cash & Cash Equivalents

Restricted Cash

Short Term Investments

Prepaid Expenses

Other Current Assets

Total current assets

Property and equipment, net

Digital assets, at fair value

Long-term portion of prepaid expenses

Operating Lease ROU Asset, net

Property and Equipment, net

$ 141,219,157

$ 164,183,736

Liabilities and shareholders’ equity

1 unchanged sentence

Accounts payable and accrued expenses

Accrued offering costs

Accrued interest - related party

1 unchanged sentence

Notes payable - related party

Notes payable, net

Derivative Liability

Convertible Notes, net

Operating Lease Liability

Total current liabilities

Long-term liabilities

Long-term convertible notes payable – related party

Long-Term Portion of Operating Lease Liability

Total liabilities

Commitments and contingencies (note 8)

Commitments and contingencies

Shareholders’ equity:

Preferred stock, par value $ 0.01 , 10,000,000 shares authorized:

none issued and outstanding as of September 30, 2025 and December 31, 2024

7,477,017 issued and outstanding on March 31, 2026, and December 31, 2025,

Common stock, par value $ 0.01 , 100,000,000 shares authorized;

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

12,575,983 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Common shares to be issued

Additional paid-in capital

2 unchanged sentences

( 10,393,061 )

Total shareholders’ equity (deficit)

( 1,358,121 )

Total shareholders’ equity

Total liabilities and shareholders’ equity

The accompanying notes are an integral part

of these unaudited condensed financial statements.

Apimeds Pharmaceuticals US, Inc

Unaudited Condensed Statements of Operations

$ 141,219,157

$ 164,183,736

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Pharmaceuticals US, Inc

Condensed Consolidated Statements of Operations

For the three months ended

For the nine months ended

September 30,

Operating expenses:

4 unchanged sentences

( 12,185,694 )

( 4,872,511 )

Other income (expense)

Change in fair value of warrant liability

Unrealized gain (loss)from changes in fair value of digital assets

( 22,078,601 )

Realized gain on sale of digital assets

Trading gains, net

Foreign currency gains/(losses), net

Change in FV of warrant liability

Change in FV of derivative

Interest income

4 unchanged sentences

$ ( 402,397 )

$ ( 1,078,357 )

Net loss per common share - basic and diluted

Weighted average common shares outstanding

The accompanying notes are an integral part

of these unaudited condensed financial statements.

Apimeds Pharmaceuticals US, Inc

Unaudited Condensed Statements of Changes in

Stockholders’ Equity (Deficit)

Preferred Stock

Balance at December 31, 2024

$ ( 4,391,924 )

$ ( 1,358,121 )

Net loss for the period ended March 31, 2025

Balance at March 31, 2025

( 4,794,321 )

( 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)

Net loss for the period ended June 30, 2025

( 2,662,193 )

Balance at June 30, 2025

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Pharmaceuticals US, Inc

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

at December 31, 2025

$ ( 10,393,061 )

Stock-based compensation - stock options

Issuance of Advisor Warrants in connection with IPO

Net loss for the period ended September 30, 2025

$ 153,347,827

loss for the period ended March 31, 2026

( 35,059,852 )

Balance at September 30, 2025

( 35,059,852 )

The accompanying notes are an integral part

of these unaudited condensed financial statements.

Apimeds Pharmaceuticals US, Inc.

Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit)

Preferred Stock

Balance at December 31, 2023

compensation expense

committed for issuance in connection with advisory agreement

at March 31, 2026

( 45,452,915 )

Net loss for the period ended March 31, 2024

Balance at March 31, 2024

at December 31, 2024

$ ( 4,391,924 )

Net loss for the period ended June 30, 2024

Balance at June 30, 2024

$ ( 1,358,121 )

Net loss for the period ended September 30, 2024

Balance at September 30, 2024

loss for the period ended March 31, 2025

at March 31, 2025

( 4,794,321 )

( 1,760,518 )

The accompanying notes

are an integral part of these unaudited condensed financial statements.

Apimeds Pharmaceuticals US, Inc

Unaudited Condensed Statements of Cash Flows

For the nine months ended September 30,

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

Pharmaceuticals US, Inc

Condensed Consolidated Statements of Cash Flows

For the three months ended

Cash flows from operating activities:

2 unchanged sentences

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

Accretion expense

Stock based compensation - Option grants

Advisory Shares committed for issuance

Depreciation & Amortization expense

Change in fair value of derivative liability

Interest expense

Accretion on Convertible notes

Unrealized gain from changes in fair value of digital assets

Non-cash digital asset operating expenses

Changes in operating assets and liabilities:

Prepaid expenses and other current and non-current assets

( 2,219,630 )

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Operating lease liability

Net cash used in operating activities

1 unchanged sentence

Cash flows from investing activities:

Purchase of furniture and equipment

Redemption of short term investments

Purchases of PP&E

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

Proceeds from notes payable

Payment of issuance costs

Cash advances from related parties

Cash advances paid to related parties

Net cash provided by financing activities

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash and cash equivalents, beginning of period

Restricted cash

Cash, cash equivalents, and restricted cash, end of period

Supplemental disclosure of cash flow information:

2 unchanged sentences

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

of these unaudited condensed financial statements.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash

The accompanying notes are an integral part of these unaudited condensed

Consolidated financial statements.

Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

DESCRIPTION OF BUSINESS

Business Description

Apimeds Pharmaceuticals US, Inc.

(the “Company”

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

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 sponsored 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 (“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.

Pharmaceuticals US, Inc.

(“APUS” or the “Company”) is a development-stage biopharmaceutical company incorporated

in the State of Delaware as a C-Corporation.

The Company is focused on the development of Apitox, a purified honeybee venom-based drug

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

On December 1, 2025 , the Company completed a merger

(the “Merger”) with MindWave Innovations Inc.

(“MindWave”), whereby MindWave became a wholly owned subsidiary

of the Company.

In connection with the Merger, the Company acquired digital assets, including Bitcoin (“BTC”), Tether (“USDT”),

and MindWaveDAO NILA tokens (“NILA Tokens”), and assumed certain operations related to digital asset activities.

Company operates its biopharmaceutical business through Lokahi Therapeutics Inc.

(“Lokahi”), a wholly owned subsidiary.

of December 31, 2025, the Company’s corporate structure is as follows:

— Public parent and SEC registrant (Delaware C-Corporation)

Therapeutics Inc.

(“The BioBusiness”):

Wholly owned subsidiary;

operates the BioBusiness segment

Innovations Inc.:

(acquired December 1, 2025):

Wholly owned subsidiary;

operates the Digital Asset segment

Company has not yet generated revenue from its biopharmaceutical operations and is subject to the risks and uncertainties common to development-stage

companies in the biotechnology industry.

The success of the Company is dependent on both obtaining the necessary regulatory approvals

of its BioBusiness product candidates, and the continuation of the Digital Asset segment, including the accumulation of Bitcoin (“BTC”),

Tether (“USDT”), and market adoption of its MindWaveDAO blockchain (“The DAO”) through the sale of its native

cryptocurrency, NILA tokens (“NILA”).

It is not possible to predict either the outcome of future research and development,

or future advancement of digital asset operations, which are subject to the natural volatility concerns of cryptocurrency.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

Company has prepared these unaudited condensed financial statements in accordance with accounting principles generally accepted in the

United States of America (“U.S.

GAAP”) 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, 2025 (the “Annual Report”).

Accordingly, the unaudited condensed financial

statements and related disclosures herein should be read in conjunction with the Annual Report.

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.

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 September 30, 2025, the Company had an accumulated

deficit of $ 9,237,769 .

The Company incurred net losses of $ 1,781,255 and $ 4,845,845 for the three and nine months ended September 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 cash proceeds

to the Company of $ 11.9 million.

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

projections of future Company operations, the Company believes that its cash will be sufficient to fund the Company’s current operating

plan through at least the next twelve months from the date of issuance of the accompanying unaudited condensed financial statements.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

Use of Estimates

The preparation of financial statements in

conformity with U.S.

GAAP requires management to make certain estimates, judgements and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and

the reported amounts of expenses during the reporting period.

Therefore, the

results and trends in these interim financial statements may not be representative of those for the full year.

Apimeds Pharmaceuticals

to the Unaudited Condensed Consolidated Financial Statements

of Consolidation

accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries,

Lokahi Therapeutics Inc.

and MindWave Innovations Inc.

All intercompany balances and transactions have been eliminated in consolidation.

accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates

the realization of assets and the satisfaction of liabilities in the normal course of business.

As of March 31, 2026, the Company had

accumulated deficit amount of $ 45,452,913 For the three months ended March 31, 2026, the Company incurred net losses of $ 35,059,852

and used cash from operations of $ 2,067,727 .

and expects to continue to incur substantial losses in the future.

On December 8, 2025,

the Company completed a PIPE financing (the “PIPE”) with an aggregate maximum amount of $ 120,900,000 drawn in tranches at

the Company’s discretion if the market conditions allow.

As of March 31, 2026, the Company has drawn a total amount of $ 10,900,000

from the PIPE (see note 6) wherein $ 8,000,000 in proceeds have been recorded as restricted cash.

Ther can be no assurance that the Company

will be able to draw funds from the PIPE at terms acceptable to it or at all.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

These condensed consolidated financial statements do not contain any adjustments that might result

from the outcome of this uncertainty.

preparation of financial statements in conformity with U.S.

GAAP requires management to make certain estimates, judgements and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of expenses during the reporting period.

Significant estimates and assumptions made in the accompanying

unaudited condensed financial statements include, but are not limited to, the determination of prepaid clinical development costs,

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:

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

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.

unaudited condensed financial statements include, but are not limited to, the fair value of digital assets, the determination of prepaid

clinical development costs, 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.

assets consist of Bitcoin (“BTC”), Tether (“USDT”), and MindWaveDAO NILA tokens (“NILA Tokens”).

Effective upon the adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets , the Company accounts for in-scope

crypto assets that meet the definition of an intangible asset and are fungible as follows:

BTC — Measured at

fair value with changes in fair value recognized in the consolidated statement of operations within “Unrealized gain (loss)

on digital assets.” BTC meets the criteria of ASU 2023-08 and is classified within Level 1 of the fair value hierarchy based

on quoted prices in active markets.

USDT — Tether is

a stablecoin pegged to the U.S.

The Company measures USDT at fair value and classifies USDT within Level 1 of the fair value

hierarchy based on quoted prices on active cryptocurrency exchanges.

Because USDT is designed to maintain a stable value relative

dollar, changes in fair value are generally not material.

NILA Tokens — The

NILA Tokens are utility tokens issued within the MindWaveDAO ecosystem.

NILA Tokens trade on a limited number of centralized cryptocurrency

exchanges, primarily the NILA/USDT trading pair.

The Company measures NILA Tokens at fair value and classifies them within Level

2 of the fair value hierarchy based on quoted prices for identical or similar assets in markets that are not considered active due

to the limited number of trading venues and relatively low trading volume.

Gains and losses realized upon the sale of NILA Tokens

are recognized within “Realized gain (loss) on sale of digital assets” in the consolidated statement of operations.

NILA Tokens are remeasured at fair value at each reporting date, with unrealized changes recognized within “Unrealized gain

(loss) on digital assets” in the consolidated statement of operations.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

Value Measurement

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

prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions

for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets

or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

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 Carrying value

of cash, restricted cash and short-term investments approximates their fair value as these assets all represent cash.

The tables below

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

Fair Value at

September 30,

Fair Value Measurement

Warrant Liability

Fair Value at

Fair Value Measurement

Warrant Liability

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

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 815”).

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.

This 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.

For issued 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 operations.

The fair value of the Representative Warrants and initial liability and fair value upon issuance 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 Warrants”).

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), the Company recorded a warrant liability at the IPO date fair value and remeasures that

liability at each reporting date.

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,

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 nine months ended September

Beginning Balance - December 31, 2024

Advisor warrant liability incurred in connection with the IPO

Re-measurement adjustments:

Change in fair value of warrant liability

Balance – August 5, 2025

Reclassification of warrants to equity classification

Ending balance – September 30, 2025

summarize the fair values of our financial assets and liabilities as of March 31, 2026:

of March 31, 2026

Digital assets — BTC

Digital assets — USDT

Digital assets — NILA Tokens

Total assets at fair value

Warrant liabilities

Derivative liability

Total liabilities at fair value

of December 31, 2025

Digital assets — BTC

Digital assets — USDT

Digital assets — NILA Tokens

Total assets at fair value

Warrant liabilities

Derivative liability

Total liabilities at fair value

Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

Company accounts for the embedded conversion feature of its senior secured convertible note as a derivative liability in accordance with

FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”).

At the time of issuance, the Company evaluates whether the conversion

feature meets the definition of a derivative under ASC 815-10 and whether it is required to be bifurcated from the host debt instrument

and accounted for separately.

The assessment considers whether the embedded feature is clearly and closely related to the host contract,

whether the hybrid instrument is measured at fair value through earnings, and whether the feature, if freestanding, would meet the definition

of a derivative — including the criteria for equity classification under ASC 815-40, such as whether the feature is indexed to

the Company’s own common stock and whether the Company could be required to settle the feature in a manner that precludes equity classification.

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

period end date while the convertible note remains outstanding.

embedded conversion features that meet all the criteria for equity classification under ASC 815-40, no bifurcation is required and the

entire instrument is accounted for as debt.

For embedded conversion features that do not meet the criteria for equity classification

and otherwise meet the bifurcation requirements of ASC 815-15, the feature is bifurcated from the host debt instrument and recorded as

a derivative liability at its initial fair value on the date of issuance, with the residual proceeds allocated to the host debt instrument.

The derivative liability is remeasured at fair value at each subsequent balance sheet date, with changes in fair value recognized as

a non-cash gain or loss in other income (expense) in the consolidated statements of operations.

The fair value of the derivative liability

was estimated using a Monte Carlo simulation model.

December 8, 2025, the Company issued a senior secured convertible note with a principal amount of $ 10.9 million for proceeds of $ 10.0

The Company evaluated the embedded conversion feature and concluded that it did not meet the criteria for equity classification

under ASC 815-40 and was required to be bifurcated and accounted for as a derivative liability.

Accordingly, the Company recorded the

conversion feature at its initial fair value of $ 1,672,059 on the issuance date, with a corresponding reduction to the carrying amount

of the convertible note, and remeasures the derivative liability at fair value at each reporting date.

the Company’s 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 ended March 31, 2026:

Balance – December 31, 2025

Change in fair value of derivative liability

Ending balance – March 31, 2026

Remeasurement)

Warrant Liability

Derivative Liability

Fair Value $ 1,568,634

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 August 5 , 2025, was valued utilizing

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

$ 1.78 of stock price, 3.74 % risk-free rate, 77.11 % volatility, 0 % dividend

rate, and the expected term of 5 years.

Upon issuance of the advisor warrants on August 5, 2025, the Advisor Warrants were reclassified

to additional paid-in capital and will remain equity classified.

Upon the issuance of the warrants on August 5,

2025, the final terms were evaluated, and the warrants met all conditions for equity classification under ASC 815-40.

As a result, the

warrants were revalued as of August 5, 2025 with the change in value reflected in the statement of operations.

That amount was then reclassified

to additional paid-in capital.

No gain or loss was recognized in the consolidated statements of operations in connection with the reclassification.

The warrants are no longer subject to recurring fair value measurement

following equity classification.

Prior to issuance, changes in the fair value of the warrant liability were recorded in other income (expense).

For the three and nine months ended September 30, 2025, the Company recognized a gain of $ 12,859 and $ 22,377 , respectively, in other

income (expense) for the change in fair value.

Common Stock Reverse Stock Split

On February 7, 2025 , the

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.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

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 September 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 September 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 U.S.

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

A single management team reports directly to the CODM and oversees the entire business comprehensively.

Resource allocation,

performance evaluation, incentive setting, and forecasting activities are conducted at the corporate level using the financial statements

and a unified budget.

Accordingly, the Company does not evaluate performance by geographic area or product line, as it has not yet commenced

commercial operations and has limited activity due to current liquidity and funding constraints.

All operations are based in the United

States of America, and all assets and operating expenses — including those related to research and development and general and administrative

functions — are attributed to the Company’s single reportable segment.

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 September 30, 2025 and December

31, 2024, the Company had no cash equivalents.

Convertible Instruments

The Company evaluates and accounts for conversion

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

Applicable U.S.

GAAP requires companies to

bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according

to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative

instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument

that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other U.S.

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.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

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 842, 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 September 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 value.

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.

Valuation technique Monte Carlo Simulation Model

connection with the issuance of the senior secured convertible note on December 8, 2025, the Company bifurcated the embedded conversion

feature and recorded it as a derivative liability with an initial fair value of $ 1,672,059 .

The derivative liability is remeasured at

fair value at each reporting date, with changes in fair value recognized in other income (expense) in the consolidated statements of

the period from issuance through December 31, 2025, the Company recognized a gain of $ 55,146 from the change in fair value of the derivative

liability, resulting in a balance of $ 1,616,913 as of December 31, 2025.

During the three months ended March 31, 2026, the Company recognized

an additional gain of $ 48,279 from the change in fair value, resulting in a balance of $ 1,568,634 as of March 31, 2026.

fair value of the derivative liability was estimated using a Monte Carlo simulation model, which incorporates assumptions regarding the

Company’s stock price, expected volatility, risk-free interest rate, expected term, and the probability and timing of the various conversion,

redemption, and contingent payment scenarios contemplated by the note.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

Related Parties

The Company follows ASC 850, “ Related Party Disclosures” for

the identification of related parties and disclosure of related party transactions.

to the Unaudited Condensed Consolidated Financial Statements

Concentrations

of Credit Risk

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, 2026, the Company has not experienced

losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

accordance with ASC 280, Segment Reporting, the Company operates as two segments:

(i) the BioBusiness segment, which advances the Company’s

lead product candidate, Apitox, and related preclinical and translational research activities;

and (ii) the Digital Assets segment, which

encompasses the Company’s digital asset holdings (Bitcoin, Tether, and NILA Tokens) acquired in connection with the MindWave acquisition

and the activities associated with the MindWaveDAO ecosystem.

The Company’s chief operating decision maker (“CODM”), who is

the Chief Executive Officer , regularly reviews discrete financial information for each segment, including key segment expenses and segment

loss, for purposes of making operating decisions, allocating resources, and evaluating financial performance.

CODM assesses each segment’s performance primarily through the analysis of operating expenses, with key categories including research

and development and general and administrative expenses.

Financial information provided to and utilized by the CODM is consistent with

the Company’s U.S.

GAAP financial statements.

As of March 31, 2026, the Company has not generated any revenue from either segment.

the purposes of this disclosure, all BioBusiness activity pertaining to the three months ended December 31, 2025, and prior to BioBusiness

formation as of December 1, 2025 are categorized as BioBusiness expenses given the Company operated as a singular biopharmaceutical entity

predating the Merger transaction closed December 1, 2025.

following tables presents the Company’s segmented results for the three months ended March 31, 2026 and March 31, 2025, respectfully.

the three months ended March 31, 2026

Digital Asset

Operating expenses:

Research and development

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.

Total operating expenses

Loss from operations

( 2,279,218 )

( 1,660,921 )

( 8,245,555 )

( 12,185,694 )

Other income (expense), net:

Realized gain on sale of digital assets

Trading gains, net

Unrealized gain (loss) on digital assets

( 22,078,601 )

Change in FV of derivative

Change in FV of warrant liability

Interest income

Interest expense

Foreign currency transaction loss

Total other income (expense), net

$ ( 22,063,039 )

$ ( 808,897 )

$ ( 22,874,158 )

$ ( 2,281,440 )

$ ( 23,723,960 )

$ ( 9,054,452 )

$ ( 35,059,852 )

Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

the three months ended March 31, 2025

Digital Asset

Operating expenses:

Research and development

Research and development expenses consist primarily

of consulting, regulatory and manufacturing related costs, third-party license fees and external costs of vendors engaged to conduct preclinical

development activities.

These costs are expensed as incurred and non-refundable prepayments for goods or services that will be used or

rendered for future research and development activities are deferred and capitalized in prepaid expenses and other current assets.

The Company enters into arrangements with contract

research organizations in connection with pre-clinical and clinical trials.

Such arrangements often provide for payment prior to commencing

the project or based upon predetermined milestones throughout the period during which services are expected to be performed.

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

That expense is recognized over the period during which an employee is required to provide services in exchange for the award,

known as the requisite service period (usually the vesting period).

The Company accounts for forfeitures as they occur.

The Company classifies

share-based compensation expense in its statements of operations in the same manner in which the award recipient’s cash compensation

costs are classified.

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

General and administrative

Total operating expenses

Loss from operations

Other income (expense), net:

Realized gain on sale of digital assets

Trading gains, net

Unrealized gain (loss) on digital assets

Change in FV of derivative

Change in FV of warrant liability

Interest income

Interest expense

Foreign currency transaction loss

Total other income (expense), net

$ ( 364,368 )

$ ( 402,397 )

following tables present the Company’s segmented assets as of March 31, 2026 and December 31, 2025.

of March 31, 2026

Digital Asset

Cash & Cash Equivalents

Restricted Cash

Short Term Investments

Prepaid Expenses

Digital assets, at fair value

$ 127,870,877

$ 141,219,157

of December 31, 2025

Digital Asset

Cash & Cash Equivalents

Restricted Cash

Short Term Investments

Prepaid Expenses

Digital assets, at fair value

$ 150,029,971

$ 164,183,736

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

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.

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 nine months ended

September 30,

Employee stock options

Representative Warrants

Advisor Warrants

Convertible notes and interest

Emerging Growth Company

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 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.

to the Unaudited Condensed Consolidated Financial Statements

Cash, Cash Equivalents, and Restricted Cash

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, 2026 and December 31, 2025, the Company had no cash equivalents.

Company considers all cash balances in which the Company maintains legal ownership but does not maintain the ability to effectively draw

upon the balance on a day-to-day basis as restricted cash.

As of March 31, 2025, and December 31, 2025, the Company has recorded a balance

of $ 8,000,000 to be recognized as restricted cash, as the amount is held within an investor-controlled Deposit Account Control Agreement

(“DACA”) account.

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.

Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining

substantially all of the asset’s economic benefits.

The Company determines the initial classification and measurement of its right-of-use

assets (“ROU”) and lease liabilities at the lease commencement date and thereafter if modified.

ROU assets and liabilities

are to be represented on the balance sheet at the present value of future minimum lease payments to be made over the lease term.

Company has elected as an accounting policy not to apply the recognition requirements in ASC 842, Leases (“ASC 842”)

to short-term leases.

Short-term leases are leases that have a term of 12 months or less and do not include an option to purchase

the underlying asset that the Company is reasonably certain to exercise.

The Company recognizes the lease payments for short-term leases

on a straight-line basis over the lease term.

As of March 31, 2026, and December 31, 2025, the Company has recognized a lease which qualifies

to be classified in accordance with ASC 842.

and Equipment, net

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 method.

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 value.

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

Company follows ASC 850, “ Related Party Disclosures” for the identification of related parties

and disclosure of related party transactions.

and Administrative

and administrative expenses consist primarily of management personnel costs, professional service fees, and other general overhead and

facility costs, including rent, insurance, and select operating expenses pertaining to management and maintenance of the DAO, which relate

to the Company’s general and administrative functions.

For the three months ended March 31, 2026, General and administrative expenses include a one-time charge of $8.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

Recently Issued Accounting Pronouncements

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

Standards Update No.

to the Unaudited Condensed Consolidated Financial Statements

and Development

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.

Company enters into arrangements with contract research organizations in connection with pre-clinical and clinical trials.

Such arrangements

often provide for payment prior to commencing the project or based upon predetermined milestones throughout the period during which services

are expected to be performed.

As part of the process of preparing the Company’s financial statements, management is required to

estimate prepaid and accrued clinical trial expenses.

The date on which services commence, the level of services performed on or before

a given date, and the cost of such services are often determined based on subjective judgments informed by the facts and circumstances

known to management from the terms of the contract and the Company’s ongoing monitoring of service performance.

The Company makes

these judgments based upon the facts and circumstances known to management based on the terms of the contract and the Company’s

ongoing monitoring of service performance.

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.

Based Compensation

Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation — Stock

Compensation (“ASC 718”), which prescribes accounting and reporting standards for all share-based payment transactions

in which employee services are acquired.

Transactions include incurring liabilities, or issuing or offering to issue shares, options,

and other equity instruments such as employee stock ownership plans and stock appreciation rights.

Share-based payments to employees,

including grants of employee stock options, are recognized as compensation expense in the unaudited condensed financial statements based

on the estimated grant date fair values.

That expense is recognized over the period during which an employee is required to provide services

in exchange for the award, known as the requisite service period (usually the vesting period).

The Company accounts for forfeitures as

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.

fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing

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

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 future.

Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

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.

in deferred tax assets and liabilities are recorded in the provision for income taxes.

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.

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.

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.

and Diluted Loss per share

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.

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:

Series A convertible preferred shares (1:20 conversion ratio)

Stock options

Convertible notes

Total anti-dilutive shares excluded

Growth Company

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.

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 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.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

Issued Accounting Pronouncements

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

November 2024, the FASB issued Accounting Standards Update No.

2024-03, Disaggregation of Income Statement Expenses .

This guidance will require additional disclosures

and disaggregation of certain costs and expenses presented on the face of the income statement.

The amendments are effective for annual

reporting periods beginning after December 15, 2026 and interim reporting period beginning after December 15, 2027 with early adoption

The Company is currently evaluating the impact of this new guidance to our financial statements.

This guidance will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income

The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting period beginning

after December 15, 2027 with early adoption permitted.

The Company is currently evaluating the impact of this new guidance to our financial

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.

Under 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.

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.

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

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 was $ 1 .

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.

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.

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

The total consideration exchanged for the exclusive license agreement was $ 1 .

PREPAID EXPENSE AND OTHER ASSETS

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

the prepaid expense and other assets balance consists of the following:

September 30,

of March 31, 2026, and December 31, 2025, the prepaid expense and other assets balance consists of the following:

Prepaid development costs

Prepaid expenses

Refunds and retainers receivable

Prepaid insurance

Prepaid clinical development costs

Other prepaid assets

long-term portion of prepaid insurance

Prepaid expenses and other current assets, current

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

(Less) Long term portion of prepaid insurance

Total Prepaid Expenses

Apimeds Pharmaceuticals

to the Unaudited Condensed Consolidated Financial Statements

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 of September 30, 2025, and December 31, 2024,

the accounts payable and accrued expense balances consists of the following:

September 30,

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

of March 31, 2026, and December 31, 2025, the accounts payable and accrued expense balances consist of the following:

Professional fees payable

Clinical trials payable

IT expenses payable

Manufacturing payable

Accrued development costs

Accrued compensation

Wages and benefits payable

CRO installments payable

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:

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).

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

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 nine months ended

September 30, 2025, respectively.

Interest expenses were $ 3,170 and $ 9,438 for the three and nine months ended September 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 nine months ended September 30, 2025, respectively.

There was accretion on the note’s debt discount of $ 8,898 and $ 21,742 for the three and nine months ended September 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.

Convertible Note is convertible at any time up through the maturity date.

On December 5, 2023, the Company amended

their convertible note to be convertible at $ 1 per share and extended the maturity date to be the earlier of (i) December 31,

2026 or (ii) consummation of a Qualified Offering.

The repurchase and cancellation of the old note was accounted for as a debt extinguishment

that did not result in any gain/loss on extinguishment due to related party treatment.

The conversion option was valued utilizing the

Black-Scholes model, with the following inputs:

volatility of 92.22 %, the fair value of the stock of $ 1.96 , expected dividend yield of

0 %, and a risk-free rate of return of 4.33 %.

The resulting value of the convertible option of $ 240,079 , based on the allocation of relative

fair value to cash proceeds, was applied towards additional paid-in capital and added as a discount on the convertible note.

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

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 nine months ended September 30, 2025, respectively.

Interest expenses were $ 4,877 and $ 14,521 for the three and nine months ended

September 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 nine months ended September 30, 2025, respectively.

There was accretion on the note’s debt discount of $ 13,632 and $ 33,359 for the three and nine months ended September 30, 2024,

respectively.

2024 Promissory Notes — Related

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

promissory note to Inscobee.

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.

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,

As of September 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 nine months ended September 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 nine months ended September

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

2025 Promissory Note — Related

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,

As of September 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 nine months ended September

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

balance sheet.

ADVANCE PAYABLE — RELATED

As of September 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.

Secured Convertible Note

December 1, 2025, the Company entered into a Securities Purchase Agreement (“SPA”) providing for the issuance, in tranches,

of senior secured convertible notes with an aggregate maximum principal amount of $ 120,900,000 .

The first tranche, a senior secured convertible

note dated December 8, 2025, with a principal amount of $ 10,900,000 (gross issuance proceeds of $ 10,000,000 ), matures on December 8,

2026 and is classified as a current liability.

Issuance costs totaled $ 1,446,000 (including $ 500,000 of deferred offering costs).

issuance, $ 1,104,000 of proceeds were disbursed to MindWave and $ 8,000,000 was placed in an investor-controlled Deposit Account Control

Agreement (“DACA”), recorded as restricted cash.

conversion feature embedded in the convertible note has been bifurcated and accounted for as a derivative liability measured at fair

value at each reporting date.

No additional tranches were drawn under the SPA.

Interest expense and accretion of debt discount for the

three months ended March 31, 2026 and March 31, 2025, totaled $ 8,387 and $ 851,018 , and $ 0 and $ 38,032 , respectively.

Party Notes Payable

As of March 31, 2026, the Company had outstanding $ 500,100 consisting

of $ 250,100 unsecured promissory notes payable to Inscobee Inc., a stockholder, comprising amounts originally advanced in 2024 and a $ 250,000

note dated March 21, 2025, payable to Apimeds Korea a wholly owned subsidiary of Inscobee.

All notes bear interest at 5 % per annum and

mature on December 31, 2026.

As of the March 31, 2026, these related party notes remain outstanding with accrued interest totaling $ 34,219 .

Promissory Note

March 30, 2026, Lokahi (the BioBusiness) issued a secured promissory note (the “2026 Promissory Note”) to the Keren Eliyahu

Charitable Trust in the principal amount of $ 1,000,000 .

The note is repayable in the amount of $ 1,100,000 (representing 110 % of principal)

on May 15, 2026, and is collateralized by a certificate of deposit classified as short term investment on the consolidated balance sheet.

The note is recorded as a current liability of the Company and is reflected in the BioBusiness segment.

Pharmaceuticals US, Inc

to the Unaudited Condensed Consolidated Financial Statements

ADVANCE PAYABLE — RELATED PARTY

of March 31, 2025, and December 31, 2025, the Company had an outstanding balance of $ 12,000 , respectively, due to funds received from

officers of the Company.

advance payables carry no interest and do not have a maturity date.

The cash proceeds from these advances 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 September 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 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 IPO.

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.

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

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, 2026, and December 31, 2025, there are no pending claims or litigation

that are expected to materially affect the Company’s results going forward.

SHAREHOLDERS’ EQUITY

As of September 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 September 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.

All share and per share amounts in the accompanying unaudited condensed financial statements and

footnotes have been retrospectively adjusted for the reverse stock split.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

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 expenses and research and development expenses, respectively,

for the three and nine month periods ended September 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 Representative Warrants have an exercise price of $ 5.00 per share and also feature a cashless exercise option.

The initial exercise

date of the Representative Warrants is November 4, 2025.

The Company accounts for Representative 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 (“ASC

The measurement of fair value of the Representative 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 Representative 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 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), the Company recorded a warrant liability at the IPO date fair value

and remeasures that liability at each reporting date.

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.

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 August 5, 2025, was valued utilizing

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

$ 1.78 of stock price, 3.74 % risk-free rate, 77.11 % volatility, 0 % dividend

rate, and the expected term of 5 years.

Upon the issuance of the warrants on August 5,

2025, the final terms were evaluated, and the warrants met all conditions for equity classification under ASC 815-40.

As a result, the

warrants were revalued as of August 5, 2025 with the change in value reflected in the statement of operations.

That amount was then reclassified

to additional paid-in capital.

No gain or loss was recognized in the consolidated statements of operations in connection with the reclassification.

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 September 30, 2025, and December 31, 2024.

of March 31, 2026, and December 31, 2025, the Company had 100,000,000 authorized shares of common stock.

The Company had 12,575,983 shares

of common stock issued and outstanding, as of March 31, 2026, and December 31, 2025, respectively.

Each share of common stock is entitled

On February 7,

2025, the Board approved and implemented a reverse stock split ratio of 1-for-2.6, which provided that every 2.6 shares

of its issued and outstanding common stock were automatically combined into one issued and outstanding share of common

stock, without any change in the par value per share .

All share and per share amounts in the accompanying unaudited condensed financial

statements and footnotes have been retrospectively adjusted for the reverse stock split.

Company accounts for Representative 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 (“ASC 815”).

connection with the merger that closed on December 1, 2025, the Company issued advisory warrants to purchase 745,663 shares of common

stock, equal to 5 % of the Company’s fully diluted shares outstanding as of October 20, 2025.

The warrants have an exercise price of $ 1.78

per share and a term of 5 years.

The Company evaluated the warrants under ASC 480 and ASC 815 and determined that they meet all of the

criteria for equity classification.

The grant date fair value of the warrants was estimated to be $ 898,301 utilizing a Black-Scholes

model with the following assumptions:

share price of $ 1.82 , exercise price of $ 1.78 , term of 5 years, volatility of 79.4 %, risk-free

rate of 3.58 %, and expected dividend rate of 0.0 %.

The grant date fair value was recognized as a transaction cost of the merger with

a corresponding increase to additional paid-in capital.

Pharmaceuticals US, Inc

Notes to the Unaudited Condensed Consolidated

Financial Statements

December 5, 2023, the Company authorized 10,000,000 shares of preferred stock with a par value of $ 0.01 .

In connection with the

Merger, on December 1, 2025, the Company issued 7,477,017 shares of Series A Convertible Preferred Stock to the former stockholders of

MindWave Innovations.

The aggregate fair value of the Series A Preferred Stock was equivalent to the fair value of the net assets acquired

from MindWave.

The material terms of the Series A Preferred Stock are as follows:

● Conversion:

Each share of Series A Preferred Stock is convertible into 20 shares of common stock, which convert automatically upon majority shareholder approval.

Voting rights:

A Preferred Stock does not maintain any voting rights.

The Preferred Stock issued is not redeemable

Company evaluated the Series A Preferred Stock under ASC 480 and determined that the instrument is classified in permanent equity based

on the terms of the Merger.

Shares to be Issued

February 2, 2026, the Company approved an advisory agreement previously executed on December 1, 2025, with E.F.

Hutton (“The Advisor”),

pursuant to which the Company is obligated to issue an aggregate of 4,558,044 shares of its common stock as consideration for advisory

services provided.

The agreement gained approval as of the date disclosed above, therefore was not recognized as an obligation of the

Company prior to February 2, 2026.

The Company evaluated the share commitment under ASC 480, Distinguishing Liabilities from Equity,

and ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the obligation qualifies for equity classification, as it represents

an obligation to issue a fixed number of shares with no cash settlement features.

fair value of the share commitment of $ 8,113,318 , based on the closing market price of the Company’s common stock on February 2, 2026,

of $ 1.78 per share, was recorded as an expense with an offsetting credit to common stock issuable within stockholders’ equity.

March 31, 2026, the 4,558,044 shares had not yet been issued.

STOCK-BASED COMPENSATION

Stock Options

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 September 30, 2025.

There were 213,692 nonqualified stock option

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

The Company and its 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.

Apimeds Pharmaceuticals US, Inc

to the Unaudited Condensed Financial Statements

There were 496,179 stock options granted under the 2024 Equity Incentive

Plan to the Company’s employees and directors during the three and nine months ended September 30, 2025, and no stock options granted

for three and nine months ended September 30, 2024.

The stock options granted during the three and

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

$ 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:

Number of Options Weighted Average Exercise Price Weighted-Average Remaining Contractual Term

Company maintains the 2024 Equity Incentive Plan (the “Plan”), under which the Company may grant stock options, restricted

stock units, and other equity awards to employees, directors, and consultants.

As of March 31, 2026, 2,096,679 shares were authorized

for issuance under the Plan, of which 1,096,679 shares were granted in the form of stock options, and 1,000,000 shares were issued to

executives in the form of common stock.

The Plan currently maintains 0 shares available for issuance.

equity awards of the Company have been granted to employees who are now employees of Lokahi Therapeutics (“the BioBusiness”).

Because there is no recharge arrangement (an agreement in which the subsidiary reimburses the parent for the cost of stock-based awards

granted to the subsidiary’s employees), between the Company and the BioBusiness, the Company recognizes the stock-based compensation

expense associated with these awards in its consolidated statement of operations.

In the standalone financial statements of Lokahi, the

expense is offset by a corresponding capital contribution from the Company.

For the period ended March 31, 2026, a total of $ 114,166

in stock compensation was attributable to Lokahi employees.

Company and its 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.

Pharmaceuticals US, Inc

Notes to the Unaudited Condensed Consolidated

Financial Statements

following represents a summary of options:

Options Weighted

Price Weighted-

Issued and outstanding, December 31, 2025 1,310,371 $ 2.82 8.85

Granted 496,179 1.82 -

Forfeited/Expired -

Issued and outstanding, September 30, 2025 709,871 $ 3.48 8.22

Exercisable at September 30, 2025 372,604 $ 5.22 6.76

For the three and nine months ended September

30, 2025 the Company had $ 42,674 and $ 234,727 of stock compensation related to the stock options outstanding, of which $ 13,629 and $ 178,424

were included in general and administrative expenses and research and development expenses, respectively, on the accompanying unaudited

condensed statements of operations.

There was no expense related to the stock option grants recognized during the three and nine months

ended September 30, 2024.

As of September 30, 2025, the remaining unamortized expense of $ 372,805 will be recognized over the next 2.52

Such amount does not include the effect of future grants of equity compensation, if any.

The intrinsic value of options outstanding

was $ 1,445 at September 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 nine months ended September 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 September 30, 2025.

Issued and outstanding, March 31, 2026 1,310,371 $ 2.82 8.60

the three months ended March 31, 2026, there were no additional stock options issued, exercised, or forfeited.

Company recorded no provision or benefit for income tax expense for the three months ended March 31, 2026 and March 31,

2025 respectfully.

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

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.

Company has no open tax audits with any taxing authority as of March 31, 2026.

SUBSEQUENT EVENTS

The company’s management has evaluated subsequent

events occurring after September 30, 2025, the date of our most recent balance sheet, through the date our financial statements were issued.

On October 15, 2025, the Company entered into

a Waiver Agreement with D.

Boral Capital in connection to its previously executed Underwriting Agreement dated May 8, 2025, whereby the

Right of First Refusal (as defined in the Waiver Agreement) and the Company Lock-Up Agreements (as defined in the Waiver Agreement) are

waived and terminated.

In consideration for such waiver and termination, the Company paid to D.

Boral Capital a non-refundable fee of

$ 700,000 upon execution of the Waiver Agreement.

On October 15, 2025, the board of directors approved the grant of 510,500 options for shares of the Company’s common stock to participants

in the 2024 Equity Incentive Plan and vest in quarterly installments beginning on the respective vesting commencement dates, such that

the awards shall be fully vested after three years .

The exercise price of the options granted was determined by the value of the stock

on the quoted trading price of $ 1.92 per share.

company’s management has evaluated subsequent events occurring after March 31, 2026, the date of our most recent balance sheet,

through the date our financial statements were issued.

the merger was entered into by all parties, the Apimeds’ Korean Affiliate, owner of a majority of Apimeds’

pre-conversion voting stock purported to remove Apimeds’ directors and CEO and made document requests suggesting it takes

issue with the terms of the merger transaction.

The former CEO has filed litigation (Erik Emerson v.

Inscobee Inc.

Inc.) in the Southern District of New York disputing the validity of the Korean affiliate's actions and seeking to compel the

completion of the merger transaction's remaining steps.

On April 29, 2026, the Company and its respective

subsidiaries entered into a Settlement Agreement which resolves all outstanding disputes among related parties arising from the merger.

On May 5, 2026, the action against the Korean Affiliate was voluntarily dismissed without prejudice.

The holder of the Senior Secured Note delivered

notice to the Company of its default under the financing documented because of the Korean affiliate’s actions.

On April 30, 2026,

The Company the holder entered into a forbearance agreement regarding the defaults under the financing documents.

The forbearance will

extend until June 30, 2026 or such earlier date as the defaults are cured.

On May 6, 2026, the Company repaid the

original note to Keren Eliyahu Charitable Trust and the BioBusiness issued a $ 1,000,000 promissory note (“Note One”) to Keren

Eliyahu Charitable Trust.

The note bears a non-compounding return equivalent to one hundred and twenty percent ( 120 %) of the principal

The 2026 Promissory Note maintains a maturity date of July 5, 2026 , upon which the Repayment Amount of $ 1,200,000 shall be due.

The note was later amended in connection with the following debt agreement to extend the maturity date to June 11, 2026.

On May 11, 2026 the Company issued 2,515,194 shares of Common Stock

as a portion, of the shares owed to the Advisor.

May 12, 2026, the BioBusiness issued a $ 2,000,000 promissory note (“Note Two”) to Keren Eliyahu Charitable Trust.

bears a non-compounding return (“The Repayment Amount”) equivalent to one hundred and twenty-five percent ( 125 %) of the principal

The 2026 Promissory Note maintains a maturity date of June 11, 2026 , upon which, the Repayment Amount of $ 2,500,000 shall be

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