Apimeds Pharmaceuticals US, Inc. 10-Q

Item 1. Financial Statements. INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Contents Page Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 2 Unaudited Condensed Consolidated Statements of Operations for the Three Ended March 31, 2026 and 2025 3 Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025 4 Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026, and 2025 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 1 Apimeds Pharmaceuticals US, Inc. Unaudited Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, 2026 2025 Assets Current assets: Cash & Cash Equivalents $ 979,534 $ 1,636,655 Restricted Cash 8,000,000 8,000,000 Short Term Investments 1,500,000 2,000,000 Prepaid Expenses 2,625,169 2,298,704 Other Current Assets 48,500 48,500 Total current assets 13,153,203 13,983,859 Digital assets, at fair value 127,815,173 149,885,371 Long-term portion of prepaid expenses 22,410 75,485 Operating Lease ROU Asset, net 171,779 187,395 Property and Equipment, net 56,592 51,626 Total assets $ 141,219,157 $ 164,183,736 Liabilities and shareholders’ equity Current liabilities: Accounts payable and accrued expenses $ 2,978,190 $ 918,649 Accrued offering costs 575,000 500,000 Accrued interest - related party 36,339 27,952 Advance payable to related party 12,000 12,000 Notes payable - related party 500,100 500,100 Notes payable, net 920,000 Derivative Liability 1,568,634 1,616,913 Convertible Notes, net 7,942,281 7,091,263 Operating Lease Liability 52,339 39,578 Total current liabilities 14,584,883 10,706,455 Long-term liabilities Long-Term Portion of Operating Lease Liability 118,815 129,454 Total liabilities $ 14,703,698 $ 10,835,909 Commitments and contingencies Shareholders’ equity: Preferred stock, par value $ 0.01 , 10,000,000 shares authorized: 7,477,017 issued and outstanding on March 31, 2026, and December 31, 2025, 74,770 74,770 Common stock, par value $ 0.01 , 100,000,000 shares authorized; 12,575,983 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 125,760 125,760 Common shares to be issued 8,113,318 Additional paid-in capital 163,654,524 163,540,358 Accumulated Deficit ( 45,452,913 ) ( 10,393,061 ) Total shareholders’ equity 126,515,459 153,347,827 Total liabilities and shareholders’ equity $ 141,219,157 $ 164,183,736 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 Apimeds Pharmaceuticals US, Inc Unaudited Condensed Consolidated Statements of Operations For the three months ended March 31, 2026 2025 Operating expenses: Research and development expenses $ 901,144 $ - General and administrative expenses 11,284,550 364,368 Total operating expenses 12,185,694 364,368 Loss from operations ( 12,185,694 ) ( 364,368 ) Other income (expense) Unrealized gain (loss)from changes in fair value of digital assets ( 22,078,601 ) - Realized gain on sale of digital assets 15,100 - Trading gains, net 2,029 - Foreign currency gains/(losses), net ( 1,567 ) - Change in FV of warrant liability - - Change in FV of derivative 48,279 - Interest income 7 3 Interest expense ( 859,405 ) ( 38,032 ) Total other income (expense) ( 22,874,158 ) ( 38,029 ) Net loss $ ( 35,059,852 ) $ ( 402,397 ) Net loss per common share - basic and diluted $ ( 2.26 ) $ ( 0.05 ) Weighted average common shares outstanding 15,513,389 7,903,850 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Apimeds Pharmaceuticals US, Inc Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) Preferred Stock Common Stock Shares to be Issued Additional Number of Shares Amount Number of Shares Amount Number of Shares Amount Paid-in capital Accumulated Deficit Total Balance at December 31, 2025 7,477,017 $ 74,770 12,575,983 $ 125,760 - $ - 163,540,358 $ ( 10,393,061 ) $ 153,347,827 Net loss for the period ended March 31, 2026 - - - - - - - ( 35,059,852 ) ( 35,059,852 ) Stock compensation expense - - - - - - 114,166 - 114,166 Shares committed for issuance in connection with advisory agreement - - - - 4,558,044 8,113,318 - - 8,113,318 Balance at March 31, 2026 7,477,017 74,770 12,575,983 125,760 4,558,044 8,113,318 163,654,524 ( 45,452,915 ) 126,515,459 Balance at December 31, 2024 - $ - 7,903,850 $ 79,039 - $ - 2,954,764 $ ( 4,391,924 ) $ ( 1,358,121 ) Net loss for the period ended March 31, 2025 - - - - - - - ( 402,397 ) ( 402,397 ) Balance at March 31, 2025 - - 7,903,850 79,039 - - 2,954,764 ( 4,794,321 ) ( 1,760,518 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Apimeds Pharmaceuticals US, Inc Unaudited Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2026 2025 Cash flows from operating activities: Net loss $ ( 35,059,852 ) $ ( 402,397 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock based compensation - Option grants 114,166 - Advisory Shares committed for issuance 8,113,318 Depreciation & Amortization expense 20,044 - Change in fair value of derivative liability ( 48,279 ) - Interest expense 8,387 11,256 Accretion on Convertible notes 851,018 26,776 Unrealized gain from changes in fair value of digital assets 22,061,472 - Non-cash digital asset operating expenses 8,726 - Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 273,390 ) 40 Accounts payable and accrued expenses 2,134,541 344,012 Operating lease liability 2,122 - Net cash used in operating activities $ ( 2,067,727 ) $ ( 20,313 ) Cash flows from investing activities: Redemption of short term investments 500,000 - Purchases of PP&E ( 9,394 ) - Net cash provided by investing activities $ 490,606 $ - Cash flows from financing activities: Proceeds from notes payable 995,000 250,000 Payment of issuance costs ( 75,000 ) - Cash advances from related parties - 17,200 Net cash provided by financing activities $ 920,000 $ 267,200 Net increase (decrease) in cash, cash equivalents and restricted cash ( 657,121 ) 246,887 Cash and cash equivalents, beginning of period 1,636,655 3,455 Restricted cash 8,000,000 - Cash, cash equivalents, and restricted cash, end of period $ 8,979,534 $ 250,432 Supplemental disclosure of cash flow information: Cash paid for interest $ - $ - Cash paid for taxes $ - $ - Non-cash investing and financing activities: Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents 979,534 250,432 Restricted cash 8,000,000 - Total cash, cash equivalents, and restricted cash $ 8,979,534 $ 250,432 The accompanying notes are an integral part of these unaudited condensed Consolidated financial statements. 5 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements 1. DESCRIPTION OF BUSINESS Business Description Apimeds 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. The Company operates its biopharmaceutical business through Lokahi Therapeutics Inc. (“Lokahi”), a wholly owned subsidiary. As of December 31, 2025, the Company’s corporate structure is as follows: APUS — Public parent and SEC registrant (Delaware C-Corporation) Lokahi Therapeutics Inc. (“The BioBusiness”): Wholly owned subsidiary; operates the BioBusiness segment MindWave Innovations Inc.: (acquired December 1, 2025): Wholly owned subsidiary; operates the Digital Asset segment The 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. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company has prepared these unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (“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. 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. 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. 6 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Principals of Consolidation The 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. Liquidity The 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. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying unaudited condensed financial statements include, but are not limited to, 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. Digital Assets Digital 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. dollar. 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 to the U.S. 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. Unsold 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. 7 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Fair Value Measurement The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1 — Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 — Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3 — Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. 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 March 31, 2026: As of March 31, 2026 Level 1 Level 2 Level 3 Total Assets: Digital assets — BTC $ 66,552,480 - - 66,552,480 Digital assets — USDT $ 6,491,176 - - 6,491,176 Digital assets — NILA Tokens $ - 54,771,517 - 54,771,517 Total assets at fair value $ 73,043,656 54,771,517 - 127,815,173 Liabilities: Warrant liabilities - - - - Derivative liability $ - 1,568,634 1,568,634 Total liabilities at fair value $ - - - 1,568,634 As of December 31, 2025 Assets: Digital assets — BTC $ 88,318,950 - - 88,318,950 Digital assets — USDT $ 6,484,632 - - 6,484,632 Digital assets — NILA Tokens $ - 55,081,789 - 55,081,789 Total assets at fair value $ 94,803,582 55,081,789 - 149,885,371 Liabilities: Warrant liabilities - - - - Derivative liability $ - 1,616,913 1,616,913 Total liabilities at fair value $ - - - 1,616,913 8 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Convertible Instruments The 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. For 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. On December 8, 2025, the Company issued a senior secured convertible note with a principal amount of $ 10.9 million for proceeds of $ 10.0 million. 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. For 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 $ 1,616,913 Change in fair value of derivative liability ( 48,279 ) Ending balance – March 31, 2026 $ 1,568,634 March 31, 2026 (Issuance Remeasurement) Derivative Liability Fair Value $ 1,568,634 Valuation technique Monte Carlo Simulation Model In 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 operations. During 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. The 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. 9 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated 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 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. Segment Information In 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. The 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. For 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. The following tables presents the Company’s segmented results for the three months ended March 31, 2026 and March 31, 2025, respectfully. For the three months ended March 31, 2026 BioBusiness Segment Digital Asset Segment Corporate Consolidated Revenue $ - $ - $ - $ - Operating expenses: Research and development 901,144 - - 901,144 General and administrative 1,378,074 1,660,921 8,245,555 11,284,550 Total operating expenses $ 2,279,218 $ 1,660,921 $ 8,245,555 $ 12,185,694 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 - 15,100 - 15,100 Trading gains, net - 2,029 - 2,029 Unrealized gain (loss) on digital assets - ( 22,078,601 ) - ( 22,078,601 ) Change in FV of derivative - - 48,279 48,279 Change in FV of warrant liability - - - - Interest income - - 7 7 Interest expense ( 2,222 ) - ( 857,183 ) ( 859,405 ) Foreign currency transaction loss - ( 1,567 ) - ( 1,567 ) Total other income (expense), net $ ( 2,222 ) $ ( 22,063,039 ) $ ( 808,897 ) $ ( 22,874,158 ) Net loss $ ( 2,281,440 ) $ ( 23,723,960 ) $ ( 9,054,452 ) $ ( 35,059,852 ) 10 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements For the three months ended March 31, 2025 BioBusiness Segment Digital Asset Segment Corporate Consolidated Revenue $ - $ - $ - $ - Operating expenses: Research and development - - General and administrative 364,368 - - 364,368 Total operating expenses $ 364,368 $ $ $ 364,368 Loss from operations ( 364,368 ) ( 364,368 ) 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 - - 3 3 Interest expense - ( 38,032 ) ( 38,032 ) Foreign currency transaction loss - - - - Total other income (expense), net $ - $ - $ ( 38,029 ) $ ( 38,029 ) Net loss $ ( 364,368 ) $ - $ ( 38,029 ) $ ( 402,397 ) The following tables present the Company’s segmented assets as of March 31, 2026 and December 31, 2025. As of March 31, 2026 BioBusiness Digital Asset Segment Segment Corporate Consolidated Cash & Cash Equivalents $ 921,284 $ 55,704 $ 2,546 $ 979,534 Restricted Cash - - 8,000,000 8,000,000 Short Term Investments 1,500,000 - - 1,500,000 Prepaid Expenses 2,647,579 - - 2,647,579 Digital assets, at fair value - 127,815,173 - 127,815,173 Other Assets 228,371 - 48,500 276,871 Total Assets $ 5,297,234 $ 127,870,877 $ 8,051,046 $ 141,219,157 As of December 31, 2025 BioBusiness Digital Asset Segment Segment Corporate Consolidated Cash & Cash Equivalents $ 1,492,054 $ 144,600 $ - $ 1,636,654 Restricted Cash - - 8,000,000 8,000,000 Short Term Investments 2,000,000 - - 2,000,000 Prepaid Expenses 2,374,189 - - 2,374,189 Digital assets, at fair value - 149,885,371 - 149,885,371 Other Assets 239,021 - 48,500 287,521 Total Assets $ 6,105,264 $ 150,029,971 $ 8,048,500 $ 164,183,736 11 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of March 31, 2026 and December 31, 2025, the Company had no cash equivalents. The 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 Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statements of operations. Leases The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its right-of-use assets (“ROU”) and lease liabilities at the lease commencement date and thereafter if modified. ROU assets and liabilities are to be represented on the balance sheet at the present value of future minimum lease payments to be made over the lease term. The Company has elected as an accounting policy not to apply the recognition requirements in ASC 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. 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 method. 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. Related Parties The Company follows ASC 850, “ Related Party Disclosures” for the identification of related parties and disclosure of related party transactions. General and Administrative General and administrative expenses consist primarily of management personnel costs, professional service fees, and other general overhead and facility costs, including rent, 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. 1 million. 12 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Research and Development Research and development expenses consist primarily of consulting, regulatory and manufacturing related costs, third-party license fees and external costs of vendors engaged to conduct preclinical development activities. These costs are expensed as incurred and non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized in prepaid expenses and other current assets. The Company enters into arrangements with contract research organizations in connection with pre-clinical and clinical trials. Such arrangements often provide for payment prior to commencing the project or based upon predetermined milestones throughout the period during which services are expected to be performed. As part of the process of preparing the Company’s financial statements, management is required to estimate prepaid and accrued clinical trial expenses. The date on which services commence, the level of services performed on or before a given date, and the cost of such services are often determined based on subjective judgments informed by the facts and circumstances known to management from the terms of the contract and the Company’s ongoing monitoring of service performance. The Company makes these judgments based upon the facts and circumstances known to management based on the terms of the contract and the Company’s ongoing monitoring of service performance. In line with the guidance suggested under ASC 450, Contingencies and ASC 730, Research and Development, all research and development costs will be expensed as incurred. Development and regulatory milestone payments are accounted for by estimating the probability of milestone achievement. Stock Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation — Stock Compensation (“ASC 718”), which prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the unaudited condensed financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company accounts for forfeitures as they occur. The Company classifies share-based compensation expense in its statements of operations in the same manner in which the award recipient’s cash compensation costs are classified. 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 future. 13 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes and for operating loss and tax credit carryforwards. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company’s deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which these temporary differences are expected to be recovered or settled. A valuation allowance is recorded to reduce deferred tax assets if it is determined that it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results, expectations of future taxable income, carryforward periods available and other relevant factors. The Company records changes in the required valuation allowance in the period that the determination is made. The Company assesses its income tax position and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in the financial statements. The Company records interest and penalties related to uncertain tax positions, if applicable, as a component of income tax expense. Basic and Diluted Loss per share Basic loss per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted net loss per share is computed by giving effect to all potential shares of common stock to the extent they are dilutive. The following table sets forth the number of potential shares of common stock that have been excluded from basic net loss per share because their effect was anti-dilutive: March 31, 2026 March 31, 2025 Series A convertible preferred shares (1:20 conversion ratio) 149,540,340 Stock options 512,620 213,693 Warrants 1,116,913 Convertible notes 8,307,927 295,672 Total anti-dilutive shares excluded 159,477,800 509,365 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. 14 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated 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. 2024-03, Disaggregation of Income Statement Expenses . This guidance will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting period beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of this new guidance to our financial statements. We adopted ASU 2023-08, Accounting for and Disclosure of Crypto Assets , effective upon the acquisition of digital assets in connection with the MindWave Merger on December 1, 2025. 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. 3. LICENSE AGREEMENTS On August 2, 2021, the Company entered into a business agreement with Apimeds Korea. Under the agreement, the Company received the right to continue any clinical trial and acquire the permits and approval necessary from the U.S. Food and Drug Administration. The Company will pay Apimeds Korea a royalty of 5 % of the earnings before interest and taxes, delivered from the sale or license of Apitox less any credits and charges, however, the royalty terms shall not apply when shares of the Company are transferred or sold through merger, acquisition, or share transfer agreement to a third party. On October 12, 2021, the Company entered into an exclusive patent license agreement with Apimeds Korea, a shareholder of the Company. Under the agreement, the Company was granted the exclusive right and license under the licensed patents to make and sell the licensed products in the United States of America. The agreement 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 . 4. PREPAID EXPENSE AND OTHER ASSETS As of March 31, 2026, and December 31, 2025, the prepaid expense and other assets balance consists of the following: March 31, December 31, 2026 2025 Prepaid development costs $ 2,268,239 $ 2,022,467 Prepaid expenses 25,999 60,988 Refunds and retainers receivable 115,681 - Prepaid insurance 237,660 290,735 (Less) Long term portion of prepaid insurance ( 22,410 ) ( 75,485 ) Total Prepaid Expenses 2,625,169 2,298,705 15 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements 5. 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 March 31, 2026, and December 31, 2025, the accounts payable and accrued expense balances consist of the following: March 31, December 31, 2026 2025 Professional fees payable $ 1,875,921 $ 739,795 IT expenses payable 5,987 11,736 Manufacturing payable 243,324 545 Accrued development costs 398,969 118,168 Accrued compensation 13,000 13,000 Wages and benefits payable 250,990 26,406 CRO installments payable 190,000 Other - 9,000 Total Accounts payable and accrued expenses 2,978,190 918,650 6. DEBT Senior Secured Convertible Note On 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). At 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. The 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. Related 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 . 2026 Promissory Note On 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. 16 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements 7. ADVANCE PAYABLE — RELATED PARTY As 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. These advance payables carry no interest and do not have a maturity date. The cash proceeds from these advances were used for operating purposes. 8. COMMITMENTS AND CONTINGENCIES Legal Periodically, the Company reviews the status of any significant matters that exist and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. As of March 31, 2026, and December 31, 2025, there are no pending claims or litigation that are expected to materially affect the Company’s results going forward. 9. SHAREHOLDERS’ EQUITY Common Stock As 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 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. Warrants 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 815”). In 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. 17 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements Preferred Stock On 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: The Series A Preferred Stock does not maintain any voting rights. ● Redemption: The Preferred Stock issued is not redeemable The 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. Common Shares to be Issued On 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. The 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. As of March 31, 2026, the 4,558,044 shares had not yet been issued. 10. STOCK-BASED COMPENSATION Stock Options The 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. Certain 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. 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. 18 Apimeds Pharmaceuticals US, Inc Notes to the Unaudited Condensed Consolidated Financial Statements The following represents a summary of options: Number of Options Weighted Average Exercise Price Weighted- Average Remaining Contractual Term (In Years) Issued and outstanding, December 31, 2025 1,310,371 $ 2.82 8.85 Granted - - - Exercised - - - Forfeited/Expired - - - Issued and outstanding, March 31, 2026 1,310,371 $ 2.82 8.60 For the three months ended March 31, 2026, there were no additional stock options issued, exercised, or forfeited. 11. INCOME TAXES The Company recorded no provision or benefit for income tax expense for the three months ended March 31, 2026 and March 31, 2025 respectfully. For all periods presented, the pretax losses incurred by the Company received no corresponding tax benefit because the Company concluded that it is more likely than not that the Company will be unable to realize the value of any resulting deferred tax assets. The Company will continue to assess its position in future periods to determine if it is appropriate to reduce a portion of its valuation allowance in the future. The Company has no open tax audits with any taxing authority as of March 31, 2026. 12. SUBSEQUENT EVENTS The 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. After 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. and Apimeds, 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 amount. 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. On May 12, 2026, the BioBusiness issued a $ 2,000,000 promissory note (“Note Two”) to Keren Eliyahu Charitable Trust. The note bears a non-compounding return (“The Repayment Amount”) equivalent to one hundred and twenty-five percent ( 125 %) of the principal amount. The 2026 Promissory Note maintains a maturity date of June 11, 2026 , upon which, the Repayment Amount of $ 2,500,000 shall be due. 19