10-Q: Quarterly report [Sections 13 or 15(d)]
Published on November 12, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from _______________________to___________________________
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As of November 12, 2025, there were
TABLE OF CONTENTS
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
INDEX TO FINANCIAL STATEMENTS
1
Apimeds Pharmaceuticals US, Inc.
Unaudited Condensed Balance Sheets
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Long-term portion of prepaid expenses | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued interest - related party | ||||||||
| Advance payable to related party | ||||||||
| Notes payable - related party | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Long-term convertible notes payable – related party | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (note 8) | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, par value $ | ||||||||
| Common stock, par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
Apimeds Pharmaceuticals US, Inc
Unaudited Condensed Statements of Operations
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development expenses | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Change in fair value of warrant liability | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 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.
3
Apimeds Pharmaceuticals US, Inc
Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit)
| Preferred Stock | Common Stock | Additional | ||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Paid-in capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss for the period ended March 31, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| 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 $ | ||||||||||||||||||||||||||||
| Net loss for the period ended June 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at June 30, 2025 | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation - stock options | - | - | ||||||||||||||||||||||||||
| Issuance of Advisor Warrants in connection with IPO | - | - | ||||||||||||||||||||||||||
| Net loss for the period ended September 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
Apimeds Pharmaceuticals US, Inc.
Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit)
| Preferred Stock | Common Stock | Additional | ||||||||||||||||||||||||||
| Number of Shares | Amount | Number of Shares | Amount | Paid-in capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net loss for the period ended March 31, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss for the period ended June 30, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at June 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss for the period ended September 30, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
Apimeds Pharmaceuticals US, Inc
Unaudited Condensed Statements of Cash Flows
| For the nine months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| 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 | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid expenses and other current and non-current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of furniture and equipment | ( | ) | ||||||
| Net cash provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Cash proceeds from issuance of common stock in IPO | ||||||||
| Proceeds from notes payable - related parties | ||||||||
| Cash advances from related parties | ||||||||
| Cash advances paid to related parties | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Conversion of convertible debt - related party | $ | $ | ||||||
| Conversion of accrued interest expense for convertible debt - related party | $ | $ | ||||||
| Issuance of Representative Warrants in connection with IPO | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
6
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed Financial Statements
1. DESCRIPTION OF BUSINESS
Business Description
Apimeds Pharmaceuticals US, Inc. (the “Company” or “Apimeds”) was formed as a corporation in May 2020 and was incorporated in the State of Delaware. 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 operations. It is not possible to predict either the outcome of future research and development or commercialization programs, or the Company’s ability to fund these programs.
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company has prepared these unaudited condensed financial statements in accordance with accounting principles generally accepted in the United States of America (“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, 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. 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.
Liquidity
As of September 30, 2025, the Company had an accumulated
deficit of $
7
Apimeds Pharmaceuticals US, Inc
Notes 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. 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:
| 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.
| Fair Value at September 30, | Fair Value Measurement | |||||||||||||||
| 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Warrant Liability | $ | $ | $ | $ | ||||||||||||
| Fair Value at December 31, | Fair Value Measurement | |||||||||||||||
| 2024 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Warrant Liability | $ | $ | $ | $ | ||||||||||||
8
Apimeds Pharmaceuticals US, Inc
Notes 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
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 30, 2025:
| 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 | $ |
| August 5, 2025 (Issuance Remeasurement) | ||||
| Warrant Liability | ||||
| Fair Value | $ | |||
| Valuation technique | options pricing model | |||
| Significant unobservable unit | 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: $
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 $
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
9
Apimeds Pharmaceuticals US, Inc
Notes 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 $
Segment Information
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 the loss. A single management team reports directly to the CODM and oversees the entire business comprehensively. Resource allocation, performance evaluation, incentive setting, and forecasting activities are conducted at the corporate level using the financial statements and a unified budget. Accordingly, the Company does not evaluate performance by geographic area or product line, as it has not yet commenced commercial operations and has limited activity due to current liquidity and funding constraints. All operations are based in the United States of America, and all assets and operating expenses — including those related to research and development and general and administrative functions — are attributed to the Company’s single reportable segment.
Cash
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of September 30, 2025 and December 31, 2024, the Company had 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. GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are accreted over the term of the related debt to their stated date of redemption.
If a security or instrument becomes convertible only upon the occurrence of a future event outside the control of the Company, or, is convertible from inception, but contains conversion terms that change upon the occurrence of a future event, then any contingent beneficial conversion feature is measured and recognized when the triggering event occurs and contingency has been resolved.
10
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed Financial Statements
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 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
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.
11
Apimeds Pharmaceuticals US, Inc
Notes 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.
General and Administrative
General and administrative expenses consist primarily of management personnel costs, professional service fees, and other general overhead and facility costs, including rent and insurance, which relate to the Company’s general and administrative functions.
Research and Development
Research and development expenses consist primarily of consulting, regulatory and manufacturing related costs, third-party license fees and external costs of vendors engaged to conduct preclinical development activities. These costs are expensed as incurred and non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized in prepaid expenses and other current assets.
The Company enters into arrangements with contract research organizations in connection with pre-clinical and clinical trials. Such arrangements often provide for payment prior to commencing the project or based upon predetermined milestones throughout the period during which services are expected to be performed. As part of the process of preparing the Company’s financial statements, management is required to estimate prepaid and accrued clinical trial expenses. The date on which services commence, the level of services performed on or before a given date, and the cost of such services are often determined based on subjective judgments informed by the facts and circumstances known to management from the terms of the contract and the Company’s ongoing monitoring of service performance. The Company makes these judgments based upon the facts and circumstances known to management based on the terms of the contract and the Company’s ongoing monitoring of service performance.
In line with the guidance suggested under ASC 450, Contingencies and ASC 730, Research and Development, all research and development costs will be expensed as incurred. Development and regulatory milestone payments are accounted for by estimating the probability of milestone achievement.
Stock Based Compensation
The Company accounts for share-based compensation in accordance with the fair value recognition provision of FASB ASC 718, Compensation — Stock Compensation (“ASC 718”), which prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the unaudited condensed financial statements based on the estimated grant date fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company accounts for forfeitures as they occur. The Company classifies share-based compensation expense in its statements of operations in the same manner in which the award recipient’s cash compensation costs are classified.
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.
12
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed 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
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, | ||||||||
| 2025 | 2024 | |||||||
| 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.
13
Apimeds Pharmaceuticals US, Inc
Notes 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. 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.
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
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 $
4. 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, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid clinical development costs | ||||||||
| Other prepaid assets | ||||||||
| Less: long-term portion of prepaid insurance | ( | ) | ||||||
| Prepaid expenses and other current assets, current | $ | $ | ||||||
14
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed 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 September 30, 2025, and December 31, 2024, the accounts payable and accrued expense balances consists of the following:
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Professional fees payable | $ | $ | ||||||
| Clinical trials payable | ||||||||
| Accrued compensation | ||||||||
| Other | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
6. DEBT
2022 Convertible notes (amended from notes payable) — related parties
On March 21, 2022, the Company issued a promissory
note in the amount of $
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 $
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
Offering”). An aggregate of $
15
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed Financial Statements
As of December 31, 2024, there was accrued interest
in connection to the 2022 Convertible Notes of $
There was accretion on the note’s debt discount
in connection to the 2022 Convertible Notes of $
2021 Convertible note — related party
On August 30, 2021, the Company issued a
convertible promissory note in the amount of $
On December 5, 2023, the Company amended
their convertible note to be convertible at $
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 $
Interest expenses were $
There was accretion on the note’s debt discount
in connection to the 2021 Convertible Notes of $
2024 Promissory Notes — Related Parties
On May 20, 2024, the Company issued a $
As of September 30, 2025 and December 31,
2024, there was accrued interest in connection with the 2024 Promissory Notes of $
16
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed Financial Statements
2025 Promissory Note — Related Parties
On March 21, 2025, the Company issued a $
As of September 30, 2025, there was accrued interest
in connection with the 2025 Promissory Note of $
7. ADVANCE PAYABLE — RELATED PARTY
As of September 30, 2025, and December 31, 2024
the Company had an outstanding balance of $
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.
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 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
On May 12, 2025, the Company consummated the IPO.
Immediately following the IPO on May 16, 2025, the Board approved the grant of
9. SHAREHOLDERS’ EQUITY
Common Stock
As of September 30, 2025 and December 31, 2024,
the Company had
17
Apimeds Pharmaceuticals US, Inc
Notes to the Unaudited Condensed Financial Statements
On May 12, 2025, the Company consummated the IPO
of
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 $
Immediately following the IPO on May 16, the board
of directors approved the grant of
Warrants
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
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”). 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 $
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
The warrant liability as of May 12, 2025 (IPO
date), was valued utilizing the Black-Scholes options pricing model with the following inputs: $
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. STOCK-BASED COMPENSATION
Stock Options
On September 18, 2024, the Company adopted the
2024 Equity Incentive Plan.
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 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: $
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, 2024 | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | - | |||||||||||
| Forfeited/Expired | - | |||||||||||
| Issued and outstanding, September 30, 2025 | $ | |||||||||||
| Exercisable at September 30, 2025 | $ | |||||||||||
For the three and nine months ended September
30, 2025 the Company had $
11. INCOME TAXES
The Company recorded 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.
12. 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
$
On October 15, 2025, the board of directors approved the grant of
19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Apimeds Pharmaceuticals US, Inc. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 15, 2025 (the “Annual Report”) and the “Risk Factors” section of this report. Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
Apimeds Pharmaceuticals US, Inc. is a clinical stage biopharmaceutical company that is in the process of developing Apitox, a proprietary intradermally administered bee venom-based toxin. Our primary focus is to advance Apitox in the treatment of inflammatory conditions in the United States, specifically osteoarthritis (“OA”) and, eventually, multiple sclerosis (“MS”).
Apitox, is currently marketed and sold by Apimeds, Inc. in South Korea (“Apimeds Korea”) as “Apitoxin” for the treatment of inflammation and pain management symptoms associated with OA. There is an extensive history of use of bee venom, both in the United States and around the world, to assist with pain management. We believe that, in addition to knee OA and MS, Apitox has the potential to help manage difficult to control pain and inflammation issues, which we will explore in the future.
20
Our Product Candidate
Our product candidate Apitox is a purified, pharmaceutical grade venom of the Apis mellifera, or honeybee, which is classified by the U.S Food and Drug Administration (“FDA”) as an active pharmaceutical ingredient. Apimeds Korea has developed a proprietary method and process of turning extracted bee venom into a lyophilized powder for reconstitution prior to intradermal dose injections, which they sell in South Korea as Apitoxin. Apimeds Korea has exclusively licensed to us all rights to develop, commercialize, market and sell Apitoxin as “Apitox” in the United States in exchange for a sales royalty.
The success of the Company is dependent on obtaining the necessary regulatory approvals of its product candidates, marketing its products and achieving profitable operations. The continuation of the research and development activities and the commercialization of its products, if approved, are dependent on the Company’s ability to successfully complete these activities and to obtain additional financing through a combination of financing activities and operations. It is not possible to predict either the outcome of future research and development or commercialization programs, or the Company’s ability to fund these programs.
Financial Results
Since inception, Apimeds has incurred significant operating losses. For the three and nine months ended September 30, 2025 and 2024, Apimeds Pharmaceuticals US, Inc. net loss was $1,781,255 and $4,845,845 and $332,521 and $1,078,357, respectively.
Liquidity
As of September 30, 2025, the Company had accumulated deficit amount to $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 proceeds to the Company of $11.9 million. Based on cash that is available for Company operations, together with the proceeds from the IPO, and projections of future Company operations, the Company believes that its cash will be sufficient to fund the Company’s current operating plan through at least the next twelve months from the date of issuance of the accompanying condensed financial statements.
Results of operations for the three months ended September 30, 2025 and 2024
Operating Expense
The following table sets forth the Company’s selected statements of operations data for the following periods:
| Three Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Operating expenses | ||||||||||||
| Research and development expenses | $ | 619,693 | $ | - | $ | 619,693 | ||||||
| General and administrative expenses | 1,224,546 | 299,999 | 924,547 | |||||||||
| Loss from operations | (1,844,239 | ) | (299,999 | ) | (1,544,240 | ) | ||||||
| Other expenses | ||||||||||||
| Interest income | 56,426 | 116 | 56,310 | |||||||||
| Change in fair value of warrant liability | (12,859 | ) | - | (12,859 | ) | |||||||
| Interest expense | (6,301 | ) | (32,638 | ) | 26,337 | |||||||
| Net loss | $ | (1,781,255 | ) | $ | (332,521 | ) | $ | (1,448,734 | ) | |||
21
Revenues
For the three months ended September 30, 2025 and 2024, the Company had no revenue.
Operating expenses
Research and development expense
The following table summarizes the year-over-year changes in research and development expenses for the three months ended September 30, 2025:
| Three Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Payroll expenses | $ | 8,871 | $ | - | $ | 8,871 | ||||||
| Clinical trials | 557,430 | - | 557,430 | |||||||||
| Compensation - stock and stock options | 13,629 | - | 13,629 | |||||||||
| Other | 39,763 | - | 39,763 | |||||||||
| $ | 619,693 | $ | - | $ | 619,693 | |||||||
Research and development expenses totaled $619,693 for the three months ended September 30, 2025, compared to no such expenses for the same period in 2024, reflecting an increase of $619,693. This increase was primarily driven by the availability of funding, which supported higher overall research and development spending. The increase was mainly attributable to stock-based compensation of approximately $14,000, clinical trial costs of approximately $557,000, and other research and development expenses totaling approximately $40,000.
General and administrative expenses
The following table summarizes the year-over-year changes in general and administrative expenses for the three months ended September 30, 2025:
| Three Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Payroll expenses | $ | 384,451 | $ | 91,000 | $ | 293,451 | ||||||
| Professional services | 549,590 | 202,995 | 346,595 | |||||||||
| Compensation - stock and stock options | 29,045 | - | 29,045 | |||||||||
| Insurance | 54,255 | - | 54,255 | |||||||||
| Office expenses | 106,131 | 3,818 | 102,313 | |||||||||
| Other general and administrative | 101,074 | 2,186 | 98,888 | |||||||||
| $ | 1,224,546 | $ | 299,999 | $ | 924,547 | |||||||
General and administrative expenses totaled $1,224,546 for the three months ended September 30, 2025, compared to $299,999 for the same period in 2024, representing an increase of $924,547. The increase was primarily driven by higher stock compensation costs and expanded operational activities. Specifically, the change included an increase in professional services of approximately $347,000, stock-based compensation of approximately $29,000, insurance expenses of approximately $54,000, office expenses of approximately $102,000, and other general and administrative costs of approximately $99,000.
22
Other Income (expense)
The following table summarizes the year-over-year changes in other income (expense) for the periods presented:
| Three Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Interest income | $ | 56,426 | $ | 116 | $ | 56,310 | ||||||
| Change in fair value of warrant liability | 12,859 | - | 12,859 | |||||||||
| Interest expense | (6,301 | ) | (32,638 | ) | 26,337 | |||||||
| $ | 62,984 | $ | (32,522 | ) | $ | 95,506 | ||||||
Other income was $62,984 for the three months ended September 30, 2025, compared to other expense of $32,522 for the same period in 2024, representing an increase in income of $95,506. The increase was mainly due to an increase in interest income of approximately $56,000 and a decrease in interest expense of approximately $26,000.
Net Loss
Net loss was $1,781,255 for the three months ended September 30, 2025, compared to net loss of $332,521 in the same period of 2024, representing an increased loss of $1,448,734. The increase was mainly due to the increase in both general and administrative expenses and research and development expenses due to higher payroll expenses, professional services and expanded operational and research and development activities.
Results of operations for the nine months ended September 30, 2025 and 2024
Operating Expense
The following table sets forth the Company’s selected statements of operations data for the following periods:
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Operating expenses | ||||||||||||
| Research and development expenses | $ | 1,271,477 | $ | - | $ | 1,271,477 | ||||||
| General and administrative expenses | 3,601,034 | 999,482 | 2,601,552 | |||||||||
| Loss from operations | (4,872,511 | ) | (999,482 | ) | (3,873,029 | ) | ||||||
| Other expenses | ||||||||||||
| Interest income | 71,676 | 2,794 | 68,882 | |||||||||
| Change in fair value of warrant liability | 22,377 | - | 22,377 | |||||||||
| Interest expense | (67,387 | ) | (81,669 | ) | 14,282 | |||||||
| Net loss | $ | (4,845,845 | ) | $ | (1,078,357 | ) | $ | (3,767,488 | ) | |||
Revenues
For the nine months ended September 30, 2025 and 2024, the Company had no revenue.
23
Operating expenses
Research and development expenses
The following table summarizes the year-over-year changes in research and development expenses for the nine months ended September 30, 2025:
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Payroll expenses | $ | 81,027 | $ | - | $ | 81,027 | ||||||
| Clinical trials | 674,967 | - | 674,967 | |||||||||
| Compensation - stock and stock options | 452,258 | - | 452,258 | |||||||||
| Other | 63,225 | - | 63,225 | |||||||||
| Total research and development expenses | $ | 1,271,477 | $ | - | $ | 1,271,477 | ||||||
Research and development expenses totaled $1,271,477 for the nine months ended September 30, 2025, compared to no such expenses for the same period in 2024, reflecting an increase of $1,271,477. This increase was primarily driven by the availability of funding, which supported higher overall research and development spending. The increase was mainly attributable to payroll expenses of approximately $81,000, stock-based compensation of approximately $452,000, clinical trial costs of approximately $675,000, and other research and development expenses totaling approximately $63,000.
General and administrative expenses
The following table summarizes the year-over-year changes in general and administrative expenses for the nine months ended September 30, 2025:
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Payroll expenses | 594,929 | 297,000 | 297,929 | |||||||||
| Professional services | 1,138,448 | 669,923 | 468,525 | |||||||||
| Compensation - stock and stock options | 1,482,469 | - | 1,482,469 | |||||||||
| Insurance | 85,510 | - | 85,510 | |||||||||
| Office expenses | 176,508 | 14,144 | 162,364 | |||||||||
| Other general and administrative | 123,170 | 18,415 | 104,755 | |||||||||
| Total general and administrative expenses | 3,601,034 | $ | 999,482 | $ | 2,601,552 | |||||||
General and administrative expenses totaled $3,601,034 for the nine months ended September 30, 2025, compared to $999,482 for the same period in 2024, representing an increase of $2,601,552. The increase was primarily driven by higher stock compensation costs and expanded operational activities. Specifically, the change included the increases in professional services of approximately $469,000, stock-based compensation of approximately $1,482,000, payroll expenses of approximately $298,000, insurance expenses of approximately $86,000 and office expenses of approximately $162,000.
24
Other Expense
The following table summarizes the year-over-year changes in other expenses for the periods presented:
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Interest income | $ | 71,676 | $ | 2,794 | $ | 68,882 | ||||||
| Change in fair value of warrant liability | 22,377 | - | 22,377 | |||||||||
| Interest expense | (67,387 | ) | (81,669 | ) | 14,282 | |||||||
| $ | 26,666 | $ | (78,875 | ) | $ | 105,541 | ||||||
Other income was $26,666 for the nine months ended September 30, 2025, compared to other expense of $78,875 for the same period in 2024, representing an increase in other income of $105,541. The increase was mainly due to an increase in interest income of approximately $69,000 corresponding with the decrease in interest expense of approximately $14,000 due to conversion of the notes, as well as gain as a result of the change in fair value of warrant liability for approximately $22,000.
Net Loss
Net loss was $4,845,845 for the nine months ended September 30, 2025, compared to net loss of $1,078,357 in the same period of 2024, representing an increase in loss of $3,767,488. The increase was mainly due to the increase in both general and administrative expenses and research and development expenses due to higher stock compensation costs and expanded operational and research and development activities.
Liquidity and Capital Resources
The Company has generated no revenue, has incurred operating losses since inception, expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. Until such time as the Company is able to establish a revenue stream, it is dependent upon obtaining necessary equity and/or debt financing to continue operations. The Company cannot make any assurances that sales will commence in the near term or that additional financing will be available to it on acceptable terms or at all. This could negatively impact our business and operations and could also lead to the reduction of our operations.
Cash Flows
The following table presents selected financial information and statistics for each of the periods shown below:
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Net cash used in operating activities | $ | (5,107,575 | ) | $ | (633,910 | ) | $ | (4,473,665 | ) | |||
| Net cash used in investing activities | (35,909 | ) | - | (35,909 | ) | |||||||
| Net cash provided by financing activities | 12,126,646 | 250,000 | 11,876,646 | |||||||||
| Net increase (decrease) in cash | $ | 6,983,162 | $ | (383,910 | ) | $ | 7,367,072 | |||||
During the nine months ended September 30, 2025, operating activities used approximately $5,108,000 of cash, primarily resulting from a net loss of $4,859,332, partially offset by non-cash stock-based compensation for stock and stock options grants in the approximate amount of $1,700,000 and $235,000, respectively, accretion expense of approximately $40,000, and changes in operating assets and liabilities of approximate decrease of $2,243,000, mainly due to increase in prepaid research costs and prepaid insurance and decrease in accounts payable and accrued expenses.
25
During the nine months ended September 30, 2025, operating activities used approximately $634,000 of cash, primarily resulting from a net loss of $1,078,357, partially offset by non-cash interest expense-related parties of approximately $27,000, accretion expense of approximately $55,000, and positive changes in operating assets and liabilities of approximately $363,000.
Investing activities
During the nine months ended September 30, 2025 and 2024 investing activities used approximately $36,000 and $0, respectively, resulting from acquired furniture and equipment.
Financing activities
During the nine months ended September 30, 2025, financing activities provided approximately $12,126,600 of cash. This was primarily attributable to net proceeds from the issuance of common stock in the IPO of $11,953,046, proceeds from notes payable from related parties of $250,000, and cash advances from related parties of $17,400, partially offset by cash advances paid to related parties in the amount of $93,800.
During the nine months ended September 30, 2024, financing activities provided $250,000 of cash, consisting entirely of proceeds from notes payable from related parties.
Contractual Obligations and Commitments
See Note 6 – Debt, and Note 8 – Commitments and Contingencies, of the notes to the Company’s financial statements as of and for the three months ended September 30, 2025 included elsewhere in this Quarterly Report for further discussion of the Company’s commitments and contingencies.
Off-Balance Sheet Arrangements
The Company is not party to any off-balance sheet transactions. The Company has no guarantees or obligations other than those which arise out of normal business operations.
Critical Accounting Policies and Significant Judgments and Estimates
The Company’s management’s discussion and analysis of its financial condition and results of operations is based on its financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed financial statements requires Apimeds Pharmaceuticals US, Inc. to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of expenses during the reporting period. In accordance with U.S. GAAP, Apimeds Pharmaceuticals US, Inc. evaluates its estimates and judgments on an ongoing basis. The most significant estimates relate to convertible instruments. Apimeds Pharmaceuticals US, Inc. bases its estimates and assumptions on current facts, historical experiences, and various other factors that Apimeds Pharmaceuticals US, Inc. believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company defines its critical accounting policies as those accounting principles that require it to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on its financial condition and results of operations, as well as the specific manner in which the Company applies those principles. While its significant accounting policies are more fully described in Note 2 to its financial statements, the Company believes the following are the critical accounting policies used in the preparation of its unaudited condensed financial statements that require significant estimates and judgments.
Convertible Instruments
The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.
The Company accounts for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we have elected not to provide the disclosure required by this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report in providing reasonable assurance of achieving the desired control objectives. This was due to deficiencies that existed in the design and operation of our internal controls over financial reporting, involving internal controls and procedures, that were considered to be material weaknesses, as described below.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our board of directors (the “Board”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
| (1) | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets |
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and |
| (3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on the financial statements. |
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Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
We have conducted an assessment of the effectiveness of our internal control over financial reporting as of the end of the period covered by this Quarterly Report, based on the framework established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework). This assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls. Based on that evaluation, as a result of the material weaknesses described below, management has concluded that our internal control over financial reporting was not effective as of the end of the period covered by this Quarterly Report.
A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects our ability to initiate, authorize, record, process, or report external financial data reliably in accordance with U.S. GAAP such that there is more than a remote likelihood that a material misstatement of our annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified material weaknesses in our internal control over financial reporting. Specifically, we do not have sufficiently documented procedures or control activities in place to support a reliable financial reporting process. This includes an absence of controls over the review and approval of journal entries, segregation of duties, reconciliations, and other fundamental accounting processes.
Based on our assessment under the criteria described above, we have concluded that our internal control over financial reporting was not effective as of the end of the period covered by this Quarterly Report.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. The Company continues to review its disclosure controls and procedures, including its internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that the Company’s systems evolve with its business.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently subject to any legal proceedings. However, we may from time to time become a party to various legal proceedings arising in the ordinary course of our business.
Item 1A. Risk Factors.
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Quarterly Report. However, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in the “Risk Factors” section of the Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)
Warrant Issued to Murdock Capital Partners Corp.
On August 5, 2025 (the “Issuance Date”), the Company issued to Murdock Capital Partners Corp. (“Murdock”) a warrant to purchase 202,500 shares of the Company’s common stock, at an exercise price of $4.00 per share, subject to adjustment pursuant to the terms of the warrant (the “Murdock Warrant”). The Murdock Warrant was issued pursuant to the terms of that certain business development agreement, dated November 9, 2023, by and between the Company and Murdock. The Murdock Warrant is exercisable at any time during the period beginning on the Issuance Date and ending on the fifth anniversary of the Issuance Date (such period, the “Exercise Period”). In the event that the Murdock Warrant is not exercised on or prior to the last day of the Exercise Period, the Murdock Warrant shall be deemed exercised (even if the Murdock Warrant is not surrendered) pursuant to a Cashless Exercise (as defined in the Murdock Warrant) immediately prior to the expiration of the Exercise Period. The Murdock Warrant was issued in reliance on the exemption from registration requirements provided by Section 4(a)(2) of the Securities Act.
(b) Not applicable.
(c) None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
(a) None.
(b) None.
(c) During the quarter ended September 30, 2025,
no director or officer of the Company
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| * | Filed or furnished with this Quarterly Report. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| APIMEDS PHARMACEUTICALS US, INC. | ||
| Date: November 12, 2025 | By: | /s/ Erick Frim |
| Name: | Erick Frim | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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