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</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>UNITED STATES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SECURITIES AND EXCHANGE COMMISSION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>WASHINGTON, D.C. 20549</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>FORM <ix:nonNumeric contextRef="c0" name="dei:DocumentType">20-F</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentRegistrationStatement">&#9744;</ix:nonNumeric> <b>REGISTRATION STATEMENT PURSUANT TO SECTION
12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:DocumentAnnualReport">&#9746;</ix:nonNumeric> <b>ANNUAL REPORT PURSUANT TO SECTION 13
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For the fiscal year ended <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:DocumentPeriodEndDate"><ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-en" name="dei:CurrentFiscalYearEndDate">December 31</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:DocumentFiscalYearFocus">2022</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentTransitionReport">&#9744;</ix:nonNumeric> <b>TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>OR</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentShellCompanyReport">&#9744;</ix:nonNumeric> <b>SHELL COMPANY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of event requiring this shell company report</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For the transition period from __________ to
__________</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Commission file number: <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-38764</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><span style="-sec-ix-hidden: hidden-fact-0">APTORUM GROUP LIMITED</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Exact Name of Registrant as Specified in its
Charter)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>N/A</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Translation of Registrant&#8217;s Name into
English)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:edgarprovcountryen" name="dei:EntityIncorporationStateCountryCode"><b>Cayman Islands</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Jurisdiction of Incorporation or Organization)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName">Darren Lui</ix:nonNumeric>, Chief Executive Officer</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Aptorum Group Limited</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1">17 Hanover Square</ix:nonNumeric></ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">London</ix:nonNumeric></ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:EntityAddressPostalZipCode"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressPostalZipCode">W1S 1BN</ix:nonNumeric></ix:nonNumeric>, <ix:nonNumeric contextRef="c1" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry"><ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry">United Kingdom</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Tel: <ix:nonNumeric contextRef="c1" name="dei:CityAreaCode">+44</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:LocalPhoneNumber">20 8092 9299</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Fax: +44 20 3928 8277</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Address of principal executive offices and
Name, Telephone, E-mail and/or Facsimile number and<br/>
Address of Company Contact Person)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Securities registered or to be registered pursuant
to Section 12(b) of the Act:</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; width: 32%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Title of Each Class</b></span></td> <td style="width: 2%; text-align: center">&#160;</td> <td style="border-bottom: black 1.5pt solid; width: 32%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Trading Symbol</b></span></td> <td style="width: 2%; text-align: center">&#160;</td> <td style="border-bottom: black 1.5pt solid; width: 32%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name of Each Exchange on Which Registered</b></span></td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Class A Ordinary shares, par value $0.00001</b></span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:TradingSymbol"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>APM</b></span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><ix:nonNumeric contextRef="c0" name="dei:SecurityExchangeName">NASDAQ</ix:nonNumeric> Global Market</b></span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Securities registered or to be registered pursuant
to Section 12(g) of the Act:</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>None</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>(Title of Class)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>None</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>(Title of Class)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate the number of outstanding shares of each
of the issuer&#8217;s classes of capital or common stock as of the close of the period covered by the annual report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Class A Ordinary Shares: <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">1,326,953</ix:nonFraction> (retroactively
reflecting the ten-for-one reverse stock split that was effectuated on January 23, 2023)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Class B Ordinary Shares: <ix:nonFraction contextRef="c3" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">2,243,776</ix:nonFraction> (retroactively
reflecting the ten-for-one reverse stock split that was effectuated on January 23, 2023)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes &#9744;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric> &#9746;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes &#9744;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric> &#9746;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. <ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric> &#9746;&#160;&#160;No &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). &#160;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric> &#9746;&#160;&#160;No
&#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of &#8220;large
accelerated filer,&#8221; accelerated filer,&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="white-space: nowrap; width: 18%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer </span></td> <td style="white-space: nowrap; width: 16%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="white-space: nowrap; width: 15%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated filer</span></td> <td style="white-space: nowrap; width: 16%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="white-space: nowrap; width: 25%"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated filer</span></ix:nonNumeric></td> <td style="white-space: nowrap; width: 10%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></td></tr> <tr style="vertical-align: top"> <td style="white-space: nowrap">&#160;</td> <td style="white-space: nowrap">&#160;</td> <td style="white-space: nowrap">&#160;</td> <td style="white-space: nowrap">&#160;</td> <td style="white-space: nowrap"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company </span></td> <td style="white-space: nowrap"><ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</span></ix:nonNumeric></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards<sup>+ </sup>provided pursuant to Section 13(a) of the Exchange
Act. <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><sup>+</sup></td><td style="text-align: justify">The term &#8220;new or revised financial accounting standard&#8221;
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has filed a report on and attestation to its management&#8217;s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:IcfrAuditorAttestationFlag">&#9744;</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If the securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant&#8217;s
executive officers during the relevant recovery period pursuant to &#167;240.10D-1(b). &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 20%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c0" name="dei:DocumentAccountingStandard">U.S. GAAP</ix:nonNumeric> &#9746;&#160;</span></td> <td style="width: 60%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">International Financial Reporting Standards as issued by the International Accounting Standards Board &#9744;</span></td> <td style="width: 20%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other &#9744;</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
&#8220;Other&#8221; has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. Item 17 &#168; Item 18 &#168;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). &#160;&#160;&#160;&#160;&#160;&#160;Yes &#9744;&#160;&#160;No <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany">&#9746;</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 2 --><div>
    </div><div style="margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt"><table cellpadding="0" cellspacing="0" style="width: 100%"><tr><td style="text-align: center; width: 100%">&#160;</td></tr></table></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>TABLE OF CONTENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="background-color: #CCEEFF">
    <td colspan="2" style="vertical-align: top"><a href="#a_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INTRODUCTION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii</span></td></tr>
  <tr>
    <td style="vertical-align: top; width: 10%">&#160;</td>
    <td style="vertical-align: top; text-align: justify; width: 80%">&#160;</td>
    <td style="vertical-align: bottom; text-align: center; width: 10%">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><a href="#a_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART I</span></a></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 1.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 2.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OFFER STATISTICS AND EXPECTED TIMETABLE</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 3.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">KEY INFORMATION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 4.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">INFORMATION ON THE COMPANY</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">58</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 4A.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">UNRESOLVED STAFF COMMENTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">103</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 5.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">OPERATING AND FINANCIAL REVIEW AND PROSPECTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">103</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 6.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">118</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 7.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">131</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 8.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL INFORMATION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">134</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 9.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE OFFER AND LISTING</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 10.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ADDITIONAL INFORMATION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">135</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 11.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">142</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 12.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">142</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr>
    <td style="vertical-align: top"><a href="#a_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART II</span></a></td>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">143</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 13.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_017"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">143</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 14.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">143</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 15.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CONTROLS AND PROCEDURES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">143</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_020"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">[RESERVED]</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">144</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16A.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_021"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AUDIT COMMITTEE FINANCIAL EXPERT</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">144</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16B.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_022"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CODE OF ETHICS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16C.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_023"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRINCIPAL ACCOUNTANT FEES AND SERVICES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16D.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16E.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16F.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16G.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_027"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CORPORATE GOVERNANCE</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16H.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_028"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MINE SAFETY DISCLOSURE</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16I.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_029"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">145</span></td></tr>
  <tr>
    <td style="vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><a href="#a_030"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART III</span></a></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">146</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 17.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_031"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL STATEMENTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">146</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 18.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_032"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FINANCIAL STATEMENTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">146</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 19.</span></td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_033"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">EXHIBITS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">146</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><div><a id="a_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>INTRODUCTION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless the context otherwise
requires, in this annual report on Form 20-F references to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;505(b)(2) Application&#8221; refers to an application for which one or more of the investigations relied upon by the applicant for approval &#8220;were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted&#8221; (21 U.S.C. 355(b)(2)).</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;A*STAR&#8221; refers to Agency for Science, Technology and Research.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Discrepancies in any table
between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This annual report on Form
20-F includes our audited consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations
and comprehensive (loss) income, equity and cash flows for the years ended December 31, 2022, 2021 and 2020.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our operations and equity
are funded in U.S. dollars and we currently incur the majority of our expenses in U.S. dollars or in H.K. dollars. H.K. dollar is currently
pegged to the U.S. dollar; however, we cannot guarantee that such peg will continue to be in place in the future. Our exposure to foreign
exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity and
limited revenue contracts dominated in H.K. dollars in certain PRC operating entities. We do not believe that we currently have any significant
direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial instruments.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 6; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->iv<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><div><a id="a_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Part I</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
AND ADVISERS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Item 3. KEY INFORMATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">All share and per share amounts have been retroactively adjusted to&#160;reflect&#160;the&#160;reverse&#160;stock&#160;split
that occurred on January 23, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A. [Reserved]</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">B. <span style="text-decoration:underline">Capitalization and Indebtedness</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">C. <span style="text-decoration:underline">Reasons for the Offer and Use of Proceeds</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">D. <span style="text-decoration:underline">Risk Factors</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Our business faces significant
risks. You should carefully consider all of the information set forth in this annual report on Form 20-F and in our other filings with
the United States Securities and Exchange Commission, or the SEC, including the following risk factors which we face and which are faced
by our industry. Our business, financial condition, results of operations and growth prospects could be materially adversely affected
by any of these risks. This report also contains forward-looking statements that involve risks and uncertainties. Our results could materially
differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below
and elsewhere in this annual report and our other SEC filings. See &#8220;Special Note Regarding Forward-Looking Statements&#8221; below.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Summary Risk Factors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following summarizes some,
but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 3.D. &#8220;Risk Factors&#8221;
in this annual report for a more thorough description of these and other risks.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 7; Options: NewSection; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify"><b>Risks Related to Doing Business in
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify">&#160;</p><div>

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  <tr style="vertical-align: top">
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    <td>&#160;</td>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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    <td>&#160;</td>
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  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to the Preclinical and Clinical
Development of Our Drug Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Obtaining Regulatory Approval
for Our Drug Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 8; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Commercialization of Our Drug
Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our IP</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to being unaware of others&#8217; pending patent applications </span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to unable to protect and enforce our IP rights throughout the world</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to lawsuits for protecting our IP or against infringing IP rights of other parties</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to non-compliance with patent protection requirements or obligations in the license agreements</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to the terms and scope of our patents not sufficient to protect our candidates</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Reliance on Unrelated
Parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to AML Clinic, Natural Supplements
and Diagnostic Technology</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Industry, Business and
Operation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to difficulties in managing our growth</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to our disclosure controls and procedures and internal financial reporting controls</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to do business internationally</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks relating to product liability lawsuits arise from clinical trials</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Corporate Structure</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to our Securities</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 9; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to the Preclinical and Clinical
Development of Our Drug Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We currently do not generate revenue from
product sales and may never become profitable; unless we can raise more capital through additional financings, of which there can be no
guarantee, our principal source of revenue will be from AML Clinic, which may not be substantial.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ability to generate revenue
and become profitable depends upon our ability to successfully complete the development of, and obtain the necessary regulatory approvals
for, the drug candidates in our Lead Projects and any future drug candidates we may develop, as we do not currently have any drugs that
are available for commercial sale. We expect to continue to incur losses before commercialization of our drug candidates and any future
drug candidates. None of our drug candidates has been approved for marketing in the U.S., Europe, the PRC or any other jurisdictions and
may never receive such approval. Our ability to generate revenue and achieve profitability is dependent on our ability to complete the
development of our drug candidates and any future drug candidates we develop in our portfolio, obtain necessary regulatory approvals,
and have our drugs products under development manufactured and successfully marketed, of which there can be no guarantee. Although AML
Clinic commenced operations in June 2018 and we have received some revenue from such operations, even at full capacity, AML Clinic may
not bring enough revenue to support our operation and R&amp;D. Thus, we may not be able to generate a profit until our drug candidates
become profitable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even if we receive regulatory
approval and marketing authorization for one or more of our drug candidates or one or more of any future drug candidates for commercial
sale, a potential product may not generate revenue at all unless we are successful in:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In addition, our ability to
achieve and maintain profitability depends on timing and the amount of expenses we will incur. Our expenses could increase materially
if we are required by the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities to perform studies in addition to those
that we currently have anticipated. Even if our drug candidates are approved for commercial sale, we anticipate incurring significant
costs associated with the commercial launch of these products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our ability to become and remain
profitable depends on our ability to generate revenue. Even if we are able to generate revenues from AML Clinic or the sale or sublicense
of any products we may develop or license, we may not become profitable on a sustainable basis or at all. Our failure to become and remain
profitable would decrease the value of our Company and adversely affect the market price of our Class A Ordinary Shares, which could impair
our ability to raise capital, expand our business or continue our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>AML Clinic&#8217;s operations and the initial
commercialization of our NativusWell<sup>&#174;</sup> (NLS-2) natural supplements may be our principal source of revenue for the foreseeable
future and most likely, without additional financing, such revenue will not be sufficient for us to carry out all of our plans.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As stated above, we have not
generated any revenue and do not foresee generating any revenue from our drug candidates in the near future. Effective as of March 2018,
we leased the property in Central, Hong Kong that is the home to AML Clinic, which commenced operations in June 2018. We have also launched
NativusWell<sup>&#174;</sup> (NLS-2) in Hong Kong through HKTV Mall, a leading online shopping mall in Hong Kong, in September 2022, and
in China through one of the largest e-commerce platform in China, JD.com, in March 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Until our therapeutic candidates
produce revenue, our principal source of revenue is from AML Clinic, but it is not sufficient by itself to fund our other operations;
even if we receive revenue from NativusWell<sup>&#174;</sup> (NLS-2) natural supplements, it will not provide sufficient revenue. We believe
that available cash, together with the efforts from management plans and actions described elsewhere in this report, should enable the
Company to meet presently anticipated cash needs for at least the next 12 months after the date that the financial statements are issued
and the Company has prepared the consolidated financial statements on a going concern basis. However, the Company continues to have ongoing
obligations and it expects that it will require additional capital in order to execute its longer-term development plan. If the Company
encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures
to conserve liquidity, which could include, but not necessarily be limited to, deferring some of its research and seeking to dispose of
marketable securities. Management cannot provide any assurance that the Company will raise additional capital if needed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Because we rely upon third parties to perform
the payment processing for our sales of on the e-commerce platforms, the failure or inability of the third party to provide these services
could impair our business and operation.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The third party payment service
providers such as UnionPay, Alipay and WeChat Pay are used by most e-commerce platforms in China for their convenience, reliability and
cost-effectiveness. However, the payment processing business is highly regulated, and it is subject to a number of risks that could materially
and adversely affect their abilities to provide payment processing services to us, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">increased
regulatory focus and the requirement that it comply with numerous complex and evolving laws, rules and regulations;</span></td>
</tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">increases in the costs to the third party, including
fees charged by banks to process funds through the third parties, which could result in increased costs to us and to our participants;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">dissatisfaction with the third parties&#8217;
services;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">a decline in the use of the third parties&#8217;
services generally which could result in increases in costs to users such as us and our participants;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the ability of the third parties to maintain
adequate security procedures to prevent the hacking or other unauthorized access to account and other information provided by us and the
participants who use the system;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">system failures or failure to effectively scale
the system to handle large and growing transaction volumes;</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the failure or inability of the third parties
to manage funds accurately or the loss of funds by the third parties, whether due to employee fraud, security breaches, technical errors
or otherwise; and</span></td></tr></table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top">
<td style="width: 0.5in"></td><td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the failure or inability of these third parties
to adequately manage business and regulatory risks.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely on the convenience
and ease of use that third party&#8217;s payment methods for our sales of NativusWell<sup>&#174;</sup> (NLS-2) on the e-commerce platforms.
If the quality, utility, convenience or attractiveness of these payment services declines for any reason, the attractiveness of our product
could be materially impaired. If we need to migrate to other third-party payment services for any reason, the transition could require
considerable time and management resources, and the third-party payment services may not be as effective, efficient or well-received by
our clients. Further, our customers may be reluctant to use a different payment system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Preclinical development is a long, expensive
and uncertain process, and we may terminate one or more of our current preclinical development programs.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Traditionally, drug discovery
and development is a time-consuming, costly and high-risk business. On average, the cost of launching a new drug is estimated to approach
US$2.6 billion and can take around 12 years to make it to the market (4 key benefits of drug repositioning. (n.d.). Retrieved from http://www.totalbiopharma.com/2012/07/04/4-key-benefits-drug-repositioning/).
Despite the huge expenditures, only approximately 1 in 1,000 potential drugs is graduated to human clinical trials after pre-clinical
testing in the United States, (Norman, G. A. Drugs, Devices, and the FDA: Part 1. JACC: Basic to Translational Science, 1(3), 170-179,
2016) and nearly 86.2% of drug candidates entering phase 1 trials fails to achieve drug approval. (Wong C. H., Siah K. W. &amp; Lo A.
W. (2019, April), &#8220;Estimation of clinical trial success rates and related parameters,&#8221; retrieved from https://academic.oup.com/biostatistics/article/20/2/273/4817524).
Even after a drug is commercialized, there are just too many factors affecting the sales of pharmaceutical products, including unmet need/burden
of disease (68.2%), clinical efficacy (47.3%), comparator choice (36.4%), safety profile (36.4%), and price (35.5%) (Sendyona, S., Odeyemi,
I., &amp; Maman, K. &#8220;Perceptions and factors affecting pharmaceutical market access: Results from a literature review and survey
of stakeholders in different settings&#8221; Journal of Market Access &amp; Health Policy, 4(1), 31660, 2016). In the end, on average,
only 20% of approved new drugs generate revenues that exceed the average R&amp;D investment. (Rosenblatt, M. (2014, December 19) &#8220;The
Real Cost of &#8220;High-Priced&#8221; Drugs,&#8221; retrieved from https://hbr.org/2014/11/the-real-cost-of-high-priced-drugs). We may
determine that certain preclinical product candidates or programs do not have sufficient potential to warrant the allocation of resources
toward them. Accordingly, we may elect to terminate our programs for and, in certain cases, our licenses to, such product candidates or
programs. If we terminate a preclinical program in which we have invested significant resources, we will have expended resources on a
program that will not provide a full return on our investment and missed the opportunity to have allocated those resources to potentially
more productive uses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Management has discretion to terminate the
development of any of our projects at any time.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In light of the costs, both
in time and expense, as well as the preclinical results and general business considerations, management may decide not to continue developing
a particular preclinical program without announcement. Management will always base its decision on what it believes to be the most efficient
use of the Company&#8217;s resources to provide the most value to its shareholders. As a result, investors may not always be aware of
the termination of a previously announced study or trial. The Company will continue to provide update on its active preclinical projects
in its SEC filings and/or press releases, as appropriate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be successful in our efforts
to identify or discover additional drug candidates. Due to our limited resources and access to capital, we must continue to prioritize
development of certain drug candidates; such decisions may prove to be wrong and may adversely affect our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we intend to explore
other therapeutic opportunities in addition to the drug candidates that we are currently developing, we may fail to identify other drug
candidates for a number of reasons. For example, our research methodology may be unsuccessful in identifying potential drug candidates
or those we identify may be shown to have harmful side effects or other undesirable characteristics that make them unmarketable or unlikely
to receive regulatory approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Research programs to pursue
the development of our drug candidates for additional indications and to identify new drug candidates and disease targets require substantial
technical, financial and human resources whether or not we ultimately are successful. Our research programs may initially show promise
in identifying potential indications and/or drug candidates, yet fail to yield results for clinical development for a number of reasons,
including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 12; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because we have limited financial
and managerial resources, we have chosen to focus at present on our three Lead Projects, which may ultimately prove to be unsuccessful.
As a result of this focus, we may forego or delay pursuit of opportunities with other drug candidates, or for other indications that later
prove to have greater commercial potential or a greater likelihood of success. Even if we determine to pursue alternative therapeutic
or diagnostic drug candidates, these other drug candidates or other potential programs may ultimately prove to be unsuccessful. In short,
our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accordingly, there can be
no assurance that we will ever be able to develop suitable potential drug candidates through internal research programs. This could materially
adversely affect our future growth and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we encounter difficulties enrolling patients
in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we obtained CTA/FDA
approval to initiate clinical trials for our Lead Projects, there can be no assurance, timely completion of clinical trials in accordance
with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who meet the trial criteria
and remain in the trial until its conclusion. We may experience difficulties enrolling and retaining appropriate patients in our clinical
trials for a variety of reasons, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even if we are able to enroll
a sufficient number of patients in our clinical trials, delays in patient enrollment may result in increased costs or may affect the timing
or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance
the development of our drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 13; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Clinical drug development involves a lengthy
and expensive process and could fail at any stage of the process. We have limited experience in conducting clinical trials and results
of earlier studies and trials may not be reproduced in future clinical trials.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For our drug candidates, clinical
testing is expensive and can take many years to complete, while failure can occur at any time during the clinical trial process. The results
of studies in animals and early clinical trials of our drug candidates may not predict the results of later-stage clinical trials. Drug
candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through
studies in animals and initial clinical trials. In some instances, there can be significant variability in safety and/or efficacy results
between different trials of the same drug candidate due to numerous factors, including changes in trial procedures set forth in protocols,
differences in the size and type of the patient populations (including genetic differences), patient adherence to the dosing regimen and
the patient dropout rate. Results in later trials may also differ from earlier trials due to a larger number of clinical trial sites and
additional countries and languages involved in such trials. In addition, the design of a clinical trial can determine whether its results
will support approval of a drug candidate, and flaws in the design of a clinical trial may not become apparent until the clinical trial
is well advanced and significant expense has been incurred.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A number of companies in the
pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of demonstrated
efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Clinical trials of potential products often
reveal that it is not practical or feasible to continue development efforts. Furthermore, if the trials we conduct fail to meet their
primary statistical and clinical endpoints, they will not support the approval from the FDA, NMPA, EMA, Health Canada or other comparable
regulatory authorities for our drug candidates. If this occurs, we would need to replace the failed study with new trials, which would
require significant additional expense, cause substantial delays in commercialization and materially adversely affect our business, financial
condition, cash flows and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If clinical trials of our drug candidates
fail to demonstrate safety and efficacy to the satisfaction of the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities,
or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable
to complete, the development and commercialization of our drug candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Before applying for and obtaining
regulatory approval for the sale of any of our drug candidates, we must conduct extensive clinical trials to demonstrate the safety and
efficacy of our drug candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete
and may fail. A failure of one or more of our clinical trials can occur at any stage of testing and successful interim results of a clinical
trial do not necessarily predict successful final results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We and our CROs are required
to comply with current Good Clinical Practices (&#8220;cGCP&#8221;) requirements, which are regulations and guidelines enforced by the
FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities for all drugs in clinical development. Regulatory authorities
enforce these cGCP through periodic inspections of trial sponsors, principal investigators and trial sites. Compliance with cGCP can be
costly and if we or any of our CROs fail to comply with applicable cGCP, the clinical data generated in our clinical trials may be deemed
unreliable and the FDA, NMPA, EMA, Health Canada or comparable regulatory authorities may require us to perform additional clinical trials
before approving our marketing applications.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may experience numerous
unexpected events during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or
commercialize our drug candidates, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are required to conduct
additional clinical trials or other testing of our drug candidates beyond those that we currently contemplate, if we are unable to successfully
complete clinical trials of our drug candidates or other testing, if the results of these trials or tests are not positive or are only
modestly positive or if they raise safety concerns, we may:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">be subject to restrictions on how a drug is distributed or used; or</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Delays in testing or approvals
may result in increases in our drug development costs. We do not know whether any clinical trials will begin as planned, will need to
be restructured, or will be completed on schedule, or at all. Clinical trials may produce negative or inconclusive results. Moreover,
these trials may be delayed or proceed less quickly than intended. Delays in completing our clinical trials will increase our costs, slow
down our drug candidate development and approval process, and jeopardize our ability to commence product sales and generate revenues and
we may not have sufficient funding to complete the testing and approval process. Any of these events may significantly harm our business,
financial condition and prospects, lead to the denial of regulatory approval of our drug candidates or allow our competitors to bring
drugs to market before we do, impairing our ability to commercialize our drugs if and when approved.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Significant clinical trial
delays also could shorten any periods during which we have the exclusive right to commercialize our drug candidates or allow our competitors
to bring products to market before we do, impair our ability to commercialize our drug candidates and may harm our business and results
of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may in the future conduct clinical trials
for our drug candidates in sites outside the U.S. and the FDA may not accept data from trials conducted in such locations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may in the future conduct
certain of our clinical trials outside the U.S. Although the FDA may accept data from clinical trials conducted outside the U.S. for our
New Drug Application (&#8220;NDA&#8221;), acceptance of this data is subject to certain conditions imposed by the FDA. There can be no
assurance the FDA will accept data from any of the clinical trials we conduct outside the U.S. If the FDA does not accept the data from
any of our clinical trials conducted outside the U.S., it would likely result in the need for additional clinical trials in the U.S.,
which would be costly and time-consuming and could delay or prevent the commercialization of any of our drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Obtaining Regulatory Approval
for Our Drug Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The regulatory approval processes of the
FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities are lengthy, time-consuming and inherently unpredictable, and
if we are ultimately unable to obtain regulatory approval for our current drug candidates or any future drug candidates we may develop,
our business will be substantially harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot commercialize drug
candidates without first obtaining regulatory approval to market each drug from the FDA, NMPA, EMA, Health Canada or comparable regulatory
authorities. Before obtaining regulatory approvals for the commercial sale of any drug candidate for a target indication, we must demonstrate
in studies in animals and well-controlled clinical trials, and, with respect to approval in the United States and other regulatory agencies,
to the satisfaction of the FDA, NMPA, EMA, Health Canada or comparable regulatory authorities, that the drug candidate is safe and effective
for use for that target indication and that the manufacturing facilities, processes and controls are adequate.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The time required to obtain
approval from the FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities is unpredictable but typically takes many
years following the commencement of studies in animals and clinical trials and depends upon numerous factors, including the substantial
discretion of the regulatory authorities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, approval policies,
regulations or the type and amount of clinical data necessary to gain approval can differ among regulatory authorities and may change
during the course of the development of a drug candidate. We have not obtained regulatory approval for any drug candidate. It is possible
that neither our existing drug candidates nor any drug candidates we may discover or acquire for development in the future will ever obtain
regulatory approval. Even if we obtain regulatory approval in one jurisdiction, we may not obtain it in other jurisdictions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our drug candidates could
fail to receive regulatory approval from any of the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities for many
reasons, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">disagreement with regulators regarding the design or implementation of our clinical trials;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure of clinical trial results to meet the level of statistical significance required for approval;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure to demonstrate that a drug candidate&#8217;s clinical and other benefits outweigh its safety risks;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">disagreement with regulators regarding our interpretation of data from studies in animals or clinical trials;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insufficiency of data collected from clinical trials of our drug candidates to support the submission and filing of a New Drug Application (&#8220;NDA&#8221;), or other submission or to obtain marketing approval;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the FDA, NMPA, EMA, Health Canada or a comparable regulatory authority&#8217;s finding of deficiencies related to the manufacturing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes in approval policies or regulations that render our preclinical studies and clinical data insufficient for approval.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 16; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any of the FDA, NMPA, EMA,
Health Canada or other comparable regulatory authorities may require more information, including additional preclinical studies or clinical
data, to support approval, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development
program. If we were to obtain approval, regulatory authorities may approve any of our drug candidates for fewer or more limited indications
than we request. Regulatory authorities also may grant approval contingent on the performance of costly post-marketing clinical trials,
or may approve a drug candidate with a label that is not desirable for the successful commercialization of that drug candidate. In addition,
if our drug candidate produces undesirable side effects or involves other safety issues, the FDA may require the establishment of a Risk
Evaluation Mitigation Strategy (&#8220;REMS&#8221;), or NMPA, EMA, Health Canada or other comparable regulatory authorities may require
the establishment of a similar strategy. Such a strategy may, for instance, restrict distribution of our drug candidates, require patient
or physician education, or impose other burdensome implementation requirements on us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Regulatory approval may be substantially
delayed or may not be obtained for one or all of our drug candidates if regulatory authorities require additional time or studies to assess
the safety or efficacy of our drug candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently do not have any
drug candidates that have gained approval for sale by the FDA, NMPA or EMA, Health Canada or other regulatory authorities in any other
country, and we cannot guarantee that we will ever have marketable drugs. Despite SACT-1 having been granted orphan drug status, this
is not an approval for sale by the FDA. Our business is substantially dependent on our ability to complete the development of, obtain
marketing approval for and successfully commercialize drug candidates in a timely manner. We cannot commercialize drug candidates without
first obtaining marketing approval from the FDA, NMPA, EMA, Health Canada and comparable regulatory authorities. In the U.S., we hope
to file INDs for the drug candidates from our Lead Projects and, subject to the approval of IND, Phase 1 clinical trials in humans. Even
if we are permitted to commence such clinical trials, they may not be successful and regulators may not agree with our conclusions regarding
the data generated by our clinical trials.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may be unable to complete
development of our drug candidates or initiate or complete development of any future drug candidates we may develop on our projected schedule.
While we believe that our existing cash will likely enable us to complete the preclinical development of at least one of our current Lead
Projects, the full clinical development, manufacturing and launch of that drug candidate, will take significant additional time and likely
require funding beyond the existing cash. In addition, if regulatory authorities require additional time or studies to assess the safety
or efficacy of our drug candidates, we may not have or be able to obtain adequate funding to complete the necessary steps for approval
for our drug candidates or any future drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Preclinical studies in animals
and clinical trials in humans to demonstrate the safety and efficacy of our drug candidates are time-consuming, expensive and take several
years or more to complete. Delays in preclinical or clinical trials, regulatory approvals or rejections of applications for regulatory
approval in the U.S., Europe, the PRC or other markets may result from many factors, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
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</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>
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</div><!-- Field: Page; Sequence: 17; Value: 1 --><div>
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</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Changes in regulatory requirements
and guidance may also occur, and we may need to amend clinical trial protocols submitted to applicable regulatory authorities to reflect
these changes. Amendments may require us to resubmit clinical trial protocols to IRBs or ethics committees for re-examination, which may
increase the costs or time required to complete a clinical trial.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we experience delays in
the completion of, or the termination of, a clinical trial, of any of our drug candidates, the commercial prospects of our drug candidates
will be harmed, and our ability to generate product sales revenues from any of those drug candidates will be delayed. In addition, any
delay in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process, and jeopardize
our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects
significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may
also ultimately lead to the denial of regulatory approval of our drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are required to conduct
additional clinical trials or other studies with respect to any of our drug candidates beyond those that we initially contemplated, if
we are unable to successfully complete our clinical trials or other studies or if the results of these studies are not positive or are
only modestly positive, we may be delayed in obtaining regulatory approval for that drug candidate, we may not be able to obtain regulatory
approval at all or we may obtain approval for indications that are not as broad as intended. Our product development costs will also increase
if we experience delays in testing or approvals, and we may not have sufficient funding to complete the testing and approval process.
Significant clinical trial delays could allow our competitors to bring their products to market before we do and impair our ability to
commercialize our drugs, if and when approved. If any of this occurs, our business will be materially harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our drug candidates may cause undesirable
adverse events or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved
label, or result in significant negative consequences following any regulatory approval.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Undesirable adverse events
caused by our drug candidates or any future drug candidates we may develop could cause us or regulatory authorities to interrupt, delay
or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, NMPA, EMA,
Health Canada or other comparable regulatory authorities. Results of our potential clinical trials could reveal a high and unacceptable
severity or prevalence of adverse effects. In such event, our trials could be suspended or terminated and the FDA, NMPA, EMA, Health Canada
or other comparable regulatory authorities could order us to cease further development of, or deny approval of, our drug candidates for
any or all target indications. Drug-related adverse events could also affect patient recruitment or the ability of enrolled subjects to
complete the trial, could result in potential product liability claims and may harm our reputation, business, financial condition and
business prospects significantly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 18; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, if any of our
current or future drug candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such
drugs, a number of potentially significant negative consequences could result, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">adding warnings on the label;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any of these events could
prevent us from achieving or maintaining market acceptance of the particular drug candidate, if approved, and could significantly harm
our business, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Even if we receive regulatory approval for
our drug candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant
additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems
with our drug candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our drug candidates or
any future drug candidates we develop are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling,
packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy,
and other post-market information, including both federal and state requirements in the United States and requirements of comparable regulatory
authorities outside of the United States.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Manufacturers and manufacturers&#8217;
facilities are required to comply with extensive requirements from the FDA, NMPA, EMA, Health Canada and comparable regulatory authorities,
including, in the United States, ensuring that quality control and manufacturing procedures conform to cGMP regulations. As such, our
contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments
made in any NDA, other marketing application, and previous responses to inspection observations. Accordingly, we and others with whom
we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and
quality control.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any regulatory approvals that
we receive for our drug candidates may be subject to limitations on the approved indicated uses for which the drug may be marketed or
to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials
and surveillance to monitor the safety and efficacy of the drug candidate. The regulatory authorities may also require risk management
plans or programs as a condition of approval of our drug candidates (such as REMS of the FDA and risk-management plan of the EMA), which
could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to
ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA,
NMPA, EMA, Health Canada or a comparable regulatory authority approves our drug candidates, we will have to comply with requirements including,
for example, submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with
cGCP and cGMP, for any clinical trials that we conduct post-approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 19; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The FDA may impose consent
decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the
drug reaches the market. Later discovery of previously unknown problems with our drug candidates, including adverse events of unanticipated
severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements,
may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies
to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences
include, among other things:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">restrictions on the marketing or manufacturing of our drug candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">fines, untitled or warning letters, or holds on clinical trials;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">product seizure or detention, or refusal to permit the import or export of our drug candidates; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The FDA strictly regulates
marketing, labeling, advertising and promotion of products that are placed on the market. Companies may promote drugs only for the approved
indications and in accordance with the provisions of the approved label and may not promote drugs for any off-label use, such as uses
that are not described in the product&#8217;s labeling and that differ from those approved by the regulatory authorities. However, physicians
may prescribe drug products for off-label uses and such off-label uses are common across some medical specialties. Thus, they may, unbeknownst
to us, use our product for an &#8220;off label&#8221; indication for a specific treatment recipient. The FDA, NMPA, EMA, Health Canada
and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and if we are
found to be out of compliance with the requirements and restrictions imposed on us under those laws and restrictions, we may be subject
to significant liability, including civil and administrative remedies as well as criminal sanctions, and the off-label use of our products
may increase the risk of product liability claims. In addition, management&#8217;s attention could be diverted from our business operations
and our reputation could be damaged.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The policies of the FDA, NMPA,
EMA, Health Canada and other regulatory authorities may change and we cannot predict the likelihood, nature or extent of government regulation
that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt
to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance,
we may lose any regulatory approval that we may have obtained and we may not achieve or sustain profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Despite FDA&#8217;s consent for us to pursue
the 505(b)(2) development pathway for SACT-1, we may be unable to successfully complete the 505(b)(2) pathway for the pediatric formulation
of SACT-1 to treat neuroblastoma as planned, which would materially impact our likelihood of obtaining FDA approval.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even though the FDA is allowing
us to pursue the 505(b)(2) regulatory pathway for our product candidates, we will need to conduct additional clinical trials, provide
additional data and information and meet additional standards for regulatory approval. If this were to occur, the time and financial resources
required to obtain FDA approval for our product candidates would likely substantially increase. We cannot assure you that we will receive
the requisite or timely approvals for commercialization of such product candidate. Any failure to obtain regulatory approval of our product
candidates would significantly limit our ability to generate revenues, and any failure to obtain such approval for all of the indications
and labeling claims we deem desirable could reduce our potential revenues.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 20; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we or our third-party suppliers fail
to comply with the FDA&#8217;s good manufacturing practice regulations or fail to adequately, timely, or sufficiently respond to an FDA
Form 483 or subsequent Warning Letter, this could impair our ability to market our products in a cost-effective and timely manner and
could result in FDA enforcement action.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We and our third-party suppliers
are required to comply with the FDA&#8217;s Current Good Manufacturing Practices (cGMP) which covers the methods and documentation of
the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products.
The FDA audits compliance with the cGMP and related regulations through periodic announced and unannounced inspections of manufacturing
and other facilities. The FDA may conduct these inspections or audits at any time. If, during the inspection, FDA identifies issues which,
in FDA&#8217;s judgment, may constitute violations of the Federal Food, Drug, and Cosmetic Act or FDA&#8217;s regulations, the FDA inspector
may issue an FDA Form 483 listing these observations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Note that if an entity does
not address observations found in an FDA Form 483 to FDA&#8217;s satisfaction, the FDA could take enforcement action, including any of
the following sanctions:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">refusal to grant export approval for our product; or</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">criminal prosecution.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any of the foregoing actions
could have a material adverse effect on our reputation, business, financial condition and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Commercialization of Our Drug
Candidates</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Even if any of our drug candidates receive
regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in
the medical community necessary for commercial success.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">After we complete clinical
trials and receive regulatory approval for any of our drug candidates, which may not happen for some time, we recognize that such candidate(s)
may ultimately fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.
We may not be able to achieve or maintain market acceptance of our products over time if new products or technology are introduced that
are more favorably received than our products, are more cost effective or render our drug obsolete. We will face competition with respect
to our drug candidates from other pharmaceutical companies developing products in the same disease/therapeutic area and specialty pharmaceutical
and biotechnology companies worldwide. Many of the companies against which we may be competing have significantly greater financial resources
and expertise in research and development, manufacturing, animal testing, conducting clinical trials, obtaining regulatory approvals and
marketing approval for drugs than we do. Physicians, patients and third-party payors may prefer other novel products to ours, which means
that we may not generate significant sales revenues for that product and that product may not become profitable. The degree of market
acceptance of our drug candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">clinical indications for which our drug candidates are approved;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">physicians, hospitals, and patients considering our drug candidates as a safe and effective treatment;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 21; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></p></div><div>
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</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We depend substantially on the success of
the drug candidates being researched as our current Lead Projects. If we are unable to license or sublicense, sell or otherwise commercialize
our drug candidates, or experience significant delays in doing so, our business will be materially harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business and the ability
to generate revenue related to product sales, if ever achieved, will depend on the successful development, regulatory approval and licensing
or sublicensing or other commercialization of our drug candidates or any other drug candidates we may develop. We have invested a significant
amount of financial resources in the development of our drug candidates and we may invest in other drug candidates. The success of our
drug candidates and any other potential drug candidates will depend on many factors, including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintenance of an acceptable safety profile for our drug candidates following regulatory approval, if and when received.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not achieve regulatory
approval and commercialization in a timely manner or at all. Significant delays in obtaining approval for and/or to successfully commercialize
our drug candidates would materially harm our business and we may not be able to generate sufficient revenues and cash flows to continue
our operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our IP</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>A significant portion of our IP portfolio
currently includes pending patent applications that have not yet been issued as granted patents and if the pending patent applications
covering our product candidates fail to be issued, our business will be adversely affected. If we or our licensors are unable to obtain
and maintain patent protection for our technology and drugs, our competitors could develop and commercialize technology and drugs similar
or identical to ours, and our ability to successfully commercialize our technology and drugs may be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success depends largely
on our ability to obtain and maintain patent protection&#160;and other forms of IP rights for the composition of matter, method of use
and/or method of manufacture for each of our drug candidates. Failure to obtain, maintain protection, enforce or extend adequate patent
and other IP rights could materially adversely affect our ability to develop and market one or more of our drug candidates. We also rely
on trade secrets and know-how to develop and maintain our proprietary and IP position for each of our drug candidates. Any failure to
protect our trade secrets and know-how with respect to any specific drug and diagnostics technology candidate could adversely affect the
market potential of that potential product.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date of this report,
the Company has, through its licenses, obtained rights to patents and patent applications covering some or all its drug and diagnostics
technology candidates that have been filed in major jurisdictions such as the United States, member states of the European Patent Organization
(the &#8220;EPO&#8221;) and the PRC (collectively, &#8220;Major Patent Jurisdictions&#8221;), as well as in other countries. We have also
filed a number of provisional applications to establish earlier filing dates for certain of our other ongoing researches, the specifics
of which are currently proprietary and confidential. To the extent we do not seek or obtain patent protection in a particular jurisdiction,
we may not have commercial incentive to seek marketing authorization in such jurisdiction. Nonetheless, other parties might enter those
markets with generic versions or copies of our products and received regulatory approval without having significantly invested in their
own research and development costs compared to the Company&#8217;s investment. For more information about our IP portfolio, please refer
to the Intellectual Property section below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to issued patents
in certain jurisdictions, for example in the U.S. and under the EPO, we may be entitled to obtain a patent term extension to extend the
patent expiration date provided we meet the applicable requirements for obtaining such patent term extensions. We have sought to support
our proprietary position by working with our licensors in filing patent applications in the names of the licensors in the United States
and through the PCT, related to the Lead Projects and certain other drug candidates. In the future, we intend to file patent applications
on supplemental or improvement IP derived from the licensed technologies, where those IP would be solely or jointly owned by the Company
pursuant to the terms of respective license agreements. Filing patents covering multiple technologies in multiple countries is time-consuming
and expensive, and we may not have the resources file and prosecute all necessary or desirable patent applications in a timely manner.
It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain
patent protection.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot be certain that
patents will be issued or granted with respect to patent applications that are currently pending, or that issued or granted patents will
not later be found to be invalid or unenforceable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The patent position of biotechnology
and pharmaceutical companies is generally uncertain because it involves complex legal and factual considerations. The standards applied
by the EPO, the U.S. Patent and Trademark Office, or USPTO, and foreign patent offices in granting patents are not always applied uniformly
or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable
in biotechnology and pharmaceutical patents. Consequently, patents may not issue from our pending patent applications and even if they
do issue, such patents may not issue in a form that effectively prevents others from commercializing competing products. As such, we do
not know the degree of future protection that we will have on our proprietary products and technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, the issuance
of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts
or patent offices in the United States and abroad. Even if patents do successfully issue and even if such patents cover our drug candidates,
other parties may initiate, for patents filed before March 16, 2013 (i.e., the enactment of the America Invents Act), interference or
re-examination proceedings, for patents filed on or after March 16, 2013, post-grant review,&#160;<i>inter partes</i>&#160;review, nullification
or derivation proceedings, in court or before patent offices, or similar proceedings challenging the validity, enforceability or scope
of such patents, which may result in the patent claims being narrowed or invalidated. Successful defense of its patents can constitute
a material factor in a company&#8217;s expenses. According to an article published by BlueIron (https://finance.yahoo.com/news/current-patent-litigation-costs-between-120200165.html),
depending on the value at stake, the American Intellectual Property Law Association&#8217;s &#8220;2019 Report of the Economic Survey&#8221;
reported the average costs of a patent litigation are between $2.3 million to $4.0 million.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the fact that
the Company has exclusive rights to prevent others from using a patented invention does not&#160;necessarily&#160;mean that the Company
itself will have the unrestricted right to use that invention.&#160;Other parties may obtain ownership or licenses to patents or other
IP rights that cover the manufacture, use or sale of our current or future products (or elements thereof).&#160;This may enable such other
parties to enforce their patents or IP rights against us, and may, as a result, affect the commercialization of our products or exploitation
of our own technology.&#160;We endeavor to identify early patents and patent applications which may block development of a product or
technology and minimize this risk by conducting prior art searches before and during the projects. However, relevant documents may be
overlooked, yet-to-be published or missed, which may in turn impact on the freedom to commercialize the relevant asset.&#160;In such cases,
we may not be in a position to develop or commercialize products or drug candidates unless we successfully pursue litigation to nullify
or invalidate the other IP rights concerned, or enter into a license agreement with the IP right holder, if available on commercially
reasonable terms.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are unable to obtain and maintain
the appropriate scope for our patents, our competitors could develop and commercialize technology and drugs similar or identical to ours,
and our ability to successfully commercialize our technology and drugs may be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not obtain sufficient
claim scope in those patents to prevent another party from competing successfully with our drug and diagnostics technology candidates.
Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent
competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our
patents by developing similar or alternative technology or drug and diagnostics technology candidates in a non-infringing manner. The
issuance of a patent is not conclusive as to its scope, validity or enforceability, and our patents may be challenged in the courts or
patent offices in the United States and abroad. Such challenges may result in patent claims being narrowed, invalidated or held unenforceable,
which could limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology
and drug and diagnostics technology candidates, or limit the duration of the patent protection of our technology and drug and diagnostics
technology candidates. Given the amount of time required for the development, testing and regulatory review of new drug and diagnostics
technology candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As
a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing drug and diagnostics technology
candidates similar or identical to ours.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, the issuance, scope,
validity, enforceability and commercial value of our and our current or future licensors&#8217; or collaboration partners&#8217; patent
rights are highly uncertain. Our and our licensors&#8217; pending and future patent applications may not result in patents being issued
which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies
and products.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to protect and enforce
our IP rights throughout the world.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our commercial success will
depend, in part, on our ability to maintain IP protection for our drug candidates in which we seek to develop and commercialize. While
we rely primarily upon a combination of patents, trademarks, trade secrets and other contractual obligations to protect the IP related
to our brands, products and other proprietary technologies, these legal means may afford only limited protection.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Filing and prosecuting patents
on drug candidates and defending the validity of the same (if challenged) in all countries throughout the world could be prohibitively
expensive for us, and our IP rights in countries outside the Major Patent Jurisdictions can be less extensive than those in the Major
Patent Jurisdictions. In addition, the laws of some countries in the rest of the world such as India do not protect IP rights to the same
extent as laws in the Major Patent Jurisdictions. Consequently, we may not be able to prevent other parties from practicing our inventions
in the rest of the world, despite our continued efforts in enforcing our IP rights through legal means. Competitors may use our technology
in jurisdictions where we have not or not yet obtained patent protection to develop their own drugs and further, may export otherwise
infringing drugs to non-U.S. jurisdictions where we have patent protection.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our, our licensors&#8217;
or collaboration partners&#8217; patent applications cannot be enforced against other parties practicing the technology claimed in such
applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.
In addition, patents and other IP rights also will not protect our technology, drug candidates if another party, including our competitors,
design around our protected technology, drug candidates without infringing, misappropriating or otherwise violating our patents or other
IP rights.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, currently and as
our R&amp;D continues to progress, some of our patents and patent applications are or may be co-owned with another party. Some of our
licenses already provide that future-developed technologies (and any resulting patents) will be co-owned with the licensors and other
patents for technologies we may acquire or develop with other parties may also be jointly owned. If we are unable to obtain an exclusive
license to any such co-owners&#8217; interest in such patents or patent applications, such co-owners may be able to license their rights
to other persons, including our competitors, and our competitors could market competing products and technology, and we will be unable
to transfer or grant exclusive rights to potential purchasers or development partners of such co-owned technologies. In addition, we may
need the cooperation of any such co-owners of our patents in order to enforce such patents against other parties, and such cooperation
may not be provided to us. Any of the foregoing could limit the revenue we might generate from our patents or patent applications and
thus have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because patent applications
are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we or our licensors or
collaborators were or will be the first to file any patent application related to a drug and diagnostics technology candidate. Furthermore,
in the United States, if patent applications of other parties have an effective filing date before March&#160;16, 2013, an interference
proceeding can be initiated by such other party to determine who was the first to invent any of the subject matter covered by the patent
claims of our applications. If patent applications of other parties have an effective filing date on or after March&#160;16, 2013, in
the United States a derivation proceeding can be initiated by such other parties to determine whether our invention was derived from theirs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even where we have a valid
and enforceable patent, we may not be able to exclude others from practicing our invention where the other party can show that they used
the invention in commerce before our filing date or the other party benefits from a compulsory license. In addition, we may be subject
to other challenges regarding our exclusive ownership of our IP. If another party were successful in challenging our exclusive ownership
of any of our IP, we may lose our right to use such IP, such other party may be able to license such IP to other parties, including our
competitors, and our competitors could market competing products and technology. Any of the foregoing could have a material adverse effect
on our competitive position, business, financial conditions, results of operations, and prospects.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many companies have encountered
significant problems in protecting and defending IP rights in jurisdictions outside Major Patent Jurisdictions. The legal systems of some
countries do not favor the enforcement of patents, trade secrets and other IP, which could make it difficult in those jurisdictions for
us to stop the infringement or misappropriation of our patents or other IP rights, or the marketing of competing drugs in violation of
our proprietary rights generally.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To date, we have not sought
to enforce any issued patents in any jurisdictions. Proceedings to enforce our patent and other IP rights in any jurisdictions could result
in substantial costs and divert our efforts and attention from other aspects of our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, such proceedings
could put our patents at risk of being invalidated, held unenforceable, or interpreted narrowly, could put our patent applications at
risk of not issuing, and could provoke other parties to assert claims of infringement or misappropriation against us. We may not prevail
in any lawsuits that we initiate in jurisdictions where opposition proceedings are available and the damages or other remedies awarded,
if any, may not be commercially meaningful. The requirements for patentability may differ in certain countries, particularly developing
countries. Certain countries in Europe, the PRC, and developing countries including India, have compulsory licensing laws under which
a patent owner may be compelled to grant licenses to other parties. In those countries, we and our licensors may have limited remedies
if patents are infringed or if we or our licensors are compelled to grant a license to another party, which could materially diminish
the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our IP rights around
the world may be inadequate to obtain a significant commercial advantage from the IP that we develop.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may become involved in lawsuits to protect
or enforce our IP, which could be expensive, time-consuming and unsuccessful. Our patent rights relating to our drug and diagnostics technology
candidates could be found invalid or unenforceable if challenged in court or before the USPTO or comparable non-U.S. authority.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Competitors may infringe our
patent rights or misappropriate or otherwise violate our IP rights. To counter infringement or unauthorized use, litigation may be necessary
in the future to enforce or defend our IP rights, to protect our trade secrets or determine the validity and scope of our own IP rights
or the proprietary rights of others. This can be expensive and time-consuming. Any claim that we assert against perceived infringers could
also provoke these parties to assert counterclaims against us alleging that we infringe their IP rights. Many of our current and potential
competitors have the ability to dedicate substantially greater resources to enforce and/or defend their IP rights than we can. Accordingly,
despite our efforts, we may not be able to prevent other parties from infringing upon or misappropriating our IP. Litigation could result
in substantial costs and diversion of management resources, which could harm our business and financial results. In addition, in an infringement
proceeding, a court may decide that patent rights or other IP rights owned by us are invalid or unenforceable, or may refuse to stop the
other party from using the technology at issue on the grounds that our patent rights or other IP rights do not cover the technology in
question. An adverse result in any litigation proceeding could put our patent, as well as any patents that may issue in the future from
our pending patent applications, at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the
substantial amount of discovery required in connection with IP litigation, there is risk that some of our confidential information could
be compromised by disclosure during this type of litigation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we initiate legal proceedings
against another party to enforce our patent, or any patents that may be issued in the future from our patent applications, that relates
to one of our drug and diagnostics technology candidates, the defendant could counterclaim that such patent rights are invalid or unenforceable.
In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace, and there
are numerous grounds upon which another party can assert invalidity or unenforceability of a patent. Parties may also raise similar claims
before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include ex parte
re-examination,&#160;<i>inter partes</i>&#160;review, post-grant review, derivation and equivalent proceedings in non-U.S. jurisdictions,
such as opposition proceedings. Such proceedings could result in revocation or amendment to our patents in such a way that they no longer
cover and protect our drug and diagnostics technology candidates. With respect to the validity of our patents, for example, there may
be invalidating prior art of which we, our patent counsel, and the patent examiner were unaware during prosecution. If a defendant were
to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection
on our drug and diagnostics technology candidates. Such a loss of patent protection could have a material adverse impact on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may not be able to prevent
misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights
as fully as in the United States. Furthermore, because of the substantial amount of discovery required in connection with IP litigation,
there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be subject to claims challenging
the inventorship of our patents and other IP.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we are not currently
experiencing any claims challenging the inventorship of our patents or ownership of our IP, we may in the future be subject to claims
that former employees, collaborators or other parties have an interest in our patents or other IP as inventors or co-inventors. For example,
we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our drug
and diagnostics technology candidates and who have not clearly contracted to transfer or assign any rights they may have to the Company.
In addition, for our licensed patents, although a majority of our licensors have procured assignment forms and records from inventors
to affirm their ownership in the licensed IP, another party or former employee or collaborator of our licensors not named in the patents
may challenge the inventorship of claim an ownership interest in one or more of our or our licensors&#8217; patents.&#160;Litigation may
be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to
paying monetary damages, we may lose rights such as exclusive ownership of, or right to use, our patent rights or other IP. Such an outcome
could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result
in substantial costs and be a distraction to management and other employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are sued for infringing IP rights
of other parties, such litigation could be costly and time-consuming and could prevent or delay us from developing or commercializing
our drug candidates, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our commercial success depends
in part on our avoiding infringement of the patents and other IP rights of other parties. There is a substantial amount of litigation
involving patent and other IP rights in the biotechnology and pharmaceutical industries. Numerous issued patents, provisional patents
and pending patent applications, which are owned by other parties, exist in the fields in which we are developing drug candidates. As
the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our drug candidates may give
rise to claims of infringement of the patent rights of others.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other parties may assert that
we are employing their proprietary technology without authorization. There may be other patents of which we are currently unaware with
claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our drug candidates.
Because patent applications can take many years to issue, there may be currently pending patent applications or provisional patents which
may later result in issued patents that our drug candidates may infringe. In addition, other parties may obtain patents in the future
and claim that use of our technology infringes upon these patents. If any other patents were held by a court of competent jurisdiction
to cover the manufacturing process of any of our drug candidates, any molecules formed during the manufacturing process or any final drug
itself, the holders of any such patents may be able to prevent us from commercializing such drug candidate unless we obtain a license
under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable. Similarly,
if any other patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or
methods of use, including combination therapy or patient selection methods, the holders of any such patent may be able to block our ability
to develop and commercialize the applicable drug candidate unless we obtain a license, limit our uses, or until such patent expires, or
is finally determined to be held invalid or unenforceable. In either case, such a license may not be available on commercially reasonable
terms or at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other parties who bring successful
claims against us for infringement of their IP rights may obtain injunctive or other equitable relief, which could prevent us from developing
and commercializing one or more of our drug candidates. Defense of these claims, regardless of their merits, would involve substantial
litigation expense and be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement
or misappropriation against us, we may have to pay substantial damages, including treble damages and attorneys&#8217; fees in the case
of willful infringement, obtain one or more licenses from other parties, pay royalties or redesign our infringing drug candidates, which
may be impossible or require substantial time and monetary expenditure. In the event of an adverse result in any such litigation, or even
in the absence of litigation, we may need to obtain licenses from other parties to advance our research or allow commercialization of
our drug candidates. Any required license may not be available at all, or may not be available on commercially reasonable terms. In the
event that we are unable to obtain such a license, we would be unable to further develop and commercialize one or more of our drug candidates,
which could harm our business significantly. We may also elect to enter into license agreements in order to settle patent infringement
claims or resolve disputes prior to litigation, and any such license agreements may require us to pay royalties and other fees that could
significantly reduce our profitability for any product related to that patent and thus harm our business.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even if resolved in our favor,
litigation or other legal proceedings relating to IP claims may cause us to incur significant expenses, and could distract our technical
personnel, management personnel, or both from their normal responsibilities. In addition, there could be public announcements of the results
of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be
negative, it could have a substantial adverse effect on the market price of our Class A Ordinary Shares. Such litigation or proceedings
could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing
or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their
greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could
have a material adverse effect on our ability to compete in the marketplace.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>There may be patent applications pending
of which we are not aware, but which cover similar products to the ones we are attempting to license or develop, which may result in lost
time and money, as well as litigation.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is possible that we have
failed to identify relevant outstanding patents or applications. For example, U.S. applications filed before November&#160;29, 2000 and
certain U.S. applications filed after that date that will not be filed outside the United States remain confidential until patents are
issued. Patent applications filed in the United States after November 29, 2000 and generally filed elsewhere are published approximately
18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority
date. Therefore, patent applications covering our products could have been filed by others without our knowledge. Additionally, pending
patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our products
or the use of our products. Holders of any such unanticipated patents or patent applications may actively bring infringement claims against
us, with the same potential litigation consequences as alluded to elsewhere in this annual report. Any of these events could require us
to divert substantial financial and management resources that we would otherwise be able to devote to our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Obtaining and maintaining our patent protection
depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent
agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Periodic maintenance fees
on any issued patent are due to be paid to the USPTO and other patent agencies in several stages over the lifetime of the patent. The
USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and
other similar provisions during the patent application process. Although an inadvertent lapse can in many cases be cured by payment of
a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment
or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance
events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within
prescribed time limits, non-payment of fees, and failure to properly submit documents requesting an extension of time. In any such event,
our competitors might be able to enter the market, which would have a material adverse effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The terms of our patents may not be sufficient
to effectively protect our drug and diagnostics technology candidates and business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In most countries in which
we file, including the United States, the term of an issued patent is generally 20 years from the earliest claimed filing date of a non-provisional
patent application in the applicable country. Although various extensions may be available, the life of a patent and the protection it
affords is limited. For example, depending upon the timing, duration and specifics of the FDA regulatory approval for our drug candidates,
one or more of our U.S. patents, if issued, might be eligible for limited patent term restoration under the Drug Price Competition and
Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent term extension
of up to five years as compensation for patent term lost during drug development and the FDA regulatory review process. Patent term extensions,
however, cannot extend the remaining term of a patent beyond a total of 14 years from the date of drug approval by the FDA, and only one
patent can be extended for a particular drug. The application for patent term extension is subject to approval by the USPTO, in conjunction
with the FDA. We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply
prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period
or the scope of patent protection afforded could be less than we request. If we are unable to obtain a patent term extension for a given
patent or the term of any such extension is less than we request, the period during which we will have the right to exclusively market
our drug will be that of the originally issued patents themselves.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even if patents covering one
of our drug candidates are obtained, thereby giving us a period of exclusivity for manufacturing and marketing that drug, we will not
be able to assert such patent rights upon the expiration of the issued patents against potential competitors who may begin marketing generic
copies of our medications, and our business and results of operations may be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Changes in patent law in the United States
could diminish the value of patents in general, thereby impairing our ability to protect our drug and diagnostics technology candidates.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The United States has recently
enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope
of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to
increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty
with respect to the value of patents once obtained, if any. Depending on decisions by the U.S. Congress, the federal courts and the USPTO,
the laws and regulations governing patents in the United States could change in unpredictable ways that would weaken our ability to obtain
new patents, or to enforce our existing patents and patents that we might obtain in the future. For example, in a recent case,&#160;<i>Assoc.
for Molecular Pathology v. Myriad Genetics, Inc.</i>, the U.S. Supreme Court held that certain claims to naturally-occurring substances
are not patentable. Although we do not believe that any of the patents owned or licensed by us will be found invalid based on this decision,
future decisions by the courts, the U.S. Congress or the USPTO may impact the value of our patent rights. There could be similar changes
in the laws of foreign jurisdictions that may impact the value of our patent rights or our other IP rights.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, recent patent
reform legislation in the U.S., including the Leahy-Smith America Invents Act, or the America Invents Act, could increase those uncertainties
and costs. The America Invents Act was signed into law on September&#160;16, 2011, and many of the substantive changes became effective
on March&#160;16, 2013. The America Invents Act reforms U.S. patent law in part by changing the U.S. patent system from a &#8220;first
to invent&#8221; system to a &#8220;first inventor to file&#8221; system, expanding the definition of prior art, and developing a post-grant
review system, thus changing the U.S. patent law in a way that may weaken our ability to obtain patent protection in the U.S. for those
applications filed after March&#160;16, 2013. Further, the America Invents Act created new procedures to challenge the validity of issued
patents in the U.S., including post-grant review and<i>&#160;inter&#160;</i>partes&#160;review proceedings, which some other parties have
been using to cause the cancellation of selected or all claims of issued patents of competitors. For a patent with an effective filing
date of March&#160;16, 2013 or later, a petition for post-grant review can be filed by another party in a nine-month window from issuance
of the patent. A petition for<i>&#160;inter partes</i>&#160;review can be filed immediately following the issuance of a patent if the
patent has an effective filing date prior to March&#160;16, 2013. A petition for<i>&#160;inter partes</i>&#160;review can be filed after
the nine-month-period for filing a post-grant review petition has expired for a patent with an effective filing date of March&#160;16,
2013 or later. Post-grant review proceedings can be brought on any ground of invalidity, whereas<i>&#160;inter partes</i>&#160;review
proceedings can only raise an invalidity challenge based on published prior art and patents. These adversarial actions at the USPTO review
patent claims without the presumption of validity afforded to U.S. patents in lawsuits in U.S. federal courts, and use a lower burden
of proof than used in litigation in U.S. federal courts. Therefore, it is generally considered easier for a competitor or other party
to have a U.S. patent invalidated in a USPTO post-grant review or&#160;<i>inter partes</i>&#160;review proceeding than invalidated in
a litigation in a U.S. federal court. If any of our patents are challenged by another party in such a USPTO proceeding, there is no guarantee
that we or our licensors or collaborators will be successful in defending the patent, which would result in our loss of the challenged
patent right.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are unable to protect the confidentiality
of our trade secrets, our business and competitive position would be harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to our issued
patents, provisional patent, and pending patent applications, we expect to rely on trade secrets, including unpatented know-how, technology
and other proprietary information, to maintain our competitive position and protect our drug and diagnostics technology candidates. We
seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties that have access
to them, such as our employees, corporate collaborators, outside scientific collaborators, sponsored researchers, contract manufacturers,
consultants, advisors and other parties. We also enter into confidentiality and invention or patent assignment agreements with our employees
and consultants. However, any of these parties may breach such agreements and disclose our proprietary information, and we may not be
able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret
can be difficult, expensive and time-consuming, and the outcome is unpredictable. If trade secrets which are material to our business
were to be obtained by a competitor, our competitive position would be harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be subject to claims that our employees
have wrongfully used or disclosed alleged trade secrets of their former employers.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we try to ensure
that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that
we or these employees have used or disclosed IP, including trade secrets or other proprietary information, of any such employee&#8217;s
former employer. In addition, while we typically require our employees, consultants and contractors who may be involved in the development
of IP to execute agreements assigning such IP to us, we may be unsuccessful in executing such an agreement with each party who in fact
develops IP that we regard as our own, which may result in claims by or against us related to the ownership of such IP. We are not aware
of any threatened or pending claims that any of our projects involve misappropriated IP or other proprietary information, but in the future
litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages,
we may lose valuable IP rights. Even if we are successful in defending against such claims, litigation could result in substantial costs
and be a distraction to management.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be unable to execute on the optimal
development plan for one or more of our existing product candidates if we are unable to obtain or maintain necessary rights for some aspect
of the developing technology through acquisitions or licenses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our existing programs currently
use or may in the future use additional technologies subject to proprietary rights held by others, such as particular compositions or
methods of manufacture, treatment or use. The licensing and acquisition of IP rights is a competitive area, and more established companies
may pursue strategies to license or acquire such IP rights that we may consider necessary or useful. These established companies may have
a competitive advantage over us due to their size, cash resources and greater capabilities in clinical development and commercialization.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, companies that
perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire IP rights
on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain or maintain licenses
or other rights from other parties to use IP of those parties, our business, financial condition and prospects for growth could suffer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we fail to comply with our obligations
in the agreements under which we license IP rights from other parties or otherwise experience disruptions to our business relationships
with our licensors, we could be required to pay monetary damages or could lose license rights that are important to our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many of our projects (including
our Lead Projects) are based on IP which we have licensed from other parties. (See &#8220;Item 4. Information on the Company &#8211; B.
Business Overview &#8211; Intellectual Property&#8221;) Certain of these license agreements impose diligence, development or commercialization
obligations on us, such as obligations to pay royalties on net product sales of our drug candidates once commercialized by us, to pay
a percentage of sublicensing revenues if the licensed product is sublicensed, to make other specified milestone and/or annual payments
relating to our drug candidates or to pay license maintenance and other fees, as well as obligations to pursue commercialization with
due diligence. Specifically, a number of our license agreements also require us to meet development timelines in order to maintain the
related license(s). In spite of our efforts, our licensors might conclude that we have materially breached our obligations under such
license agreements and might therefore seek to terminate the license agreements. If one of our licensors, despite our efforts, were to
be successful in terminating its agreement with us, we would not be able to continue to develop, manufacture or market any drug candidate
under that license agreements, and we could face claims for monetary damages or other penalties under that agreement. Such an occurrence
would diminish or eliminate the value of that project to our Company, even if we are able to negotiate new or reinstated agreements, which
may have less favorable terms. Depending on the importance of the IP and the related project, any such development could have a material
adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, disputes may arise
regarding intellectual property subject to a licensing agreement, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr>
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  <tr>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td></tr>
  <tr>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr>
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    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td></tr>
  <tr>
    <td style="text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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  <tr>
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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  <tr>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the agreements
under which we currently license intellectual property or technology from other parties are complex, and certain provisions in such agreements
may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow
what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our
financial or other obligations under the relevant agreement, either of which (depending on the importance of the IP and the related project)
could have a material adverse effect on our business, financial condition, results of operations, and prospects. Moreover, if disputes
over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangement for a project
on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected drug and diagnostics technology
candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not have complete control of the
preparation, filing and prosecution of patent applications, or to maintain patents, licensed by us from other parties.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has in-licensed,
and may in the future in-license patents owned or controlled by others for our use as part of our development plans. We also may out-license
or sublicense patents which we own or control in collaborations with others for development and commercialization of our products. In
either case, the continuing right to control the preparation, filing and prosecution of patent applications, or to maintain the patents,
covering technology under development is a matter for negotiation and we may not always be the party that obtains such control, in which
case we will be reliant on our licensors, collaboration partners or sublicensees for determining strategies with respect to those patents.
For our existing licenses, while we have an understanding with most of the licensors who maintain control over patent prosecution and
we have jointly appointed and engaged patent agents nominated by us under one or more of our licenses, we cannot guarantee that such licensors
or collaborators will always accept prosecution strategies proposed by us and/or our patent agents. Therefore, these patents and applications
may not be prosecuted and enforced in a manner consistent with the best interests of our business. If our current or future licensors
or collaboration partners fail to establish, maintain or protect such patents and other IP rights, such rights may be reduced or eliminated.
If our licensors or joint development partners are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement
of any patent rights, such patent rights could be compromised.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Reliance on Unrelated
Parties</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We rely on unrelated parties to conduct
discovery and further improvement of our innovations and licensed technologies, as well as our preclinical studies and clinical trials.
If these unrelated parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain
regulatory approval for or commercialize our drug candidates, and our business could be substantially harmed.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have relied upon and plan
to continue to rely upon CROs and collaborating institutions to monitor and manage data for our ongoing preclinical studies and programs.
We rely on these parties for execution of preclinical studies and clinical trials, and control only certain aspects of their activities.
Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal,
and regulatory requirements and scientific standards, and our reliance on the CROs and collaborating institutions does not relieve us
of our regulatory responsibilities. If CROs, collaborating institutions or clinical investigators do not successfully carry out their
contractual duties or obligations or meet expected deadlines, development of our product candidates could be delayed and our business
could be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, our CROs and
collaborating institutions, are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory
procedures and the handling, use, storage, treatment and disposal of hazardous materials and waste. In the event of contamination or injury
resulting from our use of hazardous materials, we might be held liable for any resulting damages, and any liability could exceed our resources.
We could also be subject to civil or criminal fines and penalties, and significant associated costs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If an IND for one of our drug candidates
requires significantly larger quantities of the candidate to be tested, we expect to rely on unrelated parties to manufacture supplies
of that candidate. If those unrelated parties fail to provide us with sufficient quantities of clinical supply on that candidate or fail
to do so at acceptable quality levels or prices, or fail to maintain required cGMP licenses, we may not be able to manufacture that candidate
in sufficient quantities to conduct the necessary human trials. Should the failure by the CRO occur in anticipation of or after marketing
approval of that candidate, we may be unable to generate as much revenue as rapidly (and such revenue may not be as profitable) as we
had anticipated.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The manufacture of many drug
products, particularly in commercial quantities, can be complex and may require significant expertise and capital investment, particularly
if the development of advanced manufacturing techniques and process controls are required. We intend to contract with outside contractors
to manufacture clinical supplies and process our drug candidates. We have not yet had our drug candidates to be manufactured or processed
on a commercial scale and may not be able to do so for any of our drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As we expect to engage contract
manufacturers, the Company will be exposed to the following risks:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each of these risks could
delay or prevent the completion of our clinical trials or the approval of any of our drug candidates by the FDA, NMPA, EMA, Health Canada
or other comparable regulatory authorities, result in higher costs or adversely impact commercialization of our drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are also responsible for
quality control by our manufacturers. We intend to rely on those unrelated-party manufactures to perform certain quality assurance tests
on our drug candidates prior to delivery to patients. If these tests are not appropriately done and test data are not reliable, patients
could be put at risk of serious harm and the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities could place significant
restrictions on our Company until deficiencies are remedied.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Manufacturers of drug products
often encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability
of the manufacturing process (including the absence of contamination). These problems include logistics and shipping, difficulties with
production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified
personnel, as well as compliance with strictly enforced federal, state and non-U.S. regulations. Furthermore, if contaminants are discovered
in our supply of our drug candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended
period of time to investigate and remedy the contamination. It is possible that stability failures or other issues relating to the manufacture
of our drug candidates may occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource
constraints, or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these
difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our drug candidate to patients in
clinical trials would be jeopardized. Any delay or interruption in the manufacturing of clinical trial supplies could delay the completion
of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require
us to begin new clinical trials with additional costs or terminate clinical trials completely.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Review of changes in the manufacturing process
of our drug candidates could cause delays resulting from the need for additional regulatory approvals.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Changes in a process or procedure
for manufacturing one of our drug candidates, including a change in the location where the drug candidate is manufactured or a change
of a contract manufacturer, could require prior review by the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities
and approval of the manufacturing process and procedures in accordance with the FDA, NMPA, EMA, or Health Canada&#8217;s regulations,
or comparable requirements. This review may be costly and time-consuming and could delay or prevent the launch of a product. The new facility
will also be subject to pre-approval inspection. In addition, we would have to demonstrate that the product made at the new facility is
equivalent to the product made at the former facility by physical and chemical methods, which are costly and time-consuming. It is also
possible that the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities may require clinical testing as a way to prove
equivalency, which would result in additional costs and delay.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to AML Clinic</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Failure to comply with all laws and regulations
applicable to the business of AML Clinic could have a material, adverse impact on the Company&#8217;s business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operation of AML Clinic subjects
the Company to a variety of Hong Kong laws and regulations specific to companies and professionals in the business of delivering medical
care. We and our employees will be subject to licensing and professional qualifications that do not apply to our other businesses. Breach
of any of these laws, regulations or licensing requirements could subject the Company to significant fines and other penalties and possibly
damage the Company&#8217;s reputation, which could have a material adverse effect on the Company&#8217;s business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Natural Supplements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be subject to government regulations
for natural supplements</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From a regulatory perspective,
some of the Company&#8217;s non-drug candidates (including those developed under the project company Nativus), may be regulated as natural
supplements, including NativusWell<sup>&#174;</sup> (NLS-2). For those non-drug candidates that the Company plans to develop, they are
subject to extensive and rigorous domestic government regulation, including regulation by the FDA, the Centers for Medicare &amp; Medicaid
Services, or CMS, other divisions of the U.S. Department of Health and Human Services, state and local governments and their respective
foreign equivalents. The FDA regulates natural supplements, cosmetics and drugs under different regulatory schemes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For example, the FDA regulates
the processing, formulation, safety, manufacturing, packaging, labeling, advertising and distribution of natural supplements and cosmetics
under its natural supplement and cosmetic authority, respectively. The FDA also regulates the research, development, pre-clinical and
clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling, storage, approval, advertising, promotion,
sale, distribution, import and export of pharmaceutical products under various regulatory provisions. If any drug products we develop
are tested or marketed abroad, they will also be subject to extensive regulation by foreign governments, whether or not we have obtained
FDA approval for a given product and its uses. Such foreign regulation may be equally or more demanding than corresponding U.S. regulation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Government regulation substantially
increases the cost and risk of researching, developing, manufacturing and selling products. Our failure to comply with these regulations
could result in, by way of example, significant fines, criminal and civil liability, product seizures, recalls, withdrawals, withdrawals
of approvals and exclusion and debarment from government programs. Any of these actions, including the inability of our hormone therapy
drug candidates to obtain and maintain regulatory approval, would have a materially adverse effect on our business, financial condition,
results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the FDA&#8217;s
policies may change and additional government regulations may be issued that could prevent, limit, or delay regulatory approval of our
drug candidates, or impose more stringent product labeling and post-marketing testing and other requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
have launched and marketed NativusWell<sup>&#174;</sup> (NLS-2) in Hong Kong through HKTV Mall, a leading online shopping mall in Hong
Kong in September 2022, and in China through one of the largest e-commerce platform in China, JD.com in March 2023. In Hong Kong, natural
supplements are defined as &#8220;health food&#8221; products. &#8220;Health food&#8221; containing medicines are subject to the Pharmacy
and Poisons Ordinance (Cap 138) and such &#8220;health food&#8221; containing Chinese medicines are regulated by the Chinese Medicine
Ordinance (Cap 549), where they must meet the requirements in respect of safety, quality and efficacy before they can be registered.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For other &#8220;health food&#8221;
products which cannot be classified as Chinese medicine or western medicine are regulated under the Public Health and Municipal Services
Ordinance (Cap 132) as general food products. The Public Health and Municipal Services Ordinance requires the manufacturers and sellers
of food to ensure that their products are fit for human consumption and comply with the requirements in respect of food safety, food standards
and labelling. In addition, all prepackaged food should bear labels which correctly list out the ingredients of the food under the Food
and Drugs (Composition and Labelling) Regulations (Cap 132W) under the Ordinance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The NativusWell<sup>&#174;
</sup>(NLS-2) is made with the bioactive ingredient extracted Chinese yam powder and does not contain any western or Chinese medicine;
therefore, registration is not required under the local laws for marketing in Hong Kong. We will, however, ensure the compliance of the
Food and Drugs (Composition and Labelling) Regulations (Cap 132W) with by proper labelling in place.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Diagnostics Technology</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our products could in the future be subject
to additional regulation by the U.S. Food and Drug Administration or other domestic and international regulatory agencies, which could
increase our costs and delay our commercialization efforts, thereby materially and adversely affecting our business and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The FDA has statutory authority
to assure that medical devices and&#160;in&#160;vitro&#160;diagnostics, including those where the Paths<sup>Dx</sup> Test technology may
be utilized, are safe and effective for their intended uses. Should the Paths<sup>Dx</sup> Test technology be utilized in U.S. as a Laboratory
Developed Test (LDT), the FDA has historically exercised its enforcement discretion and may not enforce applicable provisions of the FDC
Act and regulations with respect to LDTs. We believe the Paths<sup>Dx</sup> Test may not be subject to the FDA&#8217;s enforcement of
its medical device regulations and the applicable FDC Act provisions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">However, if and when we utilize
the Paths<sup>Dx</sup> Test technology in the U.S., the FDA may disagree with our assessment that the Paths<sup>Dx</sup> Test falls within
the definition of an LDT and seek to regulate the Paths<sup>Dx</sup> Test as medical devices. If the FDA determines that our products
are subject to such requirements, we could be subject to enforcement action, including administrative and judicial sanctions, and additional
regulatory controls and submissions for the Paths<sup>Dx</sup> Test, all of which could be burdensome.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the future, certain of
our products or related applications could be subject to additional FDA regulation. Even where a product is not subject to FDA clearance
or approval requirements, the FDA may impose restrictions as to the types of customers to which we can market and sell our products. Such
regulation and restrictions may materially and adversely affect our business, financial condition and results of operations. Other regulatory
regimes that do not currently present material challenges but that could in the future subject to regulations include biosecurity should
our Paths<sup>Dx</sup> Test technology be utilized in the U.S.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, many countries
have laws and regulations that could affect our products and which could limit our ability to sell our products in those countries. The
number and scope of these requirements are increasing. We may not be able to obtain regulatory approvals in such countries or may incur
significant costs in obtaining or maintaining foreign regulatory approvals. For example, the European Union, or EU, is transitioning from
the existing European Directive 98/79/EC on in vitro diagnostic medical devices, or In Vitro Diagnostic Directive (IVDD), to the In Vitro
Diagnostic Device Regulation (EU) 2017/746 (IVDR), which imposes stricter requirements for the marketing and sale of medical devices,
including in the area of clinical evaluation requirements, quality systems and post-market surveillance. The IVDR is expected to become
effective in May 2022. It is likely that we will be impacted by this new regulation, either directly as a manufacturer of IVDs, or indirectly
as a supplier to customers who are placing IVDs in the EU market for clinical or diagnostic use. Complying with the requirements of the
IVDR may require us to incur significant expenditures. Failure to meet these requirements could adversely impact our business in the EU
and other regions that tie their product registrations or chemical regulations to the EU requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Risks Related to Our Industry, Business and
Operation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we do not comply with laws regulating
the protection of the environment and health and human safety, our business could be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our research, development
and clinic operations involve the use of hazardous materials, chemicals and various radioactive compounds/radiation and AML Clinic may
create medical waste and radiation. Our R&amp;D Center may maintain quantities of various flammable and toxic chemicals in our facilities
that are required for our research, development and manufacturing activities. We are subject to local laws and regulations governing the
use, manufacture, storage, handling and disposal of these hazardous materials and of medical waste at the jurisdictions where we operate
our clinic and research facilities, which are currently limited to Hong Kong. We believe our procedures for storing, handling and disposing
of these materials comply with the relevant guidelines and laws of the jurisdictions in which our facilities are located. Although we
believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations,
the risk of accidental contamination or injury from these materials cannot be eliminated. If an accident occurs, we could be held liable
for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and
regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials
and medical waste.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although we maintain workers&#8217;
compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of these
materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental
liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or
radioactive materials. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future.
We may incur substantial costs to comply with, and substantial fines or penalties, if we violate any of these laws or regulations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our future success depends on our ability
to retain our Chief Executive Officer, our scientific and clinical advisors, and other key executives and to attract, retain and motivate
qualified personnel.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are highly dependent on
Darren Lui, our Chief Executive Officer, as well as, other principal members of our management teams, scientific teams as well as scientific
and clinical advisors. Although we have formal employment agreements, which we refer to as appointment letters, with all of our executive
officers, these agreements do not prevent our executives from terminating their employment with us at any time, subject to applicable
notice periods. Nevertheless, the loss of the services of any of these persons could impede the achievement of our research, development
and commercialization objectives.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To induce valuable employees
to remain at our Company, in addition to salary and cash incentives, we provide share incentive grants that vest over time. The
value to employees of these equity grants that vest over time may be significantly affected by movements in the price of our Class A Ordinary
Shares that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Although
we have appointment letters with our key employees, any of our employees could resign at any time, with 1-month to 3-months prior written
notice or with payment in lieu of notice.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Recruiting and retaining qualified
officers, scientific, clinical, sales and marketing personnel or consultants will also be critical to our success. In addition, we rely
on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our discovery and preclinical studies
development and commercialization strategy. The loss of the services of our executive officers or other key employees and consultants
could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully
implement our business strategy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, replacing executive
officers and key employees or consultants may be difficult and may take an extended period of time, because of the limited number of individuals
in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize
drug and diagnostics technology candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train,
retain or motivate these key personnel or consultants on acceptable terms given the competition among numerous pharmaceutical and biotechnology
companies for similar personnel.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also experience competition
for the hiring of scientific and clinical personnel from universities and research institutions. Our consultants and advisors may be employed
by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability
to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We will need to increase the size and capabilities
of our organization, and we may experience difficulties in managing our growth.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date of this annual
report, we have 18 full-time and 1 part-time employees. Of these, 6 full-time are engaged in research and development and laboratory operations,
7 full-time are engaged in general and administrative functions and 5 full-time and 1 part-time are engaged in the clinic operation. As
of the date of this annual report, 18 of our employees are located in Asia and 1 of our employees is located in Europe. In addition, we
have engaged and may continue to engage 66 independent contracted consultants and advisors to assist us with our operations. As our development
and commercialization plans and strategies develop, and as we have transitioned into operating as a public company, we will need to establish
and maintain effective disclosure and financial controls and make changes in our corporate governance practices. We will need to add a
significant number of additional managerial, operational, sales, marketing, financial and other personnel with the appropriate public
company experience and technical knowledge and we may not successfully recruit and maintain such personnel. Future growth will impose
significant added responsibilities on members of management, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our future financial performance
and our ability to commercialize our drug candidates will depend, in part, on our ability to effectively manage our future growth, and
our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a
substantial amount of time to managing these growth activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently rely, and for
the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants for significant
input in selecting and evaluating new products to pursue. These independent organizations, advisors and consultants may not continue to
be available to us on a timely basis when needed, and in such case, we may not have the ability to find qualified replacements. In addition,
if we are unable to effectively manage our outsourced activities, or if the quality or accuracy of the services provided by consultants
is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory
approval of our drug candidates or otherwise advance our business. Furthermore, we may not be able to manage our existing consultants
or find other competent outside contractors and consultants on economically reasonable terms, if at all.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are not able to effectively
expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully
implement the tasks necessary to further develop and commercialize our drug and diagnostics technology candidates and, accordingly, may
not achieve our research, development and commercialization goals.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We intend to seek additional collaborations,
strategic alliances or acquisitions or enter into royalty-seeking or sublicensing arrangements in the future, but we may not realize the
benefits of these arrangements.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to form or seek
strategic alliances, create joint ventures or collaborations, acquire complimentary products, IP rights, technology or businesses or enter
into additional licensing arrangements with unrelated parties that we determine may complement or augment our development and commercialization
efforts with respect to our drug and diagnostics technology candidates. Any of these relationships may require us to incur non-recurring
and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders, or disrupt our
management and business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will face significant competition
in seeking appropriate strategic partners and the negotiation process is likely to be time-consuming, costly and complex. Moreover, we
may not be successful in our efforts to establish a strategic partnership or another alternative arrangement for any of our drug and diagnostics
technology candidates because their state of development may be deemed to be too early for collaborative effort and others may not view
our drug candidates as having the requisite potential to demonstrate safety and efficacy. If and when we enter into an agreement with
a collaboration partner or sublicensee for development and commercialization of a drug or diagnostics technology candidate, we can expect
to relinquish some or all of the control over the future success of that drug candidate to the unrelated-party.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, even if we enter
into a collaboration involving any of our drug and diagnostics technology candidates, the arrangement will be subject to numerous risks,
which may include the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result, if we enter into
collaboration agreements and strategic partnerships or license our drugs, we may not be able to realize the benefit of such transactions,
which could delay our timelines or otherwise adversely affect our business. Following a strategic transaction or license, we may not achieve
the revenue or specific net income that justifies such transaction. If we are unable to reach agreements with a suitable collaborator
on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a drug or diagnostics technology candidate,
reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce
the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities
at our own expense.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we fail to enter into collaborations,
we may seek to fund and undertake development or commercialization activities on our own, but we may not have sufficient funds or expertise
to undertake the necessary development and commercialization activities. In such a case, we may not be able to further develop our drug
and diagnostics technology candidates or bring them to market and generate product sales revenue, which would harm our business prospects,
financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our employees, independent contractors,
consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory
standards and requirements.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are exposed to the risk
of fraud, misconduct or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors.
Misconduct by these parties could include intentional, reckless and negligent conduct that fails to: comply with the laws of the FDA and
other similar non-U.S. regulatory authorities; provide true, complete and accurate information to the FDA and other similar non-U.S. regulatory
authorities; comply with manufacturing standards we have established; comply with healthcare fraud and abuse laws in the United States
and similar non-U.S. fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities
to us. If we obtain the FDA approval for any of our drug and diagnostics technology candidates and begin commercializing those drugs in
the United States, our potential exposure under U.S. laws will increase significantly and our costs associated with compliance with such
laws are also likely to increase. These laws may impact, among other things, our current activities with principal investigators of our
sponsored researches and research patients and our use of information obtained in the course of patient recruitment for clinical trials,
as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare
items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent
fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing,
discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements
generally.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is not always possible
to identify and deter misconduct by employees and other parties, and the precautions we take to detect and prevent this activity may not
be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions
or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are
not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including
the imposition of significant fines or other sanctions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our disclosure controls and procedures may
not prevent or detect all errors or acts of fraud.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our disclosure controls and
procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange
Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that any disclosure
controls and procedures, or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized
override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud
may occur and not be detected, which&#160;would likely cause investors to lose confidence in our reported financial information. This
could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our Class
A Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse
of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil
or criminal sanctions. We may also be required to restate our financial statements from prior periods.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we fail to establish and maintain proper
internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could
be impaired.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Section 404 of
the Sarbanes-Oxley Act, we are required to file a report by our management on our internal control over financial reporting, including
an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. However,
while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial
reporting issued by our independent registered public accounting firm. The presence of material weaknesses in internal control over financial
reporting could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our
financial reporting, which could require us to restate our operating results. In connection with the audit of our financial statements
for the year ended December 31, 2022, we and our independent registered public accounting firm identified one material weakness in our
internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board of
the United States. The material weakness identified was the lack of dedicated resources to take responsibility for the finance and accounting
functions and the preparation of financial statements in compliance with generally accepted accounting principles in the United States,
or U.S. GAAP.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since 2019, we took actions
to remediate the abovementioned material weakness:</p><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">However, since we are still
in the process of replenishing and building up a qualified finance and accounting team with sufficient dedicated resources, our management
assessed that the deficiency related to the lack of dedicated resources to take responsibility for the finance and accounting functions
and the preparation of financial statements in compliance with generally accepted accounting principles in the United States, or U.S.
GAAP, still existed as of December 31, 2022. We cannot assure you that we will not identify additional material weaknesses or significant
deficiencies in the future.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our management concluded that
our internal controls over financial reporting were not effective as of December 31, 2022. Investors may lose confidence in our operating
results, the price of the Class A Ordinary Shares could decline and we may be subject to litigation or regulatory enforcement actions.
In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, the Class A Ordinary Shares may not be
able to remain listed on the NASDAQ Global Market.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may market our products, if approved,
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We operate and expect to operate
in various countries, and we may not be able to market our products in, or develop new products successfully for, these markets. We may
also encounter other risks of doing business internationally including but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    <td style="text-align: justify">&#160;</td>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we are subject
to general geopolitical risks in foreign countries where we operate, such as political and economic instability and changes in diplomatic
and trade relationships, which could affect, among other things, customers&#8217; inventory levels and consumer purchasing, which could
cause our results to fluctuate and our net sales to decline. The occurrence of any one or more of these risks of doing business internationally,
individually or in the aggregate, could materially and adversely affect our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we engage in future acquisitions or strategic
partnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities,
and subject us to other risks.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may evaluate various acquisitions
and strategic partnerships, including licensing or acquiring complementary products, IP rights, technology or businesses. Any potential
acquisition or strategic partnership may entail numerous risks, including, but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, if we undertake
acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible
assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities
and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development
of our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we fail to comply with the U.S. Foreign
Corrupt Practices Act (&#8220;FCPA&#8221;),&#160;or other anti-bribery laws, including the Bribery Act 2010 of the United Kingdom (UK
Bribery Act&#8221;), our reputation may be harmed and we could be subject to penalties and significant expenses that have a material adverse
effect on our business, financial condition and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to the FCPA.
The FCPA and UK Bribery Act generally prohibits us from making improper payments to non-U.S. officials for the purpose of obtaining or
retaining business or other benefits. We are also subject to the anti-bribery laws of other jurisdictions, particularly the PRC. As our
business expands, the applicability of the FCPA and other anti-bribery laws to our operations will increase. Our procedures and controls
to monitor anti-bribery compliance may fail to protect us from reckless or criminal acts committed by our employees or agents. If we,
due to either our own deliberate or inadvertent acts or those of others, fail to comply with applicable anti-bribery laws, our reputation
could be harmed and we could incur criminal or civil penalties, other sanctions and/or significant expenses, which could have a material
adverse effect on our business, including our financial condition, results of operations, cash flows and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business and results of operations may
be negatively impacted by the UK&#8217;s withdrawal from the EU.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 23, 2016, the UK held
a referendum in which a majority of voters approved an exit from the EU, or Brexit, and the UK formally left the EU on January 31, 2020.
There was a transition period during which EU pharmaceutical laws continued to apply to the UK, which expired on December 31, 2020. However,
the EU and the UK have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and
has been formally applicable since May 1, 2021. The TCA includes specific provisions concerning pharmaceuticals, which include the mutual
recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not foresee wholesale
mutual recognition of UK and EU pharmaceutical regulations. At present, Great Britain has implemented EU legislation on the marketing,
promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol,
the EU regulatory framework will continue to apply in Northern Ireland). The regulatory regime in Great Britain therefore currently aligns
in the most part with EU regulations, however it is possible that these regimes will diverge in the future now that Great Britain&#8217;s
regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.
For example, the new Clinical Trials Regulation which became effective in the EU on January 31, 2022 and provides for a streamlined clinical
trial application and assessment procedure covering multiple EU Member States has not been implemented into UK law, and a separate application
will need to be submitted for clinical trial authorization in the UK. In addition, as we are headquartered in the UK, it is possible that
Brexit may impact some or all of our current operations. For example, Brexit will impact our ability to freely move employees from our
headquarters in the UK to other locations in the EU. Furthermore, if other EU Member States pursue withdrawal, barrier-free access among
the EEA overall could be diminished or eliminated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The long-term effects of Brexit
will depend in part on how the terms of the TCA continue to take effect in practice and the terms of any further agreements the UK makes
with the EU. Such a withdrawal from the EU is unprecedented, and it is unclear how the restrictions on the UK&#8217;s access to the European
single market for goods, capital, services and labor, or single market, and the wider commercial, legal and regulatory environment, will
impact our future operations (including business activities conducted by third parties and contract manufacturers on our behalf) and clinical
activities in the UK in the long term.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we commence clinical trials of one of
our drug or diagnostics technology candidates, and product liability lawsuits are brought against us, we may incur substantial liabilities
and the commercialization of such drug or diagnostics technology candidates may be affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any of our drug or diagnostics
technology candidates enter clinical trials, we will face an inherent risk of product liability suits and will face an even greater risk
if we obtain approval to commercialize any drugs. For example, we may be sued if our drug candidates cause or are perceived to cause injury
or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may
include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the drug, negligence, strict
liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend
ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our drug
candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual
outcome, liability claims may result in:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We shall seek to obtain the
appropriate insurance once our candidates are ready for clinical trial. However, our inability to obtain sufficient product liability
insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of
drugs we develop, alone or with collaborators. We currently do not have in place product liability insurance and although we plan to have
in place such insurance as and when the products are ready for commercialization, as well as insurance covering clinical trials, the amount
of such insurance coverage may not be adequate, we may be unable to maintain such insurance, or we may not be able to obtain additional
or replacement insurance at a reasonable cost, if at all. Our insurance policies may also have various exclusions, and we may be subject
to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement
that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital
to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such
indemnification may not be available or adequate should any claim arise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, we may be sued
if the products that we commercialize, market or sell cause or are perceived to cause injury or are found to be otherwise unsuitable,
and may result in:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">decreased demand for those products;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">damage to our reputation;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">limiting our opportunities to enter into future commercial partnership; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a decline in the price of our Class A Ordinary Shares.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our insurance coverage may be inadequate
to protect us against losses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently maintain property
insurance for our office premises (including two units of server and accessories). We hold employer&#8217;s liability insurance generally
covering death or work-related injury of employees; we maintain &#8220;Office Care Plan Insurance&#8221; for those persons working in
our offices and &#8220;Medical Plan&#8221; for our employee. We hold public liability insurance covering certain incidents involving unrelated
parties that occur on or in the premises of the Company. We have directors and officers liability insurance. We do not have key-man life
insurance on any of our senior management or key personnel, or business interruption insurance. Our insurance coverage may be insufficient
to cover any claim for product liability, damage to our fixed assets or employee injuries. If any claims for damage are brought against
us, or if we experience any business disruption, litigation or natural disaster, we might incur substantial costs and diversion of resources.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Fluctuations in exchange rates could result
in foreign currency exchange losses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our operations and equity
are funded in U.S. dollars and we currently incur the majority of our expenses in U.S. dollars or in H.K. dollars. H.K. dollar is currently
pegged to the U.S. dollar; however, we cannot guarantee that such peg will continue to be in place in the future. Our exposure to foreign
exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity and
limited revenue contracts dominated in H.K. dollars in certain Hong Kong operating entities. We do not believe that we currently have
any significant direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial
instruments.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are exposed to foreign
currency exchange risk as our results of operations, cash flows maybe subject to fluctuations in foreign currency exchange rates. For
example, if a significant portion of our clinical trial activities may be conducted outside of the United States, and associated costs
may be incurred in the local currency of the country in which the trial is being conducted, which costs could be subject to fluctuations
in currency exchange rates. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates
between particular foreign currencies and the U.S. dollar. A decline in the value of the U.S. dollar against currencies in countries in
which we conduct clinical trials could have a negative impact on our research and development costs. Foreign currency fluctuations are
unpredictable and may adversely affect our financial condition, results of operations and cash flows.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our investments are subject to risks that
could result in losses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We had unrestricted cash of
$1.88 million, $8.13 million, and $3.50 million as of December 31, 2022, 2021, and 2020, respectively. We may invest our cash in a variety
of financial instruments. All of these investments are subject to credit, liquidity, market and interest rate risk. Such risks, including
the failure or severe financial distress of the financial institutions that hold our cash, cash equivalents and investments, may result
in a loss of liquidity, impairment to our investments, realization of substantial future losses, or a complete loss of the investments
in the long-term, which may have a material adverse effect on our business, results of operations, liquidity and financial condition.
While we believe our cash position does not expose us to excessive risk, future investments may be subject to adverse changes in market
value.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are exposed to risks associated with
our computer hardware, network security and data storage.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Similar to all other computer
network users, our computer network system is vulnerable to attack of computer virus, worms, trojan horses, hackers or other similar computer
network disruptive problems. Any failure in safeguarding our computer network system from these disruptive problems may cause breakdown
of our computer network system and leakage of confidential information of the Company. Any failure in the protection of our computer network
system from external threat may disrupt our operation and may damage our reputation for any breach of confidentiality to our customers,
which in turn may adversely affect our business operation and performance. In the event that our confidential information is stolen and
misused, we may become exposed to potential risks of losses from litigation and possible liability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we are highly
dependent on our IT infrastructure to store research data and information and manage our business operations. We do not backup all data
on a real-time basis and the effectiveness of our business operations may be materially affected by any failure in our IT infrastructure.
If our communications and IT systems do not function properly, or if there is any partial or complete failure of our systems, we could
suffer financial losses, business disruption or damage to our reputation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Business disruptions could seriously harm
our future revenue and financial condition and increase our costs and expenses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our operations, and those
of our research institution collaborators, CROs, suppliers and other contractors and consultants, could be subject to supply chain disruptions,
earthquakes, power shortages, telecommunications failures, damage from computer viruses, material computer system failures, water shortages,
floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business
interruptions. In addition, we partially rely on our research institution collaborators for conducting research and development of our
drug candidates, and they may be affected by government shutdowns or withdrawn funding. The occurrence of any of these business disruptions
could seriously harm our operations and financial condition and increase our costs and expenses. We rely on contract manufacturers to
produce and process our drug candidates. Our ability to obtain clinical supplies of our drug candidates could be disrupted if the operations
of these suppliers are affected by a man-made or natural disaster or other business interruption. A large portion of our contract manufacturer&#8217;s
operations is located in a single facility. Damage or extended periods of interruption to our corporate or our contract manufacturer&#8217;s
development or research facilities due to fire, natural disaster, power loss, communications failure, unauthorized entry or other events
could cause us to cease or delay development of some or all of our drug candidates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be exposed to various risks related
to the regulatory environment of the pharmaceutical industry in the PRC.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have sold NativusWell<sup>&#174;
</sup>through JD.com in China since 2023; we are the exclusive licensee to certain PRC patents directed to our drug candidates; and we
also intend to file application for certain products in the PRC. The pharmaceutical industry in the PRC is subject to comprehensive government
regulation and supervision, encompassing the approval, registration, manufacturing, packaging, licensing and marketing of new drugs. (See
&#8220;Item 4. Information on the Company &#8211; B. Business Overview &#8211; Regulations&#8221;). In recent years, the regulatory framework
in the PRC regarding the pharmaceutical industry has undergone significant changes, and we expect that it will continue to undergo significant
changes. Any such changes or amendments may result in increased compliance costs on our business or cause delays in or prevent the successful
development or commercialization of our drug candidates in the PRC and reduce the current benefits that we believe are available to us
from developing and manufacturing drugs in the PRC. Chinese authorities have become increasingly vigilant in enforcing laws in the pharmaceutical
industry and any failure by us or our partners to maintain compliance with applicable laws and regulations or obtain and maintain required
licenses and permits may result in the suspension or termination of our business activities in the PRC. We believe our strategy and approach
is aligned with the PRC government&#8217;s policies, but we cannot ensure that our strategy and approach will continue to be aligned.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Changes in the political and
economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations
and may result in our inability to sustain our growth and expansion strategies. Our financial condition and results of operation in the
PRC could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable
to us, and consequently have a material adverse effect on our businesses, financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If the U.S. Public Company Accounting Oversight
Board, or the PCAOB, is unable to inspect our auditors as required under the Holding Foreign Companies Accountable Act, the SEC will prohibit
the trading of our Class A Ordinary Shares. A trading prohibition for our Class A Ordinary Shares, or the threat of a trading prohibition,
may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections of our
auditors would deprive our investors of the benefits of such inspections.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The U.S. Holding Foreign Companies
Accountable Act, or the HFCA Act, was enacted into law on December 18, 2020. Under the HFCA Act, if the SEC determines that we have filed
audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive
years, the SEC will prohibit our securities, including our Class A Ordinary Shares, from
being traded on a U.S. national securities exchange, including NASDAQ, or in the over-the-counter trading market in the U.S. Furthermore,
on June 22, 2021, the U.S. Senate passed the AHFCAA, which, if signed into law, would amend the HFCA Act and require the SEC to prohibit
an issuer&#8217;s securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two consecutive
years instead of three consecutive years, thus reducing the time period for triggering the prohibition on trading. On September 22, 2021,
the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated
under the HFCA Act, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign
jurisdiction because of a position taken by one or more authorities in that jurisdiction. On November 5, 2021, the SEC approved the PCAOB&#8217;s
Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act. Rule 6100 provides a framework for the PCAOB to use
when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting
firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021,
the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to
registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm
that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by
an authority in foreign jurisdictions. The process for implementing trading prohibitions pursuant to the HFCA Acts will be based on a
list of registered public accounting firms that the PCAOB has been unable to inspect and investigate completely as a result of a position
taken by a non-U.S. government, or the Relevant Jurisdiction, and such identified auditors, the PCAOB Identified Firms.&#160;&#160;The
first list of PCAOB Identified Firms was included in a release by the PCAOB on December 16, 2021, or the PCAOB December 2021 Release.
The SEC will review annual reports filed with it for fiscal years beginning after December 18, 2020 to determine if the auditor used for
such reports was so identified by the PCAOB, and such issuers will be designated as &#8220;Commission Identified Issuers&#8221; on a list
to be published by the SEC.&#160;&#160;If an issuer is a Commission Identified Issuer for two consecutive years (which will be determined
after the second such annual report), the SEC will issue&#160;a&#160;trading&#160;order that will implement&#160;prohibitions described
above.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 29, 2022, the
Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things,
an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering the prohibitions
under the HFCA Act from three years to two.</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our current independent
accounting firm, Marcum Asia CPAs LLP (formerly known as Marcum Bernstein &amp; Pinchuk LLP), whose audit report is included in this
annual report on Form 20-F, is headquartered in Manhattan, New York, and was not included in the list of PCAOB Identified Firms in
the PCAOB December 2021 Release. Our ability to retain an auditor subject to PCAOB inspection and investigation, including but not
limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese
regulators. Marcum Asia CPAs LLP&#8217;s audit working papers related to us are located in China. With respect to audits of
companies with operations in China, such as the Company, there are uncertainties about the ability of our auditor to fully cooperate
with a request by the PCAOB for audit working papers in China without the approval of Chinese authorities. If in the future Marcum
Asia CPAs LLP is included in the list of PCAOB Identified Firms and we are unable to retain a PCAOB-registered auditor subject to
PCAOB inspection and investigation, a trading prohibition for our Class A Ordinary Shares could be issued shortly after our filing
of the second consecutive annual report on Form 20-F for which we have retained a PCAOB Identified Firm.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our Class A Ordinary Shares
are subject to a trading prohibition under the HFCA Act, the price of our Class A Ordinary Shares may be adversely affected, and the threat
of such a trading prohibition would also adversely affect their price.&#160;If we are unable to be listed on another securities exchange
that provides sufficient liquidity, such a trading prohibition may substantially impair your ability to sell or purchase our Class A Ordinary
Shares when you wish to do so.&#160;Furthermore, if we are able to maintain a listing of our Class A Ordinary Shares on a non-U.S. exchange,
investors owning our Class A Ordinary Shares may have to take additional steps to engage in transactions on that exchange, including establishing
non-U.S. brokerage accounts.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The HFCA Act also imposes
additional certification and disclosure requirements for Commission Identified Issuers, and these requirements apply to issuers in the
year following their listing as Commission Identified Issuers. The additional requirements include a certification that the issuer is
not owned or controlled by a governmental entity in the Relevant Jurisdiction, and the additional requirements for annual reports include
disclosure that the issuer&#8217;s financials were audited by a firm not subject to PCAOB inspection, disclosure on governmental entities
in the Relevant Jurisdiction&#8217;s ownership in and controlling financial interest in the issuer, the names of Chinese Communist Party,
or CCP, members on the board of the issuer or its operating entities, and whether the issuer&#8217;s article&#8217;s include a charter
of the CCP, including the text of such charter.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the issues
under the HFCA discussed above, the PCAOB&#8217;s inability to conduct inspections in China and Hong Kong prevents it from fully evaluating
the audits and quality control procedures of the independent registered public accounting firm, consequently, investors would be deprived
of the benefits of such PCAOB inspections. Our current independent registered public accounting firm, Marcum Asia CPAs LLP, is headquartered
in Manhattan, New York, and has been inspected by the PCAOB on a regular basis with the last inspection in 2020. However, in the event
it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority
in a foreign jurisdiction, then such lack of inspection could cause trading in our securities to be prohibited under the HFCA Act, and
ultimately result in a determination by a securities exchange to delist our Class A Ordinary Shares.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The SEC could take the position that we
are an &#8220;investment company&#8221; subject to the extensive requirements of the Investment Company Act of 1940. Such a characterization
and the associated compliance requirements could have a material adverse effect on our business, financial condition, and results of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business had historically
included passive healthcare related investments in early stage companies primarily in the United States. Although we are in the process
of liquidating those securities that remain in our portfolio, we still hold some such investments and these are included as assets of
our Company on a consolidated basis. As part of the Restructure, we resolved to exit such portfolio investments over an appropriate timeframe
and focus our resources on our current business. Since the date of the Restructure, we have not held ourselves out as an investment company
and we do not believe we are an &#8220;investment company&#8221; under the&#160;Investment Company Act of 1940. If the SEC or a court,
however, were to disagree with us, we could be required to register as an investment company. This would subject us to disclosure and
accounting rules geared toward investment companies, rather than operating companies, which may limit our ability to borrow money, issue
options, issue multiple classes of stock and debt, and engage in transactions with affiliates, and may require us to undertake significant
costs and expenses to meet the disclosure and regulatory requirements to which we would be subject as a registered investment company.</p><div>



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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we are classified as a passive foreign investment company for U.S. federal income tax purposes, United States holders of our Class A
Ordinary Shares may be subject to adverse United States federal income tax consequences.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
non-U.S. corporation will be a passive foreign investment company (&#8220;PFIC&#8221;) for U.S. federal income tax purposes, for such
year, if either</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At least 75% of its gross
    income for such year is passive income; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The average percentage
    of our assets (determined at the end of each quarter) during such year which produce passive income or which are held for the production
    of passive income is at least 50%.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Passive
income generally includes dividends, interests, rents and royalties (other than rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
separate determination must be made after the close of each taxable year as to whether a non-U.S. corporation is a PFIC for that year.
For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets
of any entity in which it is considered to own at least 25% of the equity by value. Based on the current and anticipated value of our
assets, we believe we were a PFIC for U.S. federal income tax purposes for our taxable year ending December 31, 2022, and we may be a
PFIC for U.S. federal income tax purposes for our current taxable year ending December 31, 2023.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
determining whether we are a PFIC, cash and investments are considered by the U.S. Internal Revenue Service (&#8220;IRS&#8221;) to be
a passive asset. During our taxable year ending December 31, 2022, we believe that the amount of restricted and unrestricted cash we
had on hand and investments were greater than 50% of our total assets. The composition of our assets during the current taxable year
may cause us to continue to be classified as a PFIC. The determination of whether we will be a PFIC for our current taxable year or a
future year may depend in part upon how quickly we spend our liquid assets, and on the value of our goodwill and other unbooked intangibles
not reflected on our balance sheet, which may depend upon the market value of our Class A Ordinary Shares from time to time. Further,
while we will endeavor to use a classification methodology and valuation approach that is reasonable, the IRS may challenge our classification
or valuation of our goodwill and other unbooked intangibles for purposes of determining whether we are a PFIC in the current or one or
more future taxable years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are a PFIC for any taxable year during which a U.S. Holder owns our Class A Ordinary Shares or warrants, certain adverse U.S. federal
income tax consequences could apply to such U.S. Holder. As discussed under &#8220;Taxation &#8211; Material U.S. Federal Income Tax
Considerations for U.S. Holders &#8211; Passive Foreign Investment Company Rules&#8221;, a U.S. Holder may be able to make certain tax
elections that would lessen the adverse impact of PFIC status; however, in order to make such elections the U.S. holder will usually
have to have been provided information about the company by us, and there is no assurance that the company will provide such information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. holders if we were determined to be
a PFIC. (See &#8220;Item 10. Additional Information &#8211; E. Taxation&#160;&#8211;&#160;Material U.S. Federal Income Tax Considerations
for U.S. Holders&#160;&#8211;&#160;Passive Foreign Investment Company Rules&#8221;)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
results of operation may be negatively affected should the 2019-nCov virus (Coronavirus) continue to spread on a wider scale.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the outbreak of respiratory
illness caused by a novel coronavirus. Any outbreak of contagious diseases, and other adverse public health developments, particularly
in China, could have a material and adverse effect on our business operations. These could include disruptions or restrictions on our
ability to travel or to distribute our products, as well as temporary closures of our facilities or the facilities of our suppliers or
customers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
COVID-19 pandemic continues to rapidly evolve. The extent to which the outbreak impacts our business, preclinical studies and clinical
trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic
spread of the disease, the duration of the pandemic, travel restrictions and social distancing in various countries, business closures
or business disruptions and the effectiveness of actions taken to contain and treat the disease. If we or any of the third parties with
whom we engage were to experience shutdowns, undergo the compulsory universal testing by the HKSAR Government or other business disruptions,
our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the trading prices for our Class A Ordinary Shares and other biopharmaceutical companies have been highly volatile as a result
of the COVID-19 pandemic. As a result, we may face difficulties raising capital through sales of our securities or such sales may be
on unfavorable terms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
outbreak of the novel coronavirus disease, COVID-19, or other pandemic, epidemic or outbreak of an infectious disease may materially
and adversely impact our preclinical studies and clinical trials.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the COVID-19 outbreak, or similar pandemics, we have and may in the future experience disruptions that could materially and
adversely impact our manufacturing, preclinical development activities, preclinical studies and planned clinical trial. Potential disruptions
include but are not limited to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays or difficulties
    in enrolling patients in our clinical trials, should the relevant clinical trials be approved;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays or difficulties
    in initiating or expanding clinical trials, including delays or difficulties with clinical site initiation and recruiting clinical
    site investigators and clinical site staff;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    withdrawing from our clinical trials following enrollment as a result of contracting COVID-19 or other health conditions or being
    forced to quarantine;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and
    hospital staff supporting the conduct of our clinical trials;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by governments,
    employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject
    data and clinical study endpoints;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines for regulatory submission
    and trial initiation;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">interruption or delays
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    activities, preclinical studies and planned clinical trials;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays or disruptions in
    preclinical experiments and investigational new drug application-enabling or clinical trial application-enabling studies due to restrictions
    of on-site staff and unforeseen circumstances at contract research organizations and vendors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">interruption of, or delays
    in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production
    slowdowns or stoppages and disruptions in delivery systems;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">limitations on our ability
    to recruit and hire key personnel due to our inability to meet with candidates because of travel restrictions and &#8220;shelter
    in place&#8221; orders;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">limitations on employee
    resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness
    of employees or their families or the desire of employees to avoid contact with large groups of people; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">interruption or delays
    to our sourced discovery and clinical activities.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Our Corporate Structure</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>One
of our directors controls a majority of our voting shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">One
of our Non-Executive Directors and former CEO, Mr. Ian Huen, and his affiliates, over which he is deemed to have control and/or have
substantial influence, has voting rights with respect to an aggregate of 2,068,627 Ordinary Shares, on an as converted basis (462,480
Class A Ordinary Shares and 1,606,147 Class B Ordinary Shares), representing approximately 71% of the voting power of our outstanding
ordinary shares as of the date hereof. As a result, Mr.&#160;Huen has the ability to control the outcome of matters submitted to our
shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of
our assets. Additionally, in the event that Mr. Huen controls our company at the time of his death, control may be transferred to a person
or entity that he designates as his successor. As a board member, Mr.&#160;Huen owes a fiduciary duty to our shareholders and must act
in good faith in a manner he reasonably believes to be in the best interests of our shareholders. As a shareholder, even a controlling
shareholder, Mr.&#160;Huen is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements,
in his own interests, which may not always be in the interests of our shareholders generally.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>As
a &#8220;controlled company&#8221; under the rules of the NASDAQ Global Market, we may choose to exempt our company from certain corporate
governance requirements that could have an adverse effect on our public shareholders.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
directors and officers beneficially own a majority of the voting power of our outstanding Class A Ordinary Shares. Under the Rule 4350(c)
of the NASDAQ Global Market, a company of which more than 50% of the voting power is held by an individual, group or another company
is a &#8220;controlled company&#8221; and may elect&#160;not&#160;to comply with certain corporate governance requirements, including
the requirement that a majority of our directors be independent, as defined in the NASDAQ Global Market Rules, and the requirement that
our compensation and nominating and corporate governance committees consist entirely of independent directors. Although we do not intend
to rely on the &#8220;controlled company&#8221; exemption under the Nasdaq listing rules, we could elect to rely on this exemption in
the future. If we elect to rely on the &#8220;controlled company&#8221; exemption, a majority of the members of our board of directors
might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely
of independent directors. Accordingly, during any time while we remain a&#160;controlled company&#160;relying on the exemption and during
any transition period following a time when we are no longer a&#160;controlled company, you would not have the same protections afforded
to shareholders of companies that are subject to all of the NASDAQ Global Market corporate governance requirements. Our status as a controlled
company could cause our Class&#160;A Ordinary Share to look less attractive to certain investors or otherwise harm our trading price.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
may not be able to consolidate the financial results of some of our affiliated companies or such consolidation could materially adversely
affect our operating results and financial condition.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has three VIEs which are incorporated under the laws of Cayman Islands and conduct operations in Hong Kong. The Company currently
consolidates two of those VIEs since the Group has a variable interest in them and is determined to be the primary beneficiary of those
two VIEs under U.S. GAAP. This determination is based on whether the Group has a variable interest (or combination of variable interests)
that provides the Company with (a) the power to direct the activities that most significantly impact the VIEs&#8217; economic performance
and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Group continually
reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Group is involved with the VIE. According
to those standards, we determined that we have the power to manage and make decisions that affect Mios and Scipio&#8217;s research and
development activities, which activities most significantly impact Mios and Scipio&#8217;s economic performance. However, we do not have
such power over Libra&#8217;s research and development activities, which activities most significantly impact Libra&#8217;s economic
performance. Accordingly, we determined that we are the primary beneficiary of Mios and Scipio, but not the primary beneficiary of Libra.
As a result, Mios and Scipio&#8217;s financial results are consolidated in our consolidated financial statements. In the event that in
the future the VIEs no longer meet the definition of a VIE, or we are deemed not to be the primary beneficiary of the VIE for accounting
purpose, we would not be able to consolidate line by line that VIE&#8217;s financial results in our consolidated financial statements.
Also, if in the future an affiliate company becomes a VIE and we become the primary beneficiary of it for accounting purposes, we would
be required to consolidate that entity&#8217;s financial results in our consolidated financial statements. If such entity&#8217;s financial
results were negative, this could have a corresponding negative impact on our operating results.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
economic substance legislation of the Cayman Islands may adversely impact us or our operations.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to Cayman Islands economic substance legislation (&#8220;ESA&#8221;) requiring that where the Company carries on a
relevant activity (as defined in the ESA) it must maintain economic substance within the Cayman Islands, including adequate premises
and employees within the Cayman Islands. As an entity subject to the ESA, the Company is required to assess its operations to determine
the required compliance (if any) with the ESA, to file an annual notification with the Cayman Islands Registrar of Companies disclosing
whether the Company is carrying out any relevant activities within the meaning of the ESA and an annual return with the Department of
International Tax Co-Operation. Where applicable, the Company must establish that its operations satisfy the economic substance requirements
of the ESA. The Company is required to monitor its operations to ensure it remains in compliance with all requirements under the ESA.
Failure to satisfy these requirements may subject the Company to penalties under the ESA.<b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>EU
AML High-Risk Third Countries List</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 13, 2022, the European Commission (&#8220;EC&#8221;) updated its list of &#8216;high-risk third countries&#8217; (&#8220;EU AML
List&#8221;) identified as having strategic deficiencies in their anti-money laundering/counter-terrorist financing regimes to add nine
countries, including the Cayman Islands. The EC has noted it is committed to there being a greater alignment between the EU AML List
and the FATF listing process. The addition of the Cayman Islands to the EU AML List is a direct result of the inclusion of the Cayman
Islands on the FATF grey list in February 2021. It is unclear how long this designation will remain in place and what ramifications,
if any, the designation will have for the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Financial Action Task Force has increased monitoring of the Cayman Islands.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
February 2021, the Cayman Islands was added to the Financial Action Task Force (&#8220;FATF&#8221;) list of jurisdictions whose anti-money
laundering practices are under increased monitoring, commonly referred to as the &#8220;FATF grey list.&#8221; When the FATF places a
jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies
within agreed timeframes and is subject to increased monitoring during that timeframe. In its October 2021 and October 2022 plenary,
the FATF recognized the progress made by the Cayman Islands to improve its anti-money laundering and counter-terrorist financing regime.
Despite this recognition, it is still unclear how long this designation will remain in place and what ramifications, if any, the designation
will have for the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to our Securities</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we fail to comply with the continued listing requirements of NASDAQ, we would face possible delisting, which would result in a limited
public market for our shares and make obtaining future debt or equity financing more difficult for us.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 8, 2023, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the &#8220;<b>Staff</b>&#8221;)
of the Nasdaq Stock Market LLC (&#8220;<b>Nasdaq</b>&#8221;) notifying the Company that the Company does not meet the minimum Market
Value of Publicly Held Shares (&#8220;<b>MVPHS</b>&#8221;) of $5,000,000 for the previous 30 consecutive business days. The Nasdaq deficiency
letter has no immediate effect on the listing of the Company&#8217;s Class A Ordinary Shares, and its Class A Ordinary Shares will continue
to trade on The Nasdaq Global Market under the symbol &#8220;APM&#8221; at this time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has been given 180 calendar days, or until August 7, 2023, to regain compliance
with Rule 5450(b)(1)(C). If at any time before August 7, 2023, the MVPHS closes at $5,000,000 or more for a&#160;<i>minimum&#160;</i>of
ten consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance and the matter will
be closed.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company does not regain compliance with Rule 5450(b)(1)(C) by August 7, 2023, the Company will receive written notification that
its securities are subject to delisting and the Company may appeal the delisting determination to a Hearing&#8217;s Panel. Alternatively,
the Company may consider applying to transfer the Class A Ordinary Shares to The Nasdaq Capital Market. The Company intends to remain
on the Nasdaq Global Market and will actively monitor its MVPHS and will consider available options to resolve the deficiency and regain
compliance with Rule 5450(b)(1)(C).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company fails to regain compliance with any other listing rules when required in the future, we could be subject to suspension and
delisting proceedings. If our securities lose their status on the Nasdaq Capital Market, our securities would likely trade in the over-the-counter
market. If our securities were to trade on the over-the-counter market, selling our securities could be more difficult because smaller
quantities of securities would likely be bought and sold, transactions could be delayed, and security analysts&#8217; coverage of us
may be reduced. In addition, in the event our securities are delisted, broker-dealers have certain regulatory burdens imposed upon them,
which may discourage broker-dealers from effecting transactions in our securities, further limiting the liquidity of our securities.
These factors could result in lower prices and larger spreads in the bid and ask prices for our securities. Such delisting from the NASDAQ
Capital Market and continued or further declines in our share price could also greatly impair our ability to raise additional necessary
capital through equity or debt financing, and could significantly increase the ownership dilution to shareholders caused by our issuing
equity in financing or other transactions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Class
A Ordinary Shares eligible for future sale may adversely affect the market price of our Class A Ordinary Shares if the shares are successfully
listed on NASDAQ or other stock markets, as the future sale of a substantial amount of outstanding Class A Ordinary Shares in the public
marketplace could reduce the price of our Class A Ordinary Shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The market price of our Class
A Ordinary Shares could decline as a result of sales of substantial amounts of our Class A Ordinary Shares in the public market, or the
perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future
offerings of our Class A Ordinary Shares. An aggregate of 1,719,522 Class A Ordinary Shares are outstanding as of the date of this annual
report. 860,989 of the Class A Ordinary Shares are freely transferable without restriction or further registration under the Securities
Act. The remaining Class A Ordinary Shares will be &#8220;restricted securities&#8221; as defined in Rule 144. These Class A Ordinary
Shares may be sold without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities
Act.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>A
sale or perceived sale of a substantial number of our Ordinary Shares may cause the price of our Class A Ordinary Shares to decline.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
our shareholders sell substantial amounts of our Class A Ordinary Shares in the public market, the market price of our Class A Ordinary
Shares could fall. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and
investors to short our Class A Ordinary Shares. These sales also may make it more difficult for us to sell equity or equity-related securities
in the future at a time and price that we deem reasonable or appropriate.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Issuances
by us of additional securities, could affect ownership and voting rights over us. In addition, the issuance of preferred shares, or options
or warrants to purchase those preferred shares, could negatively impact the value of the Ordinary Shares as the result of preferential
dividend rights, conversion rights, redemption rights and liquidation provisions granted to the stockholders of such preferred shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, we may issue in public or private sales additional securities to third party investors. Such securities may provide holders
with ownership and voting rights that could provide the holders thereof with substantial influence over our business. Any preferred shares
that may be issued shall have such rights, preferences, privileges and restrictions as may be designated from time-to-time by our board,
including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions. There cannot
be any assurance that we will not issue preferred securities with rights and preferences that are more beneficial than those provided
to our Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to
the value of our shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have never paid any cash dividends on our Class A Ordinary Shares and do not anticipate paying any cash dividends on our Class A Ordinary
Shares in the foreseeable future, and any return on investment may be limited to the value of our Class A Ordinary Shares. We plan to
retain any future earnings to finance growth.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
dividend policy is subject to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial
condition, capital requirements and other factors. There is no assurance that our Board of Directors will declare dividends even if we
are profitable. Under Cayman Islands law, dividends may be declared and paid only out of funds legally available therefor, namely out
of either profit or our share premium account, and provided further that a dividend may not be paid if this would result in our Company
being unable to pay its debts as they fall due in the ordinary course of business and the realizable value of assets of our Company will
not be less than the sum of our total liabilities, other than deferred taxes as shown on our books of account, and our capital.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
Class B Ordinary Shares have greater voting power than our Class A Ordinary Shares and certain existing shareholders have substantial
influence over our Company and their interests may not be aligned with the interests of our other shareholders.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have a dual-class voting structure consisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of
Class A Ordinary Shares are entitled to one vote per share, and holders of Class B Ordinary Shares are entitled to one hundred votes
per share, which can cause the holders of Class B Ordinary Shares to have an unbalanced, higher concentration of voting power. Our management
team as a group beneficially owns over 1.8 million Class B Ordinary Shares representing approximately 81% voting power. As a result,
until such time as their collective voting power is below 50%, our management team as a group of controlling shareholders have substantial
influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets,
election of directors and other significant corporate actions. They may take actions that are not in the best interests of us or our
other shareholders. These corporate actions may be taken even if they are opposed by our other shareholders.&#160;Further,&#160;concentration&#160;of
ownership of our Class B Ordinary Shares may discourage, prevent or delay the consummation of change of control transactions that shareholders
may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. Future issuances
of Class B Ordinary Shares may also be dilutive to the holders of Class A Ordinary Shares. As a result, the market price of our Class
A Ordinary Shares could be adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
who hold shares of Class&#160;B Ordinary Shares, including our executive officers and their affiliates, hold approximately 99% of the
voting power of our outstanding ordinary shares. Because of the one hundred-to-one voting ratio between our Class&#160;B and Class&#160;A
Ordinary Shares, the holders of our Class&#160;B Ordinary Shares will collectively continue to control a majority of the combined voting
power of our Ordinary Shares and therefore be able to control all matters submitted to our shareholders for approval, so long as the
Class&#160;B Ordinary Shares represent at least 1.0% of all outstanding shares of our Ordinary Shares.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Raising
additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technology
or drug and diagnostics technology candidates.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may seek additional funding through a combination of equity offerings, debt financings, collaborations, licensing arrangements, strategic
alliances and marketing or distribution arrangements. To the extent that we raise additional capital through the sale of equity or convertible
debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect
your rights as a holder of our Class A Ordinary Shares. The incurrence of additional indebtedness or the issuance of certain equity securities
could result in increased fixed payment obligations, and could also result in certain additional restrictive covenants, such as limitations
on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license IP rights and other
operating restrictions that could adversely impact our ability to conduct our business. In addition, issuance of additional equity securities,
or the possibility of such issuance, may cause the market price of our Class A Ordinary Shares to decline. In the event that we enter
into collaborations or licensing arrangements to raise capital, we may be required to accept unfavorable terms, including relinquishing
or licensing to another party on unfavorable terms our rights to technology or drug and diagnostics technology candidates that we otherwise
would seek to develop or commercialize ourselves or potentially reserve for future potential arrangements when we might be able to achieve
more favorable terms.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Since
we are a Cayman Islands exempted company, the rights of our shareholders may be more limited than those of shareholders of a company
organized in the United States.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
corporate affairs are governed by our Third Amended and Restated Memorandum and Articles of Association (as may be amended from time
to time) (&#8220;Memorandum and Articles&#8221;), the Companies Act (2023 Revision) of the Cayman Islands (the &#8220;Companies Law&#8221;)
and the common law of the Cayman Islands.&#160;The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors are to a large extent governed by the common law of the Cayman Islands. This common
law is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which
has persuasive, but not binding, authority on a court in the Cayman Islands.&#160;Under the laws of some jurisdictions in the United
States, majority and controlling shareholders generally have certain fiduciary responsibilities to the minority shareholders. Shareholder
action must be taken in good faith, and actions by controlling shareholders which are obviously unreasonable may be declared null and
void. Cayman Islands law protecting the interests of minority shareholders may not be as protective in all circumstances as the law protecting
minority shareholders in some U.S. jurisdictions. In addition, the circumstances in which a shareholder of a Cayman Islands company may
sue the company derivatively, and the procedures and defenses that may be available to the company, may result in the rights of shareholders
of a Cayman Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders
may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The Cayman Islands courts are also
unlikely to recognize or enforce judgments from U.S. courts based on certain liability provisions of U.S. securities laws that are penal
in nature. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of
the Cayman Islands will generally recognize and enforce non-penal judgment of a foreign court of competent jurisdiction for a liquidated
sum without retrial on its merits which is not obtained in a manner contrary to public policy in the Cayman Islands and in respect of
which there are no concurrent proceedings in the Cayman Islands. This means, even if shareholders were to sue us successfully, they may
not be able to recover anything to make up for the losses suffered.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
our directors have the power to take certain actions without shareholder approval which would require shareholder approval under the
laws of most U.S. jurisdictions. For example, the directors of a Cayman Islands company, without shareholder approval, may implement
a sale of any assets, property, part of the business, or securities of the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
Cayman Islands law allows a dissenting shareholder to express the shareholder&#8217;s view that a court sanctioned reorganization of
a Cayman Islands company would not provide fair value for the shareholder&#8217;s shares, Cayman Islands statutory law does not specifically
provide for shareholder appraisal rights on a merger or consolidation of a company. This may make it more difficult for you to assess
the value of any consideration you may receive in a merger or consolidation or to require that the acquirer gives you additional consideration
if you believe the consideration offered is insufficient. However, Cayman Islands&#8217; statutory law does provide a mechanism for a
dissenting shareholder in a merger or consolidation to apply to the Grand Court for a determination of the fair value of the dissenter&#8217;s
shares, if it is not possible for the Company and the dissenter to agree a fair price within the time limits prescribed.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
of Cayman Islands exempted companies, such as our Company, have no general rights under Cayman Islands&#8217; law to inspect corporate
records and accounts or to obtain copies of lists of shareholders. Our directors have discretion under our Memorandum and Articles to
determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged
to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any
facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lastly,
under the law of the Cayman Islands, there is little statutory law for the protection of minority shareholders. The principal protection
under statutory law is that shareholders may bring an action to enforce the constituent documents of the corporation, our Memorandum
and Articles. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the memorandum
and articles of association.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common
law of the Cayman Islands for business companies is limited. Under the general rule pursuant to English company law known as the rule
in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of
its shareholders who express dissatisfaction with the conduct of the company&#8217;s affairs by the majority or the board of directors.
However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents
of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions
of the company&#8217;s memorandum and articles of association, then the courts will grant relief. Generally, the areas in which the courts
will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not
capable of ratification by the majority; (2) acts that constitute fraud on the minority where the wrongdoers control the company; (3)
acts that infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied
with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded
minority shareholders under the laws of many states in the United States subject to limited exceptions, under Cayman Islands Law a minority
shareholder may not bring a derivative action against directors. Our Cayman Islands&#8217; counsel has advised us that they are aware
of one recent as yet unreported derivative action having been brought in a Cayman Islands&#8217; court. Class actions are not recognized
in the Cayman Islands, but groups of shareholders with identical interests may bring representative proceedings, which are similar.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result, you may be limited in your ability to protect your interests if you are harmed in a manner that would otherwise enable you
to sue in a United States federal court. In addition, shareholders of Cayman Islands companies may not have standing to initiate a shareholder
derivative action in U.S. federal courts.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of all of the above, shareholders of our Company may have more difficulty in protecting their interests in the face of actions
taken by management, members of the board of directors or controlling shareholders than they would have as shareholders of a public U.S.
company.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>You
may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited
because we are incorporated under Cayman Islands law, we currently conduct substantially all of our operations outside the United States
and some of our directors and executive officers reside outside the United States.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are incorporated in the Cayman Islands and currently conduct substantially all of our operations outside the United States through our
subsidiaries. Some of our directors and executive officers reside outside the United States and a substantial portion of their assets
are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against
these individuals in the Cayman Islands, the United Kingdom or in Hong Kong, in the event that you believe that your rights have been
infringed under the securities laws of the United States or otherwise. Even if you are successful in bringing an action of this kind,
the laws of the Cayman Islands, the United Kingdom and Hong Kong may render you unable to enforce a judgment against our assets or the
assets of our directors and officers. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States,
the United Kingdom or Hong Kong, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment
of a foreign court of competent jurisdiction without retrial on the merits if such judgment is final, for a liquidated sum, not in the
nature of taxes, a fine or penalty, is not inconsistent with a Cayman Islands&#8217; judgment in respect of the same matters, and was
not obtained in a manner which is contrary to public policy. In addition, a Cayman Islands court may stay proceedings if concurrent proceedings
are being brought elsewhere.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>As
a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ
significantly from the NASDAQ Global Market corporate governance listing standards. These practices may afford less protection to shareholders
than they would enjoy if we complied fully with corporate governance listing standards.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a foreign private issuer, we are permitted to take advantage of certain provisions in the NASDAQ Global Market listing rules that allow
us to follow Cayman Islands law for certain governance matters. Certain corporate governance practices in the Cayman Islands may differ
significantly from corporate governance listing standards as, except for general fiduciary duties and duties of care, Cayman Islands
law has no corporate governance regime which prescribes specific corporate governance standards. We may follow Cayman Islands corporate
governance practices in lieu of the corporate governance requirements of the Nasdaq Global Market in respect of the following. For instance,
Cayman law does not require that we obtain shareholder approval to issue 20% or more of our outstanding Ordinary Shares in a private
offering nor we make our interim results available to shareholders, although as a NASDAQ listed company we are required to publicly file
interim results for the first six months of our fiscal year. Therefore, our shareholders may be afforded less protection than they otherwise
would have under corporate governance listing standards applicable to U.S. domestic issuers.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
are an emerging growth company within the meaning of the Securities Act and will take advantage of certain reduced reporting requirements.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an &#8220;emerging growth company,&#8221; as defined in the JOBS Act and take advantage of certain exemptions from various requirements
applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company.
As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information
they may deem important.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards
until such date that a private company is otherwise required to comply with such new or revised accounting standards. The Company has
elected to use the extended transition period for complying with new or revised accounting standard under Section 102(b)(2) of the Jobs
Act, that allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public
and private companies until those standards apply to private companies.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risks
Related to Doing Business in Hong Kong </b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Our
company currently only has limited operations to sell its NativusWell<sup>&#174;</sup> through one of mainland China&#8217;s largest e-commerce
platforms. Accordingly, the laws and regulations of the PRC do not currently have any material impact on our business, financial condition
and results of operations. However, if certain PRC laws and regulations were to become applicable to a company such as us in the future,
the application of such laws and regulations may have a material adverse impact on our business, financial condition and results of operations
and our ability to offer or continue to offer securities to investors, any of which may cause the value of our Class A Ordinary Shares,
to significantly decline or become worthless. See the following risk factors of &#8220;Our business, financial condition and results
of operations, and/or the value of our Class A Ordinary Shares or our ability to offer or continue to offer securities to investors may
be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us&#8221;
and &#8220;The PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws
of PRC must conduct their business activities. If we were to become subject to such direct influence or discretion, it may result in
a material change in our operations and/or the value of your Class A Ordinary Shares, which would materially affect the interests of
investors.&#8221;</i></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Political
risks associated with conducting business in Hong Kong.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
of our operations are based in Hong Kong. Accordingly, our business operations and financial conditions will be affected by the political
and legal developments in Hong Kong. During the period covered by the financial information incorporated by reference into and included
in this Report, we maintain substantially most of our operations in Hong Kong. Any adverse economic, social and/or political conditions,
material social unrest, strike, riot, civil disturbance or disobedience, as well as significant natural disasters, may affect the market
may adversely affect the business operations of our operations. Hong Kong is a special administrative region of the PRC and the basic
policies of the PRC regarding Hong Kong are reflected in the Basic Law (the &#8220;Hong Kong Basic Law&#8221; or the &#8220;Basic Law&#8221;),
namely, Hong Kong&#8217;s constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative
and independent judicial powers, including that of final adjudication under the principle of &#8220;one country, two systems&#8221;.
However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the
future. Since our operation is based in Hong Kong, any change of such political arrangements may pose immediate threat to the stability
of the economy in Hong Kong, thereby directly and adversely affecting our results of operations and financial positions.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Basic Law of the Hong Kong Special Administrative Region of the People&#8217;s Republic of China, Hong Kong is exclusively in charge
of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As
a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. Based on certain recent development
including the Law of the People&#8217;s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region
issued by the Standing Committee of the PRC National People&#8217;s Congress in June 2020, the U.S. State Department has indicated that
the United States no longer considers Hong Kong to have significant autonomy from China and Former President Trump signed an executive
order and Hong Kong Autonomy Act (&#8220;HKAA&#8221;) to remove Hong Kong&#8217;s preferential trade status and to authorize the U.S.
administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the
erosion of Hong Kong&#8217;s autonomy. The United States may impose the same tariffs and other trade restrictions on exports from Hong
Kong that it places on goods from mainland China. These and other recent actions may represent an escalation in political and trade tensions
involving the U.S., China and Hong Kong, which could potentially harm our business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our business operations, which
could in turn adversely and materially affect our business, results of operations and financial condition. It is difficult to predict
the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative
actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price
of our Ordinary Shares could be adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>If
we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have
to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation
and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recently,
U.S. public companies that have substantially all of their operations in China, including Hong Kong, have been the subject of intense
scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the
scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective
internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases,
allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese
companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject
to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It
is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on our company, our business and our stock
price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have
to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming
and distract our management from growing our company.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
recent joint statement by the SEC, proposed rule changes submitted by Nasdaq, and an act passed by the U.S. Senate and the U.S. House
of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments
could add uncertainties to our offering, business operations, share price and reputation.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
public companies that have substantially all of their operations in China and Hong Kong have been the subject of intense scrutiny, criticism
and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism
and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over
financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China, including Hong Kong, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting
accounting firms and audit work papers in China and Hong Kong and higher risks of fraud in emerging markets and the difficulty of bringing
and enforcing SEC, Department of Justice and other U.S. regulatory actions, including in instances of fraud, in emerging markets generally.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 20, 2020, the U.S. Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a foreign government
if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the
PCAOB is unable to inspect the company&#8217;s auditors for three consecutive years, the issuer&#8217;s securities are prohibited to
trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 21, 2021, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in a &#8220;Restrictive Market&#8221;, (ii) prohibit Restrictive Market companies from directly listing on Nasdaq Capital Market, and
only permit them to list on Nasdaq Global Select or Nasdaq Global Market in connection with a direct listing and (iii) apply additional
and more stringent criteria to an applicant or listed company based on the qualifications of the company&#8217;s auditors.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of
the HFCA Act. In the announcement, the SEC clarifies that before any issuer will have to comply with the interim final amendments, the
SEC must implement a process for identifying covered issuers. The announcement also states that the SEC staff is actively assessing how
best to implement the other requirements of the HFCA Act, including the identification process and the trading prohibition requirements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 22, 2021, the U.S. Senate passed the AHFCAA, which, if signed into law, would amend the HFCA Act and require the SEC to prohibit
an issuer&#8217;s securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two
consecutive years instead of three consecutive years.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining,
as contemplated under the HFCA Act, whether the board of directors of a company is unable to inspect or investigate completely registered
public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered
public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities
in those jurisdictions.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden. The Consolidated Appropriations Act contained,
among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering
the prohibitions under the HFCA Act from three years to two.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the
auditors based in China. As a result, investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB
to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firm&#8217;s audit
procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could
cause investors and potential investors in our Class A Ordinary Shares to lose confidence in our audit procedures and reported financial
information and the quality of our financial statements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our auditor, Marcum Asia CPAs
LLP, as the auditor of companies that are traded publicly in the U.S. and registered with the PCAOB, are subject to laws in the U.S.,
pursuant to which the PCAOB conducts regular inspections to assess their compliance with the applicable professional standards. Marcum
Asia CPAs LLP is headquartered in Manhattan, New York, and have been inspected by the PCAOB on a regular basis, with the last inspections
in 2020, and Marcum Asia CPAs LLP is not subject to the determinations announced by the PCAOB on December 16, 2021.</p><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
the recent developments would add uncertainties to our ability to offer or continue to offer securities and we cannot assure you whether
the national securities exchange we apply to for listing or regulatory authorities would apply additional and more stringent criteria
to us after considering the effectiveness of our auditor&#8217;s audit procedures and quality control procedures, adequacy of personnel
and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. In addition, the HFCA Act, as
amended, which requires that the PCAOB be permitted to inspect an issuer&#8217;s public accounting firm within two years, may result
in the delisting of our Company or prohibition of trading in our Class A Ordinary Shares in the future if the PCAOB is unable to inspect
our accounting firm at such future time.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 26, 2022, the China Securities Regulatory Commission, the MOF, and the PCAOB signed the Protocol governing inspections and investigations
of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate
registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol
disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has
the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to
secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and
voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate
the PCAOB&#8217;s access in the future, the PCAOB Board will consider the need to issue a new determination.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of this scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese and Hong Kong companies
sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder
lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what
effect this sector-wide scrutiny, criticism and negative publicity will have on us, our ability to offer or continue to offer securities,
business and our share price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true
or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will
be costly and time consuming and distract our management from developing our growth. If such allegations are not proven to be groundless,
we and our business operations will be severely affected and you could sustain a significant decline in the value of our share.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Nasdaq
may apply additional and more stringent criteria for our continued listing because our insiders hold a large portion of our listed securities.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nasdaq
Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and
Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing
of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs
that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though
the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to
deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to:
(i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or
an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company&#8217;s
audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company&#8217;s
listed securities; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S.
shareholders, operations, or members of the board of directors or management. The insiders of our Company hold a large portion of the
company&#8217;s listed securities. Therefore, we may be subject to the additional and more stringent criteria of Nasdaq for our continued
listing, which might result in deficiency letters or inquiries that will take management&#8217;s time away from focusing on our operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
business, financial condition and results of operations, and/or the value of our Class A Ordinary Shares or our ability to offer or continue
to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable
to a company such as us.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently do not have or intend to have any subsidiary or any contractual arrangement to establish a variable interest entity structure
with any entity in mainland China. All of our operating entities are in jurisdictions outside of mainland China, including all three
of our VIEs which are incorporated under the laws of Cayman Islands and conduct operations in Hong Kong. However, as our principal place
of business is in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing or future laws
of the PRC become applicable to a company such as us, it will not have a material adverse impact on our business, financial condition
and results of operations and/or our ability to offer or continue to offer securities to investors, any of which may cause the value
of such securities to significantly decline or be worthless.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
for the Basic Law, the national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied
locally by promulgation or local legislation. National laws that may be listed in Annex III are currently limited under the Basic Law
to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong
Kong. National laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III and
so do not apply directly to Hong Kong.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
laws and regulations in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties.
To the extent any PRC laws and regulations become applicable to us, we may be subject to the risks and uncertainties associated with
the legal system in the PRC, including with respect to the enforcement of laws and the possibility of changes of rules and regulations
with little or no advance notice. We currently do not have plan to expand our operation or acquire any operation in the mainland China.
However, we may also become subject to the laws and regulations of the PRC to the extent we commence business and customer facing operations
in mainland China as a result of any future acquisition, expansion or organic growth.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws of PRC must
conduct their business activities. If we were to become subject to such direct influence or discretion, it may result in a material change
in our operations and/or the value of our Class A Ordinary Shares, which would materially affect the interest of the investors. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC legal system is evolving rapidly and the PRC laws, regulations, and rules may change quickly with little advance notice. In particular,
because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential
nature of these decisions, the interpretation of these laws, rules and regulations may contain inconsistences, the enforcement of which
involves uncertainties. The PRC government has exercised and continues to exercise substantial control over many sectors of the PRC economy
through regulation and/or state ownership. Government actions have had, and may continue to have, a significant effect on economic conditions
in the PRC and businesses which are subject to such government actions.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have business operations in Hong Kong, with limited operations to sell its NativusWell<sup>&#174;</sup> through e-commerce in mainland
China, and we directly, or indirectly via our subsidiaries, own equity interests in our operating entities, none of which are located
in mainland China, although all three of our VIEs are incorporated under the laws of Cayman Islands and conduct operations in Hong Kong.
Our principal executive offices are located in Europe, but our principal place of business is in Hong Kong, a special administrative
region of China. The PRC government currently does not exert direct influence and discretion over the manner in which we conduct our
business activities outside of mainland China, however, there is no guarantee that we will not be subject to such direct influence or
discretion in the future due to changes in laws or other unforeseeable reasons or as a result of our future expansion or acquisition
of operations in mainland China. See &#8220;- Our business, financial condition and results of operations, and/or the value of our Class
A Ordinary Shares or our ability to offer or continue to offer securities to investors may be materially and adversely affected to the
extent the laws and regulations of the PRC become applicable to a company such as us.&#8221;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently do not have plans to expand our operation or acquire any operation in the mainland China. However, if we were to become subject
to the direct intervention or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons or as
a result of our future development, expansion or acquisition of operations in the PRC, it may require a material change in our operations
and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure
to comply. In addition, the market prices of our Class A Ordinary Shares could be adversely affected as a result of anticipated negative
impacts of any such government actions, as well as negative investor sentiment towards Hong Kong-based companies subject to direct PRC
government oversight and regulation, regardless of our actual operating performance. There can be no assurance that the Chinese government
would not intervene in or influence our operations at any time.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
were not required to obtain permission from the PRC government to list on a U.S. securities exchange, however there is no guarantee that
this will continue to be the case in the future in relation to the continued listing of our securities on a securities exchange outside
of the PRC, or even when such permission is obtained, it will not be subsequently denied or rescinded. Any actions by the PRC government
to exert more oversight and control over offerings (including of businesses whose primary operations are in Hong Kong) that are conducted
overseas and/or foreign investments in Hong Kong-based issuers could significantly limit or completely hinder our ability to offer or
continue to offer securities to investors and cause the value of our securities, including our Class A Ordinary Shares, to significantly
decline or be worthless.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the &#8220;Hong Kong National
Security Law&#8221;) could impact our Hong Kong holding subsidiary. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 30, 2020, the Standing Committee of the PRC National People&#8217;s Congress adopted the Hong Kong National Security Law. This law
defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories
of offences - secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national
security - and their corresponding penalties. On July 14, 2020, the former U.S. President Donald Trump signed the Hong Kong Autonomy
Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined
to have materially contributed to the erosion of Hong Kong&#8217;s autonomy. On August 7, 2020 the U.S. government imposed HKAA-authorized
sanctions on eleven individuals, including former HKSAR chief executive Carrie Lam. On October 14, 2020, the U.S. State Department submitted
to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to &#8220;the failure
of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.&#8221; The HKAA further authorizes secondary
sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant
transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect the foreign financial
institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult
to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. If our Hong
Kong subsidiaries are determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, our
business operations, financial position and results of operations could be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>The
Hong Kong legal system embodies uncertainties which could limit the availability of legal protections. </i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
one of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong&#8217;s
Basic Law. The Basic Law ensured Hong Kong will retain its own currency (Hong Kong Dollar), legal system, parliamentary system and people&#8217;s
rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function with a high degree of autonomy.
The Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary
and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English
common law system.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
if the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong&#8217;s
common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could,
in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality
protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect
of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation
or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections
available to us, including our ability to enforce our agreements with our customers.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>There
remain some uncertainties as to whether we will be required to obtain approvals from Chinese authorities to list on the U.S. exchanges
and offer or continue to offer securities in the future, and if required, we cannot assure you that we will be able to obtain such approval.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the &#8220;M&amp;A Rules&#8221;), adopted by six
PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through
acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the China Securities
Regulatory Commission (&#8220;CSRC&#8221;) prior to the listing and trading of such special purpose vehicle&#8217;s securities on an
overseas stock exchange.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are also aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market,
enhancing supervision over mainland-China-based companies listed overseas using variable interest entity structure, adopting new measures
to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, on July 6, 2021, the
General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document
to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among
other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,
to enhance supervision over mainland-China-based companies listed overseas, and to establish and improve the system of extraterritorial
application of the PRC securities laws.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 28, 2021, the Cyberspace Administration of China (&#8220;CAC&#8221;), and other PRC authorities promulgated the Cybersecurity
Review Measures, which took effect on February 15, 2022. In addition, the Cybersecurity Law, which was adopted by the Standing Committee
of the National People&#8217;s Congress on November 7, 2016 and came into force on June 1, 2017, and the Cybersecurity Review Measures,
or the &#8220;Review Measures&#8221;, provide that personal information and important data collected and generated by a critical information
infrastructure operator in the course of its operations in mainland China must be stored in mainland China, and if a critical information
infrastructure operator purchases internet products and services that affect or may affect national security, it should be subject to
national security review by the CAC together with competent departments of the State Council. In addition, for critical information infrastructure
operators, or the &#8220;CIIOs&#8221;, that purchase network-related products and services, the CIIOs shall declare any network-related
product or service that affects or may affect national security to the Office of Cybersecurity Review of the CAC for cybersecurity review.
Due to the lack of further interpretations, the exact scope of what constitutes a &#8220;CIIO&#8221; remains unclear. Further, the PRC
government authorities may have wide discretion in the interpretation and enforcement of these laws. In addition, the Review Measures
stipulates that any online platform operators holding more than one million users/users&#8217; individual information shall be subject
to cybersecurity review before listing abroad. As of the date of the annual report, neither we nor our subsidiaries have received any
notice from any authorities identifying us or our subsidiaries as a CIIO or requiring us or our subsidiaries to undertake a cybersecurity
review by the CAC. Further, as of the date of the annual report, neither we nor our subsidiaries have been subject to any penalties,
fines, suspensions, or investigations from any competent authorities for violation of the regulations or policies that the CAC has issued.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 10, 2021, the Standing Committee of the National People&#8217;s Congress promulgated the Data Security Law, which took effect on
September 1, 2021. The Data Security Law requires that data shall not be collected by theft or other illegal means, and it also provides
for a data classification and hierarchical protection system. The data classification and hierarchical protection system protects data
according to its importance in economic and social development, and the damages it may cause to national security, public interests,
or the legitimate rights and interests of individuals and organizations if the data is falsified, damaged, disclosed, illegally obtained
or illegally used, which protection system is expected to be built by the state for data security in the near future. On November 14,
2021, CAC published the Regulations on the Data Security Administration Draft, or the &#8220;Data Security Regulations Draft&#8221;,
to solicit public opinion and comments. Under the Data Security Regulations Draft, an overseas initial public offering to be conducted
by a data processor processing the personal information of more than one million individuals shall apply for a cybersecurity review.
Data processor means an individual or organization that independently makes decisions on the purpose and manner of processing in data
processing activities, and data processing activities refers to activities such as the collection, retention, use, processing, transmission,
provision, disclosure, or deletion of data. Currently we do not expect the Review Measures to have an impact on the business and operations
of our Hong Kong subsidiaries, because (i) our Hong Kong subsidiaries are incorporated and operating in Hong Kong without any subsidiary
or variety interest entity (&#8220;VIE&#8221;) structure in mainland China, and it is unclear whether the Review Measures shall be applied
to a Hong Kong company; (ii) as of the date of the annual report, our Hong Kong subsidiaries have not collected or stored personal information
of any individual clients of mainland China; and (iii) as of the date of this annual report, our Hong Kong subsidiaries have not been
informed by any PRC governmental authority of any requirement that it file for a cybersecurity review for the offering. Based on laws
and regulations currently in effect in the PRC as of the date of this annual report, we believe our Hong Kong subsidiaries are not required
to pass the cybersecurity review of the CAC in order to list our Class A Ordinary Shares in the U.S.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the
Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing
procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial
public offerings or listing application. If a PRC company fails to complete required filing procedures or conceals any material fact
or falsifies any major content in its filing documents, such PRC company may be subject to administrative penalties, such as order to
rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable
persons may also be subject to administrative penalties, such as warnings and fines. In addition, on February 24, 2023, the CSRC, together
with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China,
revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which
was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or
the Provisions. The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration
of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as
is consistent with the Trial Measures. The revised Provisions require that, including but not limited to (a) a domestic company that
plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities
including securities companies, securities service providers and overseas regulators, any documents and materials that contain state
secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file
with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through
its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities
service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security
or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. As of the date of this
annual report, we have not received any formal inquiry, notice, warning, sanction, or objection from the CSRC with respect to the listing
of our Class A Ordinary Shares. However, there remains significant uncertainty as to the enactment, interpretation and implementation
of regulatory requirements related to overseas securities offerings and other capital markets activities. If it is determined that we
are subject to the Trial Measures for the listing of the Ordinary Shares on the Nasdaq, we may fail to obtain required approval, complete
required filing or meet such requirements in a timely manner or at all, or completion could be rescinded. Any failure or perceived failure
of us to fully comply with such new regulatory requirements could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors, cause significant disruption to our business operations, and severely damage our reputation, which
could materially and adversely affect our financial condition and results of operations and could cause the value of our securities to
significantly decline or be worthless. </span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are determined to be subject to the Draft Rules Regarding Overseas Listings, we cannot assure you that we will be able to receive
clearance of such filing requirements in a timely manner, or at all, even though we believe that none of the situations that would clearly
prohibit overseas listing and offering applies to us. Based on laws and regulations currently in effect in the PRC as of the date of
this annual report, we believe our Hong Kong subsidiaries are not required to obtain regulatory approval from the CSRC in order to list
our Class A Ordinary Shares in the U.S.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
these proposed rules, statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation
making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified
or promulgated, if any. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder
our ability to offer or continue to offer the Class A Ordinary Shares, cause significant disruption to our business operations, severely
damage our reputation, materially and adversely affect our financial condition and results of operations, and cause the Class A Ordinary
Shares to significantly decline in value or become worthless.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we believe are not required to obtain approvals from the PRC authorities to operate our business or
list on the U.S. exchanges and offer or continue to offer securities; specifically, we are currently not required to obtain any permission
or approval from the CSRC, the CAC or any other PRC governmental authority to operate our business or to list our securities on a U.S.
securities exchange or issue securities to foreign investors. However, if we and our Hong Kong subsidiaries (i) do not receive or maintain
such approval, should the approval be required in the future by the PRC government, (ii) inadvertently conclude that such approval is
not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such approval in the future,
our operations and financial condition could be materially adversely affected, and our ability to offer or continue to offer securities
to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline
in value and become worthless.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevertheless,
since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making
bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or
promulgated, if any. It is also highly uncertain what potential impact such modified or new laws and regulations will have on Aptorum
Group&#8217;s daily business operations, our ability to accept foreign investments and the listing of our Class A Ordinary Shares on
a U.S. or other foreign exchanges. If there is significant change to current political arrangements between mainland China and Hong Kong,
the PRC government intervenes or influences operations of companies operated in Hong Kong like us, or exerts more control through change
of laws and regulations over offerings conducted overseas and/or foreign investment in issuers like us, it may result in a material change
in our operations and/or the value of the securities we are registering for sale or could significantly limit or completely hinder our
ability to offer or continue to offer securities to investors and cause the value of our Class A Ordinary Shares to significantly decline
or become worthless.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>It
may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within China.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholder
claims or regulatory investigations that are common in the United States generally are difficult to pursue as a matter of law or practicality
in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations
or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities
regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the
securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanisms.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities
regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed
interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator
to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting
your interests.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
auditor&#8217;s audit working papers are located in PRC. In the event that the U.S. regulators carry out investigation on us and there
is a need to conduct investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry
out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation
with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism
established with the securities regulatory authority of the PRC.</span></p><div>

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</div><div><a id="a_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
4. INFORMATION ON THE COMPANY</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">History and Development of the Company</span></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aptorum
was incorporated under the laws of the Cayman Islands on September 13, 2010. Our share capital is $100,000,000.00 divided into 9,999,996,000,000
Class A Ordinary Shares with a nominal or par value of $0.00001 each and 4,000,000 Class B Ordinary Shares with a nominal or par value
of $0.00001 each.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aptorum
is not a Chinese operating company. Aptorum is a Cayman Islands holding company with operations conducted through our subsidiaries and
the variable interest entities (VIEs). We have determined that we have three VIEs, namely, Libra, Mios and Scipio, according to the U.S.
GAAP. In accordance with ASC 810, we concluded that we are the primary beneficiary of two VIEs, Mios and Scipio, therefore, are able
to consolidate their financial statements into ours. Mios and Scipio are incorporated under the laws of the Cayman Islands and conduct
operations in Hong Kong. Our corporate structure is based on the equity ownership and control we have over our subsidiaries and the consolidated
VIEs. Our corporate structure was not set up to be used to provide investors with exposure to foreign investment in China-based companies
where Chinese law prohibits direct foreign investment in the operating companies. Foreign investment can be made directly into the VIEs,
however, your investments into Aptorum are made into the Cayman Islands holding company, not any of our VIEs, and you may never own any
equity into the VIEs or any other subsidiary.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aptorum
Therapeutics Limited, a Cayman Islands company with limited liability, entered into two concerted action agreements (&#8220;Concerted
Action Agreements&#8221;), with Peace Range Limited, a shareholder of the two consolidated VIEs, on December 30, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the two Concerted Action Agreements, Peace Range Limited and Aptorum Therapeutics Limited agreed to act in concert and give the same
expression of intentions in regard with (1) exercising voting rights at shareholders&#8217; meetings; (2) making proposals to shareholder&#8217;s
meetings; (3) nominating candidates of directors and supervisors; (4) making material decisions for the consolidated VIEs (save for the
administrative and managerial duty of work being managed by the board of directors and executives of the consolidated VIEs); (5) exercising
the rights as shareholders of the consolidated VIEs in accordance with their articles of association and other relevant agreements or
documents between the consolidated VIEs and other related parties; (6) performing the obligations as shareholders of the consolidated
VIEs in accordance with the articles of association and other relevant agreements or documents between the consolidated VIEs and other
related parties; and (7) exercising other rights granted to shareholders of the consolidated VIEs under laws, administrative regulations,
other normative documents, and the articles of association of the consolidated VIEs. The Concerted Action Agreements are governed by
and interpreted in accordance with the laws of Hong Kong. The copies of the Concerted Action Agreements were filed as exhibits 4.47 and
4.48 to the Form 20-F filed on April 29, 2022. The Concerted Action Agreements are governed by the laws of Hong Kong. The &#8220;acting
in concert&#8221; agreements like the Concerted Actions Agreements with substantially the same nature have been tested in the courts
in Hong Kong. The Hong Kong courts will enforce unless the agreements are unenforceable for other reason(s) such as the agreements are,
among others, illegal or made to mislead others, or for the purpose of avoidance of legal requirements and lack a bona fide business
purpose. We do not believe that the Concerted Actions Agreements fall within the exceptions that will make them unenforceable in Hong
Kong courts.&#8221; (Please see the risk factor section, &#8220;Risks Related to our Corporate Structure&#8221; and &#8220;Risks Related
to Doing Business in Hong Kong&#8221; for more information about the VIEs).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
current business consists of &#8220;therapeutics&#8221; and &#8220;non-therapeutics&#8221; segments, all of which we operate through
our subsidiaries (See the ownership chart on page 67).&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
refer to our therapeutics segment as Aptorum Therapeutics Group, which is operated through Aptorum&#8217;s wholly-owned subsidiary, Aptorum
Therapeutics Limited, a Cayman Islands exempted company with limited liability, whose principal place of business is in Hong Kong and
whose subsidiaries (who we sometimes refer to herein as project companies) are based in the United Kingdom, Singapore and Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
refer to our non-therapeutics segment as Aptorum Non-Therapeutics Group. The Non-Therapeutics Group consists of: (i) diagnostics projects
including Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology, (ii) natural
supplements including NativusWell<sup>&#174;</sup>, and (iii) AML Clinic. Paths<sup>Dx</sup> Test technology is currently under co-development
with A*STAR. The sale of natural supplements is operated through Nativus Life Sciences Limited (&#8220;Nativus&#8221;), a subsidiary
of Aptorum Therapeutics Limited incorporated in the Cayman Islands. The Group&#8217;s outpatient clinic is operated through our subsidiary,
Aptorum Medical Limited, which is a Hong Kong-based company incorporated in the Cayman Islands with an office in Central, Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 25, 2020, Aptorum, via its subsidiaries, enters into a series of transactions with Accelerate Technologies Pte. Ltd.&#8217;s
(&#8220;Accelerate Technologies&#8221;), the commercialization arm of the Singapore Agency for Science, Technology and Research (&#8220;A*STAR&#8221;),
in relation to the research and development of Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification and detection
diagnostics technology, through its subsidiaries. Specifically, Paths Diagnostics Pte. Limited (formerly known as Aptorum Innovations
Holding Pte. Limited), one of the Company&#8217;s subsidiaries, entered into an Exclusive Licence Agreement with Accelerate Technologies
to co-develop the Paths<sup>Dx</sup> Test technology. The term of the Exclusive Licence Agreement is described in Exhibit 4.62 on Form
20-F filed with the SEC on April 19, 2021. Furthermore, Accelerate Technologies, the inventors of the Paths<sup>Dx</sup> Test technologies
in A*STAR (&#8220;Founding Scientists&#8221;), Paths Diagnostics Pte. Limited, and Paths Innovations Limited (formerly known as Aptorum
Innovations Holding Limited), a wholly owned subsidiary of the Company, entered into a Share Subscription &amp; Shareholders Agreement
on the same day to subscribe ordinary shares of Paths Diagnostics Pte. Limited. The shares are subscribed and issued in two tranches,
the first tranche has taken place at closing of the Share Subscription &amp; Shareholders Agreement, while the second tranche will take
place after the certain first milestone is met. The total number of shares subscribed by the shareholders under the Share Subscription
&amp; Shareholders Agreement is around 2.7 million. After the two tranches of subscription, Aptorum, Accelerate Technologies and the
Founding Scientists are expected to control 71.23%, 14.25% and 9.53% of the share of Paths Diagnostics Pte. Limited respectively, with
4.99% of the shares reserved for its employee share plan.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">APTUS
CAPITAL LIMITED, which has since been renamed to AENEAS CAPITAL LIMITED, was always under the direct ownership of Jurchen and not under
the ownership chain of Aptorum Group. However, Aptus Asia Financial Holdings Limited (&#8220;AAFH&#8221;), which has since been renamed
to Aeneas Group Limited, was transferred out of the Aptorum Group on November 10, 2017 to be held directly by Jurchen Investment Corporation
and that subsequently, APTUS CAPITAL LIMITED was then transferred to be under AAFH.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 4, 2017, Mr. Huen transferred all of the ordinary shares in the Company he owned (in the amount of 2,230,760) to Jurchen, a company
incorporated in the British Virgin Islands and wholly-owned by Mr. Huen. On October 13, 2017, as part of the Conversions (as defined
below) the ordinary shares held by Jurchen were redesignated as 223,076 Class A Ordinary Shares and 2,007,684 Class B Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 21 and March 1, 2017, the Company&#8217;s board of directors and shareholders resolved to restructure the Company from an investment
fund with management shares and non-voting participating redeemable preference shares to a holding company with operating subsidiaries,
respectively (the &#8220;Restructuring Plan&#8221;).</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the Restructuring Plan, the 256,571.12 then issued participating shares with par value of $0.01 (&#8220;Participating Shares&#8221;)
were redeemed and 4,743,418.88 unissued Participating Shares were cancelled;&#160;&#160; following such redemption and cancellation,
we no longer have any Participating Shares authorized or issued. Additionally, the Company authorized a class of securities consisting
of 10,000,000 ordinary shares, par value $10.00 per share and issued 2,565,711 ordinary shares to our original investors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the period March 1, 2017 through October 13, 2017, an aggregate of 220,703 ordinary shares were issued at a price of approximately $39
per share in a private placement we described as a &#8220;Series A&#8221; offering. Each investor of the Series A offering, in addition
to a subscription agreement, signed a shareholder agreement, which set forth the basic governance terms of the Company, as well as our
capital structure. The shareholders agreement was terminated in October 2017.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 13, 2017, ordinary resolutions were passed at an extraordinary
general meeting of the Company approving (the &#8220;Conversions&#8221;): (i) converting 7,213,587 of authorized but unissued ordinary
shares into 5,457,362 authorized but unissued Class A Ordinary Shares, par value of $10.00 per share and 1,756,225 authorized but unissued
Class B Ordinary Shares, par value of $10.00 per share, respectively; (ii) converting 2,493,085 ordinary shares held by three shareholders
into an aggregate of 249,309 Class A Ordinary Shares and 2,243,776 Class B Ordinary Shares; and (iii) converting 293,330 ordinary shares
held by 24 shareholders into an aggregate 293,330 Class A Ordinary Shares. Following these issuances, we had 27 shareholders of record.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 19, 2017, we changed our name from APTUS Holdings Limited to our current name, Aptorum Group Limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 23, 2018, Jurchen transferred 44,615 Class A Ordinary Shares and 401,537 Class B Ordinary Shares to CGY Investments Limited, a
company incorporated in Hong Kong and which we deem Mr. Darren Lui jointly controls and/or of which he has substantial influence on the
disposition rights and voting rights of such shares.&#160;Following this transfer, Jurchen owns approximately 33% and 72% of our Class
A Ordinary Shares and Class B Ordinary Shares, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 17, 2018, the Company consummated its IPO of 76,142 Class A Ordinary Shares. The Registration Statement was declared effective
by the U.S. Securities and Exchange Commission on December 3, 2018 (the &#8220;Effective Date&#8221;). The shares were sold at a price
of $158 per share, generating gross proceeds to the Company of approximately $12,030,420.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 26, 2021, the Company entered into a private placement shares purchase agreement with Jurchen, issuing 138,793 Class A Ordinary Shares,
par value $10 per share, at $28.82 per share, representing a 10% premium to the last closing price of the Company&#8217;s Class A Ordinary
Shares on the NASDAQ stock exchange on that date. The Company received aggregate gross proceeds of $4,000,000 from the purchase of these
shares. Following the purchase, Mr. Huen&#8217;s total shareholding represented 55.52% of the total issued share capital of the Company.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 23, 2023, the Company effectuated a ten-for-one share consolidation of its authorized share capital, such that every 10 Class
A Ordinary Shares, par value of US$1.00 per share, in the authorized share capital of the Company (including issued and unissued share
capital) be consolidated into 1 Class A Ordinary Share, par value of US$10.00 per share, and that every 10 Class B Ordinary Shares, par
value of US$1.00 per share in the authorized share capital of the Company (including issued and unissued share capital) be consolidated
into 1 Class B Ordinary Share, par value of US$10.00 per share (the &#8220;Share Consolidation&#8221; or &#8220;Reverse Split&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 21, 2023, the shareholders of the Company approved a merger of the Company with Aptorum Group Cayman Limited, a newly established
wholly owned subsidiary of the Company, whereby the Company was the surviving company, on the terms of the plan of merger that includes
the change in par value in the authorized shares of the Company from $10 to $0.00001. In addition, among other things, the shareholders
approved to increase the voting rights of the Class B Ordinary Shares from 10 votes per share to 100 votes per share, and to increase
the number of Class A Ordinary Shares authorized to 9,999,996,000,000 shares, par value $0.00001 each. These corporate actions were effective
as of February 21, 2023.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Over
the past three years, we have invested approximately $0.5 million towards our principal capital expenditures, which include laboratory
equipment, premises, leasehold improvements, and medical and other equipment.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following diagram illustrates our corporate structure as of the date of this annual report:</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_001.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Note 1: Both Mios Pharmaceuticals
Limited (&#8220;Mios&#8221;) and Scipio Life Sciences Limited (&#8220;Scipio&#8221;) issued Class A and Class B ordinary shares to various
parties; for each such entity, each Class A ordinary share is entitled to 1 vote and 1 share of economic interest of the respective company,
while each Class B ordinary share is entitled to 10 votes and 0.001 share of economic interest of the respective company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we indirectly hold 97.93% economic interest and 36.17% voting power in Mios, and 97.93% economic interest
and 35.06% voting power in Scipio. An independent third party shareholder, Peace Range Limited, holds 0.15% economic interest and 63.61%
voting power in Mios, and 0.15% economic interest and 64.72% voting power in Scipio. The remaining shareholders hold 1.92% economic interest
and 0.22% voting power in Mios, and 1.92% economic interest and 0.22% voting power in Scipio respectively. Our ownership interest in
these entities is through direct equity ownership and not through any contractual arrangements.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note
2: Dr. Clark Cheng, an Executive Director of Aptorum Group, holds the remaining 10% shareholding of Aptorum Medical Limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note
3: Angen Funds Limited, a company designated by an investor of ALS series projects, holds the remaining 20% shareholding of Acticule
Life Sciences Limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note
4: Accelerate Technologies Pte. Ltd., the commercialization arm of the Singapore Agency for Science, Technology and Research (&#8220;A*STAR&#8221;),
hold 15% shareholding of Paths Diagnostics Pte. Limited. The inventors of Paths<sup>Dx</sup> Test technologies in A*STAR hold the remaining
10% of shareholding of Paths Diagnostics Pte. Limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note
5: An investor of project VLS-2 holds the remaining 10% shareholding of mTor (Hong Kong) Limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
we conduct the majority of our operations through the following subsidiaries: Aptorum Therapeutics Limited, Acticule Life Sciences Limited,
Nativus Life Sciences Limited, Aptorum Medical Limited and Paths Diagnostics Pte. Limited. All investments into our company are into
the parent company, Aptorum Group Limited, a Cayman Islands exempted company with limited liability whose principal place of business
is in Hong Kong; you may never hold direct equity interests in our subsidiaries or the VIEs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In accordance with the provisions
of Accounting Standards Codification (&#8220;ASC&#8221;) 810, Consolidation, we consolidate any VIE of which we are regarded as the primary
beneficiary for accounting purposes. The typical condition for a controlling financial interest ownership is holding a majority of the
voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements
that do not involve controlling voting interests. On December 30, 2021, Libra (formerly known as Aptorum Pharmaceutical Development Limited),
Mios and Scipio, issued Class A and Class B ordinary shares to various parties; for each such entity, each Class A ordinary share is entitled
to 1 vote and 1 share of economic benefit of the respective company, while each Class B ordinary share is entitled to 10 votes and 0.001
share of economic benefit of the respective company. Following such share issuances, the Group lost its majority voting rights in each
of these three companies and only holds 48.33%, 48.39% and 48.36% economic interest in Libra, Mios and Scipio, respectively. However,
the Group still holds a majority of each of these three company&#8217;s outstanding Class A ordinary shares and therefore will absorb/receive
portions of these entities&#8217; expected losses or residual returns. In addition, none of these three companies have sufficient equity
to sustain its own activities, and they have two classes of ordinary shares which have different rights, benefits and obligations. We
determined that all these three companies are VIEs. On December 31, 2021, Libra, Mios and Scipio further issued Class A ordinary shares
to the Group in exchange of certain projects licenses. Upon these share issuances, the Group was holding 97.27% economic interest and
31.51% voting power in Libra, 97.93% economic interest and 36.17% voting power in Mios, and 97.93% economic interest and 35.06% voting
power in Scipio, respectively.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">
</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have considered each of these entity&#8217;s Memorandum and Article of Association and their respective board of directors (the sole
director of each of Mios and Scipio is an executive director of the Group), and determined that we have the power to manage and make
decisions that affect Mios and Scipio&#8217;s research and development activities, which activities most significantly impact Mios and
Scipio&#8217;s economic performance. However, we do not have such power over Libra&#8217;s research and development activities, which
activities most significantly impact Libra&#8217;s economic performance. Accordingly, we determined that we are regarded as the primary
beneficiary of Mios and Scipio for accounting purposes, but not the primary beneficiary of Libra.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Emerging
Growth Company Status</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are an &#8220;emerging growth company,&#8221; as defined in the Jumpstart Our Business Startups Act (the &#8220;JOBS Act&#8221;), and
we are eligible to take advantage of certain exemptions from various reporting and financial disclosure requirements that are applicable
to other public companies, that are not emerging growth companies, including, but not limited to, (1) not being required to comply with
the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and (3) exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage
of these exemptions.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. As a result, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
could remain an emerging growth company for up to five years, or until the earliest of (1) the last day of the first fiscal year in which
our annual gross revenues exceed $1.235 billion, (2) the date that we become a &#8220;large accelerated filer&#8221; as defined in Rule
12b-2 under the Exchange Act, which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceeds $700
million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least
12 months, or (3) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Foreign
Private Issuer Status</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a foreign private issuer within the meaning of the rules under the Exchange. As such, we are exempt from certain provisions applicable
to United States domestic public companies. For example:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we are not required to
    provide as many Exchange Act reports, or as frequently, as a domestic public company;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">for interim reporting,
    we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic
    public companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we are not required to
    provide the same level of disclosure on certain issues, such as executive compensation;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we are exempt from provisions
    of Regulation FD aimed at preventing issuers from making selective disclosures of material information;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we are not required to
    comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security
    registered under the Exchange Act; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we are not required to
    comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities
    and establishing insider liability for profits realized from any &#8220;short-swing&#8221; trading transaction.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Business Overview</span></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Overview
of our Company</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aptorum
is not a Chinese operating company. Aptorum is a Cayman Islands holding company with operations conducted through our subsidiaries and
the variable interest entities (VIEs). We have determined that we have three VIEs, namely, Libra, Mios and Scipio, according to the U.S.
GAAP. All three of the VIEs are incorporated in Cayman Islands and operate in Hong Kong. In accordance with ASC 810, we concluded that
we are the primary beneficiary of two VIEs, Mios and Scipio, therefore, are able to consolidate their financial statements into ours.
Our corporate structure is based on the equity ownership and control we have over our subsidiaries and the consolidated VIEs. Our corporate
structure was not set up to be used to provide investors with exposure to foreign investment in China-based companies where Chinese law
prohibits direct foreign investment in the operating companies. Foreign investment can be made directly into Mios and Scipio; however,
your investments into Aptorum are made into the Cayman Islands holding company, not any of the consolidated VIEs, and you may never own
any equity into the VIEs or any other subsidiary.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
the consolidated VIEs operate in Hong Kong, they face various legal and operational risks and uncertainties associated with doing business
in Hong Kong. Our current corporate structure does not contain any variable interest entity in mainland China and we do not have intention
establishing any VIEs in mainland China in the future. However, if in the future there is any significant change to the current political
arrangements between mainland China and Hong Kong and mainland China&#8217;s expanded authority in Hong Kong result in the PRC regulatory
authorities disallowing our current corporate structure, or if in the future our structure were to contain a VIE and the mainland PRC
regulatory authorities expand to Hong Kong and disallow our corporate structure, it would likely result in a material adverse change
in the VIE&#8217;s operations, and the value of our securities may decline significantly in value or become worthless.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
currently we do not have any business operations or VIE in mainland China and we believe that the laws and regulations of the PRC applicable
in China do not currently have any material impact on our business, financial condition or results of operations, we face risks and uncertainties
associated with the complex and evolving PRC laws and regulations and as to whether and how the recent PRC government statements and
regulatory developments, such as those relating to VIE, data and cyberspace security, and anti-monopoly concerns, would be applicable
to a company such as Mios and Scipio given their substantial operations in Hong Kong and the Chinese government&#8217;s significant oversight
authority over the conduct of business in Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
light of China&#8217;s recent expansion of authority in Hong Kong, we are subject to the risks of uncertainty about any future actions
of the PRC government or authorities in Hong Kong. The Chinese government may intervene or influence our current and future operations
in Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves.
We believe that, on the basis that we currently do not have any business operations in mainland China, we currently are not required
to obtain approvals from Chinese authorities to operate our business or list on the U.S. exchanges and offer securities; specifically,
none of Mios or Scipio is currently required to obtain any permission or approval from the China Securities Regulatory Commission (&#8220;CSRC&#8221;),
Cyberspace Administration of China (&#8220;CAC&#8221;) or any other PRC governmental authority to operate its business or for us to continue
to list our securities on a U.S. securities exchange or issue securities to foreign investors. However, there is no assurance that there
will not be any changes in the economic, political and legal environment in Hong Kong in the future. Should the PRC government choose
to affect operations of any company with any level of operations in Hong Kong, or should certain PRC laws and regulations or these statements
or regulatory actions become applicable to the VIEs in the future. Such governmental actions: (i) could significantly limit or completely
hinder our ability to continue our operations; (ii) could significantly limit or hinder our ability to offer or continue to offer our
Class A Ordinary Shares to investors; and (iii) may cause the value of our Class A Ordinary Shares to significantly decline or be worthless.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are also aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market,
enhancing supervision over mainland Chinese companies listed overseas using variable interest entity structure, adopting new measures
to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Nevertheless, since these statements
and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond
and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any.
It is also highly uncertain what the potential impact such modified or new laws and regulations will have on the VIEs&#8217; daily business
operation, and the continued listing of our Class A Ordinary Shares on a U.S. or other foreign exchanges. If any or all of the foregoing
were to occur, it may significantly limit or completely hinder our ability to complete this offering or cause the value of our Class
A Ordinary Shares to significantly decline or become worthless. See &#8220;Risk Factors - Risks Related to Our Corporate Structure&#8221;
and &#8220;Risk Factors - Risks Relating to Doing Business in Hong Kong&#8221;.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, our Class A Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign
Companies Accountable Act, as amended (the &#8220;HFCA Act&#8221;) if the Public Company Accounting Oversight Board (United States) (the
&#8220;PCAOB&#8221;) is unable to inspect our auditors for two consecutive years beginning in 2021. Our auditor, Marcum Asia CPAs LLP,
have been inspected by the PCAOB on a regular basis, with the last inspections in 2020, and Marcum Asia CPAs LLP is not subject to the
determinations announced by the PCAOB on December 16, 2021. If trading in our Class A Ordinary Shares is prohibited under the HFCA Act
in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine
to delist our Class A Ordinary Shares and trading in our Class A Ordinary Shares could be prohibited. While our auditor is based in the
U.S. and is registered with the PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable to
inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of
inspection could cause trading in our Ordinary Shares to be prohibited under the HFCA Act, and ultimately result in a determination by
a securities exchange to delist our Ordinary Shares. On August 26, 2022, the PCAOB signed a Statement of Protocol (the &#8220;SOP&#8221;)
Agreement with the CSRC and China&#8217;s Ministry of Finance. The SOP Agreement, together with two protocol agreements (collectively,
&#8220;SOP Agreements&#8221;), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking
the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland
China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion
to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December
15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting
firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should
PRC authorities obstruct or otherwise fail to facilitate the PCAOB&#8217;s access in the future, the PCAOB Board will consider the need
to issue a new determination.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Cash
Transfers and Dividend Distribution</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies
and procedures among our departments and the operating entities. Majority of the cash are managed by a few of the subsidiaries of Aptorum
Group. Each department or operating entity initiates a cash request by putting forward a payment requisition form, which explains the
specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount
and the nature of payment. The designated management member examines and approves the cash transfer based on the sources of cash and
the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above,
we currently do not have other cash management policies or procedures that dictate how funds are transferred.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are permitted under the laws of Cayman Islands to provide funding to our subsidiaries and the consolidated VIEs through loans or capital
contributions without restrictions on the amount of the funds. Under the Cayman Islands law, the VIEs are permitted to pay a dividend
on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result
in the consolidated VIEs being unable to pay its debts due in the ordinary course of business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, none of our subsidiaries or the consolidated VIEs have made any dividends or distributions to our
Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance
the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Subject to the
passive foreign investment company (&#8220;PFIC&#8221;) rules, the gross amount of distributions we make to investors with respect to
our Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, to the extent that
the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 31, 2021, Mios and Scipio has issued Class A ordinary shares to Aptorum Therapeutics Limited, in exchange of Aptorum Therapeutics
Limited&#8217;s granting of license of certain patents to each of them. Other than this, there has been no transfer of cash or other
assets occurred between us, our subsidiaries, and the consolidated VIEs.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Business
Overview</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a clinical stage biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutic assets to
treat diseases with unmet medical needs, particularly in oncology (including orphan oncology indications) and infectious diseases. The
pipeline of Aptorum is also enriched through (i) the establishment of drug discovery platforms that enable the discovery of new therapeutics
assets through, e.g. systematic screening of existing approved drug molecules, and microbiome-based research platform for treatments
of metabolic diseases; and (ii) the co-development of Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification
and detection diagnostics technology, with Accelerate Technologies Pte Ltd, commercialization arm of the Singapore&#8217;s Agency for
Science, Technology and Research.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the above main focus, we are also pursuing therapeutic projects in neurology, gastroenterology, metabolic disorders, women&#8217;s
health and other disease areas. We also have projects focused on natural supplements for women undergoing menopause and experiencing
related symptoms. We also opened a medical clinic, AML Clinic, in June 2018.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
goal is to develop a broad range of novel and repurposed therapeutics and diagnostics technology across a wide range of disease/therapeutic
areas. Key components of our strategy for achieving this goal include: (for details of our strategy, See &#8220;Business Overview &#8211;
Our Strategy&#8221;)</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Developing therapeutic
    and diagnostic innovations across a wide range of disease/therapeutic areas;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selectively expanding our
    portfolio with potential products that may be able to attain orphan drug designation and/or satisfy current unmet medical needs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Collaborating with leading
    academic institutions and CROs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expanding our in-house
    pharmaceutical development center;</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leveraging our management&#8217;s
    expertise, experience and commercial networks;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Obtaining and leveraging
    government grants to fund project development.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have devoted a substantial portion of the proceeds from our offerings, to our Lead Projects. Our Lead Projects are ALS-4, SACT-1 and
Paths<sup>Dx</sup> Test. In January 2022, we announced that we completed Phase 1 clinical trial for ALS-4 and Phase 1 clinical trial
for assessing relative bioavailability and food effect of SACT-1. No serious adverse events were observed and there were no relevant
clinical changes in respect of vital signs. In March 2023, we announced that we completed the Pre-IND discussions with the US FDA on
ALS-4. With the positive feedback on the overall development strategy from the US FDA, we are proceeding towards the IND submission
of ALS-4. In March 2023, we also announced the completion of the End of Phase 1 (EOP1) meeting with the US FDA. The FDA generally
agreed with the chemistry-manufacturing-control (CMC) strategy and our proposed clinical development plan for SACT-1 Phase 1/2
trials. In 2023, we expect to be able (i) to submit IND application to the US FDA seeking to initiate a Phase 2 clinical study to
assess the efficacy of ALS-4 in patients and (ii) submit a clinical protocol to the US FDA seeking to initiate our planned Phase
1b/2a trial for SACT-1, subject to regulatory review. We commenced clinical validation of our molecular based Paths<sup>Dx</sup>
Test and will continue to undergo validations during 2023, in parallel with its pre-commercialization process in 2023.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
current business consists of &#8220;therapeutics&#8221; and &#8220;non-therapeutics&#8221; segments. However, our focus is on the therapeutics
segments. Because of the risks, costs and extended development time required for successful drug development, we have determined to pursue
projects within our non-therapeutics segments, such as AML Clinic and NativusWell<sup>&#174;</sup>, to provide some interim revenue, as
well as diagnostics technology that may be brought to market and generate revenue more quickly.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Therapeutics
Segment</span></i>. In our therapeutics segment (&#8220;Aptorum Therapeutics Group&#8221;), we are currently seeking to develop various
drug molecules (including projects seeking to use extracts or derivatives from natural substances to treat diseases) and certain technologies
for the treatment of human disease conditions to tackle unmet needs, in particular, two of our Lead Projects targeting infectious disease
and cancer (including orphan oncology indications). In addition to our main areas of focus above, we are also pursuing therapeutic projects
in neurology, gastroenterology, metabolic disorders, women&#8217;s health and other disease areas. Aptorum Therapeutics Group is operated
through Aptorum&#8217;s wholly-owned subsidiary, Aptorum Therapeutics Limited, a Cayman Islands exempted company with limited liability,
whose principal place of business is in Hong Kong and whose subsidiaries (who we sometimes refer to herein as project companies) are
based in the United Kingdom, Singapore and Hong Kong.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Non-Therapeutics
Segment</span></i>. The non-therapeutics segment (&#8220;Aptorum Non-Therapeutics Group&#8221;) encompasses three businesses: (i) diagnostics
projects including Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology,
(ii) natural supplements including NativusWell<sup>&#174;</sup>, and (iii) AML Clinic. Paths<sup>Dx</sup> Test technology is currently
under co-development with A*STAR. The core objectives of Paths<sup>Dx</sup> Test are to rapidly and accurately identify and detect existing
or emerging unknown pathogens (including DNA/RNA-based viruses such as coronavirus, antibiotic-resistant bacteria, fungi, etc.), in a
cost-effective, unbiased and broad-spectrum manner, through liquid biopsy (patients&#8217; blood samples and is potentially adaptable
for other sample types), genome sequencing and artificial intelligence driven software analytics. A key objective is also to develop
Paths<sup>Dx</sup> Test to leverage existing and emerging Next-Generation Sequencing platforms for pathogenic genome sequencing analysis.
The sale of natural supplements is operated through Nativus Life Sciences Limited (&#8220;Nativus&#8221;), a subsidiary of Aptorum Therapeutics
Limited. The production of Aptorum Group&#8217;s dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada
and is marketed under the brand name NativusWell<sup>&#174;</sup>; we are selling NativusWell<sup>&#174; </sup>online through HKTV Mall,
JD.com and NativusWell<sup>&#174;</sup> website. The outpatient clinic is operated through our subsidiary, Aptorum Medical Limited. Effective
as of March 2018, we leased office space in Central, Hong Kong as the home to AML Clinic. AML Clinic commenced operations under the name
of Talem Medical in June 2018.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to March 2017, the Company had pursued passive healthcare related investments in early stage companies primarily in the United States.
However, we have since ceased pursuing further passive investment operations and intend to exit all such portfolio investments over an
appropriate timeframe to focus resources on our current business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 25, 2020, Aptorum, via its subsidiaries, enters into a series of transactions with Accelerate Technologies Pte. Ltd.&#8217;s
(&#8220;Accelerate Technologies&#8221;), the commercialization arm of the Singapore Agency for Science, Technology and Research (&#8220;A*STAR&#8221;),
in relation to the research and development of Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification and detection
diagnostics technology, through its subsidiaries. Specifically, Paths Diagnostics Pte. Limited, one of the Company&#8217;s subsidiaries,
entered into an Exclusive Licence Agreement with Accelerate Technologies to co-develop the Paths<sup>Dx</sup> Test technology. The term
of the Exclusive Licence Agreement is described in Exhibit 4.62 on Form 20-F filed with the SEC on April 19, 2021. Furthermore, Accelerate
Technologies, the inventors of the Paths<sup>Dx</sup> Test technologies in A*STAR (&#8220;Founding Scientists&#8221;), Paths Diagnostics
Pte. Limited, and Paths Innovations Limited, a wholly owned subsidiary of the Company, entered into a Share Subscription &amp; Shareholders
Agreement on the same day to subscribe ordinary shares of Paths Diagnostics Pte. Limited. The shares are subscribed and issued in two
tranches, the first tranche has taken place at closing of the Share Subscription &amp; Shareholders Agreement, while the second tranche
will take place after the certain first milestone is met. The total number of shares subscribed by the shareholders under the Share Subscription
&amp; Shareholders Agreement is around 2.7 million. After the two tranches of subscription, Aptorum, Accelerate Technologies and the
Founding Scientists are expected to control 71.23%, 14.25% and 9.53% of the share of Paths Diagnostics Pte. Limited respectively, with
4.99% of the shares reserved for its employee share plan.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 30, 2020, Paths Innovations Limited, one of the Company&#8217;s wholly-owned subsidiaries, entered into an Evaluation Agreement
with Illumina Inc (&#8220;Illumina&#8221;). Pursuant to the agreement, Paths Innovations Limited will evaluate the data and performance
of Illumina&#8217;s sequencing technology based on the workflow of Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification
and detection diagnostics technology, at Paths Innovations Limited&#8217;s Singapore based evaluation site.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Our
Strategy</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
we plan to continue the development and improvement of a broad range of novel therapeutics and diagnostics across a wide range of disease/therapeutic
areas, over the next 24-36 months we plan to concentrate on development of our Lead Projects, maintaining our AML Clinic and sale of
natural supplements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that execution of this strategy will position the Company to catalyze the development and improvement of a broad range of novel
and repurposed therapeutics and diagnostics across a wide range of disease/therapeutic areas. Failure to achieve positive results in
at least one of the programs for a Lead Project could have a material adverse effect on the Company&#8217;s prospects and business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
achieve this goal, we are implementing the following strategies:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Developing
therapeutic and diagnostic innovations across a wide range of disease/therapeutic areas.</b>&#160;We are currently developing drug candidates
in several disease/therapeutic areas. We believe that by diversifying our research efforts, it would increase the likelihood that at
least one of our projects will achieve clinical success and therefore add value to the Company. As of date of this annual report, the
Company is developing 10 projects covering therapeutic assets, diagnostic assets, and natural supplements, in broad range of areas across
infectious diseases, cancers (including rare oncology indications), neurology, gastroenterology, metabolic disorders and women&#8217;s
health. The 10 projects are comprised of 10 exclusively licensed projects (including Lead Project ALS-4 being exclusively licensed from
the University of Hong Kong and Paths<sup>Dx</sup> Test being exclusively licensed from A*STAR) and 7 proprietary projects developed
by our scientists (including Lead Project SACT-1). Our initial focus will be on developing our Lead Projects, but intend to continue
developing our other current projects and may seek new licensing opportunities where we determine that the market potential justifies
the additional commitment of our limited resources.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Selectively
expanding our portfolio with potential products that may be able to attain orphan drug designation and/or satisfy current unmet medical
needs.&#160;</b>We have selected innovations for development which we believe are of superior scientific quality, whilst taking into
account the potential market size and demand for same, for example, taking into consideration whether the relevant product can satisfy
significant unmet medical needs. In particular, Aptorum Group Limited has established a Scientific Advisory Board, which helped us to
select our current projects and which we expect will provide input from a scientific perspective towards any future opportunities for
acquiring or licensing life science innovations. We intend to continue expanding our line of projects under development, and subject
to our financial and other resource limitations, exploring acquisitions or licenses of additional products which may be able to attain
orphan drug designations (e.g., rare types of cancer) or satisfy significant unmet medical needs and that show strong preclinical and/or
early clinical data to provide promising opportunities for clinical and commercial success.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Collaborating
with leading academic institutions and CROs.&#160;</b>In building and developing our product portfolio, we believe that accessing external
innovation, expertise and technology through collaboration with leading academic institutions and CROs is a vital and cost-efficient
strategy. We have established strong relationships with leading academic institutions around the world and expect to continue to strengthen
our collaborations by, for example, seeking to provide their affiliated Principal Investigators resources through sponsorship to conduct
further research in specialty fields of interest and association with personnel connected to our current project companies, in exchange
for obtaining for the Company the first right to negotiate for an exclusive license to any resulting innovations. In addition, we have
entered and will continue to actively source arrangements with pharmaceutical companies, in most cases in roles as contract research
organizations, to streamline the development of our projects. This may include outsourcing part of the preclinical, clinical studies
and clinical supplies manufacturing to externally accredited cGLP, cGMP and cGCP standard contract research organizations or laboratories
in order to attain the required studies for submission to the regulatory authorities as part of the clinical development plan. (See &#8220;Item
4. Information on the Company &#8211; B. Business Overview &#8211; Arrangements with Other Parties&#8221;)</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expanding
our in-house pharmaceutical development center.&#160;</b>We believe collaborations between the R&amp;D Center and the scientists engaged
in work for our project companies will enhance clinical and commercial potential of the projects. In addition, we will assist the project
companies by engaging external pharmaceutical companies and/or contract research organizations to outsource any part of the preclinical
or clinical development work that cannot be performed by the R&amp;D Center in order to obtain the resources necessary for our development
process.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Leveraging
our management&#8217;s expertise, experience and commercial networks.&#160;</b>We believe the combination of our management&#8217;s expertise
and experience, with their academic and commercial networks make us an effective platform for advancing healthcare innovations towards
clinical studies and commercialization in key global markets. We have assembled a management team with global experience and an extensive
record of accomplishments in medical research, consulting and financing, and identification and acquisition of pharmaceutical and biopharmaceutical
drug candidates. Our Head of Research and Development also has extensive experiences in drug development. We also employ key management
personnel with banking and financial experience, which enhances our capability to establish the most efficient financial structure for
the development of our programs.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Obtaining
and leveraging government grants to fund project development.&#160;</b>Governments across the world pays close attention to the development
of the biotechnology sector and provides support and funding. We intend to aggressively seek government support from the governments
in the United States, the United Kingdom, Hong Kong, Singapore and elsewhere for our product development and to facilitate the development
of some of our projects.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Arrangements
with Other Parties</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
mentioned above, part of our business model includes collaborating with research entities such as academic institutions and CROs, as
well as highly regarded experts in their respective fields. We engage these entities and researchers either for purposes of exploring
new innovations or advancing preclinical studies of our existing licensed drug candidates. Although the financial cost of these arrangements
does not represent a material expense to the Company, the relationships we can access through, specifically, sponsored research arrangements
(&#8220;SRAs&#8221;) with academic institutions and organizations can provide significant value for our business; for example, we may
decide whether to continue development of certain early-staged projects and/or out-license a project based on the data and results from
research governed by SRAs. However, as of the date of this annual report, we do not consider the particulars of any of our SRAs to be
material to the success of our current business plans.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
drug discovery programs are based upon licenses from universities and are mainly conducted in universities via SRAs. As for the development
of our drug candidates, our R&amp;D Center conducts part of the CMC work. However, since our current facilities are not cGMP, cGLP or
cGCP qualified, we will have to rely on CROs to conduct that type of work, if and when our drug candidates reach the level of development
that requires such qualification.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Lead
Projects, Natural Supplements and Other Projects under Development</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are actively operating and managing the development of our drug candidates through various subsidiaries. Each candidate is being researched
in a subsidiary with a medical/scientific area of focus related to the drug candidate in development. We refer to these as our &#8220;Project
Companies&#8221; and their products or areas of focus as our Lead Projects (i.e., ALS-4, SACT-1 and Paths<sup>Dx</sup> Test), our natural
supplements (i.e., NativusWell<sup>&#174;</sup>) or Other Projects under Development (as defined below). The selection of a drug candidate
is based on our estimate of the market potential for that candidate, the scientific expertise required to develop it, and our overall
corporate strategy, including our ability to commit personnel and future investment to that candidate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
pursue a number of our current projects, our Project Companies have entered into standard license agreements with various universities
and licensing entities customized to the nature of each project. These license agreements largely contain the same terms, as is typically
seen in license agreements for an early-stage life science invention; such terms include a worldwide license with licensed field comprising
indications in the intended treatment areas, having upfront payments, certain royalty rates, sublicensing royalties, as well as provisions
for payments upon occurrence of development and/or regulatory milestones. Under the license agreements, the Project Company must also
adhere to certain diligence obligations (which may include specific diligence) and the types of activities or achievements that will
satisfy those diligence obligations. Additionally, our Project Company may or may not be required to obtain prior consent from the licensor
to sublicense the invention. The license terms of our Lead Projects are discussed in detail below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Generally
speaking, pharmaceutical development consists of preclinical and clinical phases. The preclinical phase can further sub-divided into
the following stages:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Target Identification
    &amp; Selection</span>: The target is the naturally existing cellular or modular structure that appears to have an important role in
    a particular disease pathway and will be targeted by the drug that will subsequently be developed. Target validation techniques for
    different disease areas can be very different but typically include from in vitro and in silico methods through to the use of whole
    animal models.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Lead Discovery</span>:
    Following &#8220;Target Identification &amp; Selection,&#8221; compound screening assays are developed as part of the Lead Discovery.
    &#8216;Lead&#8217; molecules can mean slightly different things to different researches or companies, but in this annual report,
    we refer to Lead Discovery as the process of identifying one or more small molecules with the desired activity against the identified
    targets. Leads can be identified through one or more approaches, which can depend on the target and what, if any, previous knowledge
    exists.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Lead Optimization</span>:
    In this stage of the drug discovery process, the aim is to produce a preclinical drug candidate by maintaining the desired and favorable
    properties in the lead compounds, while repairing or reducing deficiencies in their structures. For example, to optimize the chemical
    structures to improve, among others, efficacy, reduce toxicity, improve metabolism, absorption and pharmacokinetic properties.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">CTA-Enabling Studies</span>:
    Includes all the essential studies such as GLP toxicology studies, pharmacology and efficacy, pharmacokinetics, in vitro metabolism,
    CMC studies, and the data of which are used for CTA submission.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">IND-Enabling Studies</span>:
    Includes all the essential studies such as GLP toxicology studies, pharmacology and efficacy, pharmacokinetics, in vitro metabolism,
    CMC studies, and the data of which are used for IND submission.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">In vitro validation</span>:
    At this stage, the efficacy and safety of a drug candidate are assessed at cellular levels.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">In vivo validation</span>:
    At this stage, the efficacy, safety and pharmacokinetic of a drug candidate are assessed in animal models.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">IND Preparation and
    Submission</span>: Preparation of a package of documents for different sections such as CMC, clinical, nonclinical, etc. and getting
    them reviewed, approved and final checked and followed by submission to regulatory agencies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Phase 1.</b>&#160;Phase
    1 includes the initial introduction of an investigational new drug into humans. These studies are closely monitored and may be conducted
    in patients, but are usually conducted in healthy volunteer subjects. These studies are designed to determine the metabolic and pharmacologic
    actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.
    During Phase 1, sufficient information about the drug&#8217;s pharmacokinetics and pharmacological effects should be obtained to
    permit the design of well-controlled, scientifically valid, Phase 2 studies. Phase 1 studies also evaluate drug metabolism, structure-activity
    relationships, and the mechanism of action in humans. These studies also determine which investigational drugs are used as research
    tools to explore biological phenomena or disease processes. The total number of subjects included in Phase 1 studies varies with
    the drug, but is generally in the range of twenty to eighty.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Phase 2.</b>&#160;Phase
    2 includes the early controlled clinical studies conducted to obtain some preliminary data on the effectiveness of the drug for a
    particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common
    short-term side effects and risks associated with the drug. Phase 2 studies are typically well-controlled, closely monitored, and
    conducted in a relatively small number of patients, usually involving several hundred people.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Phase 3.&#160;</b>Phase
    3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness
    of the drug has been obtained in Phase 2, and are intended to gather the additional information about effectiveness and safety that
    is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies are designed to provide an adequate basis
    for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies
    usually include several hundred to several thousand people.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
non-therapeutics projects can be sub-divided into the following stages:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Development and Experimentation</span>:
    Early development work for proof-of-concept.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Product Optimization</span>:
    The practice of making changes or adjustments to a product to make it more desirable.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Clinical Validation</span>:
    Confirming the performance of a technology using clinical/patient samples.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Pre-commercialization
    preparation</span>: The logistics that need to be accomplished before commercialization.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Formulation</span>: Preparation
    of a marketed dosage form from active ingredients and excipients/additives.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Commercialization</span>:
    The process of introducing a new product or production method into commerce&#8212;making it available on the market.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_002.jpg"/><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Another
subsidiary, Aptorum Medical Limited (&#8220;AML&#8221;),<sup>1</sup>&#160;is our vehicle for developing our business of delivering medical
services in the form of AML Clinic.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
anticipate allocating approximately 20% of our resources to develop projects other than our Lead Projects (such other projects being
referred to herein as &#8220;Other Projects under Development&#8221;), with a strong focus on NativusWell<sup>&#174;</sup>, and AML Clinic.
The production of Aptorum Group&#8217;s dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada and is
marketed under the brand name NativusWell<sup>&#174;</sup>; we are selling NativusWell<sup>&#174; </sup>online through HKTV Mall, JD.com
and NativusWell<sup>&#174;</sup> website. AML Clinic is expected to provide us with a modest amount of revenue. Even though NativusWell<sup>&#174;
</sup>achieves commercial sales, revenue from these products alone will not be sufficient for us to carry out all of our plans, but it
will assist with name recognition and supplement our income while we develop our Lead Projects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 20px; padding-bottom: 6pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>1</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 6pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Clark
    Cheng, our Chief Medical Officer and an Executive Director, owns 10% of Aptorum Medical Limited as of the date of this annual report.</span></td></tr>
  </table><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Lead
Projects</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_003.jpg"/><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
consideration of various factors, such as time and resources required for further development, potential success rate and market size,
the Group decided to focus the majority of its resources on ALS-4 and SACT-1 and Paths<sup>Dx</sup> as the current Lead Projects. The
Group will continue to invest some of its resources to develop other projects, including those previously classified as Lead Projects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ALS-4:
Small molecule for the treatment of bacterial infections caused by Staphylococcus aureus including but not limited to Methicillin-resistant
Staphylococcus aureus (&#8220;MRSA&#8221;)</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Just
as certain strains of viruses, such as human immunodeficiency virus (&#8220;HIV&#8221;) and influenza have developed resistance to drugs
developed to treat them, certain bacteria such as&#160;<i>Staphylococcus aureus</i>,&#160;<i>Mycobacterium tuberculosis</i>&#160;and&#160;<i>Pseudomonas
aeruginosa&#160;</i>have become &#8220;superbugs&#8221;, having developed resistance to many, if not all, of the existing drugs available
to treat them, rendering those treatments ineffective in many instances. MRSA is one such bacterium, a gram-positive bacterium that is
genetically different from other strains of Staphylococcus aureus. Staphylococcus aureus and MRSA can cause a variety of problems ranging
from skin infections and sepsis to pneumonia and bloodstream infections. It is estimated that about one out of every three people (33%)
carry Staphylococcus aureus in their nose, usually without any illness; about two in a hundred (2%) carry MRSA (source: https://www.cdc.gov/mrsa/tracking/index.html).
Both adults and children may carry MRSA.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
MRSA infections occur in people who have been in hospital or other health care settings, such as nursing homes and dialysis centers (source:
https://www.mayoclinic.org/diseases-conditions/mrsa/symptoms-causes/syc-20375336), which is known as Healthcare-Associated MRSA (&#8220;HA-MRSA&#8221;).
HA-MRSA infections are typically associated with invasive procedures or devices, such as surgeries, intravenous tubing or artificial
joints. Another type of MRSA infection, known as Community-Associated MRSA (&#8220;CA-MRSA&#8221;), has occurred in wider community among
healthy people. It often begins as a painful skin boil and spreads by skin-to-skin contact. About 85% of serious, invasive MRSA infections
are healthcare associated infections (https://www.cdc.gov/media/pressrel/2007/r071016.htm). The incidence of CA-MRSA varies according
to population and geographic location. In the U.S., more than 94,000 people develop serious MRSA infection and about 19,000 patients
die as a result each year (https://www.cdc.gov/media/pressrel/2007/r071016.htm). According to the US Centers for Disease Control and
Prevention (&#8220;CDC&#8221;), Staphylococcus aureus, including MRSA, caused about 11% of healthcare-associated infections in 2011 (source:
http://www.healthcommunities.com/mrsa-infection/incidence.shtml). Each year in the U.S., around one out of every twenty-five hospitalized
patients contracts at least one infection in the hospital (N Engl J Med. 2014, 27;370(13):1198-208). In the U.S., there were over 80,000
invasive MRSA infections and 11,285 related deaths in 2011 (source: https://edition.cnn.com/2013/06/28/us/mrsa-fast-facts/index.html).
Indeed, severe MRSA infections most commonly occur during or soon after inpatient medical care. More than 290,000 hospitalized patients
are infected with Staphylococcus aureus and of these staphylococcal infections, approximately 126,000 are related to MRSA (source: http://www.healthcommunities.com/mrsa-infection/incidence.shtml).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ALS-4
is a small drug molecule which appears to target the products produced by bacterial genes that facilitate the successful colonization
and survival of the bacterium in the body or that cause damage to the body&#8217;s systems. These products of bacterial genes are referred
to as &#8220;virulence expression.&#8221; Targeting bacterial virulence is an alternative approach to antimicrobial therapy that offers
promising opportunities to overcome the emergence and increasing prevalence of antibiotic-resistant bacteria.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Richard Kao from The University of Hong Kong (who is also the Founder and Principal Investigator of Acticule and Inventor of ALS-1, ALS-2,
ALS-3 and ALS-4) initiated a high throughput approach for screening compounds which are active against virulence expression, which resulted
in the discovery of ALS-1, ALS-2, ALS-3 and ALS-4.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ALS-4
targets an enzyme essential for Staphylococcus aureus (including MRSA) survival in vivo. This enzyme is involved in the production of
Staphyloxanthin, a carotenoid pigment produced by Staphylococcus aureus including MRSA, and is responsible for the characteristic golden
color. This pigment has proven to be an important factor in promoting bacterial invasion as well as rendering the bacteria resistant
to attack from reactive oxygen species (ROS) and neutrophils. In other words, pigmented bacteria have increased resistance to the host&#8217;s
immune defenses. ALS-4 may have particular value if it can be shown to be an effective therapy in situations where a Staphylococcus aureus
infection is resistant to available antibiotics (i.e., where the pathogen is MRSA).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a study by the inventor, Prof. Richard Kao, ALS-4 demonstrates potent activity against Staphylococcus aureus pigment formation in vitro,
as indicated in Figure 1, with an IC<sub>50</sub>&#160;(IC<sub>50</sub>&#160;is defined as the concentration of a drug which inhibits
half of the maximal response of a biochemical process. In this case, inhibition of the formation of the golden pigment is the response)
equal to 20 nM.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
1</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_004.jpg" style="height: 661px; width: 580px"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
1: In vitro pigment inhibition by compound ALS-4: Inhibition of staphyloxathin (the golden pigment in <i>S. Aureus</i>) in the presence
of increasing concentrations of ALS-4</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Efficacy
of ALS-4 in a MRSA Wound Infection Mouse Model</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
study conducted by a third-party contract research organization, assessed ALS-4&#8217;s effect in the healing of open wounds infected
with MRSA in a mouse model. Compared with topical dosing of 2% Mupirocin and oral dosing of Linezolid at 100mg/kg twice a day, oral dosing
of ALS-4 at 30mg/kg twice a day showed statistically significant improvement in wound healing. Specifically, at the end of the study
on Day 7, ALS-4 exhibited 63.8% of wound closure compared with 48.4% for oral Linezolid and 43.2% for topical Mupirocin 2%. The results
are further illustrated in the graph below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
2</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_005.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unpaired
student&#8217;s t-test, p&lt;0.05</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
2: Result of study on ALS-4&#8217;s effect in the healing of open wounds infected with MRSA in a mouse model&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Efficacy
of ALS-4 in a Bacteraemia Mouse Model</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
a further round of&#160;<i>in vivo</i>&#160;studies, conducted by a third-party contract research organization, in a non-lethal MRSA
bacteraemia mouse model, the mice were orally administered with different doses of ALS-4 from 0.3 to 30mg/kg twice a day for 7 days,
compared to those who received vancomycin only group (3mg/kg of vancomycin administered intravenously) and a no treatment control group.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the conclusion of the study on Day 7, ALS-4 brought a statistically significant reduction in bacterial counts in major organs such as
the kidneys, lungs, liver and spleen compared with the no drug control and vancomycin only groups (unpaired student&#8217;s t-test, p&lt;0.05).
This is in addition to the previous&#160;<i>in vivo</i>&#160;results announced in February 2020, whereby ALS-4 demonstrated on a statistically
significant basis better survival rates (56% vs 0% control group) in the lethal MRSA bacteraemia rat model (Figure 3a) and higher reduction
of bacterial load (by 99.5% against the control group) in the non-lethal MRSA bacteraemia rat model (Figure 3b).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
3a</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_006.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
3a: Oral Formulation of ALS-4 in an MRSA Survival Study</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
3b</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_007.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
3b: Oral Formulation of ALS-4 in a Non-Lethal Bacteremia Model&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFU
= Colony Forming Unit, a unit used to estimate the number of viable bacteria in a sample</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
Clinical Trial Application (&#8220;CTA&#8221;) was submitted with the Public Health Agency of Canada (Health Canada) to conduct a Phase
1 clinical trial of ALS-4, an orally administered small molecule drug for the treatment of infections caused by Staphylococcus aureus
including Methicillin-resistant Staphylococcus aureus (MRSA) in Q4 2020. ALS-4 received clearance from Health Canada regarding the CTA
to initiate a Phase 1 clinical study in January 2021. In March 2021, we announced dosing the first human subject in its Phase 1 clinical
trial evaluating ALS-4. In January 2022, we further announced the completion of our Phase I clinical trial for ALS-4. The first-in-human
Phase 1 trial was a randomized, double-blinded, placebo-controlled, single and multiple ascending dose study designed to evaluate safety,
tolerability, and pharmacokinetics of orally administered ALS-4 in healthy male and female adult volunteers. The single-ascending dose
studies (SAD) and multiple-ascending dose studies (MAD) have been completed for a total of 72 healthy subjects and no subjects were dropped
from the studies. There were no serious adverse events observed and no relevant clinical changes in respect of vital signs. In March
2023, we announced the completion of the Pre-IND discussions with the US FDA. The Pre-IND discussions focused on overall development
plan in preparation for the IND application of ALS-4 targeting Acute Bacterial Skin and Skin Structure Infections (ABSSSI) initially.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
the positive feedback on the overall development strategy from the US FDA, we are proceeding towards the IND submission of ALS-4 seeking
to initiate a Phase 2 clinical study to assess the efficacy of ALS-4 in patients in 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
License</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 18, 2017, the Company&#8217;s subsidiary, Acticule, entered into an exclusive license agreement with Versitech Limited, the licensing
entity of HKU, for ALS-4. Subsequently on June 7, 2018, the parties entered into a first amendment to the exclusive license agreement,&#160;and
on July 10, 2019, the parties entered into a second amendment to the license agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 11, 2019, Acticule and Versitech Limited entered into a second license agreement for ALS-4, where Acticule exclusively licensed
the intellectual property rights on certain HKU-owned improvements to the original licensed invention.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the exclusive license agreements, we were granted an exclusive, royalty-bearing, sublicensable licenses to develop, make, have made,
use, sell, offer for sale and import products that are covered by the licensed patents (as described below). The territory of the licenses
is worldwide and the field of the licenses is for treatment or prevention of bacterial infections caused by Staphylococcus aureus including
MRSA and bacterial virulence.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
paid an upfront fee upon entering into the license agreements. We are required to pay less than 10% of the net sales of the licensed
products sold by us or our affiliates as royalties, as well as a low teens percentage of sublicense royalties that we receive from our
sublicensees, if any. In addition, we agreed to pay to the licensor aggregate regulatory milestones of up to US$1 million subject to
the following achievements: submission of investigational new drug application; completion of phase 1, 2 and 3 clinical trials; and submission
of new drug application; grant of regulatory approval. We also agreed to pay to the licensor aggregate sales milestones of up to US$7.8
million subject to the following achievement: first commercial sale; and annual net sales exceeding US$100 million in one jurisdiction.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the license agreements, Acticule became the exclusive licensee of 2 pending U.S. non-provisional patent applications and 2 PCT applications
(now expired). Prior to the expiration of the PCT applications, we filed national phase applications in member states of the PCT including
Europe, PRC and 12 other jurisdictions. The claimed inventions are described as: &#8220;Compounds Affecting Pigment Production and Methods
for Treatment of Bacterial Diseases.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Four (4) US patents and two (2) Israeli patents have been granted by
the United States Patent and Trademark Office and the Israel Patent office respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Acticule
has the right to grant sublicenses to third parties under the license agreements without prior approval from Versitech Limited and to
assign the agreements to any successor to the business related to the licenses. In the event that Acticule makes an improvement to the
licensed technologies, so long as the improvement does not incorporate any licensed patents, Acticule will be the owner to such improvement,
subject to a non-exclusive royalty-free license being granted back to Versitech Limited for academic and research purposes only.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exclusive license agreements shall be in effect until the expiration of all licensed patents (please refer to the patent expiration dates
under &#8220;Item 4. Information on the Company &#8211; B. Business Overview &#8211; Intellectual Property&#8221;). Acticule may terminate
the licenses at any time with 6-month written notice in advance. Either party may terminate the agreements upon a material breach by
other party.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SACT-1:
A Repurposed Drug for the Treatment of Neuroblastoma</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Drug
repurposing is a strategy for identifying new indications for approved or investigational drugs that are outside the scope of the original
medical uses. It is often viewed as a lower-cost method for drug commercialization, as it is based on already-approved drugs (which has
been proven to be safe for human use by the respective governing regulatory agency) and explores new target indications. (Ashburn, T.
T. &amp; Thor, K. B. Drug repositioning: identifying and developing new uses for existing drugs. Nat. Rev. Drug Discov. 3, 673&#8211;683,
2004).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">One
of the advantages of drug repurposing is a lower development risk due to safety and toxicity, as well as other properties related to
water solubility, absorption, distribution and metabolism, as the safety and CMC profiles of marketed drugs are usually well-established.
Due to the same reason, the development time is also shortened because there is no need to repeat the whole spectrum of the safety assessment.
As a result, the drug repurposing approach appears to be attractive due to its superior risk management, smaller capital investment and
quicker financial return. (Sudeep Pushpakom, et. al. Drug repurposing: progress, challenges and recommendations. Nat. Rev. Drug Discov.
18, 41-58, 2019)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
cost of bringing a repurposed drug is estimated to be around US$300 million, which is only one-tenth of the development cost for a new
drug. (Nosengo, N. Can you teach old drugs new tricks? Nature. 534, 314-316, 2016).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
summary, drug repurposing offers the following advantages:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Well-established safety
    profiles: The development risk for new indications can be substantially reduced by applying existing drugs that are approved or have
    been shown to be safe in large scale late-stage trials. Since safety accounts for approximately 30% of drug failures in clinical
    trials, this is a key advantage that repositioned drugs can harness to great effect. (The benefits of drug repositioning. (n.d.).
    Retrieved from https://www.ddw-online.com/the-benefits-of-drug-repositioning-1779-201104/)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; font-size: 10pt">&#160;</td>
    <td style="width: 0.25in; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Time-saving: As repositioned drugs can rely on existing data, including efficacy and toxicity studies, the process is usually faster than de novo development. Developing a new chemical entity (NCE) can take 10 to 17 years, depending on indications. (Roin, B. N. Solving the Problem of New Uses, 2013). For a drug repositioning company, the development process from compound identification to launch can be around 3 to 8 years. (Walker, N. (2017, December 07). Accelerating Drug Development Through Repurposing, Repositioning and Rescue. Retrieved from https://www.pharmoutsourcing.com/Featured-Articles/345076-Accelerating-Drug-Development-Through-Repurposing-Repositioning-and-Rescue/)</span></td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cost-saving: Along with
    time-saving, money-saving is also a key benefit. The cost to relaunch a repositioned drug averages $8.4 million, whereas to relaunch
    a new formulation of an existing drug in its original indication costs an average $41.3 million. Given that the average cost of launching
    a new chemical entity (NCE) is more than $1.3 billion, successfully bringing a repositioned drug to market seems to cost approximately
    160 times less than the current standard of NCE development. Even if this differential is off by a hundred times or more, from the
    purely financial perspective, repositioning is in a completely different league of investment needed to create a new drug product
    in the market. (https://www.ddw-online.com/the-benefits-of-drug-repositioning-1779-201104/)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Potential for out-licensing:
    Pharmaceutical companies are said to be exploring new models to out-license some of their clinical drug candidates that may have
    been shelved for pure business reasons unrelated to safety or efficacy, even though they have met their endpoints and have proven
    themselves to be safe. If such drugs were to be repositioned, the pharmaceutical company increases the attractiveness of these drugs
    and gives itself more options to find interested buyers. (https://www.ddw-online.com/the-benefits-of-drug-repositioning-1779-201104/)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lower failure rate: According
    to BCC Research, approval rates for repurposed drugs are close to 30%, which is greater than the approval rate for new drug applications.
    (Front Oncol. 2017; 7: 273)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">One
of the major limitations of the current drug repurposing and repositioning practice is that there is a lack of a systematic way to identify
and reinvestigate drugs that are approved and/or have failed approval.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SACT-1 is the first repurposed drug candidate to be developed under
the Smart-ACT<sup>&#174;</sup> drug discovery platform. SCAT-1 is one of the Company&#8217;s proprietary technologies. Our first targeted
indication is neuroblastoma. Neuroblastoma is a rare form of cancer, and classified as an orphan disease, that forms in certain types
of nerve tissue and most frequently in the adrenal glands as well as spine, chest, abdomen or neck, predominantly in children, especially
for those aged 5 years and below. For the high-risk group, which is close to 20% (Annu Rev Med. 2015; 66: 49&#8211;63.) of total new patient
population per year, the 5-year survival rate of this condition is around 40-50% as observed by the American Cancer Society (https://www.cancer.org/cancer/neuroblastoma/detection-diagnosis-staging/survival-rates.html).
The current high drug treatment cost for high risk patients can average USD200,000 per regimen (all 6 cycles) (https://www.cadth.ca/sites/default/files/pcodr/Reviews2019/10154DinutuximabNeuroblastoma_fnEGR_NOREDACT-ABBREV_Post_26Mar2019_final.pdf).
In addition, most pediatric patients often do not tolerate or survive the relevant chemotherapy stage which, subject to further clinical
studies, may be positively addressed by the SACT-1 candidate due to the potential synergistic effects when applied with standard chemotherapy.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
our studies, SACT-1 has been shown to be effective against numerous neuroblastoma cell lines, of which 2 are MYCN-amplified cells, which
represent the high-risk neuroblastoma patient group. In addition, by using a bliss score as a quantitative measure of the extent of drug
interaction, Aptorum Group has seen a high and robust synergism between SACT-1 and traditional chemotherapy in vitro (Figure 4), indicating
a potential efficacy enhancement/dose reduction of the chemotherapy.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
4</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_008.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
4: synergism between SACT-1 and traditional chemotherapy in vitro</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, in our study, the maximum tolerable dose of SACT-1 in a rodent model was determined to be higher than 400mg/kg. Compared with
the MTD of standard chemotherapy such as paclitaxel (20-30mg/kg) (Clin Cancer Res. 5(11):3632-8) and cisplatin (6mg/kg) (BMC Cancer 17:
684 (2017)), the safety profile of SACT-1 appears to be very impressive. Based on our internal observations of pre-existing information
from approved products, (subject to FDA&#8217;s approval and on a case-by-case basis, a 505(b)(2) Application can rely in part on existing
information from approved products (such as the FDA&#8217;s previous findings on safety and efficacy) or products in literature (such
as data available). However, typically speaking, the applicant is nonetheless required to carry out a Phase 1 bridging study to compare
the Reference Listed Drug and reference the established safety and efficacy information), SACT-1 also exhibits a well-established safety
profile: at 150mg/day, the death rate was 0% in prior clinical studies with no dosage related adverse events (Table 1). In addition,
the pharmacokinetic profile of SACT-1 has also been reported (Table 2).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Table
1: Safety Profiles of SACT-1 in Human Clinical Trials</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_009.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Table
2: The pharmacokinetic Profile of SACT-1 in Humans</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><img alt="" src="image_010.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have developed a pediatric formulation of SACT-1 to better address the needs of neuroblastoma patients who are exclusively children younger
than 5. Positive data from our latest&#160;internal <i>in vivo</i>&#160;studies show significant activity against neuroblastoma tumor
reduction when treated with the compound SACT-1 in combination with standard of care (SOC) chemotherapy.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Separately,
we also screened SACT-1 for its&#160;<i>in vitro</i>&#160;activity against over 300 cancer cell lines and showed positive results in
a number of cancer types including in particular colorectal cancer, leukemia and lymphoma, etc. Similar to our previous findings against
neuroblastoma cell lines, SACT-1 exhibits similar anti-tumor efficacy across one or more other major cancer types, including but not
limited to colorectal cancer, leukemia and lymphoma cell lines. As a result, in addition to treating neuroblastoma, SACT-1 may have potential
applications in the treatment of other cancers. Based on this discovery, we plan to carry out further&#160;<i>in vivo</i>&#160;studies
to study the efficacy of SACT-1 over other types of cancers to maximize the potential of SACT-1. Based on the initial 22 day data of
a recent study we conducted in a xenograft mouse model of neuroblastoma, SACT-1 was orally administered daily at 60mg/kg in combination
of SOC chemotherapy brought a statistically significant tumor shrinkage (unpaired student&#8217;s t-test, p&lt;0.01) from Day 15 to Day
22, compared to the control group which received SOC only. The combination reduced the tumor size by up to 54.2% in the first 22 days
compared with the control (SOC only). SACT-1 appears to be effective in accelerating the effect of the SOC in early time points (from
Day 1 - 7 vs control). This further supports our earlier&#160;<i>in vitro</i>&#160;observation that SACT-1 promotes tumor DNA damage
and tumor cell death.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
5</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_011.jpg"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
5: 22 days data of <i>in vivo</i>&#160;studies in a xenograft mouse model of neuroblastoma</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">**</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unpaired student&#8217;s
    t-test, p&lt;0.01, n=8 (based on initial 22 days period)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2021, we announced that we received clearance from the US FDA regarding the IND application to initiate clinical trials of
SACT-1. In January 2022, we further announced that the completion of our Phase I clinical trial for assessing relative bioavailability
and food effect of SACT-1, and no serious adverse events were observed. SACT-1&#8217;s Phase 1 clinical trial is an Open-label Randomized,
Single Cross Over Bioavailability and Food Effect Study of SACT-1 in healthy adult volunteers. In additions, the US FDA has granted Orphan
Drug Designation to SACT-1 in January 2022. In March 2023, we further announced the completion of the End of Phase 1 (EOP1) meeting with
the US FDA on SACT-1. The EOP1 meeting was focused on gaining alignment with the US FDA regarding the clinical and regulatory pathway
for SACT-1 for the treatment of neuroblastoma in pediatric patients aged 2-18. The FDA generally agreed with the chemistry-manufacturing-control
(CMC) strategy and our proposed clinical development plan for Phase 1/2 trials.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are on track to submit an IND application to the US FDA in 2023 seeking to initiate our planned Phase 1b/2a trial for SACT-1.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
License</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2022, the US Patent and Trademark Office has granted the first patent regarding Aptorum&#8217;s SACT-1 (through Aptorum&#8217;s
subsidiary) repurposed drug for the treatment of various cancers including but not limited to neuroblastoma (US Patent 11,166,952). Another
US patent (US Patent 11,571,422) &#160;was granted in February 2023, and altogether the SACT-1 patent portfolio has Nine (9) active national
phase patent applications all over the world. </span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Paths<sup>Dx
</sup>Test: A novel molecular-based rapid pathogen identification and detection diagnostics technology</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Infectious
disease diagnostic standard of care (SOC) often involves techniques that are slow (e.g., bacterial culturing takes several days) or expensive
(e.g., current pathogen diagnostic sequencing solutions are not comprehensive, are expensive, and often inaccessible to physicians).
Although infectious disease diagnosis capabilities have been improving in recent years, there are still issues with the public health
capacity to control infectious disease threats.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Infectious
disease diagnostic standard of care (SOC) does not necessarily provide the physician a comprehensive diagnosis or report. Most point
of care diagnostic solutions, while rapid, screen only for a single pathogen and only focus on common and widespread pathogens (e.g.,
HIV). Thus, for infectious disease patients in developed nations that present with an uncommon, novel or emerging pathogen threat, diagnosis
is often slow (2-5 days) and inconclusive leaving time for pathogen spread and increased patient suffering and/or death.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paths<sup>Dx
</sup>Test is a rapid infectious disease diagnostic test that we believe will be potentially able to identify all pathogens in a patient&#8217;s
sample, both known and unknown, by employing Next Generation Sequencing (NGS). The goal of Paths<sup>Dx</sup> Test is to cost-effectively
return a 99% accurate result within 24-48 hours. Our internal results show that, in principle, Paths<sup>Dx</sup> Test can identify pathogens
such as viruses (e.g. COVID-19/SARS-CoV-2) or any other known or emerging infectious disease event in one test (e.g., DNA or RNA-based
pathogens). With these properties, Paths<sup>Dx</sup> Test is expected to track the infectome landscape (e.g., tracking mutations), rapidly
identify antibiotic resistant microbials in the process, and be more affordable than current NGS-based diagnostic platforms, which will
make it a superior product to those currently on the market.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Preliminary
data from our internal studies, which have not been verified or confirmed by third parties, presented below demonstrate additional points
of innovation and proof of concept feasibility data.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Case
Study #1</span>:</i> We examined a bio banked blood sample from a patient with a diagnosed Hepatitis B infection (Figure 6). Our technology
successfully detected the presence of Hepatitis B, as well as additional pathogens.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
6</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_012.jpg"/><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
6: Aptorum&#8217;s technology successfully confirmed a known Hepatitis B diagnosis in a bio banked sample.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Case
Study #2</span>:</i> A patient was undergoing chemotherapy and developed a severe lung infection that was refractory to first-line antibiotics
but eventually responded to the traditional trial and error approach. Using our technology, we found that 10% of all reads came from
Leuconostoc, a Gram+ bacteria (Figure 7). Importantly, Leuconostoc was not identified by physicians, demonstrating that our technology
can identify pathogens that allude a traditional diagnosis.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
7</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><img alt="" src="image_013.jpg"/></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Figure
7: Aptorum&#8217;s technology identified pathogen(s) that allude the traditional diagnostic approach.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paths<sup>Dx
</sup>Test has the revolutionary potential to cover simultaneously over 1300 pathogens due to the unbiased approach in analyzing pathogen
genome information and caters to patients who are infected with multi-strains of pathogen. The technology can be updated through our
software analytics on an ongoing basis as further pathogenic genome sequences are updated through public databases, ensuring that it
is up-to-date on new and emerging pandemic threats.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paths<sup>Dx
</sup>Test is currently undergoing Clinical Validation to confirm the performance of Paths<sup>Dx</sup> Test using clinical/patient samples.
Paths<sup>Dx</sup> Test will continue to undergo validations during 2023, in parallel with its pre-commercialization process in 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
License and Application</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 25, 2020, the Company&#8217;s subsidiary, Paths Diagnostics Pte. Limited, entered into an exclusive licence agreement with
Accelerate Technologies Pte Ltd, the commercialization arm of the Singapore&#8217;s Agency for Science, Technology and Research (&#8220;A*STAR&#8221;),
to co-develop Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology. No
upfront fee or royalty on net sales is payable under the license agreements, although we are required to pay a mid-teens to mid-twenties
percentage of sublicense revenue that we receive from our sublicensees, if any. In addition, we agreed to pay to the licensor aggregate
development milestones of up to US$250,000. When specific development milestone is reached, we are also required to satisfy certain diligence
obligations, including recruitment of staff, establishment of relationship with potential customers and exercise commercially reasonable
efforts in selling the Licensed Products.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
filed two (2) US provisional patent applications and one (1) Singapore patent application was filed in 2021, but subsequently abandoned.
In addition, one (1) US non-provisional patent application was filed on October 8, 2021 and we entered two (2) Paris Convention (PCT)
applications on February 24, 2022 and January 7, 2023 respectively. The claimed inventions are described as: &#8220;Unbiased And Simultaneous
Amplification Method For Preparing A Double-Stranded DNA Library From A Sample Of More Than One Type Of Nucleic Acid&#8221; and &#8220;Method
of Degrading Nucleic Acids and Associated Compositions.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Statistical
Significance</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
term statistical significance is to define the probability that a measured difference between two groups (e.g. two treatment groups,
treatment versus control groups) is the result of a real difference in the tested variations and not the result of chance. It means that
the result of a test does not appear randomly or by chance, but because of a specific change that is tested, so it can be attributed
to a specific cause.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
confidence level indicates to what percentage the test results will not commit a type 1 error, the false positive. A false positive occurs
when a change in the result is due to randomness (or other noise) and not the change in variations. At a 95% confidence level (p = 0.05),
there is a 5% chance that the test results are due to a type 1 error. 95% has become the standard and usually be the minimum confidence
level for the tests. To make the test more stringent, a 99% confidence level (p = 0.01) is also commonly employed, which means that there
is a 1% chance that the test results are due to a type 1 error.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
other words, a p value represents the confidence level. For example, if the p-value for a test is &lt; 0.05, it means that there is less
than 5% chance the difference between two groups is due to random error or by chance. If the p-value is &lt; 0.01, it means that there
is less than 1% chance the difference between two groups is due to random error or by chance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
employed statistical testing to compare different treatment groups in animal studies simply for proof of concept and to aid internal
decision making for further development. We do not intend to use this standard for any regulatory submission. The US FDA or other regulatory
agencies may not necessarily employ the same statistical standard to assess the efficacy in clinical trials, the results of which would
be submitted for regulatory approval.&#160;Although a p-value of 0.05 has become the standard,&#160;the US FDA or other regulatory agencies
may also individualize their efficacy standard for different clinical programs based on the indications, the purpose of a clinical trial,
among others.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>FDA
Application Status</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this the annual report, we received CTA and IND approvals for ALS-4 and SACT-1 from Health Canada and the US FDA to initiate
human clinical trial. We have not submitted other applications for IND to the FDA or other regulatory agencies.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Other
Projects under Development</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following provides additional detail regarding Other Projects under Development. As noted elsewhere in this report, based on certain
criteria, we sometimes cease work on certain projects to focus on projects we believe are more promising. We have discontinued the development
of certain candidates because patent applications protecting such technologies could not be obtained from USPTO, so we decided to focus
our capital and efforts on other candidates. We typically discontinue the development of a candidate because the expected result could
not be generated, so we focus our capital and efforts on our other candidates. The patents and patent applications covering the Other
Projects are either owned by the Company or have been in-licensed.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 20, 2021, the Company&#8217;s subsidiary, Aptorum Therapeutics Limited, entered into an Option Agreement with Yale University to
evaluate the certain classes of autoimmune anti-inflammatory drug. The agreement ends on July 14, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SACT-COV19:
Drug repurposing for the treatment of infections caused by COVID-19</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">SACT-COV19
is a drug repurposing program for the treatment of infections caused by COVID-19. We have completed initial screening under the Smart-ACT<sup>&#174;
</sup>platform to select, out of more than 2,600 small drug molecules that were previously approved for other indications, at least 3
potential candidates for further preclinical investigation against the new coronavirus disease, COVID-19. We are collaborating with Toronto
based Covar Pharmaceuticals and University of Oxford, and have also entered into agreement with the University of Hong Kong&#8217;s Microbiology
Department to conduct further preclinical investigation of the selected candidates prior to seeking approval from regulatory agencies
to initiate clinical trials on suitable candidates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Drug
candidates from the SACT-COV19 program are currently undergoing in vitro validation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ALS-1:
Small molecule intended for the treatment of viral infections caused by Influenza virus A</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Richard Kao, the Inventor of ALS-1, was the first to identify viral nucleoproteins (NP) as an effective drug target (Nature Biotechnology.
28:600-605) We are exploring ALS-1 as a potential treatment for viral infections caused by Influenza virus A.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
is our hypothesis that Influenza A NP is an essential protein for the proliferation of the influenza virus. ALS-1 targets NP and triggers
the aggregation of NP and this prevents the aggregated NP from entering the nucleus. In an animal study published by the inventor, Prof.
Richard Kao, in Nature Biotechnology (28 (6): 600, 2010), after treating with ALS-1, 50% of the mice receiving two doses of ALS-1 (100
&#956;l of 2.3 mg/ml ALS-1) per day for 7 days survived for more than 21 days compared with 100% mortality in the treatment-free control
group within 7 days. In addition, about a 10x reduction of viral load in the lungs of the ALS-1-treated mice was observed compared to
the untreated control group. The animal study results suggest that ALS-1 has the potential to be developed into a useful anti-influenza
therapeutic.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ALS-1
is designed to target a broad range of NP variants, a novel therapeutic target. Compared with the currently marketed antiviral drugs
for which the viruses have acquired extensive resistance, ALS-1 acts on a completely different therapeutic target.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ALS-1
is currently undergoing Lead Optimization to optimize its drug-like properties.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>ALS-2/
3: Small molecules for the treatment of bacterial infections caused by Staphylococcus aureus including MRSA</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ALS-2/3
is a potential class of next generation small molecules targeting bacterial virulence for the treatment of bacterial infections caused
by Staphylococcus aureus including MRSA. In a recent paper published by the inventor, Professor Richard Kao from The University of Hong
Kong (also the Founder and Principal Investigator of Acticule), in PNAS (115(310: 8003, 2018), ALS-2/3 suppresses the expression of multiple
virulence factors in Staphylococcus aureus simultaneously. In a lethal infection mouse model, compared with the vehicle group, ALS-2/3
protected against Staphylococcus aureus for all the mice in the group, with significant differences between the treatment and control
groups [P = 0.0057, by log-rank (Mantel-Cox) test].</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ALS-2/3
small molecules are currently at the Lead Optimization stage to optimize its drug-like properties.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NLS-1:
A Derivative of Epigallocatechin-3-Gallate (&#8220;Pro-EGCG&#8221;) for the treatment of Endometriosis</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NLS-1,
a drug molecule derived from natural products (green tea), is currently under development for the treatment of endometriosis, a disease
in which the tissue that normally lines the uterus (endometrium) grows outside the uterus.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NLS-1
acts as an anti-angiogenic to offer a potential novel treatment of endometriosis. In a paper published by the inventors in Angiogenesis
(16:59, 2013), NLS-1 brought a statistically significantly reduction in the lesion size and weight compared with EGCG and the control
without any treatment in an experimental endometriosis mouse model (Student t-test, p &lt; 0.05). In addition, the inhibition by NLS-1
in all of the angiogenesis parameters was statistically significantly greater than that by EGCG (Student t-test, p &lt; 0.05). In addition,
NLS-1 significantly (Student t-test, p &lt; 0.05) reduces the lesion size in both prevention and treatment group compared with both saline
and EGCG groups. Moreover, NLS-1 also had better bioavailability and greater antioxidation and anti-angiogenesis capacities compared
with EGCG. As a follow-up study in an animal model of endometriosis, orally administered NLS-1 reduced the lesion size significantly
better than oral EGCG (p&lt;0.05-0.001 at week 3- 8, ANOVA) and other hormone-based therapy such as intramuscular GnRH analog (p&lt;0.05
at week 4-8, ANOVA) and other synthetic anti-angiogenesis agents such as intraperitoneal PTK787 (p&lt;0.05-0.01 at week 4-8, ANOVA).
Regarding safety, there was no signs of stress to NLS-1 administration were observed during the treatment period. No significant weight
change was observed over the course of the experiment. Histological examination revealed no obvious reproductive effects on ovarian follicles
and endometrial glands under NLS-1 treatments. Also, vascularization of the ovaries and the uterus was not affected in the NLS-1 treatment
group.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are currently undergoing some activities to enable NLS-1 to enter IND-enabling studies. Besides, we are exploring possibilities to develop
a non-drug formulation for NLS-1.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 6, 2021, we announced that we entered into an agreement with Exeltis&#160;(&#8220;Exeltis&#8221;) (a division of the global pharmaceutical
group Insud Pharma) to develop, manufacture and commercialize NLS-1 in the following territories: the European Union and Latin America
(with an option to expand the collaboration to the United States). This novel candidate is intended to target woman&#8217;s health and
gynecological conditions, such as endometriosis or related conditions. Under this agreement, Aptorum Group will retain the development
rights in other jurisdictions in the world, as well as the right to develop the novel candidate into a drug product. Commercialization
of the product is subject to relevant regulatory approvals in their respective jurisdictions.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Aptorum
Medical Limited - AML Clinic</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated
in August 2017, Aptorum Medical Limited is a Hong Kong-based company incorporated in Cayman Islands focused on delivering premium healthcare
and clinic services. AML can draw on the expertise of many of the region&#8217;s most experienced medical practitioners, and is committed
to providing a comprehensive cross-functional facility for healthcare professionals to practice evidence-based medicine and offer high-quality
medical services to their patients. We also intend that AML will offer to conduct clinical trials of both the Company&#8217;s and third
parties&#8217; new drug products.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
as of March 2018, we leased office space in Central, Hong Kong, the commercial and financial heart of Hong Kong, as the home to AML Clinic.
We operate the AML Clinic under the name of Talem Medical. AML Clinic commenced operation in June 2018.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
renovated medical center is staffed by our group of medical professionals and offers state-of-the-art facilities. Initially we expect
to focus our expertise on treatment of chronic diseases resulting from modern sedentary lifestyles and an aging population.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Natural
supplement</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NLS-2:
NativusWell<sup>&#174;</sup>, a Bioactive Ingredient (DOI) in Chinese Yam for the Relief of Menopausal Symptoms as a Natural Supplement.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NativusWell<sup>&#174;
</sup>(NLS-2) is a natural supplement made with the bioactive ingredient extracted Chinese yam powder containing &#8220;DOI&#8221;, which
is Aptorum Group&#8217;s non-hormonal approach intended to meet certain growing consumer nutritional trends and concerns. It is estimated
that 1.2 billion women worldwide will be menopausal or postmenopausal by the year 2030<sup>1</sup>. The global woman&#8217;s health supplement
market for menopausal symptoms is projected to reach over USD$50bn by 2025 with a CAGR rate of 16.4% (2016-2025)<sup>2</sup>. Initially,
the supplement will be commercialized and sold in Hong Kong; the Company is seeking regulatory clearance to market the product in other
major jurisdictions. We previously entered into a regional distribution and marketing agreement, but have since decided to commercialize
NLS-2 through our own efforts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
production of Aptorum Group&#8217;s dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada and is marketed
under the brand name NativusWell<sup>&#174;</sup>; we are selling it online through HKTV Mall, JD.com and NativusWell<sup>&#174; </sup>website.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">NativusWell<sup>&#174;
</sup>tablets are natural, non-hormonal supplements containing DOI. The yam powder with DOI utilizes a non-hormonal approach that is
intended to boost the general wellness of women undergoing menopause. Third party scientific studies indicate that DOI, the naturally
occurring bioactive ingredient in Chinese yam, appears to stimulate estradiol biosynthesis, induce estradiol and progesterone secretion
and increase bone density, thereby potentially counteracting the progression of osteoporosis<sup>3</sup>, one of the common symptoms
associated with menopause<sup>4</sup>.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Competition</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
industry is highly competitive and subject to rapid and significant change. While we believe that our development and commercialization
experience, scientific knowledge and industry relationships provide us with competitive advantages, we face competition from pharmaceutical
and biotechnology companies, including specialty pharmaceutical companies, and generic drug companies, academic institutions, government
agencies and research institutions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are a number of large pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development
of drugs for the diagnosis and treatment of diseases for which we are developing products or technology. Moreover, a number of additional
drugs are currently in clinical trials and may become competitors if and when they receive regulatory approval.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>1</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">World Health Technical
    Report Series. Research on the Menopause in the 1990&#8217;s. Geneva, Switzerland: World Health Organization; 1996.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>2</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">https://www.grandviewresearch.com/press-release/global-isoflavones-market</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>3</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">https://www.ke.hku.hk/story/innovation/the-magic-of-chinese-yam-for-treatment-of-menopausal-syndrome;
    see also, Scientific Reports, 5-10179.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><sup>4</sup></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">https://www.everydayhealth.com/menopause/osteoporosis-and-menopause.aspx</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Many
of our competitors have longer operating histories, better name recognition, stronger management capabilities, better supplier relationships,
a larger technical staff and sales force and greater financial, technical or marketing resources than we do. Mergers and acquisitions
in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our
competitors. Our commercial opportunity could be reduced or eliminated if our competitors develop or market products or other novel therapies
that are more effective, safer or less costly than our current drug candidates, or any future drug candidates we may develop, or obtain
regulatory approval for their products more rapidly than we may obtain approval for our current drug candidates or any such future drug
candidates. Our success will be based in part on our ability to identify, develop and manage a portfolio of drug candidates that are
safer and more effective than competing products.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Inflation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inflation
affects us by generally increasing our cost of labor and research and development costs, the way it does to all labor and research costs.
However, we do not anticipate that inflation will materially affect our business in the foreseeable future.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Seasonality</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our operation and sales do not experience seasonality.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employees</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this the annual report, we have 18 full-time and 1 part-time employees. Of these, 6 full-time are engaged in research
and development and laboratory operations, 7 full-time are engaged in general and administrative functions and 5 full-time and 1 part-time
are engaged in the clinic operation. As of the date of this annual report, 18 of our employees are located in Asia and 1 of our employees
is located in Europe. In addition, we have engaged and may continue to engage 66 independent contracted consultants and advisors to assist
us with our operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have
never experienced any employment related work stoppages, and we consider our relations with our employees to be good.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Intellectual
Property</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
technologies underlying our various research and development projects are the subject of various patents and patent applications claiming,
in certain instances, composition of matter and, in other instances, methods of use. Prosecution, maintenance and enforcement of these
patents, as well as those on any future protectable technologies we may acquire, are and will continue to be an important part of our
strategy to develop and commercialize novel medicines, as described in more detail below. Through entering into license agreements with
their owners, we have obtained exclusive rights to these patents, applications and related know-how in the U.S. and certain other countries
to develop, manufacture and commercialize the products using or incorporating the protected inventions that are described in this annual
report and that are expected to contribute significant value to our business. The technologies protected by these patents may also for
the basis for the development of other products.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to licensed intellectual property, our in-house science team has been actively developing our own proprietary intellectual property.
No non-provisional&#160;patent application has yet been filed in the Company&#8217;s own name for the Lead Projects. We have, however,
filed a number of provisional applications to establish earlier filing dates for certain of our other ongoing researches, the specifics
of which are currently proprietary and confidential.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
U.S. patent system permits the filing of provisional and non-provisional patent applications (i.e., a regular patent application). A
non-provisional patent application is examined by the USPTO, and can mature into a patent once the USPTO determines that the claimed
invention meets the standards for patentability. On the other hand, a provisional patent application is not examined for patentability,
and automatically expires 12 months after its filing date. As a result, a provisional patent application cannot mature into a patent.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provisional
applications are often used, among other things, to establish an earlier filing date for a subsequent non-provisional patent application.
The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
effective filing date of a non-provisional patent application is used by the USPTO to determine what information is prior art when it
considers the patentability of a claimed invention. If certain requirements are satisfied, a non-provisional patent application can claim
the benefit of the filing date of an earlier filed provisional patent application. As a result, the filing date accorded by the provisional
patent application may supersede information that otherwise could preclude the patentability of an invention.</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
provisional patent application is not eligible to become an issued patent unless, among other things, we file a non-provisional patent
application within 12 months of the filing date of the provisional patent application. If we do not timely file&#160;a non-provisional
patent application claiming priority to said provisional application, we may lose our priority date with respect to our provisional patent
applications. Further, if any (self or by others) publication of the invention is made after such priority date, and if we do not file
a non-provisional application claiming priority to said provisional application, our invention may become unpatentable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
we cannot predict whether such future patent applications will result in the issuance of patents that effectively protect any of our
product candidates or will effectively prevent others from commercializing competitive products.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not expect to incur material expenses in the prosecution of the provisional applications or other licensed patent applications. We
expect to fund the patent costs from our cash and restricted cash.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
value of our drug products will depend significantly on our ability to obtain and maintain patent and other proprietary protection for
those products, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and
proprietary rights of other parties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date hereof, we are the patentee of a number of provisional and non-provisional patent applications, both on our proprietarily
developed projects and improvement to our in-licensed projects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a list of our patent rights under the exclusive licenses as of the date of this annual report related to our
Lead Projects, ALS-4 and Paths<sup>Dx</sup> Test; on the other hand, our other Lead Project, SACT-1 is a proprietary technology not subject
to any license agreement:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 8%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Project
    Company / Project name</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 18%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>License
    Agreement</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 10%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Licensor(s)</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 10%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Licensee</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Licensed
    / IP Rights</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 20%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Patent
    Expiration Dates</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Acticule / ALS-4</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive
    Patent License Agreement, dated October 18, 2017</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">First
    Amendment to Exclusive License Agreement, dated June 7, 2018</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Second
    Amendment to Exclusive License Agreement dated July 10, 2019</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive
    Patent License Agreement dated January 11, 2019</span></p></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Versitech Limited</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Acticule Life Sciences
    Limited</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive
    licensee: 2 pending U.S. applications (16/867,540 and 17/006,985), 1 pending European applications (EP18835238.9), 1 pending PRC
    application (CN201880048674.5), 12 pending applications in other foreign jurisdictions including Australia, Brazil, Canada, Chile,
    Eurasia, Hong Kong, Israel, Japan, Korea, Malaysia, New Zealand, Singapore</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    licensed IP rights include granted patents in the U.S. and pending patent applications in the U.S., Europe, PRC and other foreign
    jurisdictions.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    U.S. patents will expire in 2038; any other patent based on the pending application, if granted, will have a 20-year patent term
    from 2018.</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paths<sup>Dx</sup> Test</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive Patent License
    Agreement, dated September 25, 2020</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerate Technologies
    Pte Ltd</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Paths Diagnostics Pte.
    Limited</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive licensee: 4 U.S.
    patents US7635566, US8241850, US9920355, US10472667, 1 European patent EP3224374, 1 Great Britain patent GB2532749</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The U.S. patents will expire
    in 2027, 20282034 and 2037 respectively. The UK patent will expire in 2034. The European patent will expire in 2035.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
of the extensive time required for clinical development and regulatory review of a drug we may develop, it is possible that, before any
of our drug candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization,
thereby reducing any advantage of any such patent. If appropriate, the Company may seek to extend the period during which it has exclusive
rights to a product by pursuing patent term extensions and marketing exclusivity periods that are available from the regulatory authorities
of certain countries (including the United States) and the EPO.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Even
though the Company has certain patent rights, the ability to obtain and maintain protection of biotechnology and pharmaceutical products
and processes such as those we intend to develop and commercialize involves complex legal and factual questions. No consistent policy
regarding the breadth of claims allowed in such patents has emerged to date in the U.S. The scope of patent protection outside the United
States is even more uncertain. Changes in the patent laws or in interpretations of patent laws in the United States and other countries
have diminished (and may further diminish) our ability to protect our inventions and enforce our IP rights and, more generally, could
affect the value of IP.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
we have already secured rights to a number of issued patents directed to our drug candidates, we cannot predict the breadth of claims
that may issue from the pending patent applications and provisional patents that we have licensed or that we have filed. Substantial
scientific and commercial research has been conducted for many years in the areas in which we have focused our development efforts, which
has resulted in other parties having a number of issued patents, provisional patents and pending patent applications relating to such
areas. The patent examiner in any particular jurisdiction may take the view that prior issued patents and prior publications render our
patent claims &#8220;obvious&#8221; and therefore unpatentable or require us to reduce the scope of the claims for which we are seeking
patent protection.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, patent applications in the United States and elsewhere generally are not available to the public until at least 18 months from
the priority date, and the publication of discoveries in the scientific or patent literature frequently occurs substantially later than
the date on which the underlying discoveries were made. Therefore, patent applications relating to drugs similar to our drug candidates
may have already been filed, which (if they result in issued patents) could restrict or prohibit our ability to commercialize our drug
candidates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other IP rights. Our ability
to prevent competition for our drug candidates and technologies will depend on our success in obtaining patents containing substantial
and enforceable claims for those candidates and enforcing those claims once granted. With respect to any applications which have not
yet resulted in issued patents, there can be no assurance that meaningful claims will be obtained. Even issued patents may be challenged
or invalidated. If others have prepared and filed patent applications in the United States that also claim technology to which we have
filed patent applications or otherwise wish to challenge our patents, we may have to participate in interferences, post-grant reviews,
inter parties reviews, derivation or other proceedings in the USPTO and other patent offices to determine issues such as priority of
claimed invention or validity of such patent applications as well as our own patent applications and issued patents. Patents may also
be circumvented, and our competitors may be able to independently develop and commercialize similar drugs or mimic our technology, business
model or strategy without infringing our patents. The rights granted under any issued patents may not provide us with proprietary protection
or competitive advantages against competitors with similar technology.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may rely, in some limited circumstances, on unpatented trade secrets and know-how to protect aspects of our technology. However, it is
challenging to monitor and prevent the disclosure of trade secrets. We seek to protect our proprietary trade secrets and know-how, in
part, by entering into confidentiality agreements with consultants, scientific advisors and contractors and invention assignment agreements
with our employees. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical
security of our premises and physical and electronic security of our information technology systems. While we have confidence in these
individuals, organizations and systems, agreements or security measures may be breached, giving our competitors knowledge of our trade
secrets and know-how, and we may not have adequate remedies for any such breach, in which case our business could be adversely affected.
Our trade secrets will not prevent our competitors from independently discovering or developing the same know-how. Although our agreements
with our consultants, contractors or collaborators require them to provide us only original work product and prohibit them from incorporating
or using IP owned by others in their work for us, if they breach these obligations, disputes may arise as to the rights in any know-how
or inventions that arise from their work.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
commercial success will also depend in part on not infringing the proprietary rights of other parties. Although we seek to review the
patent landscape relevant to our technologies on an ongoing basis, we may become aware of a new patent which has been issued to others
with claims covering or related to aspects of one of our drug candidate. The issuance of such a patent could require us to alter our
development plans for that candidate, redesign the candidate, obtain a license from the patent holder or cease development. Our inability
to obtain a license to proprietary rights that we may require to develop or commercialize any of our drug candidates would have a material
adverse impact on us.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Trademarks</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we own trademark registrations covering the trade names and logos of Aptorum and our subsidiaries,
including but not limited to &#8220;APTORUM&#8221;, &#8220;<span style="text-transform: uppercase">APTORUM THERAPEUTICS</span>,&#8221;
&#8220;<span style="text-transform: uppercase">VIDENS LIFE SCIENCES,</span>&#8221; &#8220;ACTICULE LIFE SCIENCES,&#8221; &#8220;NATIVUS
LIFE SCIENCES,&#8221; &#8220;NativusWell,&#8221; &#8220;TALEM&#8221; in jurisdictions Hong Kong, EU and the United Kingdom and PRC. Furthermore,
we are in the process of applying for registration of trademarks in jurisdictions including the U.S., EU, the United Kingdom, Australia
and PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also own certain unregistered trademark rights.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
other trade names, trademarks and service marks of other companies appearing in this annual report are the property of their respective
holders. Solely for convenience, the trademarks and trade names in annual report are referred to without the <sup>&#174;</sup> and <sup>&#8482;
</sup>symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest
extent under applicable law, their rights thereto. We do not intend our use or display of other companies&#8217; trademarks and trade
names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Regulations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Government
authorities in the United States at the federal, state and local level and in other countries extensively regulate, among other things,
the research and clinical development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping,
promotion, advertising, distribution, post-approval monitoring and reporting, marketing, pricing, export and import of drug products
(&#8220;Regulated Products&#8221;), such as those we are developing. Generally, before a new Regulated Product can be marketed, considerable
data demonstrating its quality, safety and efficacy must be obtained, organized to address the requirements of and in the format specific
to each regulatory authority, submitted for review and approved by the regulatory authority. This process is very lengthy and expensive,
and success is uncertain.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regulated
Products are also subject to other federal, state and local statutes and regulations in the United States and other countries, as applicable.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes
and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable regulatory
requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative
or judicial sanctions. These sanctions could include, among other actions, the regulatory authority&#8217;s refusal to approve pending
applications, withdrawal of an approval, clinical holds, untitled or warning letters, voluntary product recalls or withdrawals from the
market, product seizures, total or partial suspension of production or distribution, injunctions, disbarment, fines, refusals of government
contracts, restitution, disgorgement, or civil or criminal penalties. Any such administrative or judicial enforcement action could have
a material adverse effect on us.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
AML Clinic and part of the Company&#8217;s principal place of business is in Hong Kong, the Company is subject to various Hong Kong laws
and regulation covering its business activities there, described in further detail below. Also, the Company anticipates that, if it obtains
marketing approval for any of its drug candidates, it intends to focus its marketing and sales efforts primarily in three regions: the
United States, Canada, Europe and PRC. The regulatory framework for each of these regions is described below.</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>U.S.
Drug Development Process</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
process of obtaining regulatory approvals and maintaining compliance with appropriate federal, state and local statutes and regulations
requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any
time during the product development process, approval process, or after approval, may subject an applicant to administrative or judicial
sanctions or lead to voluntary product recalls. Administrative or judicial sanctions could include the FDA&#8217;s refusal to approve
pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product seizures, total or partial suspension
of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
The process required by the FDA before a drug may be marketed in the United States generally involves the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">completion of non-clinical
    laboratory tests, preclinical studies according to cGLP and manufacturing of clinical supplies according to cGMP;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">submission to the FDA of
    an IND, which must become effective before human clinical trials may begin;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">approval by an independent
    IRB, at each clinical site before each trial may be initiated;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">performance of adequate
    and well-controlled human clinical trials according to cGCP, to establish the safety and efficacy of the proposed product for its
    intended use;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">preparation and submission
    to the FDA of an NDA, for a drug;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">satisfactory completion
    of an FDA advisory committee review, if applicable;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">satisfactory completion
    of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess
    compliance with cGMP; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">payment of user fees and
    the FDA review and approval of the NDA.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
testing and approval process requires substantial time, effort and financial resources and we cannot be certain that any approvals for
our drug candidates, or any future drug candidates we may develop, will be granted on a timely basis, if at all.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
a drug candidate is identified for development, it enters the non-clinical testing stage. Non-clinical tests include laboratory evaluations
of product chemistry, toxicity, formulation and stability, as well as preclinical studies. An IND sponsor must submit the results of
the non-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the
FDA as part of the IND prior to commencing any testing in humans. An IND sponsor must also include a protocol detailing, among other
things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to be used
in monitoring safety, and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation.
Some non-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt
by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold
within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical
trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or
non-compliance, and may be imposed on all products within a certain class of products. The FDA also can impose partial clinical holds,
for example, prohibiting the initiation of clinical trials for certain duration or for certain doses.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with cGCP regulations. These
regulations include the requirement that all research subjects provide informed consent in writing before their participation in any
clinical trial. Further, an IRB representing each institution participating in a clinical trial must review and approve the plan for
any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least
annually. An IRB is responsible for protecting the rights of clinical trial subjects and considers, among other things, whether the risks
to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also
approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his
or her legal representative and must monitor the clinical trial until completed. Each new clinical protocol and any amendments to the
protocol must be submitted to the FDA for review, and to the IRBs for approval. Protocol detail, among other things, includes the objectives
of the clinical trial, testing procedures, sublease selection and exclusion criteria, and the parameters to be used to monitor subject
safety.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Phase 1.</b>&#160;Phase
    1 includes the initial introduction of an investigational new drug into humans. These studies are closely monitored and may be conducted
    in patients, but are usually conducted in healthy volunteer subjects. These studies are designed to determine the metabolic and pharmacologic
    actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.
    During Phase 1, sufficient information about the drug&#8217;s pharmacokinetics and pharmacological effects should be obtained to
    permit the design of well-controlled, scientifically valid, Phase 2 studies. Phase 1 studies also evaluate drug metabolism, structure-activity
    relationships, and the mechanism of action in humans. These studies also determine which investigational drugs are used as research
    tools to explore biological phenomena or disease processes. The total number of subjects included in Phase 1 studies varies with
    the drug, but is generally in the range of twenty to eighty.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Phase 2.</b>&#160;Phase
    2 includes the early controlled clinical studies conducted to obtain some preliminary data on the effectiveness of the drug for a
    particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common
    short-term side effects and risks associated with the drug. Phase 2 studies are typically well-controlled, closely monitored, and
    conducted in a relatively small number of patients, usually involving several hundred people.</span></td></tr>
  </table><div>
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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Phase 3.&#160;</b>Phase
    3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness
    of the drug has been obtained in Phase 2, and are intended to gather the additional information about effectiveness and safety that
    is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies are designed to provide an adequate basis
    for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies
    usually include several hundred to several thousand people.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Progress
reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety reports must be submitted
to the FDA and clinical investigators within 15 calendar days for serious and unexpected suspected adverse events, any clinically important
increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator&#8217;s brochure, or any
findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug candidate. Additionally,
a sponsor must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction no later than 7 calendar days after
the sponsor&#8217;s receipt of the information. There is no assurance that Phase 1, Phase 2 and Phase 3 testing can be completed successfully
within any specified period, or at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds,
including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend
or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB&#8217;s
requirements or if the product has been associated with unexpected serious harm to subjects.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concurrent
with clinical trials, companies usually complete additional preclinical studies and must also develop additional information about the
chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in
accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product
drug and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final
product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that
the product drug does not undergo unacceptable deterioration over its shelf life.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
results of product development, non-clinical studies and clinical trials, together with other detailed information regarding the manufacturing
process, analytical tests conducted on the product, proposed labeling and other relevant information, are submitted to the FDA as part
of an NDA requesting approval to market the new drug. The FDA reviews all NDAs submitted within 60 days of submission to ensure that
they are sufficiently complete for substantive review before it accepts them for filing. If the submission is accepted for filing, the
FDA begins an in-depth substantive review.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
approval process is lengthy and difficult and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied
or may require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately
decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the
FDA may interpret data differently than we interpret the same data. The FDA will issue a complete response letter if the agency decides
not to approve the NDA in its present form. The complete response letter usually describes all of the specific deficiencies that the
FDA identified in the NDA that must be satisfactorily addressed before it can be approved. The deficiencies identified may be minor,
for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response
letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete
response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or
withdraw the application or request an opportunity for a hearing.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
after such review a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages
or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require
that certain contraindications, warnings or precautions be included in the product labeling. Any products for which we receive the FDA
approval would be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting
of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution
requirements, complying with certain electronic records and signature requirements and complying with the FDA promotion and advertising
requirements. In addition, the FDA may require post-approval studies, including Phase 4 clinical trials, to further assess a product&#8217;s
safety and effectiveness after NDA approval and may require testing and surveillance programs to monitor the safety of approved products
that have been commercialized. The FDA also may conclude that an NDA may only be approved with a Risk Evaluation and Mitigation Strategy
designed to mitigate risks through, for example, a medication guide, physician communication plan, or other elements to assure safe use,
such as restricted distribution methods, patient registries and other risk minimization tools.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Post-Approval
Requirements</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
products for which we receive the FDA approval are subject to continuing regulation by the FDA, including, among other things, record-keeping
requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product
sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with the FDA
promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on
products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions
of the approved label. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable
time, resources and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior
the FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional
labeling claims, are also subject to further the FDA review and approval.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
FDA may withdraw a product approval if compliance with regulatory requirements is not maintained or if problems occur after the product
reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product&#8217;s marketing
or even complete withdrawal of the product from the market. Further, the failure to maintain compliance with regulatory requirements
may result in administrative or judicial actions, such as fines, untitled or warning letters, holds on clinical trials, product seizures,
product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions
on marketing or manufacturing, injunctions or consent decrees, or civil or criminal penalties, or may lead to voluntary product recalls.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Patent
Term Restoration and Marketing Exclusivity</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
drug approval can take an extended period of time, there may be limited remaining life for the patents covering the approved drug, meaning
that the company has limited time to use the patents to protect the sponsor&#8217;s exclusive rights to make, use and sell that drug.
In such a case, U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration
Act of 1984, commonly referred to as the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent restoration term of up to five years
as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration
cannot extend the remaining term of a patent beyond a total of 14 years from the product&#8217;s approval date.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to
gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new
drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity
period, the FDA may not accept for review an abbreviated new drug application (&#8220;ANDA&#8221;) or a 505(b)(2) Application submitted
by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data
required for approval.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the future, if appropriate, we intend to apply for restorations of patent term and/or marketing exclusivity for some of our products;
however, there can be no assurance that any such extension or exclusivity will be granted to us.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Disclosure
of Clinical Trial Information</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sponsors
of clinical trials of the FDA-regulated products, including drugs are required to register and disclose certain clinical trial information,
which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation,
study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are
also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed
until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain
knowledge regarding the progress of development programs.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Pharmaceutical
Coverage, Pricing and Reimbursement</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Much
of the revenue generated by new Regulated Products depends on the willingness of third-party payors to reimburse the price of the product.
Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
In the United States, sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the
availability of coverage and reimbursement from third-party payors. Third-party payors include government authorities, managed care providers,
private health insurers and other organizations. The process for determining whether a payor will provide coverage for a product may
be separate from the process for setting the reimbursement rate that the payor will pay for the product. Third-party payors may limit
coverage to specific products on an approved list, or formulary, which is not required to include all of the FDA-approved products for
a particular indication. Moreover, a payor&#8217;s decision to provide coverage for a product does not imply that an adequate reimbursement
rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize
an appropriate return on our investment in product development.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Third-party
payors are increasingly challenging the price and examining the medical necessity and cost- effectiveness of medical products and services,
in addition to their safety and efficacy. To obtain coverage and reimbursement for any product that might be approved for sale, we may
need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of any products,
in addition to the costs required to obtain regulatory approvals. Our product candidates may not be considered medically necessary or
cost-effective. If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may
not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow
a company to sell its products at a profit.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth
of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic
products for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions
with existing controls and measures, could limit payments for pharmaceuticals.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Even
if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable
coverage policies and reimbursement rates may be implemented in the future. Unfavorable coverage or reimbursement policies regarding
any of the Company&#8217;s products would have a material adverse impact on the value of that product.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Other
Healthcare Laws and Compliance Requirements</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we obtain regulatory approval of our products, we may be subject to various federal and state laws targeting fraud and abuse in the healthcare
industry. These laws may impact, among other things, our proposed sales, marketing and education programs. In addition, we may be subject
to patient privacy regulation by both the federal government and the states in which we conduct our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Patient
Protection and the Affordable Care Act</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Affordable Care Act, enacted in March 2010, includes measures that have or will significantly change the way health care is financed
in the United States by both governmental and private insurers. Among the provisions of the Affordable Care Act of greatest importance
to the pharmaceutical industry are the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Medicaid Drug Rebate
    Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of
    the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer&#8217;s
    outpatient drugs furnished to Medicaid patients. The Affordable Care Act increased pharmaceutical manufacturers&#8217; rebate liability
    on most branded prescription drugs from 15.1% of the average manufacturer price to 23.1% of the average manufacturer price, added
    a new rebate calculation for line extensions of solid oral dosage forms of branded products, and modified the statutory definition
    of average manufacturer price. The Affordable Care Act also expanded the universe of Medicaid utilization subject to drug rebates
    by requiring pharmaceutical manufacturers to pay rebates on Medicaid managed care utilization and expanding the population potentially
    eligible for Medicaid drug benefits.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->95<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In order for a pharmaceutical
    product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government
    agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The Affordable
    Care Act expanded the types of entities eligible to receive discounted 340B pricing.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Affordable Care Act
    imposed a requirement on manufacturers of branded drugs to provide a 50% discount off the negotiated price of branded drugs dispensed
    to Medicare Part D patients in the coverage gap (i.e., the &#8220;donut hole&#8221;).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Affordable Care Act
    imposed an annual, non-deductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned
    among these entities according to their market share in certain government healthcare programs, although this fee does not apply
    to sales of certain products approved exclusively for orphan indications.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to these provisions, the Affordable Care Act established a number of bodies whose work may have a future impact on the market
for certain pharmaceutical products. These include the Patient-Centered Outcomes Research Institute, established to oversee, identify
priorities in, and conduct comparative clinical effectiveness research, the Independent Payment Advisory Board, which has authority to
recommend certain changes to the Medicare program to reduce expenditures by the program, and the Center for Medicare and Medicaid Innovation
within the Centers for Medicare and Medicaid Services, to test innovative payment and service delivery models to lower Medicare and Medicaid
spending.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
and other laws may result in additional reductions in healthcare funding, which could have a material adverse effect on customers for
our product candidates, if we gain approval for any of them. Although we cannot predict the full effect on our business of the implementation
of existing legislation or the enactment of additional legislation pursuant to healthcare and other legislative reform, we believe that
legislation or regulations that would reduce reimbursement for, or restrict coverage of, our products could adversely affect how much
or under what circumstances healthcare providers will use our product candidates if we gain approval for any of them.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Canadian
Regulation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
Canada, our pharmaceutical product candidates and our research and development activities are primarily regulated by the&#160;<i>Food
and Drugs Act&#160;</i>and the rules and regulations thereunder, which are enforced by Health Canada. Health Canada regulates, among
other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution,
post-approval monitoring, marketing and import and export of pharmaceutical products. Drug approval laws require licensing of manufacturing
facilities, carefully controlled research and testing of products, government review and approval of experimental results prior to giving
approval to sell drug products. Regulators also typically require that rigorous and specific standards such as Good Manufacturing Practices
(GMP), Good Laboratory Practices, or GLP, and Good Clinical Practices, or GCP, are followed in the manufacture, testing and clinical
development, respectively, of any drug product. The processes for obtaining regulatory approvals in Canada, along with subsequent compliance
with applicable statutes and regulations, require the expenditure of substantial time and financial resources.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
principal steps required for drug approval in Canada is as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Preclinical
Toxicology Studies</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-clinical&#160;studies
are conducted&#160;<i>in vitro&#160;</i>and in animals to evaluate pharmacokinetics, metabolism and possible toxic effects to provide
evidence of the safety of the drug candidate prior to its administration to humans in clinical studies and throughout development. Such
studies are conducted in accordance with applicable laws and GLP.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Initiation
of Human Testing</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
Canada, the process of conducting clinical trials with a new drug cannot begin until we have received a NOL (No objection Letter) from
Health Canada, typically within 30 days (during Covid the 30 days extended to 45 days) of a CTA submission. Similar regulations apply
in Canada to a CTA as to an IND in the United States. Once approved, two key factors influencing the rate of progression of clinical
trials are the rate at which patients can be enrolled to participate in the research program and whether effective treatments are currently
available for the disease that the drug is intended to treat. Patient enrollment is largely dependent upon the incidence and severity
of the disease, the treatments available and the potential side effects of the drug to be tested and any restrictions for enrollment
that may be imposed by regulatory agencies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Clinical
Trials</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Similar
regulations apply in Canada regarding clinical trials as in the United States. In Canada, Research Ethics Boards, or REBs, instead of
IRBs, are used to review and approve clinical trial plans. Clinical trials involve the administration of an investigational new drug
to human subjects under the supervision of qualified investigators in accordance with current Good Clinical Practices, or cGCP, requirements,
which include review and approval by REBs. Clinical trials are conducted under protocols detailing, among other things, the objectives
of the trial, the trial procedures, the parameters to be used in monitoring safety and the efficacy criteria to be evaluated and a statistical
analysis plan. Human clinical trials are typically conducted in three sequential phases, as discussed above in similar context to government
regulation in the United States.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
manufacture of investigational drugs for the conduct of human clinical trials is subject to current Good Manufacturing Practice, or cGMP,
requirements. Investigational drugs and active pharmaceutical ingredients imported into Canada are also subject to regulation by Health
Canada relating to their labeling and distribution. Post authorization requirements include reporting of serious adverse events and clinical
trial site inspection program. Phase 1, Phase 2 and Phase 3 clinical trials are subject to a clinical trial application (CTA) for each
phase of study. Furthermore, in Canada, Health Canada or the sponsor may suspend or terminate a clinical trial at any time on various
grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an REB can suspend
or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the REB&#8217;s
requirements or if the drug has been associated with unexpected serious harm to subjects. Additionally, some clinical trials are overseen
by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.
This group regularly reviews accumulated data and advises the study sponsor regarding the continuing safety of trial subjects, potential
trial subjects and the continuing validity and scientific merit of the clinical trial. We may also suspend or terminate a clinical trial
based on evolving business objectives or competitive climate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>New
Drug Submission (NDS)</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
successful completion of Phase 3 clinical trials, in Canada the company sponsoring a new drug then assembles all the preclinical and
clinical data and other testing relating to the product&#8217;s pharmacology, chemistry, manufacture, and controls, and submits it to
Health Canada as part of a New Drug Submission, or NDS. The NDS is then reviewed by Health Canada for approval to market the drug.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of the approval process, an additional application for a Drug Establishment License (DEL) 90 days prior the NDS submission to Health
Canada to initiate review and inspection of the facility or the facilities at which the drug is manufactured are compliant with GMP requirements.
Health Canada will not approve the product unless compliance with cGMP&#8212;a quality system regulating manufacturing&#8212;is satisfactory
and the NDS contains data that provide substantial evidence that the drug is safe and effective in the indication studied. In addition,
before approving an NDS, Health Canada will typically inspect one or more clinical sites to assure compliance with GCP.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
testing and approval process for an NDS requires substantial time, effort and financial resources, and may take several years to complete.
Data obtained from preclinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which
could delay, limit or prevent regulatory approval. Health Canada may not grant approval of an NDS on a timely basis, or at all. In Canada,
NDSs are subject to user fees and these fees are typically increased annually to reflect inflation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Even
if Health Canada approves a product candidate, the relevant authority may limit the approved indications for use of the product candidate,
require that contraindications, warnings or precautions be included in the product labeling, including a black box warning, require that
post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug&#8217;s safety after approval, require
testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution
restrictions or other risk management mechanisms.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Health
Canada may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After
approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling
claims, are subject to further testing requirements, notification, and regulatory authority review and approval. Further, should new
safety information arise, additional testing, product labeling or regulatory notification may be required.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>European
Union Regulation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Regulation
in the European Union</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
process governing approval of medicinal products in the EU generally follows the same lines as in the United States. It entails satisfactory
completion of pharmaceutical development, non-clinical studies and adequate and well-controlled clinical trials to establish the safety
and efficacy of the medicinal product for each proposed indication. It also requires the submission to relevant competent authorities
for clinical trials authorization and to the European Medicines Authority, or EMA, for a marketing authorization application, or MAA,
and granting of a marketing authorization by these authorities before the product can be marketed and sold in the EU.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Clinical
Trial Approval</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC on cGCP, a system for the approval of clinical
trials in the EU (the equivalent of the IND process in the United States) has been implemented through national legislation of the EU
member states. Under this system, an applicant must obtain approval from the competent national authority of an EU member state in which
the clinical trial is to be conducted or in multiple EU member states if the clinical trial is to be conducted in a number of EU member
states. Furthermore, the applicant may only start a clinical trial at a specific study site after the independent ethics committee has
issued a favorable opinion. The clinical trial application, or CTA, must be accompanied by an investigational medicinal product dossier
with supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and corresponding national laws of the EU member
states and further detailed in applicable guidance documents.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the current Clinical Trials Directive
2001/20/EC. It is expected that the new Clinical Trials Regulation will apply in 2019. It will overhaul the current system of approvals
for clinical trials in the EU. Specifically, the new regulation, which will be directly applicable in all EU member states, aims at simplifying
and streamlining the approval of clinical trials in the EU. For instance, the new Clinical Trials Regulation provides for a streamlined
application procedure using a single entry point and strictly defined deadlines for the assessment of clinical trial applications.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Marketing
Authorization</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
obtain a marketing authorization for a product under the EU regulatory system (the equivalent of the NDA process in the United States),
an applicant must submit an MAA, either under a centralized procedure administered by the EMA or one of the procedures administered by
competent authorities in EU member states (decentralized procedure, national procedure, or mutual recognition procedure). A marketing
authorization may be granted only to an applicant established in the EU. Regulation (EC) No. 1901/2006 provides that prior to obtaining
a marketing authorization in the EU, an applicant must demonstrate compliance with all measures included in an EMA-approved Pediatric
Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class
waiver, or a deferral for one or more of the measures included in the PIP.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU
member states. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for
medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products
and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer.
For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for
which a centralized process is in the interest of patients, the centralized procedure may be optional.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established by the EMA is responsible for
conducting the assessment of a product to define its risk/benefit profile. Under the centralized procedure, the maximum timeframe for
the evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided
by the applicant in response to questions of the CHMP. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a
medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic
innovation.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the CHMP accepts such a request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP may revert
to the standard time limit for the centralized procedure if it determines that it is no longer appropriate to conduct an accelerated
assessment.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Periods
of Authorization and Renewals</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a reevaluation
of the risk benefit balance by the EMA or by the competent authority of the authorizing Member State. To that end, the marketing authorization
holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy,
including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization
ceases to be valid. Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the
competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period.
Any authorization that is not followed by the placement of the drug on the EU market (in the case of the centralized procedure) or on
the market of the authorizing Member State within three years after authorization ceases to be valid.</span></p><div>

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    </div><!-- Field: /Page --><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Regulatory
Requirements after Marketing Authorization</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing,
marketing, promotion and sale of the medicinal product. These include compliance with the EU&#8217;s stringent pharmacovigilance or safety
reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. In addition, the
manufacturing of authorized products, for which a separate manufacturer&#8217;s license is mandatory, must also be conducted in strict
compliance with the EMA&#8217;s cGMP requirements and comparable requirements of other regulatory bodies in the EU, which mandate the
methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. Finally,
the marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed
toward the prescribers of drugs and/or the general public, are strictly regulated in the EU under Directive 2001/83EC, as amended.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Orphan
Drug Designation and Exclusivity</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regulation
(EC) No. 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission
if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically
debilitating condition affecting not more than five in ten thousand persons in the EU when the application is made, or (2) a life-threatening,
seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the
drug in the EU would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must
demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been
authorized in the EU or, if such method exists, the drug has to be of significant benefit compared to products available for the condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
orphan drug designation provides a number of benefits, including fee reductions, regulatory assistance and the possibility to apply for
a centralized EU marketing authorization. Marketing authorization for an orphan drug leads to a ten-year period of market exclusivity.
During this market exclusivity period, neither the EMA nor the European Commission or the EU member states can accept an application
or grant a marketing authorization for a &#8220;similar medicinal product.&#8221; A &#8220;similar medicinal product&#8221; is defined
as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and
which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may, however,
be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan
drug designation because, for example, the product is sufficiently profitable not to justify market exclusivity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PRC
Regulation</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are selling NativusWell<sup>&#174;</sup> through JD.com in PRC. In order to protect our potential market in the PRC, we have obtained
an exclusive license of certain PRC patents directed to certain of the drug candidates that we are developing and are currently seeking
approval of additional patent and other IP filings in the PRC. Seeking IP approval in the PRC subjects us to some of the rules and practices
of the PRC government. Since the Company intends eventually to market its products in the PRC, at least some of our drug candidates may
become subject to regulatory approval and marketing authorization in the PRC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Permission
Required from the PRC Authorities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we are not required to obtain approvals from the PRC authorities to operate our business or list on
the U.S. exchanges and offer or continue to offer securities; specifically, we are currently not required to obtain any permission or
approval from the CSRC, the CAC or any other PRC governmental authority to operate our business or to list our securities on a U.S. securities
exchange or issue securities to foreign investors. The laws and regulations of mainland China do not currently have any material impact
on our business, financial condition or results of operations and we are currently not subject to the PRC government&#8217;s direct influence
or discretion over the manner in which we conduct our business activities outside of the mainland China.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevertheless,
we are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market,
enhancing supervision over mainland Chinese companies listed overseas using a VIE structure, adopting new measures to extend the scope
of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new,
it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws
or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what
potential impact such modified or new laws and regulations will have on Aptorum Group&#8217;s daily business operations, its ability
to accept foreign investments and the listing of our Class A Ordinary Shares on a U.S. or other foreign exchange. If there is significant
change to current political arrangements between mainland China and Hong Kong, the PRC government intervenes or influences operations
of companies operated in Hong Kong like us, or exerts more control through change of laws and regulations over offerings conducted overseas
and/or foreign investment in issuers like us, it may result in a material change in our operations and/or the value of the securities
we are registering for sale or could significantly limit or completely hinder our ability to offer or continue to offer securities to
investors and cause the value of our Class A Ordinary Shares to significantly decline or become worthless. (Please see the risk factor
section, &#8220;Risks Related to our Corporate Structure&#8221; and &#8220;Risks Related to Doing Business in Hong Kong&#8221; for more
information).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Hong
Kong Regulation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
operations of AML Clinic and sales of NativusWell<sup>&#174;</sup> in Hong Kong are subject to certain general laws and regulations in
relation to clinic medical professionals, trade description and safety of consumer goods, medical advertisement and importation, exportation,
dealing in and sale of pharmaceutical products and drugs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Medical
Clinics Ordinance</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Medical Clinics Ordinance provides for the registration, control and inspection of medical clinics. It requires a medical clinic to be
registered, with name and address and other prescribed particulars. &#8220;Medical clinic&#8221; means any premises used or intended
to be used for the medical diagnosis or treatment of persons suffering from, or believed to be suffering from, any disease, injury or
disability of mind or body, with specific exceptions, including private consulting rooms used exclusively by registered medical practitioners
in the course of their practice on their own account and not bearing any title or description which includes the word &#8220;clinic&#8221;
or &#8220;polyclinic&#8221; in the English language.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
application of registration may be refused if:</span></p><div>

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</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the income derived or to
    be derived from the establishment or operation of the clinic is not, or will not be, applied solely towards the promotion of the
    objects of the clinic; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any portion of such income,
    except payment of remuneration to employed registered medical practitioners, nurses and menial servants, will be paid by way of dividend,
    bonus or otherwise howsoever by way of profit to the applicant himself, or to any persons properly so employed, or to any other persons
    howsoever.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not believe that the Medical Clinic Ordinance is applicable to the business of our Company and its subsidiaries, having considered,
among others, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the legislative intent
    behind the Medical Clinics Ordinance was to provide for registration of non-profit making clinics;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iv)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the Food and Health Bureau
    of Hong Kong published a consultation document, &#8220;Regulation of Private Healthcare Facilities&#8221; in 2014 which specifically
    states that the Medical Clinics Ordinance and the Code of Practice For Clinics Registered Under The Medical Clinics Ordinance (Chapter
    343 of the Laws of Hong Kong) set out the regulatory framework for non-profit-making medical clinics and that other private healthcare
    facilities, such as ambulatory medical centers and clinics operated by medical groups or individual medical practitioners, are not
    subject to direct statutory control beyond the regulation of an individual&#8217;s professional practice; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(v)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our business is one which
    makes and intends to continue making profit as a listed entity. The payment of bonuses to some of our Hong Kong Doctors is clearly
    a reflection of the profit-making nature of our business.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hence,
we do not believe that AML Clinic is required to be registered under the Medical Clinics Ordinance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 107; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->101<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Waste
Disposal Ordinance</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong) (&#8220;WDO&#8221;) and the Waste Disposal (Clinical Waste) (General)
Regulation (Chapter 354O of the Laws of Hong Kong) (the &#8220;WDR&#8221;) provide for, among others, the control and regulation of the
production, storage, collection and disposal of clinical waste.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the WDO, clinical waste means waste consisting of any substance, matter or thing generated in connection with:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a dental, medical, nursing
    or veterinary practice;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any other practice, or
    establishment (howsoever described), that provides medical care and services for the sick, injured, infirm or those who require medical
    treatment;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">dental, medical, nursing,
    veterinary, pathological or pharmaceutical research; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a dental, medical, veterinary
    or pathological laboratory practice,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">and
which consists wholly or partly of any of the materials specified in one or more of the groups listed below:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">used or contaminated sharps;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">laboratory waste;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">human and animal tissues;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">infectious materials;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">dressings; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">such other wastes as specified
    by the Director of the Environmental Protection Department (&#8220;EPD&#8221;) of Hong Kong.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
the medical services provided by AML Clinic and the research works in our R&amp;D Center may produce used or contaminated sharps such
as syringes and needles as well as dressings, we are subject to WDO, WDR and the Code of Practice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Public
Health and Municipal Services Ordinance</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have launched NativusWell<sup>&#174;</sup> (NLS-2) in Hong Kong. In Hong Kong, natural supplements are defined as &#8220;health food&#8221;
products. &#8220;Health food&#8221; containing medicines are subject to the Pharmacy and Poisons Ordinance (Cap 138) and such &#8220;health
food&#8221; containing Chinese medicines are regulated by the Chinese Medicine Ordinance (Cap 549), where they must meet the requirements
in respect of safety, quality and efficacy before they can be registered.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
other &#8220;health food&#8221; products which cannot be classified as Chinese medicine or western medicine are regulated under the Public
Health and Municipal Services Ordinance (Cap 132) as general food products. The Public Health and Municipal Services Ordinance requires
the manufacturers and sellers of food to ensure that their products are fit for human consumption and comply with the requirements in
respect of food safety, food standards and labelling. In addition, all prepackaged food should bear labels which correctly list out the
ingredients of the food under the Food and Drugs (Composition and Labelling) Regulations (Cap 132W) under the Ordinance.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
NativusWell<sup>&#174; </sup>(NLS-2) is made with the bioactive ingredient extracted Chinese yam powder and does not contain any western
or Chinese medicine; therefore, registration is not required under the local laws for marketing in Hong Kong. We will, however, ensure
the compliance of the Food and Drugs (Composition and Labelling) Regulations (Cap 132W) with by proper labelling in place.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 108; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->102<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Rest
of the World Regulation</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
other countries in the world, the requirements governing the conduct of clinical trials, medical product licensing, pricing and reimbursement
vary from country to country. In all cases if clinical trials are required, they must be conducted in accordance with cGCP requirements
and the applicable regulatory requirements and the ethical principles having their origin in the Declaration of Helsinki.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal
of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Our Structure</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 4. Information on the Company &#8211; A. History and Development of the Company.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
<span style="text-decoration:underline">Property, plants and equipment</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have several operating leases for offices, laboratories and clinic. Our offices are located in London, New York and Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
office space in London consists of approximately 172 square feet under a lease that commenced in August 2019, last renewed in December
2022, expires in May 2023 and has a rent of $4,183 per month. Our office space in New York consists of approximately 95 square feet under
a lease that commenced in February 2020, which will automatically renew until 1 month&#8217;s notice for termination, and has a rent
of $2,041 per month. Our facilities in Hong Kong consists of: (i) 2,021 square feet lab space under a lease that commenced in March 2020,
renewed in March 2023 and expires in March 2026, that carries an initial monthly rent of $6,348 and which is used for the center for
R&amp;D; (ii) 1,177 square feet office space under a lease that commenced in March 2023 and expires in March 2026, with a monthly rent
of $3,471, (the &#8220;HKSTP Office Space&#8221;); (iii) 3,173 square feet space under a lease that commenced in March 2018, renewed
in March 2022 and expires in March 2024 with an initial monthly rent of $24,408 (the &#8220;AML Lease&#8221;, which is home to AML Clinic);
and (iv) 70 square feet office space under a lease that commenced in September 2022 and expires in August 2023 with a monthly rent of
$423.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payments
under operating leases are expensed on a straight-line basis over the periods of the respective leases, and the terms of the leases do
not contain rent escalation, contingent rent, and renewal or purchase options.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our current facilities are sufficient to meet our needs.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
4A. UNRESOLVED STAFF COMMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated
financial statements and their related notes included in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of Item 5, reference to the &#8220;We&#8221;, &#8220;Our&#8221;, &#8220;Ours&#8221; or &#8220;Group&#8221; means Aptorum Group
Limited and all of its subsidiaries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
annual report includes consolidated financial statements for the years ended December 31, 2022, 2021, and 2020. However, as permitted
by Instruction 6 to Item 5 of Form 20-F, a discussion of the changes in our results of operations for the years ended December 31, 2020
and 2019 has been omitted from this annual report, but may be found in &#8220;Item 5.&#160;Operating And Financial Review And Prospects&#8221;&#160;in
our annual report on Form 20-F&#160;for the year ended December 31, 2020, filed with the SEC on April 19, 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
annual report contains forward-looking statements that are based on our management&#8217;s beliefs and assumptions and on information
currently available to us. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
can identify these forward-looking statements by words or phrases such as &#8220;may,&#8221; &#8220;will,&#8221; &#8220;expect,&#8221;
&#8220;anticipate,&#8221; &#8220;aim,&#8221; &#8220;estimate,&#8221; &#8220;intend,&#8221; &#8220;plan,&#8221; &#8220;believe,&#8221;
&#8220;potential,&#8221; &#8220;continue,&#8221; &#8220;is/are likely to&#8221; or other similar expressions. We have based these forward-looking
statements largely on our current expectations and projections about future events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other
things, statements relating to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our goals and strategies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our future business development,
    financial conditions and results of operations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our expectations regarding
    demand for and market acceptance of our products once available;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our expectations regarding
    our development and commercialization of our therapeutics;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">competition in our industry;
    and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">relevant government policies
    and regulations relating to our industry.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
should thoroughly read this annual report and the documents that we refer to in this annual report with the understanding that our actual
results in the future may be materially different from or worse than what we expect. We qualify all of our forward-looking statements
by these cautionary statements. Other sections of this annual report include additional factors which could adversely affect our business
and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time
and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors
on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Important risks and factors that could cause our actual results to be materially different
from our expectations are generally set forth in &#8220;Item 3. Key Information&#8212;D. Risk Factors&#8221; and elsewhere in this annual
report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
forward-looking statements made in this annual report relate only to events or information as of the date on which these statements are
made in this annual report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date of this annual report. You should not rely upon forward-looking statements as
predictions of future events.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Operating Results</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Overview</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a clinical stage biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutic assets to
treat diseases with unmet medical needs, particularly in oncology (including orphan oncology indications) and infectious diseases. The
pipeline of Aptorum is also enriched through (i) the establishment of drug discovery platforms that enable the discovery of new therapeutics
assets through, e.g. systematic screening of existing approved drug molecules, and microbiome-based research platform for treatments
of metabolic diseases, and (ii) the co-development of Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification
and detection diagnostics technology, with Accelerate Technologies Pte Ltd, commercialization arm of the Singapore&#8217;s Agency for
Science, Technology and Research.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the above main focus, we are also pursuing therapeutic projects in neurology, gastroenterology, metabolic disorders, women&#8217;s
health and other disease areas. We also have projects focused on natural supplements for women undergoing menopause and experiencing
related symptoms. We also opened a medical clinic, AML Clinic, in June 2018.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on our evaluation of preliminary data and our consideration of a number of factors including substantial unmet needs, benefits over existing
therapies, potential market size, competition in market, the Company decides how to prioritize its resources among projects. Overall,
our rationale for selecting Lead Projects is not based on any mechanical formula or rigid selection criteria, but instead focused on
a combination of the factors and individual attributes of the Lead Projects themselves. See &#8220;Item 3. Key Information&#8212;D. Risk
Factors&#8212; Risks Related to the Preclinical and Clinical Development of Our Drug Candidates&#8212; &#8220;Preclinical development
is a long, expensive and uncertain process, and we may terminate one or more of our current preclinical development programs.&#8221;
and &#8220;Management has discretion to terminate the development of any of our projects at any time.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
current business consists of &#8220;therapeutics&#8221; and &#8220;non-therapeutics&#8221; segments. However, our focus is on the therapeutics
segments. Because of the risks, costs and extended development time required for successful drug development, we have determined to pursue
projects within our non-therapeutics segments, such as AML Clinic and NativusWell<sup>&#174;</sup>, to provide some interim revenue, as
well as diagnostics technology that may be brought to market and generate revenue more quickly.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Therapeutics
Segment</span></i>. In our therapeutics segment (&#8220;Aptorum Therapeutics Group&#8221;), we are currently seeking to develop various
drug molecules (including projects seeking to use extracts or derivatives from natural substances to treat diseases) and certain technologies
for the treatment of human disease conditions to tackle unmet needs, in particular, two of our Lead Projects targeting infectious disease
and cancer (including orphan oncology indications). In addition to our main areas of focus above, we are also pursuing therapeutic projects
in neurology, gastroenterology, metabolic disorders, women&#8217;s health and other disease areas. Aptorum Therapeutics Group is operated
through Aptorum&#8217;s wholly-owned subsidiary, Aptorum Therapeutics Limited, a Cayman Islands exempted company with limited liability,
whose principal place of business is in Hong Kong and whose subsidiaries (who we sometimes refer to herein as project companies) are
based in the United Kingdom, Singapore and Hong Kong.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span style="text-decoration:underline">Non-Therapeutics
Segment</span></i>. The non-therapeutics segment (&#8220;Aptorum Non-Therapeutics Group&#8221;) encompasses three businesses: (i) diagnostics
projects including Paths<sup>Dx</sup> Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology,
(ii) natural supplements including NativusWell<sup>&#174;</sup>, and (iii) AML Clinic. Paths<sup>Dx</sup> Test technology is currently
under co-development with A*STAR. The core objectives of Paths<sup>Dx</sup> Test are to rapidly and accurately identify and detect existing
or emerging unknown pathogens (including DNA/RNA-based viruses such as coronavirus, antibiotic-resistant bacteria, fungi, etc.), in a
cost-effective, unbiased and broad-spectrum manner, through liquid biopsy (patients&#8217; blood samples and is potentially adaptable
for other sample types), genome sequencing and artificial intelligence driven software analytics. A key objective is also to develop
Paths<sup>Dx</sup> Test to leverage existing and emerging Next-Generation Sequencing platforms for pathogenic genome sequencing analysis.
The sale of natural supplements is operated through Nativus Life Sciences Limited (&#8220;Nativus&#8221;), a subsidiary of Aptorum Therapeutics
Limited. The production of Aptorum Group&#8217;s dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada
and is marketed under the brand name NativusWell<sup>&#174;</sup>; we are selling NativusWell<sup>&#174; </sup>online through HKTV Mall,
JD.com and NativusWell<sup>&#174;</sup> website. The outpatient clinic is operated through our subsidiary, Aptorum Medical Limited. Effective
as of March 2018, we leased office space in Central, Hong Kong as the home to AML Clinic. AML Clinic commenced operations under the name
of Talem Medical in June 2018.</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
goal is to develop a broad range of novel and repurposed therapeutics and diagnostics technology across a wide range of disease/therapeutic
areas. Key components of our strategy for achieving this goal include: (for details of our strategy, See &#8220;Item 4. Information on
the Company &#8211; B. Business Overview &#8211; Our Strategy&#8221;)</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Developing therapeutic
    and diagnostic innovations across a wide range of disease/therapeutic areas;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selectively expanding our
    portfolio with potential products that may be able to attain orphan drug designation and/or satisfy current unmet medical needs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Collaborating with leading
    academic institutions and CROs;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expanding our in-house
    pharmaceutical development center;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leveraging our management&#8217;s
    expertise, experience and commercial networks;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Obtaining and leveraging
    government grants to fund project development.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have devoted a substantial portion of the proceeds from our offerings to our Lead Projects. Our Lead Projects are ALS-4, SACT-1 and Paths<sup>Dx
</sup>Test. In January 2022, we announced that we have completed Phase 1 clinical trial for ALS-4 and Phase 1 clinical trial for assessing
relative bioavailability and food effect of SACT-1. No serious adverse events observed and no relevant clinical changes in respect of
vital signs. In March 2023, we announced the completion of the Pre-IND discussions with the US FDA on ALS-4. With the positive feedback
on the overall development strategy from the US FDA, we are proceeding towards the IND submission of ALS-4. In March 2023, we also announced
that the completion of the End of Phase 1 (EOP1) meeting with the US FDA. The FDA generally agreed with the chemistry-manufacturing-control
(CMC) strategy and our proposed clinical development plan for SACT-1 Phase 1/2 trials. In 2023, we expect to be able (i) to submit IND
application to the US FDA seeking to initiate a Phase 2 clinical study to assess the efficacy of ALS-4 in patients and (ii) submit a
clinical protocol to the US FDA seeking to initiate our planned Phase 1b/2a trial for SACT-1, subject to regulatory review. We commenced
clinical validation of our molecular based Paths<sup>Dx</sup> Test and will continue to undergo validations during 2023, in parallel
with its pre-commercialization process in 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Potential
Take-Over</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 27, 2023, we entered into a non-binding Letter of Intent and Term Sheet to acquire (&#8220;Transaction&#8221;) 100% of URF Holding
Group Limited and its underlying businesses (collectively &#8220;U Group&#8221;). Currently, it is contemplated that the Transaction
will occur via a reverse takeover of the Company, which would result in the continued listing of the combined entity on Nasdaq.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Transaction is subject to, among other things, the execution of a mutually agreeable definitive agreement, completion of due diligence,
fairness opinions, stockholder approvals, if necessary, delivery of relevant financial statements, board of directors and special committee
approvals and satisfaction of all regulatory and Nasdaq approvals, where relevant. There can be no assurance that a definitive agreement
will be entered into or that the proposed transaction will be consummated on the terms set forth herein or at all. Therefore, it is possible
that the Transaction may never occur. &#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
foregoing is only a brief description of the Transaction and does not purport to be a complete description of the proposed terms of the
Transaction and is qualified in its entirety by reference to the Term Sheet attached hereto as an exhibit and the definitive documents,
if materialized.</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>At
the Market Offering</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On March 26, 2021, the Company
entered into an at the market offering agreement (the &#8220;Sales Agreement&#8221;), with H.C. Wainwright&#160;&amp; Co., LLC, acting
as our sales agent (the &#8220;Sales Agent&#8221;), relating to the sale of our Class A Ordinary Shares, offered pursuant to the prospectus
supplement and the accompanying prospectus to the registration statement on Form F-3 (File No. 333-268873) (such offering, the &#8220;ATM
Offering&#8221;, or &#8220;At The Market Offering&#8221;). In accordance with the terms of the Sales Agreement, we may offer and sell
shares of our Class A Ordinary Shares having an aggregate offering price of up to $15,000,000 from time to time through the Sales Agent
under such prospectus supplement and the accompanying prospectus. As of the date of this annual report, we have issued 7,875 Class A Ordinary
Shares pursuant to the ATM Offering.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Private
Placement Offering</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Sales
of Class A Ordinary Shares</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 26, 2021, the Company entered into a private placement shares purchase agreement with Jurchen, issuing 138,793 Class A Ordinary Shares,
par value $10 each, at $28.82 per share, representing a 10% premium to the last closing price of the Company&#8217;s Class A Ordinary
Shares on the NASDAQ stock exchange on that date. The Company received aggregate gross proceeds of $4,000,000 from the purchase of these
shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Sales
of convertible notes</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 9, 2022, Aptorum Group Limited entered into a Securities Purchase Agreement (the &#8220;Agreement&#8221;) with Aenco Technologies
Ltd (&#8220;Note holder&#8221;), a Cayman Islands company that is indirectly 34.56% effectively owned by our non-executive director and
major shareholder, Ian Huen. Since Mr. Huen is an affiliate of the Company, the Agreement and the transaction contemplated therein has
been approved by the audit committee of the board of directors of the Company, which only consists of independent directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $3,000,000 (the &#8220;Note&#8221;). The Note is
unsecured, convertible into the Company&#8217;s restricted Class A Ordinary Shares at the Note holder option. The Notes will have a maturity
date of 12 months subject to the Note holder&#8217;s extension, a bullet interest rate of 7% per annum, and a conversion price of $12
per Class A Ordinary share (&#8220;Conversion Price&#8221;). The Company shall have an obligation to repay the principal amount and interest
of the Note on the maturity date in cash or in unregistered Class A Ordinary Shares or a combination of such at the Company&#8217;s discretion.
The shares used to meet a repayment would be valued at the Conversion Price. In April 2023, the Note was fully converted into 250,000
Class A Ordinary Shares.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->107<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Factors
Affecting our Results of Operations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Research
and Development Expenses</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our ability to successfully develop innovative drug candidates will be the primary factor affecting our long-term competitiveness,
as well as our future growth and development. Creating high quality global first-in-class or best-in-class drug candidates requires significant
investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments
in this area. As a result of this commitment, our pipeline of drug candidates has been steadily advancing. For more information on the
nature of the efforts and steps necessary to develop our drug candidates, see Item 4.B. &#8220;Business Overview&#8212; Lead Projects,
Natural Supplements and Other Projects under Development.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
drug candidates are still in development, and we have incurred and will continue to incur significant research and development costs
for pre-clinical studies and clinical trials. We expect that our research and development expenses will significantly increase in future
periods in line with the advancement and expansion of the development of our drug candidates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
and development expenses include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">employee and consultant
    compensation related expenses, including salaries, benefits and share based compensation expenses;</span></td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">expenses incurred for payments
    to CROs, investigators and clinical trial sites that conduct our clinical studies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
and development expenses incurred totaled $9.2 million, $10.9 million and $11.6 million for the years ended December 31, 2022, 2021 and
2020, respectively, representing approximately 49.0%, 52.4%, and 54.7% of our total operating expenses for the respective period.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have been able to fund the research and development expenses for our drug candidates through a range of sources, including the proceeds
raised from our public offering and follow-on offerings on Nasdaq, private placement to other investors and line of credit facilities
from shareholders, related parties and banks.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
diversified approach to funding allows us to not depend on any one method of funding for our research and development activities, thereby
reducing the risk that sufficient financing will be unavailable as we continue to accelerate the development of our drug candidates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>RESULTS
OF OPERATIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Results
of Operations for the Years ended December 31, 2022 and 2021</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
statements and information are presented for the years ended December 31, 2022 and 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes our results of operations for the years ended December 31, 2022 and 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Impact
of COVID-19 Outbreak</span></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 30, 2020, the World Health Organization declared the coronavirus outbreak a &#8220;Public Health Emergency of International Concern&#8221;
and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include
restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The
coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial
markets of many countries, including the geographical area in which the Group operates. While the closures and limitations on movement,
domestically and internationally, are expected to be temporary, if the outbreak continues on its current trajectory the duration of the
supply chain disruption could reduce the availability, or result in delays, of materials or supplies to and from the Group, which in
turn could materially interrupt the Group&#8217;s business operations. There was no material negative impact on the Group&#8217;s 2022
and 2021 consolidated result of operations. However, given the speed and frequency of the continuously evolving developments with respect
to this pandemic, the Group cannot reasonably estimate the magnitude of the impact to its consolidated results of operations in the future.
We have taken every precaution possible to ensure the safety of our employees.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
it is reasonably possible that estimates made in the consolidated financial statements have been, or will be, materially and adversely
impacted in the near term as a result of these conditions, including losses on investments; impairment losses related to long-lived assets
and current obligations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 115; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenue</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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was $1,295,889 and $1,541,778 for the years ended December 31, 2022 and 2021, which related to the service income derived from the AML
clinic. The decrease in revenue was mainly due to the number of patients decreased when compared to last year due to one of the general
practitioner did not provide service in our clinic in 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cost of healthcare services</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Cost of healthcare services
was $1,215,824 and $1,459,924 for the years ended December 31, 2022 and 2021, which related to the cost incurred by the AML clinic. The
decrease in cost of healthcare services was in line with the decrease in revenue.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Research
and development expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a summary of our research and development expenses for the years ended December 31, 2022 and 2021. The decrease
in research and development expenses was mainly due to the decrease in contracted research organizations services as we are in a planning
process for Phase 2 of our lead projects which does not require many services from contracted research organizations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year Ended <br/> December&#160;31, <br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a summary of our general and administrative expenses for the years ended December 31, 2022 and 2021. The decrease
in general and administration fees was mainly due to decrease in payroll expenses due to decrease in number of staff.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">21,857</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">143,498</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">546,675</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">555,159</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 116; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Legal
and professional fees</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2022 and 2021, the legal and professional fees were $2,888,140 and $2,617,834, respectively. The increase
in legal and professional fees was mainly due to more consulting services engaged during 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
operating expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2022 and 2021, the other operating expenses was $261,038 and $392,511, respectively. The decrease in other
operating expenses was mainly due to an impairment loss on other receivables in 2021 while there were no such expenses in 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
income (loss), net</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the years ended December 31, 2022 and 2021, the other income (loss),
net was $5,984,011 and $(7,906,858), respectively.&#160;The other income, net in 2022 was mainly consists of gain on long-term investments
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Net
loss attributable to Aptorum Group Limited</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2022 and 2021, net loss attributable to Aptorum Group Limited (excluding net loss attributable to non-controlling
interests) was $9,799,560 and $25,048,389, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Results
of Operations for the Years ended December 31, 2021 and 2020</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
statements and information are presented for the years ended December 31, 2021 and 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes our results of operations for the years ended December 31, 2021 and 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="white-space: nowrap; text-align: center">&#160;</td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 117; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Revenue</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Healthcare
services income was $1,541,778 and $911,509 for the years ended December 31, 2021 and 2020, which related to the service income derived
from the AML clinic. The increase in revenue was mainly due to the number of patients increased when compared to last year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Cost
of healthcare services</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cost
of healthcare services was $1,459,924 and $1,015,023 for the years ended December 31, 2021 and 2020, which related to the cost incurred
by the AML clinic. The increase in cost of healthcare services was mainly due to the number of patients increased when compared to last
year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Research
and development expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a summary of our research and development expenses for the years ended December 31, 2021 and 2020. The decrease
in research and development expenses was mainly due to less sponsored research to universities in current period, partly offset by the
increase in contracted research organizations services and consultation due to the development progress of our lead projects.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year Ended <br/> December&#160;31, <br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 118; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>General
and administrative fees</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a summary of our general and administrative expenses for the years ended December 31, 2021 and 2020. The increase
in general and administration fees was mainly due to increase in bonus expenses to our directors, employees, external consultants and
advisors. The increase is partly offset by a significant decrease in travelling expenses due to the outbreak of COVID-19.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>General and Administrative Fees:</td><td>&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">366,615</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">140,019</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">231,131</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">347,824</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">509,593</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Advertising and marketing expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">95,953</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">55,430</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Other expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">264,975</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">178,733</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Total General and Administrative Fees</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">4,853,488</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Legal
and professional fees</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2021 and 2020, the legal and professional fees were $2,617,834 and $2,854,225, respectively. The decrease
in legal and professional fees was mainly due to less one-off professional services engaged during 2021.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
operating expenses</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2021 and 2020, the other operating expenses was $392,511 and $877,391, respectively. The decrease in other
operating expenses was mainly due to an impairment loss and loss on disposal of fixed assets in 2020 while there were no such expenses
in 2021, and decreased exchange loss during 2021.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Other
(loss) income, net</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2021 and 2020, the other (loss) income, net was $(7,906,858) and $25,195,708, respectively.&#160;The other
loss, net in 2021 was mainly consists of loss on investment in marketable securities, net; while the other income, net in 2020 was mainly
derived from gains on investment in marketable securities.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Net
(loss) income attributable to Aptorum Group Limited</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2021 and 2020, net (loss) income attributable to Aptorum Group Limited (excluding net loss attributable
to non-controlling interests) was $(25,048,389) and $6,311,340, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Liquidity and Capital Resources</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In April 2022, the Group accepted
a banking facilities agreement offered by a bank. According to the banking facilities agreement, the bank offers a revolving loan of up
to $3 million to the Group. The Group may draw down from the revolving loan at any time through the day immediately preceding 12 months
of the agreement effective date. Interest will be payable on demand on the outstanding loans at the rate of either Hong Kong Interbank
Offered Rate (&#8220;HIBOR&#8221;) plus 1.5% per annum for loan in Hong Kong Dollars, or Secured Overnight Financing Rate (&#8220;SOFR&#8221;)
compounded rate plus 1.5% per annum for loan in the United State Dollars. The loan is secured by a charge over deposits of up to $3 million
when the Group draw down. As of the date of this annual report, the Group has drawn down $3 million from the banking facility,</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 119; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Group reported a net loss of $11,525,102 and net operating cash
outflow of $12,318,965 for the year ended December 31, 2022. In addition, the Group had an accumulated deficit of $65,337,075 as of December
31, 2022. The Group&#8217;s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Group
will be able to reduce or eliminate its net losses for the foreseeable future. If management is not able to generate significant revenues
from its product candidates currently in development, the Group may not be able to achieve profitability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Group&#8217;s principal
sources of liquidity have been cash and line of credit facilities from related parties and banks. As of the date of this annual report,
the Group has approximately $1.4 million of restricted and unrestricted cash (excluded $3 million time deposits pledged to a loan), and
$9.5 million of undrawn line of credit facilities from related parties. In addition, the Group maintains its operating costs at a level
through strictly cost control and budget until the completion of the reverse takeover transaction.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">The Group believes that available cash, together with the efforts from
aforementioned management plan and actions, should enable the Group to meet current anticipated cash needs for at least the next 12 months
after the date of this annual report are issued and the Group has prepared the consolidated financial statements on a going concern basis.
We may, however, need additional capital in the future to fund our continued operations. If we determine that our cash requirements exceeds
the amount of cash and cash equivalents we have at the time, we may seek to issue equity or debt securities or obtain credit facilities.
The issuance and sale of additional equity or convertible debts would result in further dilution to our shareholders. The incurrence of
indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We
cannot assure you the financing will be available in amounts or on terms acceptable to us, if at all.&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Condensed
Summary of Cash Flows for the Years Ended December 31, 2022 and 2021</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">16,507,039</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,780,725</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities amounted to $12.3 million and $14.7 million for the years ended December 31, 2022 and 2021. The decrease
in net cash used in operating activities is mainly due to our net loss excluding non-cash items decreased by $2.0 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Investing
activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by investing activities amounted to $2.4 million and $16.5 million for the year ended December 31, 2022 and 2021. The decrease
in net cash provided by investing activities was due to there was a proceeds from disposal of investment in marketable securities of
$20.1 million in 2021, partly offset by a loan provided to a related party of $3.4 million in 2021 and a repayment of loan from a related
party of $3.0 million in 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financing
activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities amounted to $6.6 million and $2.8 million for the year ended December 31, 2022 and 2021. The increase
in net cash provided by financing activities was due to there was a loan repayment due to related parties of $5.5 million in 2021, partly
offset.by decrease in total proceeds from issuance of shares, warrants and debts by $1.6 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Condensed
Summary of Cash Flows for the Years Ended December 31, 2021 and 2020</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; text-indent: -9pt; padding-left: 9pt">Net cash used in operating activities</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(14,651,633</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Net cash provided by investing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">16,507,039</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,842,164</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Net increase (decrease) in cash and restricted cash</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">4,636,131</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right">(1,667,817</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 120; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->114<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities amounted to $14.7 million and $15.9 million for the years ended December 31, 2021 and 2020. The decrease
in net cash used in operating activities is mainly due to our decreased operating expenses by $0.5 million and the decreased in changes
in other receivables and prepayment by $1.1 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Investing
activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by investing activities amounted to $16.5 million and $1.8 million for the year ended December 31, 2021 and 2020. The increase
in net cash provided by investing activities was due to the proceeds from disposal of investment in marketable securities of $20.1 million
in 2021, partly offset by a loan provided to a related party of $3.4 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Financing
activities</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities amounted to $2.8 million and $12.4 million for the year ended December 31, 2021 and 2020. The decrease
in net cash provided by financing activities was due to the decrease in net proceeds from issuance of Class A Ordinary Shares and warrants
by $12.8 million, partly offset by the increase in loan received from related parties of $2.5 million.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>CAPITAL
EXPENDITURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our capital expenditures were $0.2 million, $0.1 million and $0.2 million
for the years ended December 31, 2022, 2021 and 2020, respectively. These capital expenditures were incurred primarily for investments
in facilities, leasehold improvements, equipment and technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>COMMITMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth our contractual obligations as of December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Payment Due by Period</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">314,690</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Debt obligations</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">613,110</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Operating
lease commitments</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have several operating leases for office, laboratories and clinic. Operating lease commitments reflect our obligation to make payments
under these operating leases.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Debt
obligations</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Debt
obligations reflects (i) outstanding principal obligations under a revolving loan of up to $3 million offered by a bank, and (ii) outstanding
principal obligations due to Aeneas Group Limited, a wholly-owned subsidiary of Aeneas Limited, under a line of credit arrangement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group can access up to a total $3 million under a revolving loan offered by HSBC. The revolving loan arrangement will be matured on June
26, 2023, and the interest on the outstanding principal indebtedness is at the rate of either Hong Kong Interbank Offered Rate (&#8220;HIBOR&#8221;)
plus 1.5% per annum for loan in Hong Kong Dollars, or Secured Overnight Financing Rate (&#8220;SOFR&#8221;) compounded rate plus 1.5%
per annum for loan in the United State Dollars. The loan is secured by a charge over deposits of up to $3 million when the Group draw
down.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group can access up to a total $12 million under a line of credit offered by Aeneas Group Limited. The line of credit was originally
mature on August 12, 2022. The Group and Aeneas Group Limited has mutually agreed to extend the line of credit arrangement further 3
years to August 12, 2025. The interest on the outstanding principal indebtedness is at the rate of 8% per annum. The Group may early
repay, in whole or in part, the principal indebtedness and all interest accrued at any time prior to the maturity date without the prior
written consent of the lender and without payment of any premium or penalty.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>CONTINGENT
PAYMENT OBLIGATIONS</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have entered into agreements with independent third parties for purchasing office and laboratory equipment. As of December 31, 2022,
we had non-cancellable purchase commitments of $50,075.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have additional contingency payment obligations under each of the license agreements, such as milestone payments, royalties, research
and development funding, if certain condition or milestone is met.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Milestone
payments are to be made upon achievements of certain conditions, such as Investigational New Drugs (&#8220;IND&#8221;) filing or U.S.
Food and Drug Administration (&#8220;FDA&#8221;) approval, first commercial sale of the licensed products, or other achievements. The
aggregate amount of the milestone payments that we are required to pay up to different achievements of conditions and milestones for
all the license agreements signed as of December 31, 2021 are below:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amount</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Drug molecules: up to the conditions and milestones of</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">Preclinical to IND filing</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">222,564</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">From entering phase 1 to before first commercial sale</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">20,336,410</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">First commercial sale</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">14,282,051</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Net sales amount more than certain threshold in a year</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">65,769,231</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt">Subtotal</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">100,610,256</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left">Diagnostics technology: up to the conditions and milestones of</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Before FDA approval</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">205,554</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">100,815,810</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2022, 2021 and 2020, the Group incurred $nil, $nil and $129,203 milestone payments, respectively. For the
years ended December 31, 2022, 2021 and 2020, the Group did not incur any royalties or research and development funding, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Research and Development, Patents and Licenses, etc.</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, the Company has 10 exclusively licensed technologies in the area of neurology, infectious diseases,
gastroenterology, oncology, diagnostics and natural health. In addition, the Company is actively developing 7 proprietary technologies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December 31, 2022, 2021, and 2020, the Group incurred $9,219,595, $10,869,642, and $11,586,923, respectively, on research
and development expenses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
<span style="text-decoration:underline">Trend Information</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than as disclosed elsewhere in this annual report, we are not aware of any material recent trends in production, sales and inventory,
the state of the order book and costs and selling prices since our last fiscal year. We are also unaware of any known trends, uncertainties,
demands, commitments or events for the year ended December 31, 2022 that are reasonably likely to have a material adverse effect on our
revenues, net income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily
to be indicative of future operating results or financial conditions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
<span style="text-decoration:underline">Critical Accounting Estimates</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities
in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other
assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities. Changes in the economic environment, financial markets, and any other parameters used in determining
such estimates could cause actual results to differ. We believe that the following estimates involve the most significant judgments used
in the preparation of our financial statements. The critical accounting estimates should be read in conjunction with our risk factors
as disclosed in &#8220;Item 3. Key Information&#8212;D. Risk Factors.&#8221; See note 3 to our consolidated financial statements for
the year ended December 31, 2022 for more information. Out of our significant accounting policies, which are described in Note 3&#8212;Summary
of Significant Accounting Policies of our consolidated financial statements included elsewhere in this Form 20-F, certain accounting
policies are deemed &#8220;critical,&#8221; as they require management&#8217;s highest degree of judgment, estimates and assumptions,
including (i) impairment of long-lived assets; (ii) share based compensation, and (iii) Provision of income tax and valuation allowance
for deferred tax asset.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Impairment
of long-lived assets</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may no longer be recoverable. When these events occur, we measure impairment by comparing the carrying value of the long-lived assets
to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. The sum
of the expected undiscounted cash flow is sensitive to key assumption such as projected revenue and research and development expenses,
which are required management&#8217;s judgement. For the year ended December 31, 2022, we recorded $205,189 loss on disposal of a patented
license in research and development expenses. For the year ended December 31, 2021, no impairment loss was recorded. For the year ended
December 31, 2020, we recorded $330,445 of impairment loss of buildings in other operating expenses, and $200,000 impairment loss of
an unpatented license in research and development expenses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Share
based compensation</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
use the fair value method of accounting for our stock options granted to directors, employees, external consultants and advisors to measure
the cost services received in exchange for the share based awards. Determining the appropriate valuation model and estimating the fair
values of share option grants requires the input of subjective assumptions, including expected stock price volatility, risk-free interest
rate, expected term from grant date, dividend rate, and dilution factor. The expected volatility assumption is based partially upon the
historical volatility of our Class A ordinary shares, which may or may not be a true indicator of future volatility. The assumptions
used in calculating the fair values of share option grants represent management&#8217;s best estimates, but these estimates involve inherent
uncertainties and the application of judgment. As a result, if factors change and different assumptions are used, share-based compensation
expense could be significantly different from what we recorded in the current period. Share-based compensation expense is recognized
on a graded vesting basis, net of actual forfeitures in the period. In connection with the grant of share options to employees and non-employees,
we recorded share-based compensation charges of $1,123,122 and $523,877, respectively, for the year ended December 31, 2022, $1,203,000
and $479,460, respectively, for the year ended December 31, 2021, $1,191,957 and $286,608, respectively, for the year ended December
31, 2020.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Provision
of income tax and valuation allowance for deferred tax asset</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant
judgment is required in determining income tax expense based on tax laws in the various jurisdictions in which we operate. In calculating
our effective income tax rate, estimates are required regarding the timing and amount of taxable and deductible items which will adjust
the pre-tax income or loss reported in various tax jurisdictions. Through our interpretation of local tax regulations, adjustments to
pre-tax income or loss for income or loss reported in various tax jurisdictions are reflected within various tax filings. Although we
believe that our estimates and judgments discussed herein are reasonable, actual results may be materially different than the estimated
amounts.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. Significant
judgment is required in determining the valuation allowance. In assessing the need for a valuation allowance, we consider all sources
of taxable income, including projected future taxable income, reversing taxable temporary differences and ongoing tax planning strategies.
If it is determined that we are able to realize deferred tax assets in excess of the net carrying value or to the extent we are unable
to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a
corresponding increase or decrease to earnings. As of December 31, 2022 and 2021, we have made fully valuation allowance to deferred
tax assets with amount of $15.7 million and $12.6 million, respectively.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Directors and Senior Management</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Below
is a list of our directors, senior management and any employees upon whose work we are dependent as of the date of this annual report,
and a brief account of the business experience of each of them. The business address for the directors and officers of Aptorum Group
Limited is 17 Hanover Square, London, W1S 1BN, United Kingdom.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2022, Ms. Sabrina Khan resigned from her position as our Chief
Financial Officer, due to personal reasons. Mr. Martin Siu replaced Ms. Khan as the Company&#8217;s Head of Finance on that same date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mr. Lui was appointed Chief
Executive Officer (&#8220;CEO&#8221;), effective June 1, 2022. Mr. Lui succeeds Mr. Ian Huen, who was stepping down as Chief Executive
Officer, but will remain on the Company&#8217;s board as a non-executive director on the same effective date.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
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    <td style="width: 8%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Age</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 65%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Position</b></span></td></tr>
  <tr>
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    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Darren Lui</span></td>
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    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">42</span></td>
    <td style="vertical-align: bottom">&#160;</td>
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  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Clark Cheng</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Medical Officer and Executive Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Martin Siu</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">44</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Head of Finance</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Thomas Lee</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">50</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Head of Research and Development</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Non-Management Directors</i></span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ian Huen</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Founder and Non-Executive Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charles Bathurst</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">67</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Non-Executive Director and Chair of Audit Committee</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mirko Scherer</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">54</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Non-Executive Director</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Justin Wu</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">53</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Non-Executive Director and Chair of Compensation Committee</span></td></tr>
  <tr>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Douglas Arner</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">53</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Non-Executive Director and Chair of Nominating and Corporate Governance Committee</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Executive
Officers</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MR.
DARREN LUI</b>,&#160;<b>CEO, Chief Accounting Officer, and Executive Director</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Darren Lui is the CEO, Chief Accounting Officer, and an Executive Director of Aptorum Group Limited. Mr. Lui was previously the founder,
director and responsible officer of Varengold Capital Securities Limited and Varengold Capital Asset Management Limited in Hong Kong,
with subsidiaries operating brokerage, asset management, and investment businesses in Asia established since January 2015.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to this, he was a Director within the Fixed Income Group of Barclays Capital, where he spent over nine years from September 2005 to February
2014 developing and establishing their London, Singapore and New York teams. From September 2002 to August 2005 he was qualified as a
Chartered Accountant with Ernst &amp; Young LLP (London), specializing in capital markets advisory.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Lui graduated with First-Class Honors from Imperial College, London with a BSc degree in Biochemistry in June 2002. He is a Chartered
Accountant (ICAS), accredited with Chartered Financial Analyst designation, and an Associate of Chartered Institute of Securities&#160;&amp;
Investments (UK).</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>DR.
CLARK CHENG, Chief Medical Officer and Executive Director, Aptorum Group Limited</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Executive
Director, Aptorum Medical Limited</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Clark Cheng is the Chief Medical Officer and Executive Director of Aptorum Group Limited; he is also an executive director of Aptorum
Medical Limited (one of the Company&#8217;s subsidiaries); Dr. Cheng also serves as a director of several other of our subsidiaries.
Prior to this appointment, Dr. Cheng served as the Operations Director since 2009 of Raffles Medical Group, and the company&#8217;s Deputy
General Manager since 2011, representing an expanded role in the region. During his employment with Raffles Medical Group, he practiced
as a full-time medical administrator to mainly overlook Raffles Medical Hong Kong operations and also supported its development in the
PRC headquarter.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Cheng received his medical training at the University College London, UK, in 2005 and completed his foundation year training at The Royal
Free Hospital in 2007. Pursuing his career in surgery, he obtained his membership of the Royal College of Surgeons of Edinburgh in 2009
and commenced his training in Orthopaedics where he practiced as Specialist Registrar at the National University Hospital, Singapore,
with special interest in Traumatology of the lower limbs. In 2011, he also obtained his Master in Business&#160;&amp; Administration
with distinction from Tippie College of Business, University of Iowa, US.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Cheng is an active member of the Singapore Chamber of Commerce, and appears regularly as a guest speaker for The Open University of Hong
Kong, The Airport Authority Hong Kong and other corporate events.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MR.
MARTIN SIU, Head of Finance</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Martin Siu is the Head of Finance of Aptorum Group Limited since July 2022. Prior to that, Mr. Siu supported over 8 listed companies
and licensed corporations in Asia as consultant, advisor and financial manager. Extensively experienced in audit and financial strategy,
he worked in the field of audit for over 18 years, also led a professional team to provide strategic consultancy services to sizable
corporate clients specialized in audit, compliance, risk management, financial reporting and fund raising. Mr. Siu is a certified public
accountant and graduated with a BBA (Hons) in Accounting at City University of Hong Kong in 2001.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>DR.
THOMAS LEE, Head of Research and Development</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Thomas Lee serves as the Head of R&amp;D of Aptorum Group Limited since April 1, 2019; he is also the Chairman of our Scientific Advisory
Board. Dr. Lee served as Chief Executive Officer and Chief Scientific Officer of Aptorum Therapeutics Limited, a wholly-owned therapeutics
subsidiary of Aptorum Group Limited from January 2018 to March 2019. Prior to that, Dr. Lee served as an Assistant Professor in the School
of Pharmacy, Faculty of Medicine, The Chinese University of Hong Kong from August 2013 to January 2018. Dr. Lee&#8217;s key area of research
involves drug delivery with specialties including: formulation development of poorly soluble compounds, oral delivery, Nanotechnology,
and similar fields.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to academia, Dr. Lee accumulated big-pharma experience from the decade he spent at two multinational pharmaceutical companies in the
U.S. From November 2008 to July 2013, Dr. Lee worked at Celgene Corporation as a Senior Scientist of the Formulations Research&#160;&amp;
Development. From June 2003 to November 2008, Dr. Lee worked at Novartis Pharmaceuticals Corporation, as a Principal Scientist.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Lee graduated with B.Pharm. (Hons) Degree from The Chinese University of Hong Kong in December 1995, and received his Ph.D. in Pharmaceutical
Sciences (Drug Delivery) from the University of Wisconsin-Madison in the U.S in May 2003.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Non-Executive
Directors</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MR.
IAN HUEN, Founder and Non-Executive Director</b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Ian Huen is the Founder and a Non-Executive Director of Aptorum Group Limited. Mr. Huen served as Chief Executive Officer and Executive
Director of Aptorum Group Limited from October 2017 to May 2022. He has extensive experience in global asset management and previously
covered the U.S. healthcare sector as an equity research analyst at Janus Henderson Group plc (formerly known as Janus Capital). Mr.
Huen was the financial advisor in the sale of Seng Heng Bank Limited (Macau) to Industrial and Commercial Bank of China in 2007 and was
appointed as the vice president of the Board of General Meeting in Industrial and Commercial Bank of China (Macau) Capital Limited in
March 2007 for a term of 12 years until March 2019.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a trustee board member of the Dr. Stanley Ho Medical Development Foundation, Mr. Huen facilitates advisory, development funding, access
to research resources across Asia and continues to establish relationships with leading academic institutions to propel innovations in
healthcare.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Huen graduated from Princeton University with an A.B. degree in Economics in June 2001, earned a MA in Comparative and Public History
from CUHK in June 2016. Mr. Huen is also a Chartered Financial Analyst (&#8220;CFA&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MR.
CHARLES BATHURST</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Bathurst is an Independent Non-Executive Director of Aptorum Group Limited, chairs the Audit Committee and is a member of both the Compensation
Committee and the Nominating and Corporate Governance Committee. He has over 47 years&#8217; experience of management and senior executive
roles across the financial services, technology and healthcare industries. In 2011, he set up his own independent consultancy service,
Summerhill Advisors Limited, advising on management structure, business development, financial reporting, internal audit controls and
compliance to both emerging and multinational companies. Today he holds Non-Executive and Advisory board positions on fast-growing companies
in healthcare, technology and financial services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to establishing Summerhill, he served as a Director for J.O. Hambro Investment Management from September 2008 to August 2011, where he
oversaw the restructuring and commercialization of a range of in-house investment funds. He was appointed to the management board and
supervised reporting teams including Business development, accounting, regulatory reporting and internal controls.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
April 2004 to March 2008, Mr. Bathurst served in multiple roles at Old Mutual Asset Managers (UK), including being a member of the senior
management team and head of international sales. Duties included business development, launching new investment funds, recruitment, establishing
and supervision of regulatory and financial reporting teams, as well as ensuring compliance with funds&#8217; regulatory requirements
and corporate governance standards.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to this, Mr. Bathurst was an advisor to Lion Capital Advisors Limited from April 2003 to March 2004, and from June 2002 to March 2003
business development consultant reporting to the board of management of LCF Rothschild Asset Management Limited.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
April 1995 to March 2002, Mr. Bathurst joined a newly formed alternative investment management team at Credit Agricole Asset Management,
establishing the London Branch as the Managing Director in 1998. He was responsible for the recruitment and development strategy for
marketing, sales, investment, financial reporting, compliance and regulatory controls and investor relations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Between
the period of September 1989 and December 1994, Mr. Bathurst worked for GNI, the largest futures and options execution and clearing broker
on the London International Financial Futures Exchange, where he focused on marketing to European and Middle East financial institutions.
In 1991, he joined a new management team to launch a series of specialist investment funds while serving as the Head of Sales and Product
Development.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Bathurst graduated from the Royal Military Academy Sandhurst in November 1974 and commissioned into the British Army serving in the UK
and Germany.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>DR.
MIRKO SCHERER</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Mirko Scherer is an Independent Non-Executive Director of Aptorum Group Limited. Dr. Scherer has been serving as the Chief Executive
Officer at CoFeS China (formerly known as &#8220;TVM Capital China&#8221;) in Hong Kong since March 2015. CoFeS China focuses on cross-border
activities in the life science industry between China and the West. CoFeS China acts as a bridge between China and the West, assisting
Chinese investors and pharmaceutical companies accessing western innovations, while collaborating with innovative life science companies
from the West to enter the fast-growing China market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Scherer has served on the Board of the Frankfurt Stock Exchange from 2005 to 2007 and has been a board member of the Stichting Preferente
Aandelen QIAGEN since 2004. From August 2016 through July 2018, Dr. Scherer served as a Non-Executive board member of Quantapore Inc.
and from April 2015 through September 2017, he was a director of China BioPharma Capital I, (GP).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Scherer is an experienced biotechnology executive and has led numerous financing M&amp;A and licensing transactions, in both public and
private markets, in Europe and the U.S. for over 20 years. He consulted MPM Capital for the period between July 2012 and December 2014.
Dr. Scherer was also a co-founder and partner of KI Kapital from November 2008 to February 2014, a company which was specialized in providing
consultation in life science industry.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to working in the venture capital industry, Dr. Scherer co-founded GPC Biotech (Munich and Princeton, NJ) and served as the Chief Financial
Officer from October 1997 to December 2007. GPC Biotech engaged in numerous pharmaceutical alliances with companies such as Sanofi Aventis,
Boehringer Ingelheim, Altana (now part of Takeda), Yakult, and Pharmion (now part of Celgene). Over the past 20 years, Dr. Scherer has
established an extensive network in the U.S., European, and China&#8217;s biotechnology and venture capital industry. Prior to his time
at GPC Biotech, Dr. Scherer worked as a consultant from May 1993 to June 1994 at the Boston Consulting Group.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Scherer earned a Doctorate in Finance from the European Business School in Oestrich-Winkel/Germany in 1998, a MBA from Harvard Business
School in June 1996, and a degree in Business Administration from the University of Mannheim/Germany in February 1993.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PROFESSOR
JUSTIN WU</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Justin Wu is an Independent Non-Executive Director of Aptorum Group Limited. He also has been serving as the Chief Operating Officer
of CUHK Medical Centre since August 2018. He served as the Associate Dean (Development) of the Faculty of Medicine at CUHK from July
2014 to June 2018 and the Associate Dean (Clinical) of the Faculty of Medicine at CUHK from December 2012 to July 2014, and has been
serving a Professor in the Department of Medicine and Therapeutics since 2009, also the Director of the S. H. Ho Center for Digestive
Health, a research center specializing in functional gastrointestinal diseases, reflux and motility disorders, and digestive endoscopy.
Active in research publications and assessments, Professor Wu served as the International Associate Editor of American Journal of Gastroenterology
(&#8220;AJG&#8221;), and Managing Editor of Journal of Gastroenterology and Hepatology (&#8220;JGH&#8221;). He is also the Secretary
General of the Asian Neurogastroenterology and Motility Association (&#8220;ANMA&#8221;), and Secretary General of the Asia Pacific Association
of Gastroenterology (&#8220;APAGE&#8221;).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Wu has won a number of awards including the Emerging Leader in Gastroenterology Award by the JGH Foundation, and the Vice Chancellor&#8217;s
Exemplary Teaching Award at CUHK. Aside from his expertise in gastroenterology, Professor Wu has an extensive interest in the development
of Integrative Medicine in Hong Kong. He is the Founding Director of the Hong Kong Institute of Integrative Medicine, working closely
with the School of Chinese Medicine to develop an integrative model at an international level. The institute aims at maximizing the strength
of Western and Chinese medicine to provide a safe and effective integrative treatment to patients.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Wu served as a consultant and an advisory board member for Takeda Pharmaceutical, AstraZeneca, Menarini, Reckitt Benckiser and Abbott
Laboratory. He earned his Bachelor of Medicine and Bachelor of Surgery Degree (1993), and his Doctor of Medicine Degree (2000) from CUHK.
Additionally, he attained Fellowships of the Royal College of Physicians of Edinburgh and London in 2007 and 2012 respectively, Fellowship
of the Hong Kong College of Physicians in 2002, Fellowship of the Hong Kong Academy of Medicine in 2002, and has been an American Gastroenterological
Association Fellow since 2012.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>PROFESSOR
DOUGLAS ARNER</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Douglas W. Arner is an Independent Non-Executive Director of Aptorum Group Limited. Douglas is the Kerry Holdings Professor in Law and
Director and co-founder of the Asian Institute of International Financial Law at the University of Hong Kong, as well as Faculty Director
and co-founder of the LLM in Compliance and Regulation, LLM in Corporate and Financial Law, and Law, Innovation, Technology and Entrepreneurship
(LITE) Programmes. He served as Head of the HKU Department of Law from 2011 to 2014 and as Co-Director of the Duke University-HKU Asia-America
Institute in Transnational Law from 2005 to 2016. Douglas has published eighteen books and more than 200 articles, chapters and reports
on international financial law and regulation, most recently Reconceptualising Global Finance and its Regulation (Cambridge 2016) (with
Ross Buckley and Emilios Avgouleas) and The RegTech Book (Wiley 2019 (Janos Barberis and Ross Buckley). His recent papers are available
on SSRN at https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=524849, where he is among the top 75 authors in the world by total
downloads. Professor Arner led the development of Introduction to FinTech &#8211; launched with edX in May 2018 and now with over 80,000
learners spanning the world &#8211; and the foundation of the edx-HKU Online Professional Certificate in FinTech. He is a Senior Visiting
Fellow of Melbourne Law School, University of Melbourne, a non-executive director of NASDAQ and Euronext listed Aptorum Group and an
Advisory Board Member of the Centre for Finance, Technology and Entrepreneurship (CFTE). Professor Arner was an inaugural member of the
Hong Kong Financial Services Development Council (2013-2019) and has served as a consultant with, among others, the World Bank, Asian
Development Bank, APEC, Alliance for Financial Inclusion, and European Bank for Reconstruction and Development. He has lectured, co-organised
conferences and seminars and been involved with financial sector reform projects around the world. Professor Arner has been a visiting
professor or fellow at Duke, Harvard, the Hong Kong Institute for Monetary Research, IDC Herzliya, McGill, Melbourne, National University
of Singapore, University of New South Wales, Shanghai University of Finance and Economics, and Zurich, among others. Professor Arner
is the Senior Regulatory&#160;&amp; Strategic Advisor of Aeneas Group, a multi-disciplinary financial services institution with technology-driven
growth initiatives.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">He
holds a BA from Drury College (where he studied literature, economics and political science) in 1992, a JD (cum laude) from Southern
Methodist University in 1995, an LLM (with distinction) in banking and finance law from the University of London (Queen Mary College)
in 1996, and a PhD from the University of London in 2005.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Compensation of Executive Directors and Executive Officers</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth all cash compensation paid by us, as
well as certain other compensation paid or accrued, in fiscal 2022 to each of the following named executive officers. The total amount
was $3.6 million in 2022. A total 977,614 options were awarded to executive directors and executive officers in 2022. This amount does
not include business travel, relocation, professional and business association dues, and expenses reimbursed to such persons, and other
benefits commonly reimbursed or paid by companies in our industry. In addition to the compensation included in the table below, which
covers the fiscal year ended December 31, 2022, we issued an aggregate of 226,153 options to the persons included in the table below since
January 1, 2023 through the date of this report. (See &#8220;Item 6. Directors, Senior Management and Employees &#8211; E. Share Ownership&#8221;)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 1, 2022, Mr. Huen resigned as Chief Executive Officer but remains on the Company&#8217;s board as a non-executive director. The
base salary of Mr. Huen has been adjusted to HK$213,200 (approximately US$27,333 per month) effective from the same date.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
base salary of Mr. Martin Siu was set forth in an Operations Services &amp; Secondment Agreement between Aptus Management Limited and
MG Consultancy Limited (&#8220;MG&#8221;), through which Mr. Siu provides his services. MG charges an initial monthly fee of approximately
USD7,600, which may be increased to approximately USD12,700 during the term of the agreement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board also determined to issue Dr. Cheng a discretionary cash bonus equal to one-month his base salary.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
base salary of all directors and senior officer remains unchanged in 2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Fiscal <br/> Year</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Bonus<br/> ($)</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Option<br/> Awards<br/> ($)</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Change in <br/> Pension<br/> Value&#160;and<br/> Nonqualified <br/> Deferred <br/> Compensation <br/> Earnings<br/> ($)</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">All Other<br/> Compensation<br/> ($)</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total<br/> ($)</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: center">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 20%; font-weight: bold; text-align: left; text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Darren Lui <sup>(3)<br/>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr. Siu was appointed as
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(8)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Miss Khan served as the
    Chief Financial Officer of Aptorum Group from October 2017 to October 2022. </span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents deferred bonuses
    provided to directors and executive officers, which will be vested after 9.5 months &#8211; 21.5 months vesting period.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Compensation
of Non-executive Directors</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth information for the fiscal year ended
December 31, 2022, regarding the compensation of our non-executive directors who at December 31, 2022, were not also named executive officers.
A total 89,556&#160;options were awarded to non-executive directors in 2022. In addition to the compensation included in the table below,
which covers the fiscal year ended December 31, 2022, we issued an aggregate of 24,616 Class A Ordinary Shares awards to the persons included
in the table below since January 1, 2023 through the date of this report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">Name</td><td style="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Fees&#160;Earned<br/>
 or&#160;Paid<br/>
 in&#160;Cash<br/>
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 Incentive Plan<br/>
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 Deferred<br/>
 Compensation<br/>
 Earnings<br/>
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 ($)</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; font-weight: bold; text-align: left">&#160;</td><td style="width: 7%; font-weight: bold; text-align: right">-</td><td style="width: 1%; font-weight: bold; text-align: left">&#160;</td><td style="width: 1%; font-weight: bold">&#160;</td>
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    <td style="width: 1%; font-weight: bold; text-align: left">&#160;</td><td style="width: 7%; font-weight: bold; text-align: right">&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; font-weight: bold; text-align: left">&#160;</td><td style="width: 1%; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Mirko Scherer&#160;<sup>(3)</sup></b></span></td><td style="font-weight: bold">&#160;</td>
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Justin Wu&#160;<sup>(4)</sup></b></span></td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">31,673</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">22,455</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Douglas Arner&#160;<sup>(5)</sup></b></span></td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">31,673</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">22,455</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right">84,129</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Bathurst was appointed as one of our directors as of October 2017 and is entitled to receive $50,676 annually for his combined services
as a director and a committee member effective from January 1, 2022.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mr.
Bathurst&#8217;s appointment Letter provides his salary in GBP. For purposes of this table, we used a conversion ratio of GBP0.8 to USD1.00
to determine his salary in USD; however, the ultimate amount paid is based on the actual rate as of the relevant pay day at the end of
each month.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr.
Scherer was appointed as one of our directors as of October 2017 and is entitled to receive $31,673 annually for his services as a director
effective from January 1, 2022.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Wu was appointed as one of our directors as of October 2017 and is entitled to receive $31,673 annually for his combined services as
a director and a committee member effective from January 1, 2022.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professor
Arner&#8217;s appointment as one of our directors became effective as of April 1, 2018, and is entitled to receive $31,673 annually for
his combined services as a director and a committee member effective from January 1, 2022.</span></td>
</tr></table><div>

</div><p style="margin: 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 1, 2022, Mr. Huen resigned as Chief Executive Officer but remain on the Company&#8217;s board as a non-executive director. His base
salary has been adjusted to HK$213,200 (approximately US$27,333 per month)</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>2017
Share Option Plan</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 13, 2017, we adopted the 2017 Share Option Plan (the &#8220;Option
Plan&#8221;) and on November 5, 2021, we amended the Option Plan. Under the Option Plan, up to an aggregate of 550,000 Class A Ordinary
Shares (subject to subsequent adjustments described more fully below) may be issued pursuant to awards under the Option Plan. Subsequent
adjustments include that on each January 1, starting with January 1, 2020, an additional number of shares equal to the lesser of (A) 2%
of the outstanding number of Class A Ordinary Shares (on a fully diluted basis) on the immediate preceding December 31, and (B) such lower
number of Class A Ordinary Shares as may be determined by the board of directors, subject in all cases to adjustments as provided in Section
10 of the Option Plan. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions as determined by
the board of directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
adopted the Option Plan to provide additional incentives to selected directors, officers, employees and consultants, and enable our Company
to obtain and retain the services of these individuals. The Option Plan will enable us to grant options, restricted shares or other awards
to our directors, employees and consultants. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions
as determined by the board of directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">21,853 options were granted on March 15, 2019 to directors, employees,
external consultants and advisors of the Group. One-half of each option grant vests on January 1, 2020 and expires on December 31, 2030,
and the other half vests on January 1, 2021 and expires on December 31, 2031. The exercise price is $129.1 per share, which was based
on the closing price of the shares traded on the NASDAQ stock exchange on the trading day preceding the grant date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">53,694 options were granted on March 16, 2020 to directors, employees,
external consultants and advisors of the Group. One-half of each option grant vests on January 1, 2021 and expires on December 31, 2031
and the other half vests on January 1, 2022 and expires on December 31, 2032. The exercise price is $29.9 per share, which was based on
the average closing price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant
date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">14,896 options were granted on June 1, 2020 to directors and employees
of the Group. Nearly one-half of each option grant vests on December 1, 2020 and expires on November 30, 2030 and the remaining vests
on January 1, 2021 and expires on December 31, 2031. The exercise price is US$31.1 per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2,748 options were granted on August 10, 2020 to Dr. Weiss, which will
be vested on August 10, 2021 and expires on August 9, 2032. The exercise price is $36.4 per share, which was based on the average closing
price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">75,235 options were granted on March 11, 2021 to directors, employees,
external consultants and advisors of the Group with an exercise price of $27.6 per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.<i>&#160;</i>36,796 options
vest on January 1, 2022 and expire on December 31, 2032; 36,808 options vest on January 1, 2023 and expire on December 31, 2033; 906 options
vest on June 8, 2021 and expire on June 7, 2032; and 725 options vest on July 14, 2021 and expire on July 13, 2032.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">153,146
options were granted on March 8, 2022 to directors, employees, external consultants and advisors of the Group with an exercise price
of $13.4 per share, which was based on the average closing price of the shares traded on the NASDAQ stock exchange for the five trading
days immediately preceding the grant date.<i>&#160;</i>74,881 options vest on January 1, 2023 and expire on December 31, 2033; 74,906
options vest on January 1, 2024 and expire on December 31, 2034; 1,866 options vest on June 8, 2022 and expire on June 7, 2033; and 1,493
options vest on July 14, 2022 and expire on July 13, 2033.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">226,153 options were granted
on March 31, 2023 to directors and employees of the Group with an exercise price of $2.68 per share, which was based on the last closing
price of the shares traded on the NASDAQ stock exchange on the grant date. Besides, 136,200 shares awards were granted on March 31, 2023
to directors, employees and external consultants. All options vests on October 1, 2023 and expires on September 30, 2033.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Board Practices</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Board
of Directors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board of Directors currently consists of seven members, all of whom were elected pursuant to our current Memorandum and Articles. Our
nominating and governance committee and board of directors will consider a broad range of factors relating to the qualifications and
background of nominees, which may include diversity and is not limited to race, gender or national origin. We have no formal policy regarding
board diversity. Our nominating and governance committee&#8217;s and board of directors&#8217; priority in selecting board members is
identification of persons who will further the interests of our shareholders through his or her established record of professional accomplishment,
the ability to contribute positively to the collaborative culture among board members, knowledge of our business, understanding of the
competitive landscape and professional and personal experiences and expertise relevant to our growth strategy.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Committees
of the Board of Directors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Board of Directors has established an audit committee, a compensation committee and a nominating and corporate governance committee,
each of which operates pursuant to a separate charter adopted by our Board of Directors. The composition and functioning of all of our
committees will comply with all applicable requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection
Act, the NASDAQ Global Market and SEC rules and regulations. Our Board of Directors may establish other committees from time to time.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Audit
Committee</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charles
Bathurst, Douglas Arner and Justin Wu currently serve on the audit committee, which is chaired by Charles Bathurst. Our Board of Directors
has determined that each member of the audit committee is &#8220;independent&#8221; for audit committee purposes as that term is defined
in the rules of the SEC and the applicable rules of the NASDAQ Global Market. The audit committee&#8217;s responsibilities include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">selecting and appointing
    our independent registered public accounting firm, and approving the audit and permitted non-audit services to be provided by our
    independent registered public accounting firm;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">evaluating the performance
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">monitoring the integrity
    of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements
    or accounting matters;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing the adequacy
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">establishing procedures
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing and discussing
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    based upon such review and discussions, whether our financial statements shall be included in our annual report on Form 20-F;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing all related party
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing the type and
    presentation of information to be included in our earnings press releases, as well as financial information and earnings guidance
    provided by us to analysts and rating agencies.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Audit
Committee Financial Expert</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have one financial expert as of the date of this report. Our Board of Directors has determined that Mr. Charles Bathurst, Chair of our
audit committee, qualifies as an &#8220;audit committee financial expert&#8221; as defined in the SEC rules and satisfies the financial
sophistication requirements of The NASDAQ Global Market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Compensation
Committee</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charles
Bathurst, Douglas Arner and Justin Wu currently serve on the compensation committee, which is chaired by Justin Wu. Our Board of Directors
has determined that each member of the compensation committee is &#8220;independent&#8221; as that term is defined in the applicable
rules of the NASDAQ Global Market. The compensation committee&#8217;s responsibilities include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">evaluating the performance
    of our executive officers in light of the goals and objectives of our executive compensation plans and recommending to our Board
    of Directors with respect to the compensation of our executive officers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing the goals and
    objectives of our general compensation plans and other employee benefit plans as well as our general compensation plans and other
    employee benefit plans in light of such goals and objectives;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">retaining and approving
    the compensation of any compensation advisors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing all equity-compensation
    plans to be submitted for shareholder approval under the NASDAQ listing rules, and reviewing and approving all equity-compensation
    plans that are exempt from such shareholder approval requirement;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">evaluating the appropriate
    level of compensation for board and board committee service by non-employee directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing and approving
    description of executive compensation included in our annual report on Form 20-F.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Nominating
and Corporate Governance Committee</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charles
Bathurst, Douglas Arner and Justin Wu currently serve on the nominating and corporate governance committee, which is chaired by Professor
Arner. Our Board of Directors has determined that each member of the nominating and corporate governance committee is &#8220;independent&#8221;
as that term is defined in the applicable rules of the NASDAQ Global Market. The nominating and corporate governance committee&#8217;s
responsibilities include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">assisting our Board of
    Directors in identifying prospective director nominees and recommending nominees for election by the shareholders or appointment
    by our Board of Directors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">advising the board of directors
    periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with
    applicable laws and regulations, and making recommendations to our Board of Directors on all matters of corporate governance and
    on any corrective action to be taken;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">overseeing the evaluation
    of our Board of Directors; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recommending members for
    each board committee of our Board of Directors.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 133; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Scientific
Advisory Board</i>s</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
restructured the Scientific Assessment Committee into a newly formed Scientific Advisory Board. The Scientific Advisory Board shall help
the Company sharpen its focus on innovation and technological advancements and address critical scientific challenges in our research
and development; it will provide overall advise on the scientific development of the company. As of the date of this annual report, we
have 29 members on this board.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
light of the Company&#8217;s focus on developing treatment for infectious diseases, we have established a second scientific advisory
board, i.e., the Infectious Diseases Scientific Advisory Board in April 2020. As of the date hereof, the Infectious Diseases Scientific
Advisory Board has 4 members.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Family
Relationships</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no family relationship among any of our directors or executive officers.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Duties
of Directors</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Cayman Islands law, our directors have a duty to act honestly, in good faith and bona fide with a view to our best interests. Our directors
also have a duty to exercise the care, diligence and skills that a reasonably diligent person would exercise in comparable circumstances.
In fulfilling their duty of care to us, our directors must ensure compliance with our Memorandum and Articles. We have the right to seek
damages if a duty owed by our directors is breached.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
functions and powers of our Board of Directors include, among others:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointing officers and
    determining the term of office of the officers;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">authorizing the payment
    of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exercising the borrowing
    powers of the company and mortgaging the property of the company;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">executing checks, promissory
    notes and other negotiable instruments on behalf of the company; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintaining or registering
    a register of mortgages, charges or other encumbrances of the company.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Terms
of Directors and Officers</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no Cayman Islands law requirement that a director must hold office for a certain term and stand for re-election unless the resolutions
appointing the director impose a term on the appointment. The Memorandum and Articles provide that we have a&#160;staggered board of
directors consisting of three classes of directors, with directors serving staggered three-year terms. Our Board of Directors is divided
into three classes of directors. At each annual general meeting of shareholders, one class of directors will be elected for a three-year
term to succeed the class whose terms are then expiring, to serve from the time of election and qualification until the third annual
meeting following their election or until their earlier death, resignation or removal, starting with the Annual General Meeting of Shareholders
to be held in December 2023. The Company&#8217;s Board has initially designated the three classes to contain the directors set forth
below. Shareholders will only elect the Class I directors at the Company&#8217;s next Annual General Meeting; the Class III and II directors
will be deemed to have been re-elected at the February 2023 Special Meeting and shall not be required to stand for re-election until
the years specified below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 40%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name
    &amp; Class</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 40%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Positions</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expiration&#160;of&#160;Director
    Term/Re-Election Year</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2025</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Class
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ian
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2024</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Class
    I</i></b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charles
    Bathurst</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mirko
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Justin
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Douglas
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent
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    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
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  <tr style="font: 10pt Times New Roman, Times, Serif; ">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 134; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->128<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not have any age limit requirements relating to our director&#8217;s term of office.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Memorandum and Articles also provide that our directors may be removed by the directors or ordinary resolution of the shareholders, and
that any vacancy on our Board of Directors, including a vacancy resulting from an enlargement of our Board of Directors (which shall
not exceed any maximum number stated therein), may be filled by ordinary resolution or by vote of a majority of our directors then in
office.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employment
Agreements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have entered into agreements with our executive officers. Each of our executive officers is employed for a specified time period, which
will be renewed upon both parties&#8217; agreement. We may terminate the employment for cause, at any time, without notice or remuneration,
for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance
of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order,
fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or
disclose to any person, corporation or other entity without written consent, any confidential information. Each executive officer has
also agreed to assign to our group all his or her all inventions, improvements, designs, original works of authorship, formulas, processes,
compositions of matter, computer software programs, databases, mask works, concepts and trade secrets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
<span style="text-decoration:underline">Employees</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this annual report, we have 18 full-time and 1 part-time employees. Of these, 6 full-time are engaged in research and
development and laboratory operations, 7 full-time are engaged in general and administrative functions and 5 full-time and 1 part-time
are engaged in the clinic operation. As of the date of this annual report, 18 of our employees are located in Asia and 1 of our employees
is located in Europe. In addition, we have engaged and may continue to engage 66 independent contracted consultants and advisors to assist
us with our operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have
never experienced any employment related work stoppages, and we consider our relations with our employees to be good.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
<span style="text-decoration:underline">Share Ownership</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange
Act, of our Ordinary Shares as of the date of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">each of our directors and
    executive officers who beneficially own our Ordinary Shares; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Beneficial ownership includes
voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws,
the persons named in the table have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned by
them. Percentage of beneficial ownership of each listed person is based on 1,719,522 Class A Ordinary Shares and 2,243,776 Class B Ordinary
Shares outstanding as of the date of this annual report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or more of our Ordinary Shares.
Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment
power with respect to securities. In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage
ownership of such person, Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable
or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing
the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable
community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned
by them. As of the date of the annual report, we have 3 shareholders of record holding beneficial ownership of 5% or more, none of which
are located in the United States.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->129<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise indicated, the business address of each of the individuals is 17 Hanover Square, London, W1S 1BN, United Kingdom.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">21,199</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">190,787</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5.35</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">8.45</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CGY Investments Limited<sup>(7)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">85,299</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">401,537</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">12.17</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">17.79</td><td style="text-align: left">%</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span>&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less
than 1% of total outstanding Ordinary Shares on an as converted basis.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For each person and group
    included in this column, percentage ownership is calculated by dividing the number of Class A Ordinary Shares and Class B Ordinary
    Shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60
    days after the date of this annual report, by the sum of Class&#160;A Ordinary Shares and Class&#160;B Ordinary Shares, and the number
    of Class&#160;A Ordinary Shares that such person or group has the right to acquire beneficial ownership within 60 days after the
    date of this annual report. Following the IPO, each Class B Ordinary Share can be converted at any time on a one-for-one basis into
    Class A Ordinary Shares at the discretion of the holder.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For each person and group
    included in this column, percentage of total voting power represents voting power based on both Class&#160;A Ordinary Shares and
    Class&#160;B Ordinary Shares beneficially owned by such person or group with respect to all of our outstanding Class&#160;A Ordinary
    Shares and Class&#160;B Ordinary Shares as one single class. Holders of Class&#160;A Ordinary Shares are entitled to one vote per
    share and holders of Class&#160;B Ordinary Shares are entitled to one hundred votes per share on all matters subject to a shareholders&#8217;
    vote.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes
    (i) 1,485 Class A Ordinary Shares and 13,365 Class B Ordinary Shares held by DSF Investment Holdings Limited, which is 29.5% held
    by Mr. Lui, and 70.5% held by Eternal Clarity Holdings Limited which is wholly-owned by Mr. Lui&#8217;s mother, Ms. Emily Woo, and
    is located at Flat A2, 11<sup>th</sup> Floor, Wing Hang Insurance Building, 11 Wing Kut Street, Hong Kong, (ii) 24,094 Class A Ordinary
    Shares and 200,769 Class B Ordinary Shares held by CGY Investments Limited, which is 50% held by Seng Fun Yee (Mr. Lui&#8217;s spouse),
    25% held by Mandy Lui (Mr. Lui&#8217;s sister) and 25% held by Adrian Lui (Mr. Lui&#8217;s brother), and (iii) options held by CGY
    Investments Limited to purchase 18,556 Class A Ordinary Shares. Mr. Lui only controls and/or has substantial influence on the disposition
    and voting rights of 29.5% of the Aptorum shares DSF owns; Mr. Lui controls and/or has substantial influence on the disposition and
    voting rights of the shares held by his spouse, but no such control over the shares held by his sister or brother regarding the CGY
    shares. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to his appointment letter, Dr. Cheng received 10% of Aptorum Medical Limited&#8217;s ordinary shares as of the date of this annual report.
ACC Medical Limited, is a company wholly-owned by Dr. Cheng. Dr. Cheng maintains sole voting control over the shares held by ACC Medical
Limited, the principal office address of which is at Unit 1, 13/F, Block A, 19-25 Jervois Street, Hong Kong.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes
    370,308 Class A Ordinary Shares owned by Jurchen, warrants held by Jurchen to purchase 54,054 Class A Ordinary Shares, options granted
    to Mr. Huen to purchase 38,118 Class A Ordinary Shares, and 1,606,147 Class B Ordinary Shares owned by Jurchen. Jurchen Investment
    Corporation, is a company wholly-owned by Mr. Huen. Mr. Huen maintains sole voting control over the shares held by Jurchen, the principal
    office address of which is at 17<sup>th</sup> Floor, Guangdong Investment Tower, 148 Connaught Road Central, Hong Kong. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 136; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->130<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sui Fong Isabel Huen Ng
    is the mother of Mr. Ian Huen. Mr. Ian Huen does not have control nor substantial influence on the disposition and voting rights
    of the shares held by his mother.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0px"></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CGY Investments Limited
    is 50% held by Seng Fun Yee (Mr. Lui&#8217;s spouse), 25% held by Mandy Lui (Mr. Lui&#8217;s sister) and 25% held by Adrian Lui (Mr.
    Lui&#8217;s brother). Mr. Lui controls and/or has substantial influence on the disposition and voting rights of the shares held by
    his spouse, but no such control over the shares held by his sister or brother. Includes (i) 48,187 Class A Ordinary Shares and 401,537
    Class B Ordinary Shares held by CGY Investments Limited, and (ii) options held by CGY Investments Limited to purchase 37,112 Class
    A Ordinary Shares. </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.
<span style="text-decoration:underline">Disclosure of a registrant&#8217;s action to recover erroneously awarded compensation. </span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Major Shareholders</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Please
refer to &#8220;Item 6. Directors, Senior Management and Employees&#8212;E. Share Ownership.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Related Party Transactions</span>&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Lines
of Credit</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 13, 2019 (the &#8220;Effective Date&#8221;), Aptorum Therapeutics
Limited (&#8220;ATL&#8221;), one of our wholly-owned subsidiaries, entered into two separate Promissory Notes and Line of Credit Agreements
(the &#8220;Agreements&#8221;) with Aeneas Group Limited and Jurchen Investment Corporation (&#8220;Jurchen&#8221;). The Aeneas Group
Limited Agreement and Jurchen Agreement provide ATL with a line of credit up to twelve million dollars ($12,000,000) and three million
dollars ($3,000,000), respectively (collectively, the &#8220;Line of Credit&#8221;), representing the maximum aggregate amount of the
advances of funds from the Line of Credit that may be outstanding at any time under the Line of Credit (the &#8220;Principal Indebtedness&#8221;).
ATL may draw down from the Line of Credit at any time through the day immediately preceding the third anniversary of the Effective Date
(the &#8220;Maturity Date&#8221;). As of the date of this annual report, the Jurchen Agreement is matured, and the maturity of Aeneas
Group Limited Agreement is extended for additional three years and will be matured on August 12, 2025. Interest is payable on the outstanding
Principal Indebtedness at the rate of eight percent (8%) per annum, payable semi-annually in arrears on February 12 and August 12 in each
year. ATL may pre-pay in whole or in part, the Principal Indebtedness of the Line of Credit, and all interest accrued at any time prior
to the Maturity Date, without penalty. Under the Agreements, in addition to certain standard covenants, we are also not permitted, without
the prior written consent of Aeneas Group and Jurchen to (i) liquidate, dissolve or wind-up our business and affairs; (ii) effect any
merger or consolidation transaction; (iii) sell, lease, transfer, license or otherwise dispose, in a single transaction or series of related
transactions, all or substantially all of our assets; or (iv) consent to any of the foregoing. The Agreements are subject to standard
events of default, which if not cured within the agreed upon cure period, permits Aeneas Group Limited or Jurchen, as applicable, to declare
the outstanding Principal Indebtedness immediately due and payable, to exercise any other remedy provided for in the Agreements or any
other right available to Aeneas Group Limited or Jurchen as provided at law or in equity. Jurchen and Aeanas Group Limited also maintain
the right to set-off during the term of the Agreements. As of the date of this annual report, the Company has drawn down $2.5 million
from the Line of Credit.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 17, 2021, Aptorum Therapeutics Limited (the &#8220;Lender&#8221;) entered into a loan agreement with Talem Medical Group Limited
(&#8220;Talem&#8221; or the &#8220;Borrower&#8221;). According to the loan agreement, the Lender will grant a loan of up to AUD 4.7 million
for the Borrower for general working capital purposes of the Borrower and its subsidiaries. The loan is interest-bearing at a rate of
10% per annum and secured by the entire issued shares of Talem Medical Group (Australia) Pty Limited held by the Borrower. The loan is
initially matured 6 months from the date of the first drawdown date. The maturity date may be extended for 6 months to the first extended
maturity date, and further extended for another 6 months to the second extended maturity date, if certain conditions stated in loan agreement
are satisfied. We consider this loan to be a related party transaction as certain insiders, including Ian Huen, our Chief Executive Officer,
Executive Director and Director of the Lender; Dr. Clark Cheng, our Chief Medical Officer, Executive Director and Director of the Lender;
Darren Lui, our President, Executive Director and Director of the Lender; Professor Justin Wu, our Independent Non-Executive Director;
and Dr. Thomas Lee, our Head of Research and Development and Director of the Lender have direct and indirect minority interests in the
Borrower. As of the date of this annual report, there is no outstanding balance from the Borrower.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 13, 2022, the Group
entered a line of credit facility with Libra to provide up to a total $1 million in line of credit debt financing for its daily operation
The line of credit is originally matured on January 12, 2023, and is extended for additional 3 years. The interest on the outstanding
principal indebtedness is at the rate of 10% per annum. As of the date of this annual report, $0.4 million is outstanding from Libra Sciences
Limited.&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 137; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->131<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sales
and Purchases of Securities</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Private
Placement Offering</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Sale
of Class A Ordinary Shares</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 26, 2021, the Company
entered into a private placement shares purchase agreement with Jurchen, issuing 138,793 Class A Ordinary Shares, par value $10 each,
at $28.82 per share, representing a 10% premium to the last closing price of the Company&#8217;s Class A Ordinary Shares on the NASDAQ
stock exchange on that date. The Company received aggregate gross proceeds of $4,000,000 from the purchase of these shares.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Sales
of convertible notes</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 9, 2022, Aptorum Group Limited entered into a Securities Purchase Agreement (the &#8220;Agreement&#8221;) with Aenco Technologies
Ltd (&#8220;Note holder&#8221;), a Cayman Islands company that is indirectly 34.56% effectively owned by our non-executive director and
major shareholder, Ian Huen. Since Mr. Huen is an affiliate of the Company, the Agreement and the transaction contemplated therein has
been approved by the audit committee of the board of directors of the Company, which only consists of independent directors.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $3,000,000 (the &#8220;Note&#8221;). The Note is
unsecured, convertible into the Company&#8217;s restricted Class A Ordinary Shares at the Note holder option. The Notes will have a maturity
date of 12 months subject to the Note holder&#8217;s extension, a bullet interest rate of 7% <span style="text-decoration:underline">per annum, and a conversion price of</span>
$12.0 per Class A Ordinary share (&#8220;Conversion Price&#8221;). The Company shall have an obligation to repay the principal amount
and interest of the Note on the maturity date in cash or in unregistered Class A Ordinary Shares or a combination of such at the Company&#8217;s
discretion. The shares used to meet a repayment would be valued at the Conversion Price. As of the date of this annual report, the convertible
note is fully converted into 250,000 Class A Ordinary Shares.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Disposal
of a subsidiary</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#160;</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 27, 2021, Aptorum Therapeutics Limited, which is a wholly owned subsidiary of Aptorum Group Limited, entered a Share Sale Agreement
to sell all of the shares of SMPTH Limited, a previously wholly owned subsidiary of Aptorum Therapeutics Limited, to Aeneas Group Limited
at the consideration $1.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Consulting
Arrangements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">CGY
Investment Limited</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
entered into a consulting agreement with CGY Investment Limited (&#8220;CGY&#8221;) effective on January 10, 2020. Pursuant to this agreement,
CGY shall provide certain consultancy, advisory, and management services to the Group on potential investment projects related to health
care or R&amp;D platform; CGY shall be initially paid a monthly service fee of HK$104,000 per month (approximately US$13,333 per month),
during the term of the agreement, which is remain in effect unless it is terminated. The monthly service fee is adjusted to HK$171,200
(approximately US$21,949) with effect from March 1, 2022. The agreement may be terminated by either party providing 1-months written
notice to the other party.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CGY
is 50% held by Seng Fun Yee (Mr. Lui&#8217;s spouse), 25% held by Mandy Lui (Mr. Lui&#8217;s sister) and 25% held by Adrian Lui (Mr.
Lui&#8217;s brother). Mr. Lui, President and Executive Director of the Group, controls and/or has substantial influence on the disposition
and voting rights of the shares held by his spouse, but no such control over the shares held by his sister or brother. Hence, 50% of
the consulting service fee will be deemed as Mr. Lui&#8217;s compensation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">ACC
Medical Limited</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
entered into a consulting agreement with ACC Medical Limited (&#8220;ACC&#8221;) effective on December 1, 2020. Pursuant to this agreement,
ACC shall provide certain consultancy, advisory, and management services to the Group on clinic operations and other related projects
for clinics&#8217; business development; ACC shall be initially paid a monthly service fee of HK$101,542 per month (approximately US$13,018
per month), during the term of the agreement, which is to remain in effect unless it is terminated. The monthly service fee is adjusted
to HK$143,200 (approximately US$18,359 per month) effective from March 1, 2022. The agreement may be terminated by either party providing
1-months written notice to the other party. ACC is wholly owned by Dr. Clark Cheng, who is also the sole director of ACC, the Group&#8217;s
Chief Medical Officer and one of its executive directors.</span></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">GloboAsia,
LLC</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
entered into a consulting agreement with GloboAsia effective as of August 18, 2017 (the &#8220;2017 GA Agreement&#8221;); GloboAsia is
not associated or affiliated with any FINRA members. However, the 2017 GA Agreement was terminated when Dr. Chan resigned from his position
as our Chief Scientific Officer in March 2019. Dr. Chan serves as the Director of International Affairs of GloboAsia.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
as of April 1, 2019, GloboAsia, through Dr. Chan, shall serve as a member on our Scientific Advisory Board. To formalize such service,
we entered into that certain consulting agreement with GloboAsia dated March 13, 2019 (the &#8220;2019 GA Agreement&#8221;). Pursuant
to the 2019 GA Agreement, GloboAsia provides advisory and management services to us and as a member of the Scientific Advisory Board,
they provide advice to us regarding research and development, the scientific merit of licenses or products and other related scientific
issues. We agreed to pay GloboAsia an hourly rate of USD300 for work actually performed. The initial term of 2019 GA Agreement is until
December 31, 2020 and shall thereafter be automatically renewed for successive one-year terms, unless earlier terminated by either party
upon three months&#8217; notice prior to the end of the then applicable term; either party may also terminate the agreement upon 2 months
written notice and the Company may terminate the agreement if Dr. Chan is no longer with GloboAsia or if GloboAsia commits any act of
fraud or dishonesty.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Administrative
Management Services </b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline">Libra
Sciences Limited</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 1, 2022, the Group entered into an administrative management services agreement with Libra Sciences Limited. According to the
agreement, the Group will provide documentation and administrative services, include but are not limited to human resources and payroll
administration, general secretarial and administrative support, and accounting and financial reporting services. The Group is entitled
to receive a fixed amount of services fees of HKD 25,000 (approximately $3,205) per calendar month with the expiry date on December 31,
2023.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employment
Agreements</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
entered into Appointment Letters with each of our executive officers. The terms of the Appointment Letters for each of our executive
officers are consistent with each other, except with regard to the individual&#8217;s compensation, term of employment and duties and
responsibilities, the latter of which coincides with the standard functions normally associated with the given position. In addition
to setting forth the individual compensation and such, the appointment letters contain the following material terms:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, such
as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or
misconduct or a failure to perform agreed duties. We may also terminate an executive officer&#8217;s employment without cause upon three-month
advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as expressly required
by applicable law of the jurisdiction where the executive officer is based. The executive officer may resign at any time with three-month
advance written notice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
executive officer has agreed to hold, both during and after the termination or expiration of his or her Appointment Letter, in strict
confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to
applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or
prospective clients, or the confidential or proprietary information of any third-party received by us and for which we have confidential
obligations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, each executive officer has agreed to be bound by non-solicitation and non-compete restrictions during the term of his or her
employment and typically for one year following the last date of employment. Specifically, each executive officer has agreed not to (i)
solicit or entice away from the Company, any person, firm, company or organization that is or shall have been at any time within 12 months
prior to termination of employee a customer, client, identified prospective customer or client of the Company or in the habit of dealing
with the Company; (ii) employ, solicit or entice away from the Company any person who is or shall have been on the date of or within
12 months prior to termination of employment an employee of the Company; or (iii) assume employment with or provide services to, or otherwise
engage in income generating activities with any of our competitors, or engage, whether as principal, partner, licensor or otherwise,
any of our competitors, without our express consent.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
of our Appointment Letters also provide for the executive officer to participate in our mandatory provident fund, which is similar to
a pension fund.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 27, 2022, we appointed Mr. Huen as Non-Executive Director for a term of 3 years from June 1, 2022, after Mr. Huen stepping down as
Chief Executive Officer on that date. Under the appointment letter, we pay Mr. Huen approximately USD27,308 per month. The appointment
letter can be earlier terminated by either party with two-months&#8217; written notice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 30, 2022, we appointed Mr. Siu as our Head of Finance, effective on July 11, 2022, pursuant to an Operations Services &amp; Secondment
Agreement between Aptus Management Limited and MG Consultancy Limited (&#8220;MG&#8221;), through which Mr. Siu provides his services.
MG charges an initial monthly fee of approximately USD7,600, which may be increased to approximately USD12,700 during the term of the
agreement. The agreement has a three-year term, which will automatically renew for additional one-year terms, unless earlier terminated
by either party with one-month written notice.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 6. Directors, Senior Management and Employees &#8212; C. Board Practices &#8212; Employment Agreements&#8221;. &#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Interests of Experts and Counsel</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
8. FINANCIAL INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Consolidated Statements and Other Financial Information</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have appended consolidated financial statements filed as part of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Legal
Proceedings</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, we are subject to legal proceedings, investigations and claims incidental to the conduct of our business. We are not currently
a party to any legal proceeding or investigation which, in the opinion of our management, is likely to have a material adverse effect
on our business, financial condition or results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dividend
Policy</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have never declared or paid cash dividends to our shareholders, and we do not intend to pay cash dividends in the foreseeable future.
We intend to reinvest any earnings in developing and expanding our business. Any future determination relating to our dividend policy
will be at the discretion of our Board of Directors and will depend on a number of factors, including future earnings, our financial
condition, operating results, contractual restrictions, capital requirements, business prospects, our strategic goals and plans to expand
our business, applicable law and other factors that our Board of Directors may deem relevant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Cayman Islands law, dividends may be declared and paid only out of funds legally available therefor, namely out of either profit or our
share premium account, and provided further that a dividend may not be paid if this would result in our Company being unable to pay its
debts as they fall due in the ordinary course of business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Significant Changes</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 140; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->134<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
9. THE OFFER AND LISTING</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Offering and Listing Details.</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Class A Ordinary Shares are currently listed on NASDAQ Global Market under the symbol &#8220;APM&#8221; and the Professional Compartment
of Euronext in Paris under the Euronext ticker symbol &#8220;APM.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Plan of Distribution</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Markets</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Class A Ordinary Shares are currently listed on NASDAQ Global Market under the symbol &#8220;APM&#8221; and the Professional Compartment
of Euronext in Paris under the Euronext ticker symbol &#8220;APM.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
<span style="text-decoration:underline">Selling Shareholders</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
<span style="text-decoration:underline">Dilution</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.
<span style="text-decoration:underline">Expenses of the Issue</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
10. ADDITIONAL INFORMATION</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<span style="text-decoration:underline">Share Capital</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<span style="text-decoration:underline">Amended and Restated Memorandum and Articles of Association</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a Cayman Islands exempted company with limited liability and our affairs are governed by our Third Amended and Restated Memorandum
and Articles of Association (the &#8220;Memorandum and Articles&#8221;), the Companies Law, the common law of the Cayman Islands, our
corporate governance documents and rules and regulations of the stock exchange on which are shares are traded. The Memorandum and Articles
of the Company is filed herein as Exhibit 1.2 to this annual report and is hereby incorporated by reference into this annual report.
You may refer to Exhibit 2.3 for a detailed disclosure of description of our securities registered under Section 12 of the Exchange Act
of 1934, as amended, of the Memorandum and Articles.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt; ">As
of the date hereof, the authorized share capital of the Company is $100,000,000.00, divided into 9,999,996,000,000 Class A Ordinary Shares
with a nominal or par value of $0.00001 each and 4,000,000 Class B Ordinary Shares with a nominal or par value of $0.00001 each. As of
the date hereof, 1,719,522 Class A Ordinary Shares and 2,243,776 Class B Ordinary Shares are issued and outstanding. All of our issued
and outstanding Class A Ordinary Shares and Class B Ordinary Shares are fully paid.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">At the February 21, 2023 special extraordinary meeting of shareholders,
the shareholders approved by a special resolution an amendment and restatement of the Company&#8217;s Second Amended and Restated Memorandum
and Articles of Association (the &#8220;M&amp;A&#8221;) in the form of the Third Amended and Restated Memorandum and Articles of Association,&#160;&#160;to
reflect (i) the merger between the Company and Aptorum Group Cayman Limited, a newly established wholly owned subsidiary of the Company,
whereby the Company would be the surviving company (the &#8220;Merger&#8221;) pursuant to a plan of merger, which also forces a change
in par value to Ordinary Shares of the Company from USD10 to USD0.00001 (the &#8220;Plan of Merger&#8221;); (ii) the voting rights of
the Class B Ordinary Shares be increased from 10 votes per share to 100 votes per share; (iii) a staggered board of directors consisting
of three (3) classes, such that only one (1) class is subject to re-election each year; (iv) to increase the number of Class A Ordinary
Shares authorized; (v) reducing the vote required for class consent from two-thirds (2/3) to a simple majority; and (vi) to decrease the
number of days for effective service by post to shareholders from 14 days to 3 days (collectively, the &#8220;Amendments of M&amp;A&#8221;)
and that the Third Amended and Restated Memorandum and Articles of Association be adopted as the Memorandum and Articles of Association
of the Company, to the exclusion of the existing M&amp;A with effect from February 21, 2023, which is the date of the registration of
the Merger with the Registrar of Companies of the Cayman Islands.&#160;

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
<span style="text-decoration:underline">Material Contracts</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not entered into any material contracts other than in the ordinary course of business and other than those described in &#8220;Item
4. Information on the Company&#8221; or elsewhere in this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
<span style="text-decoration:underline">Exchange Controls</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no governmental laws, decrees, regulations or other legislation in the Cayman Islands, the United Kingdom or Hong Kong that may affect
the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance
of dividends, interest, or other payments by us to non-resident holders of our ordinary shares, other than withholding tax requirements.
There is no limitation imposed by Cayman Islands law, the United Kingdom law, Hong Kong law or our articles of association on the right
of non-residents to hold or vote shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
<span style="text-decoration:underline">Taxation</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Cayman
Islands Tax Considerations</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is
no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government
of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within, the jurisdiction
of the Cayman Islands. The Cayman Islands is not party to any double tax treaties which are applicable to any payments made by or to
our Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payments
of dividends and capital in respect of our Class A Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding
will be required on the payment of a dividend or capital to any holder of our Class A Ordinary Shares, nor will gains derived from the
disposal of our Class A Ordinary Shares be subject to Cayman Islands income or corporation tax.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
stamp duty is payable in respect of the issue of our Class A Ordinary Shares or on an instrument of transfer in respect of our Class
A Ordinary Shares except on instruments executed in, or brought within, the jurisdiction of the Cayman Islands.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->136<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Material
U.S. Federal Income Tax Considerations for U.S. Holders</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a description of the material U.S. federal income tax consequences to U.S. Holders (as defined below) of purchasing, owning
and disposing of Class A Ordinary Shares. It is not a comprehensive description of all U.S. federal income tax considerations that may
be relevant to a particular person&#8217;s decision to acquire Class A Ordinary Shares. This discussion applies only to a U.S. Holder
that holds a Class A Ordinary Share as a capital asset for U.S. federal income tax purposes (generally, property held for investment).
In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder&#8217;s particular circumstances,
including state and local tax consequences, non-U.S. tax consequences, federal estate or gift tax consequences, alternative minimum tax
consequences, the potential application of the provisions of the Code known as the Medicare Contribution Tax, and tax consequences applicable
to U.S. Holders subject to special rules, such as:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">banks and other financial
    institutions;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">insurance companies;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">dealers or traders in securities
    who use a mark-to-market method of tax accounting;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons holding Class A
    Ordinary Shares as part of a hedging transaction, &#8220;straddle,&#8221; wash sale, conversion transaction or integrated transaction
    or persons entering into a constructive sale with respect to the Class A Ordinary Shares;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons whose &#8220;functional
    currency&#8221; for U.S. federal income tax purposes is not the U.S. dollar;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">tax exempt entities, including
    &#8220;individual retirement accounts&#8221; and &#8220;Roth IRAs&#8221;;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">former citizens or long-term
    residents of the United States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">entities or arrangements
    classified as partnerships for U.S. federal income tax purposes;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulated investment companies
    or real estate investment trusts;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons who acquired our
    Class A Ordinary Shares pursuant to the exercise of an employee share option or otherwise as compensation;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons that own or are
    deemed to own ten percent or more of our shares; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">persons holding Class A
    Ordinary Shares in connection with a trade or business conducted outside the United States.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds Class A Ordinary Shares, the
U.S. federal income tax treatment of such partnership and each partner thereof will generally depend on the status of the partner and
the activities of the partnership. Partnerships holding Class A Ordinary Shares and partners in such partnerships are encouraged to consult
their tax advisors as to the particular U.S. federal income tax consequences of purchasing, holding and disposing of Class A Ordinary
Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
discussion is based on the Code, the Treasury Regulations issued thereunder, and administrative and judicial interpretations thereof,
all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or to different interpretation.
Such change could materially and adversely affect the tax consequences described below.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><!-- Field: Page; Sequence: 143; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->137<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this discussion, a &#8220;U.S. Holder&#8221; is a holder who, for U.S. federal income tax purposes, is a beneficial owner
of Class A Ordinary Shares and that is:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an individual citizen or
    resident of the United States;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a corporation, or other
    entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District
    of Columbia;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an estate, the income of
    which is subject to U.S. federal income taxation regardless of its source; or</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a trust, (i) if a court
    within the United States is able to exercise primary supervision over its administration and one or more &#8220;U.S. persons&#8221;
    (within the meaning of the Code) have the authority to control all of its substantial decisions, or (ii) if a valid election is in
    effect for the trust to be treated as a U.S. person.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S.
Holders are encouraged to consult their tax advisors concerning the U.S. federal, state, local and foreign tax consequences of purchasing,
owning and disposing of Class A Ordinary Shares in their particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Taxation
of Distributions</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the discussion below under &#8220;Passive Foreign Investment Company Rules,&#8221; a U.S. Holder will be required to include in gross
income as dividend income the gross amount of any distributions paid on Class A Ordinary Shares (including any amount of taxes withheld),
other than certain&#160;<i>pro rata&#160;</i>distributions of Class A Ordinary Shares, to the extent paid out of our current or accumulated
earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of our current and accumulated
earnings and profits would be treated as a non-taxable return of capital to the extent of the U.S. Holder&#8217;s adjusted tax basis
in the Class A Ordinary Shares and thereafter as a gain from the sale of the Class A Ordinary Shares. However, because we do not calculate
our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders
as dividends.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
case of a U.S. Holder that is a corporation, dividends paid on the Class A Ordinary Shares will be subject to regular corporate rates
and will not be eligible for the &#8220;dividends received&#8221; deduction generally allowed to corporate shareholders with respect
to dividends received from U.S. corporations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
received by an individual, trust or estate will be subject to taxation at standard tax rates. A reduced income tax rate applies to dividends
paid by a &#8220;qualified foreign corporations&#8221; (if certain holding period requirements and other conditions are met). A non-U.S.
corporation generally will be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive
tax treaty with the United States which includes an exchange of information program or (ii) with respect to any dividend it pays on stock
which is readily tradable on an established securities market in the United States. US. Treasury Department guidance indicates that our
Class A Ordinary Shares, which is listed on the NASDAQ Global Market is readily tradable on an established securities market in the United
States. There can be no assurance, however, that our Class A Ordinary Shares will be considered readily tradable on an established securities
market in later years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-corporate
U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the taxable year
in which such dividends are paid or in the preceding taxable year (See &#8220;Item 10. Additional Information &#8211; E. Taxation &#8211;
Material U.S. Federal Income Tax Considerations for U.S. Holders&#160;&#8211;&#160;Passive Foreign Investment Company Rules&#8221; below).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding
taxes imposed on dividends received on the Class A Ordinary Shares. A U.S. Holder who does not elect to claim a foreign tax credit for
foreign income tax withheld may instead claim a deduction for U.S. federal income tax purposes in respect of such withholding, but only
for a year in which such investor elects to do so for all creditable foreign income taxes. For purposes of calculating the foreign tax
credit limitation, dividends paid by us will, depending on the circumstances of the U.S. Holder, be either general or passive income.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
we do not expect to pay dividends in the near future, in the event any dividends are paid and if a dividend is paid in non-U.S. currency,
it must be included in a U.S. Holder&#8217;s income as a U.S. dollar amount based on the exchange rate in effect on the date such dividend
is actually or constructively received, regardless of whether the dividend is in fact converted into U.S. dollars. If the dividend is
converted to U.S. dollars on the date of receipt, a U.S. Holder generally will not recognize a foreign currency gain or loss. If the
non-U.S. currency is converted into U.S. dollars on a later date, however, the U.S. Holder must include in income any gain or loss resulting
from any exchange rate fluctuations. Such gain or loss will generally be ordinary income or loss and will be from sources within the
United States for foreign tax credit limitation purposes. U.S. Holders should consult their own tax advisors regarding the tax consequences
to them if we pay dividends in non-U.S. currency.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sale
or Other Taxable Disposition of Ordinary Shares</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
to the discussion below under &#8220;Passive Foreign Investment Company Rules,&#8221; gain or loss realized on the sale or other taxable
disposition of Class A Ordinary Shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held
the Class A Ordinary Shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder&#8217;s
tax basis in the Class A Ordinary Shares disposed of and the amount realized on the disposition. Long-term capital gain of a non-corporate
U.S. Holder is generally taxed at preferential rates. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit
purposes. The deductibility of capital losses is subject to limitations. U.S. Holders are urged to consult their tax advisors regarding
the tax consequences if a foreign tax is imposed on the disposition of Class A Ordinary Shares, including the availability of the foreign
tax credit under an investor&#8217;s own particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder that receives non-U.S. currency on the disposition of the Class A Ordinary Shares will realize an amount equal to the U.S.
dollar value of the foreign currency received on the date of disposition (or in the case of cash basis and electing accrual basis taxpayers,
the settlement date) whether or not converted into U.S. dollars at that time. Very generally, the U.S. Holder will recognize currency
gain or loss if the U.S. dollar value of the currency received on the settlement date differs from the amount realized with respect to
the Class A Ordinary Shares. Any currency gain or loss on the settlement date or on any subsequent disposition of the foreign currency
generally will be U.S.-source ordinary income or loss.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Passive
Foreign Investment Company Rules</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Special
U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal
income tax purposes. In general, a non-U.S. corporation will be classified as a PFIC for any taxable year in which, after applying certain
look-through rules, either:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at least 75% of its gross
    income for such taxable year is passive income (e.g., dividends, interest, capital gains and rents derived other than in the active
    conduct of a rental business); or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">at least 50% of its gross
    assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income or are held for the
    production of passive income.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation
in which we own, directly or indirectly, 25% or more (by value) of the equity.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
separate determination must be made after the close of each taxable year as to whether we are a PFIC for that year. As a result, our
PFIC status may change. In particular, the total value of our assets generally will be calculated using the market price of our Class
A Ordinary Shares, which may fluctuate considerably. Fluctuations in the market price of our Class A Ordinary Shares may result in our
being a PFIC for any taxable year.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the amount of restricted and unrestricted cash and investments that we had on hand during our year ending December 31, 2022, we believe
that we were classified as a PFIC for that tax year. Depending on the future composition and value of our assets, we may be classified
as a PFIC for future years.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we were to be classified as a PFIC, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder (i)
takes no action, (ii) makes an election to treat us as a &#8220;Qualified Electing Fund&#8221; (a &#8220;QEF election&#8221;) or (iii)
if permitted, makes a &#8220;mark-to-market&#8221; election with respect to our Class A Ordinary Shares. A U.S. Holder of our Class A
Ordinary Shares will also be required under applicable Treasury Regulations to file an annual information return (Form 8621) containing
information regarding our company. Additional explanations of the PFIC rules are set forth below: this material is complex and may affect
different U.S. Holders differently. Accordingly, U.S. Holders should consult their own tax advisors about the consequences of our company
being classified as a PFIC and about what steps, if any, they might take to lessen the tax impact of our PFIC status on them.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder who does not make a timely QEF or mark-to-market election (a &#8220;Non-Electing Holder&#8221;), as discussed below, will
be subject to special tax rules with respect to any &#8220;excess distribution&#8221; that you receive and any gain you realize from
a sale or other disposition (including a pledge) of Class A Ordinary Shares. Distributions you receive in a taxable year that are greater
than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period
for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the excess distribution
    or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the amount allocated to
    the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary
    income; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the amount allocated to
    each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments
    of tax will be imposed on the resulting tax attributable to each such year.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
should be noted that, until such time as we make a distribution, there are no tax consequences to Non-Electing Holders. However, if we
ever did make a distribution it would in all likelihood be an excess distribution (because we would not have previously made any distributions
to holders of Class A Ordinary Shares). At that point, and for all subsequent distributions, the rules described above would apply to
Non-Electing Holders. The tax liability for amounts allocated to years prior to the year of disposition or &#8220;excess distribution&#8221;
cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary
Shares cannot be treated as capital, even if you hold the Ordinary Shares as capital assets.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
elections may be available that would result in alternative treatments. The adverse consequences of owning stock in a PFIC could be mitigated
if a U.S. Holder makes a valid QEF election (a U.S. Holder which we refer to as an &#8220;Electing Holder&#8221;) which, among other
things, would require the Electing Holder to include currently in income its pro rata share of the PFIC&#8217;s net capital gain and
ordinary earnings, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether
or not the Electing Holder actually received distributions from us. When an Electing Holder makes a QEF election, its adjusted tax basis
in our Class A Ordinary Shares is increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits
that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in our Class A Ordinary Shares and
will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or
other disposition of our Class A Ordinary Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
U.S. Holder can make a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with its U.S. federal income
tax return. This election must be made by the deadline (including extensions) for filing the U.S. Holder&#8217;s federal tax return for
the year in question. U.S. Holders should discuss their election alternatives with their own tax advisors. Once an election is made,
the Electing Holder is subject to the QEF rules for as long as we are a PFIC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
should be noted that in order to make a QEF election a U.S. Holder needs information from us concerning our PFIC status and our financial
results for the year. We cannot assure our U.S. Holders that we will provide such information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
an alternative to making a QEF election, a U.S. Holder may make a &#8220;mark-to-market&#8221; election with respect to our Class A Ordinary
Shares provided our Class A Ordinary Shares are treated as &#8220;marketable stock.&#8221; The Class A Ordinary Shares generally will
be treated as marketable stock if they are regularly traded on a &#8220;qualified exchange or other market&#8221; (within the meaning
of applicable Treasury Regulations) on at least 15 days during each calendar quarter (other than in de minimis amounts).</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. Holder makes an effective mark-to-market election, for each taxable year that we are a PFIC, the U.S. Holder will include as ordinary
income the excess of the fair market value of its Class A Ordinary Shares at the end of the year over its adjusted tax basis in the Class
A Ordinary Shares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the
Class A Ordinary Shares over their fair market value at the end of the year, but only to the extent of the net amount previously included
in income as a result of the mark-to-market election. A U.S. Holder&#8217;s adjusted tax basis in the Class A Ordinary Shares will be
increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. In addition,
upon the sale or other disposition of your Class A Ordinary Shares in a year that we are PFIC, any gain will be treated as ordinary income
and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of
the mark-to-market election.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a U.S. Holder makes a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent
taxable years unless the Class A Ordinary Shares are no longer regularly traded on a qualified exchange or other market, or the IRS consents
to the revocation of the election. You are urged to consult your tax advisor about the availability of the mark-to-market election, and
whether making the election would be advisable in your particular circumstances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Information
Reporting and Backup Withholding</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payments
of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally
are subject to information reporting, and may be subject to backup withholding, unless (i)&#160;the U.S. Holder is a corporation or other
exempt recipient or (ii)&#160;in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and
certifies that it is not subject to backup withholding.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Backup
withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit
against the holder&#8217;s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is
timely furnished to the IRS.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Information
with Respect to Foreign Financial Assets</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
U.S. Holders may be required to report information relating to the Class A Ordinary Shares, subject to certain exceptions (including
an exception for Class A Ordinary Shares held in accounts maintained by certain U.S. financial institutions). U.S. Holders should consult
their tax advisors regarding their reporting obligations with respect to their purchase, ownership and disposition of the Class A Ordinary
Shares.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.
<span style="text-decoration:underline">Dividends and Paying Agents</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">G.
<span style="text-decoration:underline">Statement by Experts</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">H.
<span style="text-decoration:underline">Documents on Display</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have previously filed the Registration Statement with the SEC.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required
to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after
the end of each fiscal year. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained
at prescribed rates at the public reference facilities maintained by the SEC at Judiciary Plaza, 100 F Street, N.E., Washington, D.C.
20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains a web site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding
registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules
of the Exchange Act prescribing, among other things, the furnishing and content of proxy statements to shareholders, and our executive
officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also maintain a corporate website at www.aptorumgroup.com. Information contained on, or that can be accessed through, our website does
not constitute a part of this report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">I.
<span style="text-decoration:underline">Subsidiary Information</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a listing of our subsidiaries, see &#8220;Item 4. Information on the Company &#8212; A. History and Development of the Company.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">J.
<span style="text-decoration:underline">Annual Report to Security Holders.</span></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->141<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>For
purposes of Item 11, reference to the &#8220;Group&#8221; means Aptorum Group Limited and all of its subsidiaries.</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Foreign
Exchange Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currency
risk is the risk that the value of financial assets or liabilities will fluctuate due to changes in foreign exchange rates.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Currency
risk sensitivity analysis</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December 31, 2022 and 2021, the Group has no significant foreign currency risk because most of the transactions are denominated in Hong
Kong dollar or the United States dollar. Since the Hong Kong dollar is pegged to the United States dollar, the Group&#8217;s exposure
to foreign currency risk in respect of the balances denominated in Hong Kong dollars is considered to be minimal.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Credit
Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
assets which potentially subject the Group to concentrations of credit risk consist principally of bank deposits and balances.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group takes on exposure to credit risk on cash and restricted cash balances majority held with HSBC for the purposes of payments of Group
expenses. The risk of default is considered minimal as the Group considers HSBC is well established with high credit rating.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Liquidity
Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
risk is the risk that the Group will encounter difficulty in raising funds to meet commitments associated with financial assets and liabilities.
Liquidity risk may result from an inability to sell a financial asset quickly at an amount close to its fair value.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group invested in private equities which are generally unquoted and not readily marketable before its restructuring to an operating company.
After the restructuring in 2017, the Group generally does not acquire new investments in unlisted securities that cannot be readily disposed
of to minimize the liquidity risk. Investment of the Group&#8217;s assets in unquoted securities may restrict the ability of the Group
to dispose of its investment at a price and time it wishes to do so.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Interest
Rate Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>Interest
rate risk sensitivity analysis</i></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group&#8217;s cash deposits and bank loan held with banks are exposed to interest rate risk. However, Management considers the risk on
cash deposits to be minimal as they are short-term with terms less than one month.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
regard to interest rate sensitivity on our bank loans, we present the sensitivity analysis below based on the exposure to interest rates
for interest bearing bank loans with variable interest rates as of December 31, 2022. The analysis is prepared assuming that those balances
outstanding as of December 31, 2022 were outstanding for the whole financial year. A 1.0% increase or decrease which represents the management&#8217;s
assessment of the reasonably possible change in interest rates is used. Assuming no change in the outstanding balance of our existing
interest bearing bank loans balances with floating interest rates as of December 31, 2022, a 1.0% increase or decrease in each applicable
interest rate would increase or decrease $30,000 to our interest expense for the year ended December 31, 2022. We have not used any derivative
financial instruments to manage our interest risk exposure.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Inflation
Risk</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
recent years, inflation has not had a material impact on our results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Items
12.D.3 and 12.D.4 of this Item 12 is not applicable, as the Company does not have any American Depositary Shares; all other applicable
information required by this Item 12 is included in Exhibit 2.3.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Part
II</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 10. Additional Information&#8221; for a description of the rights of securities holders, which remain unchanged.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
15. CONTROLS AND PROCEDURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(a)
Disclosure Controls and Procedures</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the supervision and
with the participation of our management, including our chief executive officer and our chief financial accounting officer, we carried
out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange
Act, as of December 31, 2022. Based on that evaluation, our chief executive officer and chief financial accounting officer concluded that
our disclosure controls and procedures, as of December 31, 2022, were not effective at the reasonable assurance level due to the material
weakness described below.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(b)
Management&#8217;s Annual Report on Internal Control over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for
external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America 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 the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company
are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of the unauthorized acquisition, use or disposition of our company&#8217;s assets that could have a material
effect on the consolidated financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the Securities and Exchange Commission,
our management including our Chief Executive Officer and Chief Financial Accounting Officer assessed the effectiveness of internal control
over financial reporting as of December 31, 2022 using the criteria set forth in the report &#8220;Internal Control&#8212;Integrated
Framework (2013)&#8221; published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
management concluded that our internal control over financial reporting was effective as of December 31, 2022.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with the previous
audit of our financial statements for the year ended December 31, 2022, we and our independent registered public accounting firm identified
one material weakness in our internal control over financial reporting, as defined in the standards established by the Public Company
Accounting Oversight Board of the United States. The material weakness identified was the lack of dedicated resources to take responsibility
for the finance and accounting functions and the preparation of financial statements in compliance with generally accepted accounting
principles in the United States, or U.S. GAAP.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 149; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->143<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
2019, we took actions to remediate the abovementioned material weakness, and we believe we have remediated the material weakness by implementing
the following measures:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">provide trainings to staff
    regarding to the preparation of financial statements in compliance with generally accepted accounting principles in the United States;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">change to a new and well-established
    accounting system to enhance effectiveness and financial and system control; </span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">establish clear roles and
    responsibilities for accounting and financial reporting staff to address finance and accounting issues; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">continue to monitor the
    improvement on internal control over financial reporting.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">However, since we are still
in the process of replenishing and building up a qualified finance and accounting team with sufficient dedicated resources, our management
assessed that the deficiency related to the lack of dedicated resources to take responsibility for the finance and accounting functions
and the preparation of financial statements in compliance with generally accepted accounting principles in the United States, or U.S.
GAAP, still existed as of December 31, 2022.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot assure you that we will not identify additional material weaknesses or significant deficiencies in the future. See &#8220;Item
3. Key Information&#8212;D. Risk Factors&#8212; Risks Related to Our Industry, Business and Operation &#8212; If we fail to establish
and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable
regulations could be impaired.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding there is a
material weakness identified as described above, we believe that our consolidated financial statements contained in this annual report
on Form 20-F fairly present our financial position, results of operations and cash flows for the years covered thereby in all material
respects.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(c)
Attestation Report of the Company&#8217;s Registered Public Accounting Firm</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
did not include an attestation report of the company&#8217;s registered public accounting firm due to rules of the SEC where domestic
and foreign registrants that are non-accelerated filers, which we are, and &#8220;emerging growth companies&#8221; which we also are,
are not required to provide the auditor attestation report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(d)
Changes in Internal Control over Financial Reporting</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form
20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16. [RESERVED]</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16A. AUDIT COMMITTEE FINANCIAL EXPERT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have one financial expert as of the date of this report. Our Board of Directors has determined that Mr. Charles Bathurst, Chair of our
audit committee, qualifies as an &#8220;audit committee financial expert&#8221; as defined in the SEC rules and satisfies the financial
sophistication requirements of The NASDAQ Global Market. Mr. Bathurst is &#8220;independent&#8221; as that term is defined in the rules
of the SEC and the applicable rules of the NASDAQ Global Market.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->144<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16B. CODE OF ETHICS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s Code of Ethics became effective on the effective date of the Registration Statement. The Code of Ethics is incorporated
by reference to exhibit 14.1 of the Registration Statement.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by our principal external auditors, for the periods indicated.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended<br/> December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">(In thousand)</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Audit fees</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">258</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">258</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Audit-related fees</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">42</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">37</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Tax fees</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">All other fees</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">300</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">295</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Audit
fees&#8221; represents the aggregate fees billed or to be billed for each of the fiscal years listed for professional services rendered
by our principal auditor for the audit of our annual financial statements.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#8220;Audit-related fees&#8221;
are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit and are not
reported under audit fees. These fees primarily include issuance of comfort letters.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Tax
fees&#8221; include fees for professional services rendered by our principal auditor for tax compliance and tax advice on actual or contemplated
transactions.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8220;Other
fees&#8221; include fees for services rendered by our independent registered public accounting firm with respect to other matters not
reported under &#8220;Audit fees&#8221;, &#8220;Audit-related fees&#8221; and &#8220;Tax fees&#8221;.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
policy of our audit committee is to pre-approve all audit and non-audit services provided by our principal auditor including audit services,
audit-related services, tax services and other services.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16F. CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16G. CORPORATE GOVERNANCE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
&#8220;Item 6. Directors, Senior Management and Employees&#8221; for more information.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16H. MINE SAFETY DISCLOSURE</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_029"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 151; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->145<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_030"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Part
III</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
17. FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have elected to provide financial statements pursuant to Item 18.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_032"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
18. FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements of Aptorum Group Limited, and its subsidiaries are included at the end of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><div><a id="a_033"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Item
19. EXHIBITS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>EXHIBIT
INDEX</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 9%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit&#160;No.</b></span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 1%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 90%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex1-2_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Third Amended and Restated Articles of Association, as amended**</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex2-1_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registrant&#8217;s Specimen Certificate for Ordinary Shares*<span style="text-decoration:underline;text-decoration: none">*</span></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.2</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018015857/ff12018a2ex4-3_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Underwriter&#8217;s
    Warrant+++</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.3</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex2-3_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Securities registered under Section 12 of the Exchange Act of 1934, as amended**</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.4</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020004797/ea119035ex99-3_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Warrant+</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018015857/ff12018a2ex1-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Underwriting Agreement+++</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointment Letter between
    the Company and Ian Huen (Founder, Chief Executive Officer &amp; Executive Director), dated September 25, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-2_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Letter between
    the Company and Sabrina Khan (Chief Financial Officer), dated September 1, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-3_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Addendum to Employment
    Letter between Company and Sabrina Khan (Chief Financial Officer) dated April 24, 2018*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-4_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointment Letter between
    the Company and Darren Lui (Chief Business Officer, President &amp; Director), dated September 25, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.6</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-5_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Letter between
    the Company and Clark Cheng (Chief Medical Officer &amp; Director), dated August 31, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.7</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-6_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Addendum to Appointment
    Letter between the Company and Clark Cheng (Chief Medical Officer &amp; Director), dated September 25, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.8</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-7_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Second Addendum to Appointment
    Letter between the Company and Clark Cheng (Chief Medical Officer &amp; Director), dated October 30, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.9</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-8_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Third Addendum to Appointment
    Letter between the Company and Clark Cheng (Chief Medical Officer &amp; Director), dated January&#160;2, 2018*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.10</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-9_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointment letter between
    the Company and Keith Chan (former Chief scientific officer) (Terminated March 13, 2019)*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.11</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-10_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointment Letter between
    the Company and Charles Bathurst (Independent Non-Executive Director), dated September 24, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.12</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-11_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointment Letter between
    the Company and Mirko Scherer (Independent Non-Executive Director), dated September 24, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.13</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-12_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between
    the Company and Justin Wu (Independent Non-Executive Director), dated September 18, 2017*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.14</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-13_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between
    the Company and Douglas Arner (Independent Non-Executive Director), dated February 13, 2018*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.15</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021060309/ea150652ex99-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2017 Share Option Plan,
    as amended <sup>(15)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.16</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-35_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Service Agreement Between
    Covar Pharmaceuticals Incorporated and Videns Incorporation Limited*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.17</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019006328/f20f2018ex4-32_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consulting Agreement between
    the Company and GloboAsia, LLC (includes provisions for the appointment of Keith Chan as member of the Scientific Advisory Board)
    dated March 13, 2019<sup>(5)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.18</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-32_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive Patent License
    Agreement for ALS-4 dated October 18, 2017<sup>(3)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.19</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex10-33_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">First Amendment to Exclusive License Agreement for ALS-4 dated June 7, 2018*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.20</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020010347/f20f2019ex4-35_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Second Amendment to Exclusive
    License Agreement for ALS-4 dated July 10, 2019<sup>(6)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.21</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019006328/f20f2018ex4-39_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive License Agreement
    for ALS-4 dated January 11, 2019<sup>(4)</sup></span></a></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->146<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.22</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019005349/f6k040219ex10-2_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement with Dr. Lee dated March 13, 2019++</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.23</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019007008/f6k042419ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Master Collaboration Agreement
    by and between the Company, A*ccelerate Technologies Pte. Ltd, and AENEAS CAPITAL LIMITED dated April 24, 2019<sup>(1)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.24</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019007008/f6k042419ex10-2_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bond Repurchase Agreement
    dated April 24, 2019<sup>(1)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.25</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019015761/f6k081419ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Line of Credit
    Agreement<sup>(2)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.26</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390019015761/f6k081419ex10-2_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Promissory Note<sup>(2)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.27</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; width: 90%; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020004797/ea119035ex99-2_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Securities Purchase Agreement+</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.28</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020010347/f20f2019ex4-44_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consulting agreement with
    CGY Investment Limited effective on January 10, 2020<sup>(6)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.29</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020010347/f20f2019ex4-46_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Administrative Consultant
    Services Agreement with Aeneas Management Limited dated January 1, 2019<sup>(6)</sup> (Terminated April 30, 2020)</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.30</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020010347/f20f2019ex4-47_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Secondment Agreement between
    the Company and Aenco Limited dated January 1, 2019<sup>(6)</sup> (Replaced April 1, 2020)</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.31</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020010347/f20f2019ex4-48_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Secondment Agreement (2)
    between the Company and Aenco Limited dated April 1, 2020<sup>(6)</sup> (Terminated September 30, 2020)</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.32</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021003841/ea133776ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Evaluation Agreement with
    Illumina Inc. (portions of the exhibit have been omitted because they (i) are not material and (ii) would likely cause competitive
    harm to the Registrant if publicly disclosed.)<sup>(7)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.33</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020004797/ea119035ex99-1_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Placement Agency Agreement,
    dated February 25, 2020 between the Company and Alliance Global Partners<sup>(8)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.34</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020004797/ea119035ex99-2_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Securities Purchase
    Agreement<sup>(8)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.35</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020004797/ea119035ex99-3_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Warrant<sup>(8)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.36</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020029907/ea127736ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Securities Purchase
    Agreement dates as of September 29, 2020, by and among the Company and the purchasers named therein<sup>(9)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.37</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020029907/ea127736ex4-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Warrant<sup>(9)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.38</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020029907/ea127736ex4-2_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Pre-Funded Warrant<sup>(9)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.39</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020029907/ea127736ex4-3_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Placement Agent
    Warrant<sup>(9)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.40</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021021984/f20f2020ex4-62_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exclusive License Agreement
    with Accelerate Technologies Pte Ltd.&#8217;s dated September 25, 2020<sup>(11, 12)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.41</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021018040/ea138489ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sales Agreement, dated
    March 26, 2021 between the Company and H.C. Wainwright<sup>(10)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.42</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021021984/f20f2020ex4-64_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Subscription and
    Shareholders Agreement dated as of September 25, 2020<sup>(11,12)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.43</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390020026236/ea126731ex10-40_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Contract Research Agreement between Aptorum Therapeutics Limited and Aeneas Technology (Hong Kong) Limited<sup>(12)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.44</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021060309/ea150652ex99-2_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loan Agreement between
    Aptorum Therapeutics Limited and Talem Medical Group Limited (portions of the exhibit have been omitted because they (i) are not
    material and (ii) would likely cause competitive harm to the Company if publicly disclosed.)<sup>(11)(13)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.45</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021060309/ea150652ex99-3_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Specific Security Deed
    between Aptorum Therapeutics Limited and Talem Medical Group Limited<sup>(13)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.46</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390021029202/ea141720ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Private Placement Shares
    Purchase Agreement with Jurchen Investment Corporation<sup>(14)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.47</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390022022702/f20f2021ex4-47_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concerted Action Agreement
    between Aptorum Therapeutics Limited and Peace Range Limited dated December 30, 2021 regarding to Mios Pharmaceuticals Limited&#160;<sup>(17)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.48</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390022022702/f20f2021ex4-48_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concerted Action Agreement
    between Aptorum Therapeutics Limited and Peace Range Limited dated December 30, 2021 regarding to Scipio Life Sciences Limited&#160;<sup>(17)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.49</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390022038559/ea162582ex10-0_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operations Services &amp;
    Secondment Agreement between Aptus Management Limited and MG Consultancy Limited&#160; <sup>(16)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.50</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390022078577/ea169770ex10-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Securities Purchase
    Agreement <sup>(18)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.51</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex4-51_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Appointment letter between the Company and Ian Huen (Non-Executive Director), dated May 27, 2022**</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.52</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="https://www.sec.gov/Archives/edgar/data/1734005/000121390023022946/ea175787ex99-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-binding Letter of Intent<sup>(20)</sup></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex8-1_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><span style="text-decoration:underline;text-decoration: none">List of Subsidiaries <sup>**</sup></span></span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex12-1_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)**</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex12-2_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)**</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="f20f2022ex13-1_aptorumgroup.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002***</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="f20f2022ex15-1_aptorumgroup.htm">Consent of Marcum Asia CPAs LLP**</a></span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.1</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1734005/000121390018012108/ff12018ex14-1_aptorum.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Code of Business Ethics*</span></a></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.INS</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Instance Document**</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.SCH</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Schema Document**</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.CAL</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Calculation Linkbase
    Document**</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.DEF</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Definition Linkbase
    Document**</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.LAB</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Label Linkbase Document**</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.PRE</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Presentation Linkbase
    Document**</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; ">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cover Page Interactive Data File (formatted as Inline
    XBRL and contained in Exhibit 101)**</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">***</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furnished with this annual
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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">**</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Filed with this annual
    report on Form 20-F</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Registration Statement Filed on Form F-1 on September 5, 2018</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">+++</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Registration Statement Filed on Form F-1 on November 15, 2018</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">++</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on April 1, 2019</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">+</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on February 26, 2020</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 153; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->147<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

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  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference to our Current Report on Form 6-K filed on April 24, 2019</span></p>
                                                                              <p style="margin-top: 0; margin-bottom: 0">&#160;</p></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on August 14, 2019</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; width: 29px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Registration Statement Filed on Form F-1 on September 5, 2018; portions of the exhibit were previously omitted in reliance
    on the confidential treatment provisions available pursuant to revised paragraph 4(a) of Instructions as to Exhibits of Form 20-F.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our annual report on Form 20-F filed on April 15, 2019; portions of the exhibit were previously omitted in reliance on the confidential
    treatment provisions available pursuant to revised paragraph 4(a) of Instructions as to Exhibits of Form 20-F.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our annual report on Form 20-F filed on April 15, 2019</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our annual report on Form 20-F filed on April 29, 2020. Certain information from this exhibit has been excluded from this exhibit
    because it both (i) is not material and (ii) would likely cause&#160;competitive harm to the Registrant if publicly disclosed.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on January 25, 2021; portions of the exhibit were omitted because they (i) are not material
    and (ii) would likely cause competitive harm to the Company if publicly disclosed.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(8)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on February 26, 2020</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on October 2, 2020</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(10)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on March 26, 2021</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(11)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain information from
    this exhibit has been excluded from this exhibit because it both (i) is not material and (ii) is the type that the registrant treats
    as private or confidential.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(12)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our annual report on Form 20-F filed on April 19, 2021</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(13)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on November 17, 2021</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(14)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on May 26, 2021</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(15)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on November 17, 2021</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(16)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on July 11, 2022.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(17)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our annual report on Form 20-F filed on April 29, 2022.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(18)</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated by reference
    to our Current Report on Form 6-K filed on December 9, 2022.</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif">&#160;</td>
    <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</td></tr>
  </table><div>
</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0px"></td><td style="width: 29px; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(19)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated
by reference to our Annual Report on Form 20-F/A filed on January 17, 2023.</span></td>
</tr><tr style="vertical-align: top; text-align: justify">
<td></td><td style="text-align: left"></td><td style="text-align: justify">&#160;</td></tr>
     </table><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0px"></td><td style="width: 29px; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(20)</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated
by reference to our Current Report on Form 6-K filed on March 27, 2023.</span></td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 154; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->148<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>SIGNATURES</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aptorum Group Limited</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td colspan="2" style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif">
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 60%">Date: April 28, 2023</td>
    <td style="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 4%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td style="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 36%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Darren Lui</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Darren Lui</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer, <br/>
Chief Accounting Officer</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman of the Board of Directors</span></td></tr>
  <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="font: 10pt Times New Roman, Times, Serif"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Principal Executive &amp; Financial Officer)</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 155; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->149<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Table of Contents</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; width: 89%; padding-left: 10pt; text-indent: -10pt"><a href="#fin_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Public Accounting Firm (Marcum Asia CPAs LLP PCAOB&#160;ID: <ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">5395</ix:nonNumeric>)</span></a></td> <td style="width: 1%">&#160;</td> <td style="white-space: nowrap; vertical-align: bottom; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</span></td></tr> <tr> <td style="vertical-align: top; padding-left: 10pt; text-indent: -10pt"><a href="#fin_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Balance Sheets as of December 31, 2022 and 2021</span></a></td> <td>&#160;</td> <td style="white-space: nowrap; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</span></td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10pt; text-indent: -10pt"><a href="#fin_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="white-space: nowrap; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</span></td></tr> <tr> <td style="vertical-align: top; padding-left: 10pt; text-indent: -10pt"><a href="#fin_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Equity for the years ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="white-space: nowrap; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</span></td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10pt; text-indent: -10pt"><a href="#fin_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020</span></a></td> <td>&#160;</td> <td style="white-space: nowrap; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-6</span></td></tr> <tr> <td style="vertical-align: top; padding-left: 10pt; text-indent: -10pt"><a href="#fin_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes to Consolidated Financial Statements</span></a></td> <td>&#160;</td> <td style="white-space: nowrap; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;<img alt="" src="image_014.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="fin_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Shareholders and Board of Directors of
Aptorum Group Limited</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Opinion on the Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of Aptorum Group Limited (the &#8220;Company&#8221;) as of December 31, 2022 and 2021, the related consolidated statements
of operations and comprehensive (loss) income, equity and cash flows for each of the three years in the period ended December 31, 2022,
and the related notes (collectively referred to as the &#8220;financial statements&#8221;). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally
accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Basis for Opinion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">Marcum Asia CPAs LLP</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Marcum Asia CPAs LLP</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have served as the Company&#8217;s auditor since 2017</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">New York, NY</ix:nonNumeric> </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>April 28, 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PCAOB ID. 5395</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">NEW YORK OFFICE &#8226; 7 Penn Plaza &#8226; Suite
830 &#8226; New York, New York &#8226; 10001</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">Phone 646.442.4845 &#8226; Fax 646.349.5200 &#8226;
www.marcumasia.com</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="fin_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2022 and 2021</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:DueFromBrokers" scale="0" unitRef="usd">652</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Other receivables and prepayments</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsCurrent" scale="0" unitRef="usd">12,688,300</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="0" unitRef="usd">2,825,059</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Operating lease right-of-use assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseRightOfUseAsset" scale="0" unitRef="usd">347,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsHeldInTrust" scale="0" unitRef="usd">9,744,958</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-7">-</div></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><div style="-sec-ix-hidden: hidden-fact-8">-</div></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold">EQUITY</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Additional paid-in capital</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Accumulated other comprehensive income (loss)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Accumulated deficit</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: left">Total equity attributable to the shareholders of Aptorum Group Limited</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in">(1)</td><td style="text-align: justify"><ix:footnote id="ix_0_footnote" xml:lang="en-US">All per share amounts and shares outstanding for all periods have been retroactively restated to reflect APTORUM GROUP LIMITED&#8217;s 1 for 10 reverse stock split, which was effective on January 23, 2023.</ix:footnote></td></tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 158; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="fin_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
(LOSS) INCOME </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For Years Ended December 31, 2022, 2021 and
2020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ResearchAndDevelopmentExpense" scale="0" unitRef="usd">9,219,595</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GeneralAndAdministrativeExpense" scale="0" unitRef="usd">5,220,405</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:LegalAndProfessionalFees" scale="0" unitRef="usd">2,888,140</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Total operating expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Gain on use of digital currencies</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Loss on disposal of subsidiaries</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-12">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Total other income (loss), net</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Net (loss) income</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfitLoss" scale="0" sign="-" unitRef="usd">11,525,102</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfitLoss" scale="0" unitRef="usd">4,920,167</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Net loss attributable to non-controlling interests</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToRedeemableNoncontrollingInterest" scale="0" sign="-" unitRef="usd">1,725,542</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToRedeemableNoncontrollingInterest" scale="0" sign="-" unitRef="usd">2,065,904</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAttributableToRedeemableNoncontrollingInterest" scale="0" sign="-" unitRef="usd">2,146,687</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Deemed dividend related to warrants down round provision</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-13">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="apm:DeemedDividendRelatedToWarrantsDownRoundProvision" scale="0" unitRef="usd">755,514</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Net (loss) income attributable to Aptorum Group Limited</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic" scale="0" sign="-" unitRef="usd">9,799,560</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic" scale="0" sign="-" unitRef="usd">25,048,389</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLossAvailableToCommonStockholdersBasic" scale="0" unitRef="usd">6,311,340</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Net (loss) income per share attributable to Aptorum Group Limited</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">- Basic<sup>(1)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" id="ix_4_fact" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares">2.75</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="2" format="ixt:num-dot-decimal" id="ix_5_fact" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares">7.15</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="2" format="ixt:num-dot-decimal" id="ix_6_fact" name="us-gaap:EarningsPerShareBasic" scale="0" unitRef="usdPershares">2.03</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">- Diluted<sup>(1)</sup></span></td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" id="ix_7_fact" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares">2.75</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c10" decimals="2" format="ixt:num-dot-decimal" id="ix_8_fact" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares">7.15</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c11" decimals="2" format="ixt:num-dot-decimal" id="ix_9_fact" name="us-gaap:EarningsPerShareDiluted" scale="0" unitRef="usdPershares">2.00</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">Weighted-average shares outstanding</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">- Basic<sup>(1)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" id="ix_10_fact" name="us-gaap:WeightedAverageNumberOfSharesOutstandingBasic" scale="0" unitRef="shares">3,569,484</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" id="ix_11_fact" name="us-gaap:WeightedAverageNumberOfSharesOutstandingBasic" scale="0" unitRef="shares">3,503,396</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" id="ix_12_fact" name="us-gaap:WeightedAverageNumberOfSharesOutstandingBasic" scale="0" unitRef="shares">3,113,588</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">- Diluted<sup>(1)</sup></span></td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" id="ix_13_fact" name="us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding" scale="0" unitRef="shares">3,569,484</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" id="ix_14_fact" name="us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding" scale="0" unitRef="shares">3,503,396</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" id="ix_15_fact" name="us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding" scale="0" unitRef="shares">3,153,447</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Net (loss) income</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">11,525,102</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">27,114,293</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" unitRef="usd">4,920,167</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Other comprehensive income (loss)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in">(1)</td><td style="text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US">All per share amounts and shares outstanding for all periods have been retroactively restated to reflect APTORUM GROUP LIMITED&#8217;s 1 for 10 reverse stock split, which was effective on January 23, 2023.</ix:footnote></td></tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="fin_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For Years Ended December 31, 2022, 2021 and
2020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-17">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Issuance of shares to non-controlling interest</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-20">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-21">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Warrant Exchange</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-25">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-28">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-29">-</div></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold; text-align: right"><div style="-sec-ix-hidden: hidden-fact-30">-</div></td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Share-based compensation</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-32">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-40">-</div></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-42">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-43">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-44">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-45">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-46">-</div></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-47">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-48">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-49">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-51">-</div></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-52">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-53">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-54">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt"><span style="font-size: 7pt">&#160;</span></td><td><span style="font-size: 7pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td><span style="font-size: 7pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td><span style="font-size: 7pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td><span style="font-size: 7pt">&#160;</span></td>
    <td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: right"><span style="font-size: 7pt">&#160;</span></td><td style="text-align: left"><span style="font-size: 7pt">&#160;</span></td><td><span style="font-size: 7pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-88">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-89">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-102">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">Exercise of options</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-108">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-109">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-110">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-111">-</div></td><td style="text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in">(1)</td><td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US">All per share amounts and shares outstanding for all periods have been retroactively restated to reflect APTORUM GROUP LIMITED&#8217;s 1 for 10 reverse stock split, which was effective on January 23, 2023.</ix:footnote></td></tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the consolidated financial
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 160; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="fin_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF CASH FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For Years Ended December 31, 2022, 2021 and
2020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Share-based compensation</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-122">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Loss on investments in derivatives, net</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-125">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-129">-</div></td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-131">-</div></td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-132">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Loss on disposal of property, plant and equipment</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Impairment loss of property, plant and equipment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-134">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Impairment loss of intangible assets</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Interest income</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:InterestIncome" scale="0" unitRef="usd">235,560</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Accretion of finance lease obligation</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:AccretionOfFinanceLeaseObligation" scale="0" unitRef="usd">1,435</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: left">Changes in operating assets and liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Accounts receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd">95,704</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd">16,501</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd">21,678</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in">Inventories</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Other receivables and prepayments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherNoncurrentAssets" scale="0" unitRef="usd">105,584</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherNoncurrentAssets" scale="0" unitRef="usd">358,365</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Long-term deposits</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="0" sign="-" unitRef="usd">19,328</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-138">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="0" sign="-" unitRef="usd">20</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Due from brokers</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseDueFromOtherRelatedParties" scale="0" sign="-" unitRef="usd">75,728</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseDueFromOtherRelatedParties" scale="0" sign="-" unitRef="usd">83,957</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseDueFromOtherRelatedParties" scale="0" sign="-" unitRef="usd">156,668</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Amounts due from related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:IncreaseDecreaseInDueFromRelatedParty" scale="0" unitRef="usd">46,349</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="apm:IncreaseDecreaseInDueFromRelatedParty" scale="0" sign="-" unitRef="usd">112,635</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="apm:IncreaseDecreaseInDueFromRelatedParty" scale="0" sign="-" unitRef="usd">50,962</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Amounts due to related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDueToRelatedParties" scale="0" sign="-" unitRef="usd">6,805</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDueToRelatedParties" scale="0" sign="-" unitRef="usd">264,934</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDueToRelatedParties" scale="0" sign="-" unitRef="usd">120,560</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Accounts payable and accrued expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd">1,918,751</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd">855,272</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd">800,960</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Operating lease liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherOperatingLiabilities" scale="0" sign="-" unitRef="usd">369,505</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherOperatingLiabilities" scale="0" sign="-" unitRef="usd">450,807</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherOperatingLiabilities" scale="0" sign="-" unitRef="usd">457,508</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">12,318,965</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">14,651,633</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">15,931,913</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: left">Cash flows from investing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Purchases of intangible assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-139">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd">6,026</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-140">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Purchases of property, plant and equipment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">186,916</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">131,750</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">161,314</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-144">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Loan to a related party</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireLoansReceivable" scale="0" unitRef="usd">330,341</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-146">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Repayment of loan from a related party</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" unitRef="usd">16,507,039</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: left">Cash flows from financing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Loan from related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromRelatedPartyDebt" scale="0" unitRef="usd">500,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Repayment of loan due to related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-149">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">5,489,665</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Proceeds from issuance of subsidiaries shares</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfWarrants" scale="0" unitRef="usd">5,360</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-150">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-151">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Proceeds from issuance of Class A Ordinary Shares and warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-152">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd">4,000,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Payments of offering costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-153">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-154">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsOfDebtIssuanceCosts" scale="0" unitRef="usd">715,091</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in">Exercise of share options</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromStockOptionsExercised" scale="0" unitRef="usd">169,460</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromStockOptionsExercised" scale="0" unitRef="usd">694,224</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-155">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in">Exercise of warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-156">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromWarrantExercises" scale="0" unitRef="usd">130,012</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-157">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Loan from a bank</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromBankDebt" scale="0" unitRef="usd">3,000,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-158">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-159">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Proceeds from issuance of convertible notes</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromConvertibleDebt" scale="0" unitRef="usd">3,000,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-160">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-161">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Payment of finance lease obligations</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:PaymentOfFinanceLeaseObligations" scale="0" unitRef="usd">49,358</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="apm:PaymentOfFinanceLeaseObligations" scale="0" unitRef="usd">53,846</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="apm:PaymentOfFinanceLeaseObligations" scale="0" unitRef="usd">53,845</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">6,625,462</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">2,780,725</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">12,421,932</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Net (decrease) increase in cash and restricted cash</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect" scale="0" sign="-" unitRef="usd">3,248,607</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c10" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect" scale="0" unitRef="usd">4,636,131</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c11" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect" scale="0" sign="-" unitRef="usd">1,667,817</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Cash and restricted cash &#8211; Beginning of year</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd">8,261,487</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to the consolidated financial
statements.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 161; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="fin_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>1. ORGANIZATION</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_2" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements include
the financial statements of Aptorum Group Limited (the &#8220;Company&#8221;) and its subsidiaries. The Company and its subsidiaries
are hereinafter collectively referred to as the &#8220;Group&#8221;.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_3" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company, formerly known as APTUS Holdings
Limited and STRIKER ASIA OPPORTUNITIES FUND CORPORATION, is a company incorporated on September 13, 2010 under the laws of the Cayman
Islands with limited liability.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_4" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company researches and develops life science
and biopharmaceutical products within its wholly-owned subsidiary, Aptorum Therapeutics Limited, formerly known as APTUS Therapeutics
Limited (&#8220;Aptorum Therapeutics&#8221;) and its indirect subsidiary companies (collectively, &#8220;Aptorum Therapeutics Group&#8221;).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_5" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Below summarizes the list of the major subsidiaries consolidated as
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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_1" escape="true" name="us-gaap:SubstantialDoubtAboutGoingConcernTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>2. LIQUIDITY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_2" id="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group reported a net loss of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdjustmentsToReconcileNetIncomeLossToCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">11,525,102</ix:nonFraction>
and net operating cash outflow of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">12,318,965</ix:nonFraction> for the year ended December 31, 2022. In addition, the Group had an accumulated deficit
of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:RetainedEarningAccumulatedDeficit" scale="0" unitRef="usd">65,337,075</ix:nonFraction> as of December 31, 2022. The Group&#8217;s operating results for future periods are subject to numerous uncertainties
and it is uncertain if the Group will be able to reduce or eliminate its net losses for the foreseeable future. If management is not
able to generate significant revenues from its product candidates currently in development, the Group may not be able to achieve profitability.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_3" id="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group&#8217;s principal sources of liquidity
have been cash and line of credit facility from related parties and banks. As of the date of issuance of the consolidated financial statements,
the Group has approximately $<ix:nonFraction contextRef="c82" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:RestrictedCashEquivalents" scale="6" unitRef="usd">1.4</ix:nonFraction> million of restricted and unrestricted cash (excluded $<ix:nonFraction contextRef="c4" decimals="-6" format="ixt:num-dot-decimal" name="apm:UnrestrictedCashEquivalents" scale="6" unitRef="usd">3</ix:nonFraction> million time deposits pledged to a loan), and
approximately $<ix:nonFraction contextRef="c83" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityIncreaseDecreaseOtherNet" scale="6" unitRef="usd">9.5</ix:nonFraction> million of undrawn line of credit facilities from a related party. In addition, the Group maintains its operating costs
at a level through strict cost control and budget until the completion of the reverse takeover transaction.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_SubstantialDoubtAboutGoingConcernTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group believes that available cash, together
with the efforts from aforementioned management plan and actions, should enable the Group to meet current anticipated cash needs for
at least the next 12 months after the date that the consolidated financial statements are issued and the Group has prepared the consolidated
financial statements on a going concern basis. We may, however, need additional capital in the future to fund our continued operations.
If we determine that our cash requirements exceed the amount of cash and cash equivalents we have at the time, we may seek to issue equity
or debt securities or obtain credit facilities. The issuance and sale of additional equity or convertible debts would result in further
dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating
covenants that might restrict our operations. We cannot assure you the financing will be available in amounts or on terms acceptable
to us, if at all.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_1" escape="true" name="us-gaap:SignificantAccountingPoliciesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_2" id="_SignificantAccountingPoliciesTextBlock-c0_cont_1"><ix:nonNumeric contextRef="c0" continuedAt="_ConsolidationPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ConsolidationPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Principles of presentation and consolidation</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_3" id="_SignificantAccountingPoliciesTextBlock-c0_cont_2"><ix:continuation id="_ConsolidationPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The consolidated financial statements of the
Group are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States
of America (&#8220;U.S. GAAP&#8221;) and include the accounts of the Company, its direct and indirect wholly and majority owned subsidiaries.
In accordance with the provisions of Accounting Standards Codification (&#8220;ASC&#8221;) 810, Consolidation, we consolidate any variable
interest entity (&#8220;VIE&#8221;) of which we are the primary beneficiary. The typical condition for a controlling financial interest
ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities,
such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate
a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE&#8217;s economic performance
and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from
the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest
when we are not considered the primary beneficiary. We have determined that we are not one of the primary beneficiary of the VIE (see
Note 14, Variable Interest Entity). We evaluate our relationships with the VIE on an ongoing basis to determine whether we become the
primary beneficiary. All material intercompany balances and transactions have been eliminated in preparation of the consolidated financial
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 163; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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have been separately disclosed in the Group&#8217;s consolidated statements of operations and comprehensive loss to distinguish the interests
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</div><div>

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and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as income
and expenses during the reporting period. Significant accounting estimates reflected in the Group&#8217;s consolidated financial statements
include valuation of equity securities, fair value of investments in securities, convertible debts, finance lease, warrants and share
options, the useful lives of intangible assets and property, plant and equipment, impairment of long-lived assets, valuation allowance
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in Hong Kong is Hong Kong Dollars (&#8220;HKD&#8221;), the functional currency of a subsidiary in Singapore is Singapore Dollars (&#8220;SGD&#8221;),
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currency of the environment in which it primarily generates and expends cash. The management considered various indicators, such as cash
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</div><div>

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translated into USD. Assets and liabilities are translated from each subsidiary&#8217;s functional currency at the exchange rates on
the balance sheet dates, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated
using the average exchange rates for the year. Translation adjustments are reported as cumulative translation adjustments and are shown
as a separate component of other comprehensive income or loss in the consolidated statements of operations and comprehensive income or
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 164; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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</div><div>

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in price levels, or other causes, the inventories are written down to net realizable value.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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estimated in accordance with ASC Topic 326, <i>Credit Losses</i> and records the allowance for credit losses as an offset to accounts
receivable, and the expected credit losses charged to the allowance is included in other operating expenses in the consolidated statements
of operations. In determining expected credit losses, the Group consider the historical level of credit losses, current economic trends,
and reasonable and supportable forecasts that affect the collectability of the future cash flows. As of December 31, 2022 and 2021, no
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</div><div>

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</div><div>

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measured at fair value and classified within Level 1 and 2 in the fair value hierarchy because the Group either uses quoted prices for
identical assets in active markets, inputs that are based upon quoted prices for similar instruments in active markets, or quoted prices
for identical assets in markets with insufficient volume or infrequent transaction (less active markets).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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that are not required to be consolidated under the variable interest or voting models. Long-term investments are classified as non-current
assets on the consolidated balance sheets as those investments do not have stated contractual maturity dates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach
as of the transaction date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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an investment by investment basis at initial recognition. The fair value of such investments is based on quoted prices in an active market,
if any, or recent orderly transactions for identical or similar investment of the same issuer. Changes in the fair value of these equity
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 165; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the
Group considers the principal or most advantageous market in which it would transact its business, and it considers assumptions that market
participants would use when pricing the asset or liability.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_31" id="_SignificantAccountingPoliciesTextBlock-c0_cont_30"><ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_4" id="_FairValueMeasurementPolicyPolicyTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  <tr style="vertical-align: top">
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</div><div>

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use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument&#8217;s categorization
within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Group has
estimated the fair value amounts of its financial instruments using the available market information and valuation methodologies considered
to be appropriate and has determined that the carrying value of the Group&#8217;s cash, restricted cash, accounts receivable, due from
brokers, other receivables and prepayments, amounts due from/to related parties, accounts payable and accrued expenses, loan receivables
from related parties, loan payables, and loan payables to a related party as of December 31, 2022 and 2021 approximate fair value due
to the short-term nature of these assets and liabilities.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major
additions to physical properties are capitalized.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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impairment losses. Cost comprises of cost of laboratory equipment delivered but not ready to be used, together with interest expense capitalized
during the period of construction or installation and testing. Capitalization of these costs ceases and the asset concerned is transferred
to the appropriate fixed assets category when substantially all the activities necessary to prepare the asset for its intended use are
completed.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_37" id="_SignificantAccountingPoliciesTextBlock-c0_cont_36"><ix:nonNumeric contextRef="c0" escape="true" name="apm:PropertyPlantAndEquipmentUsefullLifeTableTextBlock"><ix:continuation continuedAt="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_5" id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_4"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon sale or disposal, the applicable amounts
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credited to income.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 166; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_40" id="_SignificantAccountingPoliciesTextBlock-c0_cont_39"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_2" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indefinite-lived intangible assets are tested
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amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair values are less than
their carrying values.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_41" id="_SignificantAccountingPoliciesTextBlock-c0_cont_40"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_3" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Finite-lived intangible assets are carried at
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which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Group. These
intangible assets are tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may
be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts.</p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_42" id="_SignificantAccountingPoliciesTextBlock-c0_cont_41"><ix:continuation continuedAt="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_4" id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><br/>
The Group may rely on a qualitative assessment when performing its intangible asset impairment test. Otherwise, the impairment evaluation
is performed at the lowest level of identifiable cash flows independent of other assets.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_43" id="_SignificantAccountingPoliciesTextBlock-c0_cont_42"><ix:continuation id="_GoodwillAndIntangibleAssetsPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group&#8217;s intangible assets mainly consist
of computer software, exclusive rights in prepaid patented and unpatented licenses. The prepaid patented licenses are for clinical purpose
or further development into other products. Prepaid unpatented license is for further development, once the associated research and development
efforts are completed, the prepaid unpatented license will be reclassified as a finite-lived asset and is amortized over its useful life.
The estimated useful life of the exclusive rights in using patents is generally the remaining patent life from the acquisition date to
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will assess the intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may no longer be recoverable.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_44" id="_SignificantAccountingPoliciesTextBlock-c0_cont_43"><ix:nonNumeric contextRef="c0" continuedAt="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Impairment of long-lived assets</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_45" id="_SignificantAccountingPoliciesTextBlock-c0_cont_44"><ix:continuation id="_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events
occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash
flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow
is less than the carrying amount of the assets, the Group would recognize an impairment loss, which is the excess of carrying amount over
the fair value of the assets, using the expected future discounted cash flows.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_46" id="_SignificantAccountingPoliciesTextBlock-c0_cont_45"><ix:nonNumeric contextRef="c0" continuedAt="_DebtPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:DebtPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Convertible notes</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_47" id="_SignificantAccountingPoliciesTextBlock-c0_cont_46"><ix:continuation continuedAt="_DebtPolicyTextBlock-c0_cont_2" id="_DebtPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group evaluates and account for conversion
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_48" id="_SignificantAccountingPoliciesTextBlock-c0_cont_47"><ix:continuation continuedAt="_DebtPolicyTextBlock-c0_cont_3" id="_DebtPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Applicable 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 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_49" id="_SignificantAccountingPoliciesTextBlock-c0_cont_48"><ix:continuation id="_DebtPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group accounts for convertible notes (when
it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Group
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 Class A Ordinary Shares 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.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 167; Value: 1 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

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if the arrangement is, or contains, a lease. Operating lease liabilities are recognized at lease commencement based on the present value
of lease payments over the lease term. Operating lease right-of-use assets are initially measured at cost, which comprises the initial
amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs
incurred and less any lease incentives received. As the rate implicit in the lease cannot be readily determined, the Group uses incremental
borrowing rate at the lease commencement date in determining the imputed interest and present value of lease payments. The incremental
borrowing rate is determined based on the rate of interest that the Group would have to pay to borrow an amount equal to the lease payments
on a collateralized basis over a similar term in a similar economic environment. The lease term for all of the Group&#8217;s leases includes
the non-cancellable period of the lease plus any additional periods covered by either a Group&#8217;s option to extend (or not to terminate)
the lease that the Group is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
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</div><div>

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assets or lease liabilities for leases with an initial term of 12 months or less and the Group recognizes lease expense for these leases
on a straight-line basis over the lease terms.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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and risks of ownership of assets to the Group, other than legal title, are accounted for as finance leases. At the inception of a finance
lease, the cost of the leased asset is capitalized at the present value of the minimum lease payments and recorded together with the obligation,
excluding the interest element, to reflect the purchase and financing. Assets held under capitalized finance leases are included in property,
plant and equipment, and depreciated over the shorter of the lease terms and the estimated useful lives of the assets. The interest expenses
of such leases are charged to the consolidated statements of operations to provide a constant periodic rate of charge over the lease terms.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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Shares, the Company may issue warrants to purchase Class A Ordinary Shares. Warrants classified as equity are initially recorded at fair
value and subsequent changes in fair value are not recognized.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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</div><div>

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</div><div>

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changes resulting from a patient&#8217;s ability to pay are recorded as bad debt expense, which is included as a component of other operating
expenses in the consolidated statements of operations. During the years ended&#160;December 31, 2022,&#160;2021,&#160;and&#160;2020,&#160;the
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</div><div>

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</div><div>

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medicine.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including
amortization of the patent license, depreciation of laboratory equipment, costs of engaging external consultants, advisors and contracted
research organization to conduct preclinical development activities and trials, payroll expenses to research and development staff, and
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 168; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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for the share options granted to directors, employees, external consultants and advisors to measure the cost services received in exchange
for the share based awards. The fair value of share option awards with only service condition is estimated on the grant or offering date
using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate,
expected term and expected volatility. These inputs are subjective and generally require significant judgment. The resulting cost is recognized
over the period during which a director, employee, external consultant or advisor is required to provide service in exchange for the awards,
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</div><div>

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cost of healthcare services, research and development expenses, general and administrative fees and legal and professional fees in the
consolidated statements of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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the distinct non-financial assets, and determines when control transfers and, therefore, when to derecognize the asset. Additionally,
the Group applies the measurement principles of revenue from contracts with customers within U.S. GAAP to determine the amount of consideration
to include in the calculation of the gain or loss for the non-financial asset. Any gains or losses have been included within other income
(loss), net.&#160;</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_70" id="_SignificantAccountingPoliciesTextBlock-c0_cont_69"><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Income taxes</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_71" id="_SignificantAccountingPoliciesTextBlock-c0_cont_70"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_2" id="_IncomeTaxPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group accounts for income taxes under the
asset and liability method. Under this method, deferred income taxes are determined based on differences between the financial carrying
amounts of existing assets and liabilities and their tax bases. Income taxes are provided for in accordance with the laws of the relevant
taxing authorities.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_72" id="_SignificantAccountingPoliciesTextBlock-c0_cont_71"><ix:continuation id="_IncomeTaxPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A valuation allowance is provided for deferred
tax assets if it is more likely than not that these items will either expire before the Group is able to realize their benefits, or that
future deductibility is uncertain. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_73" id="_SignificantAccountingPoliciesTextBlock-c0_cont_72"><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxUncertaintiesPolicy-c0_cont_1" escape="true" name="us-gaap:IncomeTaxUncertaintiesPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Uncertain tax positions</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition
by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit,
including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest
amount that is more than <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateContinuingOperations" scale="-2" unitRef="pure">50</ix:nonFraction>% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized
and recorded as necessary in the provision for income taxes. The Group recognizes interest on non-payment of income taxes and penalties
associated with tax positions when a tax position does not meet more likely than not thresholds be sustained under examination. The tax
returns of the Group&#8217;s Hong Kong subsidiaries are subject to examination by the relevant tax authorities. According to the Hong
Kong Inland Revenue Department, the statute of limitation is six years if any company chargeable with tax has not been assessed or has
been assessed at less than the proper amount, the statute of limitation is extended to ten years if the underpayment of taxes is due to
fraud or willful evasion. According to United Kingdom, Singapore, the United States, Canada and Ireland tax rule, trading losses are available
to be carried forward indefinitely. The Group did not have any material interest or penalties associated with tax positions for the years
ended December 31, 2022, 2021 and 2020, and did not have any significant unrecognized uncertain tax positions as of December 31, 2022
and 2021. The Group does not believe that its assessment regarding unrecognized tax benefits will materially change over the next twelve
months.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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expenses, gains and losses be included in net income or loss. Although certain changes in assets and liabilities are reported as separate
components of the equity section of the consolidated balance sheets, such items, along with net income or loss, are components of comprehensive
income or loss. The components of other comprehensive income or loss consist of exchange differences on translation of foreign operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_78" id="_SignificantAccountingPoliciesTextBlock-c0_cont_77"><ix:continuation id="_EarningsPerSharePolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Basic net income or loss per share is computed
by dividing net income or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during
the period. Diluted net income or loss per share reflects the potential dilution that could occur if securities or other contracts to
issue ordinary shares were exercised or converted into ordinary shares. Potential dilutive securities are excluded from the calculation
of diluted loss per share in loss periods as their effect would be anti-dilutive.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 169; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_80" id="_SignificantAccountingPoliciesTextBlock-c0_cont_79"><ix:continuation continuedAt="apm_RisksAndUncertaintiesPolicyTextBlock-c0_cont_2" id="apm_RisksAndUncertaintiesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group is subject to a number of risks associated
with companies at a similar stage, including dependence on key individuals, competition from similar services and larger companies, volatility
of the industry, ability to obtain regulatory clearance, ability to obtain adequate financing to support growth, the ability to attract
and retain additional qualified personnel to manage the anticipated growth of the Group and general economic conditions.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_81" id="_SignificantAccountingPoliciesTextBlock-c0_cont_80"><ix:continuation id="apm_RisksAndUncertaintiesPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group is currently evaluating the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Group&#8217;s
financial position and results of its operations, the specific impact is not readily determinable as of the date of the issuance of these
financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this
uncertainty.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_82" id="_SignificantAccountingPoliciesTextBlock-c0_cont_81"><ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Recently adopted accounting pronouncements</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_83" id="_SignificantAccountingPoliciesTextBlock-c0_cont_82"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2019, the FASB issued ASU 2019-12,
Income Taxes (Topic 740): &#8220;Simplifying the Accounting for Income Taxes&#8221; (&#8220;ASU 2019-12&#8221;), which simplifies the
accounting for income taxes. The Group adopted this standard effective January 1, 2022. The adoption did not have a material effect on
the Group&#8217;s consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p></ix:continuation></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_84" id="_SignificantAccountingPoliciesTextBlock-c0_cont_83"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2020, the FASB issued ASU 2020-06, Debt
- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity&#8217;s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity&#8217;s Own Equity (&#8220;ASU 2020-06&#8221;). ASU 2020-06 simplifies
the accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature models used to separately
account for embedded conversion features as a component of equity. Instead, the entity will account for the convertible debt securities
as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives. Additionally, the guidance
requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include
the effect of potential share settlement for instruments that may be settled in cash or shares. The Group adopted this standard effective
January 1, 2022. The adoption did not have any impact on the Group&#8217;s consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_85" id="_SignificantAccountingPoliciesTextBlock-c0_cont_84"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_4" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2021, the FASB issued ASU No. 2021-04,
Issuer&#8217;s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The ASU addresses
the previous lack of specific guidance in the accounting standards codification related to modifications or exchanges of freestanding
equity-classified written call options (such as warrants) by specifying the accounting for various modification scenarios. The Group adopted
this standard effective January 1, 2022. The adoption does not have a material effect on the Group&#8217;s consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_86" id="_SignificantAccountingPoliciesTextBlock-c0_cont_85"><ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2021, the FASB issued ASU 2021-10,
Government Assistance (Topic 832). This ASU requires business entities to disclose information about government assistance they receive
if the transactions were accounted for by analogy to either a grant or a contribution accounting model. The disclosure requirements include
the nature of the transaction and the related accounting policy used, the line items on the balance sheets and statements of operations
that are affected and the amounts applicable to each financial statement line item and the significant terms and conditions of the transactions.
The Group adopted this standard effective January 1, 2022. The adoption does not have a material effect on the Group&#8217;s consolidated
financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_87" id="_SignificantAccountingPoliciesTextBlock-c0_cont_86"><ix:nonNumeric contextRef="c0" continuedAt="apm_RecentlyIssuedAccountingStandardsWhichHaveNotYetBeenAdoptedPolicyTextBlock-c0_cont_1" escape="true" name="apm:RecentlyIssuedAccountingStandardsWhichHaveNotYetBeenAdoptedPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Recently issued accounting standards which have not yet been adopted</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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as defined in the Jumpstart Our Business Startups Act of 2010 (the &#8220;JOBS Act&#8221;). Under the JOBS Act, the emerging growth companies
(&#8220;EGCs&#8221;) can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such
time as those standards apply to private companies.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_88"><ix:continuation id="apm_RecentlyIssuedAccountingStandardsWhichHaveNotYetBeenAdoptedPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group does not believe other recently issued
but not yet effective accounting standards, if currently adopted, would have a material impact on the consolidated balance sheets, consolidated
statements of operations and cash flows.</p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

</div><ix:continuation id="apm_RevenueTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021 and
2020, all revenue came from provision of healthcare services in Hong Kong.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><b>&#160;</b></span></p><div>

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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_2" id="_FairValueDisclosuresTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Assets Measured at Fair Value on a Recurring Basis</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt"><b>&#160;</b></span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_3" id="_FairValueDisclosuresTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides the assets and liabilities
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</div><div>

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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_5" id="_FairValueDisclosuresTextBlock-c0_cont_4"><ix:continuation id="_FairValueAssetsMeasuredOnRecurringBasisTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_6" id="_FairValueDisclosuresTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a reconciliation of Level 3 assets
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_7" id="_FairValueDisclosuresTextBlock-c0_cont_6"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisUnobservableInputReconciliationTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_8" id="_FairValueDisclosuresTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents the quantitative
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unobservable internally-developed inputs:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: center">&#160;</td><td>&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_10" id="_FairValueDisclosuresTextBlock-c0_cont_9"><ix:continuation id="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 171; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_11" id="_FairValueDisclosuresTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Non-marketable investments</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_12" id="_FairValueDisclosuresTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">The Group&#8217;s
non-marketable investments are investments in privately held companies without readily determinable fair values. The carrying value of
the non-marketable investments are adjusted based on price changes from observable transactions of identical or similar securities of
the same issuer (referred to as the measurement alternative) or for impairment </span>if <span style="font-size: 10pt">the carrying amount
of the non-marketable investments may not be fully recoverable. Any changes in carrying value are recorded within other income (loss),
net in the consolidated statements of operations.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_13" id="_FairValueDisclosuresTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary of annual upward or
downwards adjustments and impairment recorded in other income (loss), net, and included as adjustments to the carrying value of non-marketable
investments held as of&#160;December 31, 2022, 2021 and 2020 based on the observable price in an orderly transaction for the same or similar
security of the same issuers:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_14" id="_FairValueDisclosuresTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfUnrealizedLossOnInvestmentsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_17" id="_FairValueDisclosuresTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" escape="true" name="apm:ScheduleOfCarryingValueOfOurNonmarketableInvestmentsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_18" id="_FairValueDisclosuresTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There was no transferred of non-marketable investments
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</div><div>

</div><ix:continuation continuedAt="_FairValueDisclosuresTextBlock-c0_cont_19" id="_FairValueDisclosuresTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Equity method investment, fair value option</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_FairValueDisclosuresTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2021, one of the Group&#8217;s subsidiaries,
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ordinary shares to various parties in exchange of licenses or cash. <ix:nonNumeric contextRef="c0" name="us-gaap:KeyProvisionsOfOperatingOrPartnershipAgreementDescription">Each Class A share of Libra is entitled to 1 vote while each Class
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option can better reflect the true value of Libra. Pursuant to ASC 825 &#8211; Financial Instruments (&#8220;ASC 825&#8221;), the Group
elected to apply the fair value option for its investments in Libra and will remeasure its investments in Libra at fair value every reporting
period. For the year ended December 31, 2022 and 2021, there was no change in fair value of equity method investment, at fair value.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

</div><ix:continuation continuedAt="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_2" id="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other receivables and prepayments as of December 31, 2022 and 2021
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</div><div>

</div><ix:continuation id="_OtherIncomeAndOtherExpenseDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFinancingReceivablesMinimumPaymentsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="apm_DigitalCurrenciesTextBlock-c0_cont_1" escape="true" name="apm:DigitalCurrenciesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>7. <span style="text-transform: uppercase">Digital Currencies</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

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</div><div>

</div><ix:continuation id="apm_DigitalCurrenciesTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="apm:AdditionalInformationAboutDigitalCurrenciesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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</div><div>

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</div><div>

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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_4" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation expenses for property, plant and
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</div><div>

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</div><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2021, the Group
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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</div><div>

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    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_3" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022 and 2021, the Group has
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therapeutics segment respectively. Pursuant to the license agreements, the Group paid upfront payments and became the exclusive licensee
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</div><div>

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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_6" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group wrote off the cost and the related amortization
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</div><div>

</div><ix:continuation continuedAt="_IntangibleAssetsDisclosureTextBlock-c0_cont_7" id="_IntangibleAssetsDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group expects amortization expense related
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</div><div>

</div><ix:continuation id="_IntangibleAssetsDisclosureTextBlock-c0_cont_7"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:FiniteLivedIntangibleAssetsAmortizationExpenseTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 174; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->19<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_LongTermDebtTextBlock-c0_cont_1" escape="true" name="us-gaap:LongTermDebtTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>10. LONG-TERM DEPOSITS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

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</div><div>

</div><ix:continuation id="_LongTermDebtTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDebtTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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</div><div>

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</div><div>

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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>12. INCOME TAXES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The&#160;Company and&#160;its subsidiaries file tax returns separately.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_3" id="_IncomeTaxDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Income taxes</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_4" id="_IncomeTaxDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cayman Islands: under the current laws of the
Cayman Islands, the Company and its subsidiaries in the Cayman Islands are not subject to taxes on their income and capital gains.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_5" id="_IncomeTaxDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Hong Kong: in accordance with the relevant tax
laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax
rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland
Revenue (Amendment) (No.3) Ordinance 2018 (the &#8220;Ordinance&#8221;). <ix:nonNumeric contextRef="c147" name="apm:IncomeTaxDescription">Under the two-tiered profits tax rate regime, the first $2 million
of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective
from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity&#8217;s
assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment
is not elected by the Group, all the subsidiaries registered in Hong Kong are subject to income tax at a rate of 16.5%.</ix:nonNumeric> The subsidiaries
registered in Hong Kong did not have assessable profits that were derived Hong Kong during the years ended December 31, 2022, 2021 and
2020. Therefore, no Hong Kong profit tax has been provided for in the periods presented. Our returns for 2016 and subsequent tax years
remain subject to examination by Hong Kong Inland Revenue Department.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 175; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_6" id="_IncomeTaxDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">United Kingdom: in accordance with the relevant
tax laws and regulations of United Kingdom, a company registered in the United Kingdom is subject to income taxes within United Kingdom
at the applicable tax rate on taxable income. All the United Kingdom subsidiaries that are not entitled to any tax holiday were subject
to income tax at a rate of <ix:nonFraction contextRef="c148" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">19</ix:nonFraction>%. The subsidiary in United Kingdom did not have assessable profits that were derived from United Kingdom
during the years ended December 31, 2022, 2021 and 2020. Therefore, no United Kingdom profit tax has been provided for in the periods
presented. Our returns for 2018 and subsequent tax years remain subject to examination by the UK tax authority.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_7" id="_IncomeTaxDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Singapore: in accordance with the relevant tax
laws and regulations of Singapore, a company registered in the Singapore is subject to income taxes within Singapore at the applicable
tax rate on taxable income. All the Singapore subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate
of <ix:nonFraction contextRef="c149" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">17</ix:nonFraction>%. The subsidiary in Singapore did not have assessable profits that were derived from Singapore during the years ended December 31,
2022, 2021 and 2020. Therefore, no Singapore profit tax has been provided for in the periods presented. Our returns for 2018 and subsequent
tax years remain subject to examination by the Singapore tax authority.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_8" id="_IncomeTaxDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">United States (Nevada): in accordance with the
relevant tax laws and regulations of the United States, a company registered in the United States is subject to income taxes within the
United States at the applicable tax rate on taxable income. All the United States subsidiaries in Nevada that are not entitled to any
tax holiday were subject to income tax at a rate of <ix:nonFraction contextRef="c150" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">21</ix:nonFraction>%. The subsidiary in the United States did not have assessable profits that were
derived from the United States during the years ended December 31, 2022, 2021 and 2020. Therefore, no United States profit tax has been
provided for in the periods presented. Our returns for 2019 and subsequent tax years remain subject to examination by Internal Revenue
Service.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_9" id="_IncomeTaxDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Canada: in accordance with the relevant tax laws
and regulations of Canada, a company registered in Canada is subject to income taxes within Canada at the applicable tax rate on taxable
income. All the Canada subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of <ix:nonFraction contextRef="c151" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate" scale="-2" unitRef="pure">15</ix:nonFraction>%. The subsidiary
in Canada did not have assessable profits that were derived from Canada during the years ended December 31, 2022, 2021 and 2020. Therefore,
no Canada profit tax has been provided for in the periods presented. Our returns for 2018 and subsequent tax years remain subject to examination
by the Canada tax authority.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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and regulations of Ireland, a company registered in Ireland is subject to income taxes within Ireland at the applicable tax rate on taxable
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in Ireland did not have assessable profits that were derived from Ireland during the years ended December 31, 2022, 2021 and 2020. Therefore,
no Ireland profit tax has been provided for in the periods presented. Our returns for 2018 and subsequent tax years remain subject to
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_11" id="_IncomeTaxDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The components of the provision for income taxes expenses are:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_12" id="_IncomeTaxDisclosureTextBlock-c0_cont_11"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_14" id="_IncomeTaxDisclosureTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" escape="true" name="apm:ScheduleOfIncomeTaxesExpensesStatutoryTaxRate"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-216">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-218">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_15" id="_IncomeTaxDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Deferred tax asset, net</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_16" id="_IncomeTaxDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred tax assets and deferred tax liabilities
reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose
and the tax bases used for income tax purpose. The following represents the tax effect of each major type of temporary difference.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>Deferred tax asset:</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 9pt">Tax loss carry forward</td><td style="width: 1%">&#160;</td>
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    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Deferred tax liability:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:DeferredTaxLiabilitiesDepreciationAndAmortization" scale="0" unitRef="usd">108,926</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="apm:DeferredTaxLiabilitiesDepreciationAndAmortization" scale="0" unitRef="usd">255,824</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Net deferred tax assets before valuation allowance</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:ValuationAllowance" scale="0" unitRef="usd">15,705,088</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="apm:ValuationAllowance" scale="0" unitRef="usd">12,632,164</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Valuation allowance</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsValuationAllowance" scale="0" unitRef="usd">15,705,088</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt">Deferred tax asset, net</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-219">-</div></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022 and 2021, the Group had
net operating loss carry-forwards of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="0" unitRef="usd">90,060,983</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLossCarryforwards" scale="0" unitRef="usd">73,785,041</ix:nonFraction>, respectively, including its Hong Kong, Singapore, the United States,
the United Kingdom, Canada and Ireland operations, which are available to reduce future taxable income and have an unlimited carryover
period. For the year ended December 31, 2021, there was no tax loss carried forward expired, while tax loss brought forward of $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="apm:LossCarryforwardCancelled" scale="0" unitRef="usd">1,805,527</ix:nonFraction>
was cancelled due to the disposal of various subsidiaries.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Valuation allowance was provided against deferred
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The Group had deferred tax assets which consisted of tax loss carry forward, which can be carried forward to offset future taxable income.
The Group maintains a full valuation allowance on its net deferred tax assets. The management determines it is more likely than not that
all of its deferred tax assets will not be utilized.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_20" id="_IncomeTaxDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Changes in valuation allowance are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:continuation><div>

</div><div>

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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended<br/> December&#160;31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%">Balance as of January 1</td><td style="width: 1%">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:RelatedPartyTransactionsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>13. RELATED PARTY BALANCES AND TRANSACTIONS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-size: 7pt"><b>&#160;</b></span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a list of a director and related parties to which
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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  <tr>
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  <tr>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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  <tr style="vertical-align: top">
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</table><p style="margin: 0">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center; text-indent: 0pt"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center; text-indent: 0pt"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center; text-indent: 0pt"><b>(Stated in U.S. Dollars)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;<b>&#160;</b></span></p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aenco Limited, an entity controlled by Ian Huen;</span></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aeneas Technology (Hong Kong) Limited, an entity controlled by Ian Huen;</span></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr> <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</span></td> <td style="vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aeneas Management Limited, an entity controlled by Ian Huen;</span></td></tr> <tr> <td style="vertical-align: top">&#160;</td> <td style="vertical-align: bottom">&#160;</td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Talem Medical Group Limited, an entity which Clark Cheng is a director;</span></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(j)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jurchen Investment Corporation, the holding company and an entity controlled by Ian Huen;</span></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(k)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">CGY Investment Limited, an entity jointly controlled by Darren Lui;</span></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(l)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ACC Medical Limited, an entity controlled by Clark Cheng;</span></td></tr> <tr style="vertical-align: top"> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(m)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Libra Sciences Limited, an entity which was originally a wholly owned subsidiary of ATL. 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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Amounts due from related parties</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_6" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Amounts due from related parties consisted of the following as of December
31, 2022 and 2021:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_7" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_6"><ix:nonNumeric contextRef="c0" escape="true" name="apm:ScheduleOfAmountsDueFromRelatedPartiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-224">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_8" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Amounts due to related parties</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_9" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Amounts due to related parties consisted of the following as of December
31, 2022 and 2021:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_10" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_9"><ix:nonNumeric contextRef="c0" escape="true" name="apm:ScheduleOfDueToRelatedPartiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Jurchen Investment Corporation (Note a)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-232">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-233">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 178; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_11" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Related party transactions</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

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    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left; text-indent: -9pt; padding-left: 9pt">- Aeneas Group Limited</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c198" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromRelatedParties" scale="0" unitRef="usd">500,000</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Jurchen Investment Corporation</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromRelatedParties" scale="0" unitRef="usd">500,000</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aeneas Group Limited</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aenco Technologies Ltd</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-237">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aeneas Group Limited</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Jurchen Investment Corporation</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Loan to related parties (Note b)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Talem Medical Group Limited</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Libra Sciences Limited</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-244">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Interest income (Note b)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Talem Medical Group Limited</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Libra Sciences Limited</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-247">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Loan repayment and interest received from a related party (Note b)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Talem Medical Group Limited</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-249">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Issuance of convertible notes to a related party (Note c)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aenco Technologies Ltd</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-250">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-251">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Consultant, secondment, management and administrative services fees (Note d)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- CGY Investments Limited</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c229" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">173,333</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c230" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">169,462</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- ACC Medical Limited</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">209,626</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c231" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">157,511</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c232" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">13,018</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aenco Limited</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-252">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-253">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c235" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">746,153</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aeneas Technology (Hong Kong) Limited</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-254">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-255">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c238" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">617,794</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aeneas Management Limited</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-256">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-257">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c241" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherGeneralAndAdministrativeExpense" scale="0" unitRef="usd">231,795</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Rental expense (Note e)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Jurchen Investment Corporation</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-258">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-259">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c217" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForRent" scale="0" unitRef="usd">96,300</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Administrative management services (Note g)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Libra Sciences Limited</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c226" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentForAdministrativeFees" scale="0" unitRef="usd">38,462</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-260">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-261">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Healthcare services income</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">- Aeneas Management Limited</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c239" decimals="0" format="ixt:num-dot-decimal" name="apm:HealthcareServicesIncome" scale="0" unitRef="usd">1,282</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c240" decimals="0" format="ixt:num-dot-decimal" name="apm:HealthcareServicesIncome" scale="0" unitRef="usd">7,564</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c241" decimals="0" format="ixt:num-dot-decimal" name="apm:HealthcareServicesIncome" scale="0" unitRef="usd">321</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_14" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note a: On August 13, 2019, Aptorum Therapeutics
Limited (&#8220;ATL&#8221;), a wholly owned subsidiary of the Company, entered into financing arrangements with Aeneas Group Limited,
a related party, and Jurchen Investment Corporation, the ultimate parent of the Group, allowing ATL to access up to a total $<ix:nonFraction contextRef="c156" decimals="-6" format="ixt:num-dot-decimal" name="us-gaap:LongTermLineOfCredit" scale="6" unitRef="usd">15</ix:nonFraction> million
in line of credit debt financing. Both line of credits have originally matured on August 12, 2022. ATL and Aeneas Group Limited has mutually
agreed to extend the line of credit arrangement further <ix:nonNumeric contextRef="c157" format="ixt-sec:duryear" name="us-gaap:LineOfCreditFacilityExpirationPeriod">3</ix:nonNumeric> years to August 12, 2025. The interest on the outstanding principal indebtedness
is at the rate of 8% per annum. ATL may early repay, in whole or in part, the principal indebtedness and all interest accrued at any time
prior to the maturity date without the prior written consent of the lender and without payment of any premium or penalty. As of the date
of the issuance of this consolidated financial statements, the undrawn line of credit facility is $<ix:nonFraction contextRef="c156" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityFairValueOfAmountOutstanding" scale="6" unitRef="usd">9.5</ix:nonFraction> million.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_15" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note b: On November 17, 2021, Aptorum Therapeutics
Limited (the &#8220;Lender&#8221;) entered into a loan agreement with Talem Medical Group Limited (the &#8220;Borrower&#8221;). According
to the loan agreement, the Lender granted a loan of up to AUD4,<ix:nonFraction contextRef="c158" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LoansAndLeasesReceivableRelatedParties" scale="0" unitRef="aud">700,000</ix:nonFraction> for the Borrower for general working capital purposes of the Borrower
and its subsidiaries. The loan is interest-bearing at a rate of <ix:nonFraction contextRef="c159" decimals="2" format="ixt:num-dot-decimal" name="apm:LoansInterestbearingRate" scale="-2" unitRef="pure">10</ix:nonFraction>% per annum and secured by the entire issued shares of Talem Medical
Group (Australia) Pty Limited held by the Borrower. The loan is initially matured 6 months from the date of the first drawdown. The maturity
date is extended for 6 months to the first extended maturity date, and may further extendable for another 6 months to the second extended
maturity date, if certain conditions stated in loan agreement are satisfied. As of the date of the issuance of this consolidated financial
statements, there is no outstanding balance from the Borrower.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_16" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 13, 2022, the Company entered a line
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is at the rate of <ix:nonFraction contextRef="c161" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityInterestRateDuringPeriod" scale="-2" unitRef="pure">10</ix:nonFraction>% per annum. As of the date of the issuance of this consolidated financial statements, $<ix:nonFraction contextRef="c161" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityAverageOutstandingAmount" scale="6" unitRef="usd">0.4</ix:nonFraction> million is outstanding
from Libra Sciences Limited.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_17" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note c: On December 9, 2022, the Company entered
into a Securities Purchase Agreement (the &#8220;Agreement&#8221;) with Aenco Technologies Ltd (&#8220;Note holder&#8221;), a Cayman Islands
company that is indirectly <ix:nonFraction contextRef="c162" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedPercentOfNetAssets" scale="-2" unitRef="pure">34.56</ix:nonFraction>% effectively owned by our non-executive director and major shareholder, Ian Huen. Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $<ix:nonFraction contextRef="c162" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedBalancePrincipalAmount" scale="0" unitRef="usd">3,000,000</ix:nonFraction> (the &#8220;Note&#8221;). The Note is
unsecured, convertible into the Company&#8217;s restricted Class A Ordinary Shares, par value $<ix:nonFraction contextRef="c163" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:CommonStockConvertibleConversionPriceIncrease" scale="0" unitRef="usdPershares">10.00</ix:nonFraction> per share (the &#8220;Ordinary Shares&#8221;)
at the Note holder or the Company option. The Notes will have a maturity date of <ix:nonNumeric contextRef="c164" format="ixt-sec:durmonth" name="us-gaap:MaturityOfTimeDeposits">12</ix:nonNumeric> months subject to the Note holder&#8217;s extension,
a bullet interest rate of <ix:nonFraction contextRef="c164" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:LineOfCreditFacilityInterestRateDuringPeriod" scale="-2" unitRef="pure">7</ix:nonFraction>% per annum, and a conversion price of $<ix:nonFraction contextRef="c163" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:CommonStockConvertibleConversionPriceDecrease" scale="0" unitRef="usdPershares">12.0</ix:nonFraction> per Class A Ordinary Share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_18" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note d: Aenco Limited provided certain information
technology services to the Group. For the year ended December 31, 2019, Aenco Limited was entitled to receive a fixed amount of services
fees of HKD <ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="hkd">540,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="usd">69,231</ix:nonFraction>) per calendar month with the expiry date on December 31, 2019. The agreement was originally
renewed under the same terms with the expiry date on December 31, 2020. The agreement was replaced by another agreement on April 1, 2020.
Pursuant to the replaced agreement, Aenco Limited is entitled to receive a fixed amount of services fee of HKD <ix:nonFraction contextRef="c166" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="hkd">700,000</ix:nonFraction> (approximately
$<ix:nonFraction contextRef="c166" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="usd">89,744</ix:nonFraction>) per calendar month. On September 30, 2020, the replaced agreement was terminated as mutually agreed.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_19" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Aeneas Technology (Hong Kong) Limited provided
research to the Group to assist the Group in computerized drug screening process of Smart-ACT<sup>&#174;</sup> platform. Aeneas Technology
(Hong Kong) Limited is entitled to receive a fixed amount of research fees of HKD <ix:nonFraction contextRef="c167" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherResearchAndDevelopmentExpense" scale="0" unitRef="hkd">963,760</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c167" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherResearchAndDevelopmentExpense" scale="0" unitRef="usd">123,559</ix:nonFraction>) per calendar month
with the expiry date on October 30, 2021. On September 30, 2020, the agreement was terminated as mutually agreed.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_20" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Aeneas Management Limited provided certain documentation
and administrative services to the Group. For the year ended December 31, 2019, Aeneas Management Limited was entitled to receive a fixed
amount of services fees of HKD <ix:nonFraction contextRef="c168" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="hkd">452,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c168" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="usd">57,949</ix:nonFraction>) per calendar month with the expiry date on December 31, 2019. The agreement
was originally renewed under the same terms with the expiry date on December 31, 2020. On April 30, 2020, the agreement was terminated
as mutually agreed.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_21" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">CGY Investment Limited provided certain consultancy,
advisory and management services to the Group on potential investment projects related to healthcare or R&amp;D platforms. CGY Investment
Limited is initially entitled to receive HK $<ix:nonFraction contextRef="c169" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="hkd">104,000</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c169" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="usd">13,333</ix:nonFraction>) per calendar month plus reimbursement; such the monthly service
fee is adjusted to HK$<ix:nonFraction contextRef="c169" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFeesAdjusted" scale="0" unitRef="hkd">171,200</ix:nonFraction> (approximately US$<ix:nonFraction contextRef="c169" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFeesAdjusted" scale="0" unitRef="usd">21,949</ix:nonFraction>) with effect from March 1, 2022. The agreement will be remained in effect until
1 month&#8217;s notice in writing is given by either party.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_22" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ACC Medical Limited provided certain consultancy,
advisory, and management services to the Group on clinic operations and other related projects for clinics&#8217; business development.
ACC Medical Limited is initially entitled to receive HK $<ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="hkd">101,542</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="usd">13,018</ix:nonFraction>) per calendar month plus reimbursement; such monthly
service fee is adjusted to HK$<ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFeesAdjusted" scale="0" unitRef="hkd">143,200</ix:nonFraction> (approximately US$<ix:nonFraction contextRef="c170" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFeesAdjusted" scale="0" unitRef="usd">18,359</ix:nonFraction> per month) effective from March 1, 2022. The agreement will be remained
in effect until 1 month&#8217;s notice in writing is given by either party.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_23" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note e: Jurchen Investment Corporation entered
into a sub-tenancy agreement with a subsidiary of the Group for the rental arrangement of an office in Hong Kong. For the period February
1, 2018 through January 31, 2021, Jurchen Investment Corporation was entitled to receive a fixed amount of rental fee of HK $<ix:nonFraction contextRef="c171" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LandingFeesAndOtherRentals" scale="0" unitRef="hkd">130,000</ix:nonFraction> (approximately
USD <ix:nonFraction contextRef="c171" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LandingFeesAndOtherRentals" scale="0" unitRef="usd">16,667</ix:nonFraction>) per calendar month. In May 2020, Jurchen Investment Corporation and the Group mutually agreed to early terminate the rental
agreement and returned the office on May 31, 2020.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_24" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note f: On January 2, 2020, Aptorum Medical Limited
issued <ix:nonFraction contextRef="c172" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">115</ix:nonFraction> shares to Clark Cheng in according to the appointment agreement, decreasing the equity interest of the Company from <ix:nonFraction contextRef="c173" decimals="2" format="ixt:num-dot-decimal" name="apm:OwnershipOfAeneasLimitedAndItSubsidiary" scale="-2" unitRef="pure">94</ix:nonFraction>% to
<ix:nonFraction contextRef="c174" decimals="2" format="ixt:num-dot-decimal" name="apm:OwnershipOfAeneasLimitedAndItSubsidiary" scale="-2" unitRef="pure">93</ix:nonFraction>%. On January 2, 2021, Aptorum Medical Limited further issued <ix:nonFraction contextRef="c175" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">117</ix:nonFraction> shares to Clark Cheng in according to the appointment agreement, decreasing
the equity interest of the Company from <ix:nonFraction contextRef="c176" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">93</ix:nonFraction>% to <ix:nonFraction contextRef="c177" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">92</ix:nonFraction>%. On February 25, 2022, Aptorum Medical Limited further issued <ix:nonFraction contextRef="c178" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">119</ix:nonFraction> shares to Clark Cheng
in according to the appointment agreement, decreasing the equity interest of the Company from <ix:nonFraction contextRef="c179" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">92</ix:nonFraction>% to <ix:nonFraction contextRef="c180" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">91</ix:nonFraction>%. On February 1, 2023, Aptorum
Medical Limited further issued <ix:nonFraction contextRef="c181" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">122</ix:nonFraction> shares to Clark Cheng in according to the appointment agreement, decreasing the equity interest of
the Company from <ix:nonFraction contextRef="c182" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">91</ix:nonFraction>% to <ix:nonFraction contextRef="c183" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EquityMethodInvestmentOwnershipPercentage" scale="-2" unitRef="pure">90</ix:nonFraction>%.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_25" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note g:&#160;On January 1, 2022, the Group entered
into an administrative management services agreement with Libra Sciences Limited. According to the agreement, the Group will provide documentation
and administrative services, include but are not limited to human resources and payroll administration, general secretarial and administrative
support, and accounting and financial reporting services. The Group is entitled to receive a fixed amount of services fees of HKD <ix:nonFraction contextRef="c184" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="hkd">25,000</ix:nonFraction>
(approximately $<ix:nonFraction contextRef="c184" decimals="0" format="ixt:num-dot-decimal" name="apm:ServicesFees" scale="0" unitRef="usd">3,205</ix:nonFraction>) per calendar month with the expiry date on December 31, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note h: On May 27, 2021, Aptorum Therapeutics
Limited, which is a wholly owned subsidiary of Aptorum Group Limited, entered a Share Sale Agreement to sell all of the shares of SMPTH
Limited to Aeneas Group Limited at the consideration $<ix:nonFraction contextRef="c185" decimals="0" format="ixt:num-dot-decimal" name="apm:ConsiderationAmount" scale="0" unitRef="usd">1</ix:nonFraction>. The sale of SMPTH Limited was a common control transaction and resulted in $<ix:nonFraction contextRef="c185" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RelatedPartyTaxExpenseEffectOfChangeInAllocationMethodology" scale="0" unitRef="usd">303,419</ix:nonFraction>
increase in additional paid-in capital in the consolidated statement of changes in equity.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:VariableInterestEntityDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>14. VARIABLE INTEREST ENTITY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_2" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company consolidates VIEs in which the Group
has a variable interest and is determined to be the primary beneficiary. This determination is based on whether the Group has a variable
interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly
impact the VIE&#8217;s economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially
significant to the VIE. The Group continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the
Group is involved with the VIE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_3" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 30, 2021, three of the Group&#8217;s
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Mios Pharmaceuticals Limited (&#8220;Mios&#8221;) and Scipio Life Sciences Limited (&#8220;Scipio&#8221;), issued Class A and Class B
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losses or residual returns. In addition, none of these three companies have sufficient equity to sustain its own activities, and they
have two classes of ordinary shares which have different rights, benefits and obligations. We determined that all these three companies
are variable interest entities (&#8220;VIE&#8221;). On December 31, 2021, Libra, Mios and Scipio further issued Class A ordinary shares
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</div><div>

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director of the Group), and determined that we have the power to manage and make decisions that affect Mios and Scipio&#8217;s research
and development activities, which activities most significantly impact Mios and Scipio&#8217;s economic performance. However, we do not
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</div><div>

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</div><div>

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</div><div>

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interest but is not the primary beneficiary.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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its involvement with unconsolidated VIE represents the estimated loss that would be incurred if the VIE is liquidated, so that the fair
value of the equity investment in VIE is <ix:nonFraction contextRef="c4" decimals="0" format="ixt:fixed-zero" name="us-gaap:EquityMethodInvestments" scale="0" unitRef="usd">zero</ix:nonFraction> and the amounts due from the VIE have to be fully impaired.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_10" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 1, 2022, the Group entered into an
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services, including but are not limited to human resources and payroll administration, general secretarial and administrative support,
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credit is originally matured on January 12, 2023, and is extended for additional 3 years.</ix:nonNumeric> The interest on the outstanding principal indebtedness
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><div>

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rates reflect the estimated incremental borrowing rate, which includes an assessment of the credit rating to determine the rate that the
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</div><div>

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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-264">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Cash paid for amounts included in the measurement of lease liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;&#160;&#160;&#160;Operating cash flows from operating leases</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:OperatingCashFlowsFromOperatingLeases" scale="0" unitRef="usd">369,505</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">&#160;&#160;&#160;&#160;Financing cash flows from finance leases</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:FinancingCashFlowsFromFinanceLeases" scale="0" unitRef="usd">49,358</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Right-of-use assets obtained in exchange for new operating lease liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability" scale="0" unitRef="usd">549,596</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-268">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Weighted-average remaining lease term &#8211; finance leases</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-269">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Weighted-average remaining lease term &#8211; operating leases</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Weighted-average discount rate &#8211; finance leases</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseWeightedAverageDiscountRatePercent" scale="-2" unitRef="pure">2.5</ix:nonFraction></td><td style="text-align: left">%</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Weighted-average discount rate &#8211; operating leases</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseWeightedAverageDiscountRatePercent" scale="-2" unitRef="pure">8.0</ix:nonFraction></td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseWeightedAverageDiscountRatePercent" scale="-2" unitRef="pure">8.0</ix:nonFraction></td><td style="text-align: left">%</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_4" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The maturity analysis of operating leases liabilities
as of December 31, 2022 is as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&#160;31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>Remaining periods ending December 31,</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: left">2023</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasesFutureMinimumPaymentsDueInThreeYears" scale="0" unitRef="usd">298,409</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">2024</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasesFutureMinimumPaymentsDueInFourYears" scale="0" unitRef="usd">58,434</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Total future undiscounted cash flow</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasesFutureMinimumPaymentsDue" scale="0" unitRef="usd">356,843</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Less: Discount on operating lease liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="apm:LessCurrentPortionOfFinanceLeaseLiabilities" scale="0" sign="-" unitRef="usd">15,511</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Present value of operating lease liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:PresentValueOfFinanceLeaseLiabilities" scale="0" unitRef="usd">341,332</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">Less: Current portion of operating lease liabilities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:CurrentPortionOfOperatingLeaseLiabilities" scale="0" sign="-" unitRef="usd">310,548</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt">Non-current portion of operating lease liabilities</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:NoncurrentPortionOfOperatingLeaseLiabilitie" scale="0" unitRef="usd">30,784</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table></ix:nonNumeric></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 183; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DebtDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:DebtDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>16. CONVERTIBLE NOTE</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><ix:continuation id="_DebtDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 9, 2022, the Group entered into a
Securities Purchase Agreement (the &#8220;Agreement&#8221;) with Aenco Technologies Ltd (&#8220;Note holder&#8221;). Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $<ix:nonFraction contextRef="c162" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedBalancePrincipalAmount" scale="0" unitRef="usd">3,000,000</ix:nonFraction> (the &#8220;Note&#8221;). The Note is
unsecured, convertible into the Company&#8217;s restricted Class A Ordinary Shares at the Note holder option. The Notes will have a maturity
date of 12 months subject to the Note holder&#8217;s extension, a bullet interest rate of <ix:nonFraction contextRef="c162" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DerivativeFixedInterestRate" scale="-2" unitRef="pure">7</ix:nonFraction>% per annum, and a conversion price of $<ix:nonFraction contextRef="c255" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockConvertibleConversionPrice" scale="0" unitRef="usdPershares">12.0</ix:nonFraction>
per Class A Ordinary share. The Company shall have an obligation to repay the principal amount and interest of the Note on the maturity
date in cash or in unregistered Class A Ordinary Shares or a combination of such at the Company&#8217;s discretion. As of the date of
the issuance of this consolidated financial statements, the convertible note is fully converted into <ix:nonFraction contextRef="c255" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ConvertiblePreferredStockSharesIssuedUponConversion" scale="0" unitRef="shares">250,000</ix:nonFraction> Class A Ordinary Shares.</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>17. ORDINARY SHARES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 28, 2020, the Group entered into securities
purchase agreement (the &#8220;Purchase Agreement&#8221;) with certain non-affiliated institutional investors and Jurchen Investment Corporation,
the ultimate parent of the Group, pursuant to which the Company agreed to sell a total of <ix:nonFraction contextRef="c256" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">135,135</ix:nonFraction> Class A Ordinary Shares and warrants
to purchase <ix:nonFraction contextRef="c256" decimals="0" format="ixt:num-dot-decimal" name="apm:WarrantsToPurchaseShares" scale="0" unitRef="shares">135,135</ix:nonFraction> of the Class A Ordinary Shares, for gross proceeds of approximately $<ix:nonFraction contextRef="c257" decimals="-6" format="ixt:num-dot-decimal" name="apm:GrossProceed" scale="6" unitRef="usd">10</ix:nonFraction> million. At the completion of the offering,
approximately $<ix:nonFraction contextRef="c258" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OfferingCostsPartnershipInterests" scale="6" unitRef="usd">1.0</ix:nonFraction> million offering costs was charged to additional paid-in capital. Each warrant entitled their holders to purchase <ix:nonFraction contextRef="c259" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight" scale="0" unitRef="shares">1</ix:nonFraction>
Class A Ordinary Shares and is exercisable immediately as of the date of issuance at an exercise price of $<ix:nonFraction contextRef="c259" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares">74.0</ix:nonFraction> per Class A Ordinary Share
and expire <ix:nonNumeric contextRef="c256" format="ixt-sec:durwordsen" name="us-gaap:LineOfCreditFacilityExpirationPeriod">seven years</ix:nonNumeric> from the date of issuance. Additionally, the Group issued <ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfWarrants" scale="0" unitRef="usd">4,324</ix:nonFraction> warrants to placement agent on terms substantially
the same as the warrants issued to investors, except that the exercise price of the warrants issued to the placement agent is $<ix:nonFraction contextRef="c257" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:WarrantExercisePriceDecrease" scale="0" unitRef="usdPershares">88.8</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 27, 2020, the Group entered into warrant
exchange agreements (the &#8220;Purchaser Exchange Agreements&#8221;) with two non-affiliated purchasers to exchange their warrant of
the Company by Class A Ordinary Shares of the Company (the &#8220;Purchaser Warrant Exchange&#8221;). Pursuant to the Purchaser Exchange
Agreements, the Company and the Non-affiliated Purchasers have agreed that in consideration for exchanging in full all of the warrants
held by the Non-affiliated Purchasers, the Company will exchange one (1) Class A Ordinary Share for each one (1) Purchaser Exchange Warrant.
Total <ix:nonFraction contextRef="c260" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">54,054</ix:nonFraction> Class A Ordinary Shares are issued to two non-affiliated purchasers in exchange for <ix:nonFraction contextRef="c261" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtConversionConvertedInstrumentWarrantsOrOptionsIssued1" scale="0" unitRef="shares">54,054</ix:nonFraction> warrants. For other warrant holders
did not participate in the Purchaser Warrant Exchange, the exercise prices of their respective warrants will be reduced to a nominal amount
pursuant to the anti-dilution provisions in such warrants (a &#8220;Down Round&#8221;). As a result of this Down Round being triggered,
the Group recorded a deemed dividend of $<ix:nonFraction contextRef="c262" decimals="0" format="ixt:num-dot-decimal" name="apm:DeemedDividend" scale="0" unitRef="usd">755,514</ix:nonFraction> as a decrease to net income attributable to Aptorum Group Limited in computing basic
net income per share on the consolidated statements of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 2, 2020, the Group completed a public
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proceeds of approximately $<ix:nonFraction contextRef="c265" decimals="-6" format="ixt:num-dot-decimal" name="apm:GrossProceed" scale="6" unitRef="usd">9</ix:nonFraction> million. At the completion of the offering, approximately $<ix:nonFraction contextRef="c263" decimals="-5" format="ixt:num-dot-decimal" name="apm:OfferingCosts" scale="6" unitRef="usd">1.2</ix:nonFraction> million offering costs was charged to additional
paid-in capital. The warrants have an exercise price of $<ix:nonFraction contextRef="c266" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares">32.5</ix:nonFraction> per Class A Ordinary Share, are exercisable upon issuance and will expire
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as the warrants issued to investors, except that the exercise price of the warrants issued to the placement agent is $<ix:nonFraction contextRef="c268" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares">40.625</ix:nonFraction>. <ix:nonNumeric contextRef="c267" name="apm:OrdinarySharesDescription">Following
the public offering completed on October 2, 2020, the placement agent of the offering on February 28, 2020 was further received 6,541
warrants as a tail fee, with an exercise price of $39.0 and expire seven years from the date of issuance.</ix:nonNumeric></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 26, 2021, the Company entered into an
at-the-market offering agreement (the &#8220;Sales Agreement&#8221;), with H.C. Wainwright&#160;&amp; Co., LLC, acting as our sales agent
(the &#8220;Sales Agent&#8221;), relating to the sale of our Class A Ordinary Shares, offered pursuant to the prospectus supplement and
the accompanying prospectus to the registration statement on Form F-3 (File No. 333-268873) (such offering, the &#8220;ATM Offering&#8221;,
or &#8220;At The Market Offering&#8221;). In accordance with the terms of the Sales Agreement, we may offer and sell shares of our Class
A Ordinary Shares having an aggregate offering price of up to $<ix:nonFraction contextRef="c269" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherValueOutstanding" scale="0" unitRef="usd">15,000,000</ix:nonFraction> from time to time through the Sales Agent under such prospectus
supplement and the accompanying prospectus. As of the date of issuance of the consolidated financial statements, we have issued <ix:nonFraction contextRef="c270" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">7,875</ix:nonFraction>
Class A Ordinary Shares pursuant to the ATM Offering.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 26, 2021, the Company entered into a private
placement shares purchase agreement with Jurchen Investment Corporation, issuing <ix:nonFraction contextRef="c271" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">138,793</ix:nonFraction> Class A Ordinary Shares at $<ix:nonFraction contextRef="c271" decimals="2" format="ixt:num-dot-decimal" name="apm:SharesPrice" scale="0" unitRef="usdPershares">28.82</ix:nonFraction> per share,
representing a <ix:nonFraction contextRef="c272" decimals="2" format="ixt:num-dot-decimal" name="apm:OrdinarySharesClosingPricePercentage" scale="-2" unitRef="pure">10</ix:nonFraction>% premium to the last closing price of the Company&#8217;s Class A Ordinary Shares on the NASDAQ stock exchange on that
date. The Company received aggregate gross proceeds of $<ix:nonFraction contextRef="c272" decimals="0" format="ixt:num-dot-decimal" name="apm:GrossProceed" scale="0" unitRef="usd">4,000,000</ix:nonFraction> from the purchase of these shares.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All the above issued warrants are classified as
equity in accordance with ASC 815, Derivatives and Hedging. This ASC provides a scope exception from classifying and measuring as a financial
liability a contract that would otherwise meet the definition of a derivative if the contract is both (i) indexed to the entity&#8217;s
own stock and (ii) meets the equity classifications conditions. The Group concluded all above issued warrants should be equity-classified
since they contain no provisions which would require the Group to account for the warrants as a derivative liability and therefore were
initially measured at fair value in permanent equity with subsequent changes in fair value not measured.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, the Group
issued <ix:nonFraction contextRef="c273" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">6,712</ix:nonFraction> Class A Ordinary Shares to share option holders as a result of exercise of share options. For the year ended December 31,
2021, the Group issued <ix:nonFraction contextRef="c274" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">4,000</ix:nonFraction> and <ix:nonFraction contextRef="c275" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">19,016</ix:nonFraction> Class A Ordinary Shares to warrant holders and share option holders respectively as a result of
exercise of warrants or options. For the year ended December 31, 2020, the Group issued <ix:nonFraction contextRef="c276" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">31,351</ix:nonFraction> and <ix:nonFraction contextRef="c277" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockOtherSharesOutstanding" scale="0" unitRef="shares">1,233</ix:nonFraction> Class A Ordinary Shares to warrant
holders and share option holders respectively as a result of exercise of warrants or options.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holders of Class A Ordinary Shares and Class B
Ordinary Shares have the same rights except for the following: (i) each Class A Ordinary Share is entitled to one vote while each Class
B Ordinary Share is entitled to ten votes; and (ii) each Class B Ordinary Share is convertible into one Class A Ordinary Share at any
time while Class A Ordinary Shares are not convertible under any circumstances.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 185; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_1" escape="true" name="us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>18. SHARE BASED COMPENSATION</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_2" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Share option plan</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_3" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 13, 2017, the Group adopted the 2017
Share Option Plan (the &#8220;Option Plan&#8221;) and on November 5, 2021, the Group amended the Option Plan. A total of <ix:nonFraction contextRef="c278" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">550,000</ix:nonFraction> Class
A Ordinary Shares (subject to subsequent adjustments described more fully below) may be issued pursuant to awards under the Option Plan.
Subsequent adjustments include that on each January 1, starting with January 1, 2020, an additional number of shares equal to the lesser
of (i) <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardPurchasePriceOfCommonStockPercent" scale="-2" unitRef="pure">2</ix:nonFraction>% of the outstanding number of Class A Ordinary Shares (on a fully diluted basis) on the immediate preceding December 31, and
(ii) such lower number of Class A Ordinary Shares as may be determined by the board of directors, subject in all cases to adjustments
as provided in Section 10 of the Option Plan. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions
as determined by the board of directors.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_4" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonFraction contextRef="c279" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">53,694</ix:nonFraction> options were granted on March 16, 2020 to directors, employees,
external consultants and advisors of the Group. One-half of each option grant vests on January 1, 2021 and expires on <ix:nonNumeric contextRef="c280" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">December 31, 2031</ix:nonNumeric>
and the other half vests on January 1, 2022 and expires on <ix:nonNumeric contextRef="c281" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">December 31, 2032</ix:nonNumeric>. The exercise price is $<ix:nonFraction contextRef="c282" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">29.9</ix:nonFraction> per share, which was based on
the average closing price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant
date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_5" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonFraction contextRef="c283" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">14,896</ix:nonFraction> options were granted on June 1, 2020 to directors and employees
of the Group. Nearly one-half of each option grant vests on December 1, 2020 and expires on <ix:nonNumeric contextRef="c284" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">November 30, 2030</ix:nonNumeric> and the remaining vests
on January 1, 2021 and expires on <ix:nonNumeric contextRef="c285" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">December 31, 2031</ix:nonNumeric>. The exercise price is US$<ix:nonFraction contextRef="c286" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">31.1</ix:nonFraction> per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_6" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonFraction contextRef="c287" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">2,748</ix:nonFraction> options were granted on August 10, 2020 to Dr. Weiss, which vest
on August 10, 2021 and expire on <ix:nonNumeric contextRef="c287" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">August 9, 2031</ix:nonNumeric>. The exercise price is $<ix:nonFraction contextRef="c288" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">36.4</ix:nonFraction> per share, which was based on the average closing price of
the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_7" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonFraction contextRef="c289" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">75,235</ix:nonFraction> options were granted on March 11, 2021 to directors, employees,
external consultants and advisors of the Group with an exercise price of $<ix:nonFraction contextRef="c290" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">27.6</ix:nonFraction> per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.&#160;<ix:nonFraction contextRef="c291" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">36,796</ix:nonFraction> options
vest on January 1, 2022 and expire on <ix:nonNumeric contextRef="c291" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">December 31, 2032</ix:nonNumeric>; <ix:nonFraction contextRef="c292" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">36,808</ix:nonFraction> options vest on January 1, 2023 and expire on <ix:nonNumeric contextRef="c292" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">December 31, 2033</ix:nonNumeric>; <ix:nonFraction contextRef="c293" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">906</ix:nonFraction> options
vest on June 8, 2021 and expire on <ix:nonNumeric contextRef="c293" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">June 7, 2032</ix:nonNumeric>; and <ix:nonFraction contextRef="c294" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">725</ix:nonFraction> options vest on July 14, 2021 and expire on <ix:nonNumeric contextRef="c294" format="ixt:date-monthname-day-year-en" name="us-gaap:DebtConversionConvertedInstrumentExpirationOrDueDateDayMonthAndYear">July 13, 2032</ix:nonNumeric>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_8" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonFraction contextRef="c295" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">153,146</ix:nonFraction> options were granted on March 8, 2022
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_9" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonFraction contextRef="c301" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares">226,153</ix:nonFraction> options were granted on March 31, 2023
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_10" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A summary of the option activity as of December
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_11" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><!-- Field: Page; Sequence: 186; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_12" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_11"><ix:continuation continuedAt="_ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock-c0_cont_2" id="_ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_13" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_12"><ix:continuation id="_ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

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</div><div>

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</div><div>

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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_17" id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the grant of share options
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respectively, for the year ended December 31, 2020.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, there were $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:TotalUnrecognizedSharebasedCompensation" scale="0" unitRef="usd">376,512</ix:nonFraction> total
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compensation cost may be adjusted for future changes in actual forfeitures.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_MinorityInterestDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:MinorityInterestDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>19. NON-CONTROLLING INTEREST</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_MinorityInterestDisclosureTextBlock-c0_cont_2" id="_MinorityInterestDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 25, 2020, Paths Innovation Limited, a wholly-owned subsidiary
of the Group, signed a share subscription and shareholders agreement with certain new individuals and institutions to subscribe ordinary
shares of Paths Diagnostics Pte. Limited, a wholly-owned subsidiary of Paths Innovation Limited before the share subscription agreement.
As a result, Paths Innovation Limited&#8217;s equity interest in Paths Diagnostics Pte. Limited was decreased from <ix:nonFraction contextRef="c315" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% to <ix:nonFraction contextRef="c316" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationStepAcquisitionEquityInterestInAcquireePercentage" scale="-2" unitRef="pure">75</ix:nonFraction>%. A deficit
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statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_MinorityInterestDisclosureTextBlock-c0_cont_3" id="_MinorityInterestDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 30, 2021, two of the Group&#8217;s
subsidiaries, Mios Pharmaceuticals Limited (&#8220;Mios&#8221;) and Scipio Life Sciences Limited (&#8220;Scipio&#8221;), issued Class
A and Class B ordinary shares to various parties; for each such entity, each Class A ordinary share is entitled to 1 vote and 1 share
of economic interest of the respective company, while each Class B ordinary share is entitled to 10 votes and <ix:nonFraction contextRef="c318" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:SharesIssued" scale="0" unitRef="shares">0.001</ix:nonFraction> share of economic
interest of the respective company. On December 31, 2021, Mios and Scipio further issued Class A ordinary shares to the Group in exchange
of certain projects licenses. Upon these share issuances, the Group was holding <ix:nonFraction contextRef="c319" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterestOwnershipPercentageByParent" scale="-2" unitRef="pure">97.93</ix:nonFraction>% economic interest and <ix:nonFraction contextRef="c320" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterestOwnershipPercentageByParent" scale="-2" unitRef="pure">36.17</ix:nonFraction>% voting power in Mios,
and <ix:nonFraction contextRef="c321" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterestOwnershipPercentageByParent" scale="-2" unitRef="pure">97.93</ix:nonFraction>% economic interest and <ix:nonFraction contextRef="c322" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:MinorityInterestOwnershipPercentageByParent" scale="-2" unitRef="pure">35.06</ix:nonFraction>% voting power in Scipio, respectively. &#160;&#160;Since the sole director of Mios and Scipio is
an executive director of the Group, the Group can effectively participate in all significant financial and operating decisions in these
two companies through the power granted to the sole director in Mios and Scipio&#8217;s Articles of Association. The Group is deemed to
have control over Mios and Scipio and hence these two companies are still within the Group. As a result, a total deficit of $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="apm:AdjustmentIncreaseDecreaseRetainedEarningsDeficit" scale="0" unitRef="usd">27,293</ix:nonFraction> was
reclassified from additional paid-in capital to non-controlling interests within the Group&#8217;s consolidated financial statements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_EarningsPerShareTextBlock-c0_cont_1" escape="true" name="us-gaap:EarningsPerShareTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>20. NET (LOSS) INCOME PER SHARE</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 30pt">&#160;</p></ix:nonNumeric><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_EarningsPerShareTextBlock-c0_cont_3" id="_EarningsPerShareTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation id="_EarningsPerShareTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Basic net (loss) income per share is computed
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the period. Diluted net (loss) income per share reflects the potential dilution that could occur if securities or other contracts to issue
ordinary shares were exercised or converted into ordinary shares. Potential dilutive securities are excluded from the calculation of diluted
loss per share in loss periods as their effect would be anti-dilutive.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>21. COMMITMENTS AND CONTINGENCIES</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Contingent Payment Obligations</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group has entered into agreements with independent
third parties for purchasing office and laboratory equipment. As of December 31, 2022, the Group had non-cancellable purchase commitments
of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PurchaseObligation" scale="0" unitRef="usd">50,075</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group has additional contingency payment obligations
under each of the license agreements, such as milestone payments, royalties, research and development funding, if certain condition or
milestone is met.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;&#160;&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Milestone payments are to be made upon achievements
of certain conditions, such as Investigational New Drugs (&#8220;IND&#8221;) filing or U.S. Food and Drug Administration (&#8220;FDA&#8221;)
approval, first commercial sale of the licensed products, or other achievements. The aggregate amount of the milestone payments that the
Group are required to pay up to different achievements of conditions and milestones for all the license agreements signed as of December
31, 2022 are below:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_6" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="apm:ScheduleOfMilestonePaymentsAreToBeMadeUponAchievementsOfCertainConditionsTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">From entering phase 1 to before first commercial sale</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:FromEnteringPhase1ToBeforeFirstCommercialSale" scale="0" unitRef="usd">20,336,410</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">First commercial sale</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="apm:NetSalesAmountMoreThanCertainThresholdInYear" scale="0" unitRef="usd">65,769,231</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt">Subtotal</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>APTORUM GROUP LIMITED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Stated in U.S. Dollars)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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statements and the following events with material financial impact on the Group&#8217;s consolidated financial statements, no other subsequent
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businesses. Currently, it is contemplated that the Transaction will occur via a reverse takeover of the Company. As of the date of the
issuance of this consolidated financial statements, the definitive agreement has not been signed yet.</p></ix:continuation><div>
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</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">F-35</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION
12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from __________ to
__________
Commission file number:
001-38764
APTORUM GROUP LIMITED
(Exact Name of Registrant as Specified in its
Charter)
N/A
(Translation of Registrant's Name into
English)
Cayman Islands
(Jurisdiction of Incorporation or Organization)
Darren Lui
, Chief Executive Officer
Aptorum Group Limited
17 Hanover Square
,
London
W1S 1BN
,
United Kingdom
Tel:
+44
20 8092 9299
Fax: +44 20 3928 8277
(Address of principal executive offices and
Name, Telephone, E-mail and/or Facsimile number and
Address of Company Contact Person)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Class A Ordinary shares, par value $0.00001
APM
NASDAQ
Global Market
Securities registered or to be registered pursuant
to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:
None
(Title of Class)
Indicate the number of outstanding shares of each
of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.
Class A Ordinary Shares:
1,326,953
(retroactively
reflecting the ten-for-one reverse stock split that was effectuated on January 23, 2023)
Class B Ordinary Shares:
2,243,776
(retroactively
reflecting the ten-for-one reverse stock split that was effectuated on January 23, 2023)
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No
☒
If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes ☐
No
☒
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☒  No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒  No
☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large
accelerated filer," accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Emerging growth company
☒
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards
+
provided pursuant to Section 13(a) of the Exchange
Act.
☐
+
The term "new or revised financial accounting standard"
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
☐
If the securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
☒
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐
Other ☐
*
If
"Other" has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).       Yes ☐  No
☒
TABLE OF CONTENTS
INTRODUCTION
ii
PART I
1
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
1
ITEM 3.
KEY INFORMATION
1
ITEM 4.
INFORMATION ON THE COMPANY
58
ITEM 4A.
UNRESOLVED STAFF COMMENTS
103
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
103
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
118
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
131
ITEM 8.
FINANCIAL INFORMATION
134
ITEM 9.
THE OFFER AND LISTING
135
ITEM 10.
ADDITIONAL INFORMATION
135
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
142
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
142
PART II
143
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
143
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
143
ITEM 15.
CONTROLS AND PROCEDURES
143
ITEM 16
[RESERVED]
144
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
144
ITEM 16B.
CODE OF ETHICS
145
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
145
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
145
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
145
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
145
ITEM 16G.
CORPORATE GOVERNANCE
145
ITEM 16H.
MINE SAFETY DISCLOSURE
145
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
145
PART III
146
ITEM 17.
FINANCIAL STATEMENTS
146
ITEM 18.
FINANCIAL STATEMENTS
146
ITEM 19.
EXHIBITS
146
i
INTRODUCTION
Unless the context otherwise
requires, in this annual report on Form 20-F references to:
●
"505(b)(2) Application" refers to an application for which one or more of the investigations relied upon by the applicant for approval "were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted" (21 U.S.C. 355(b)(2)).
●
"A*STAR" refers to Agency for Science, Technology and Research.
●
"Acticule" refers to Acticule Life Sciences Limited, an 80% owned subsidiary of Aptorum Group.
●
"Aeneas Group" refers to Aeneas Limited and its subsidiaries. Aeneas Limited is 76.8% owned by Jurchen Investment Corporation. Because Mr. Huen, a director, holds 100% equity interest in Jurchen Investment Corporation, we refer Aeneas Group as a fellow subsidiary of Aptorum Group.
●
"AML" refers to Aptorum Medical Limited, a 90% owned subsidiary of Aptorum Group, as of the date of this report.
●
"AML Clinic" refers to an outpatient medical clinic operated by AML under the name of Talem Medical.
●
"Aptorum Group," and "Group" refer to Aptorum Group Limited, a Cayman Islands exempted company with limited liability whose principal place of business is in Hong Kong, all of its subsidiaries and the consolidated VIEs to which we are regarded as the primary beneficiary for accounting purposes.
●
"Aptorum Non-Therapeutics Group" refers to the Company's non-therapeutics segment that encompasses: diagnostics projects including the novel molecular-based rapid pathogen identification and detection diagnostics ("Paths
Dx
Test", formerly known as "RPIDD") technology, natural supplement products including NativusWell
®
, and the AML Clinic.
●
"Aptorum Therapeutics Group" refers to the Company's therapeutics segment that is operated through its wholly-owned subsidiary, Aptorum Therapeutics Limited, a Cayman Islands exempted company with limited liability, whose principal place of business is in Hong Kong and its indirect subsidiary companies, whose principal places of business are in the United Kingdom, Singapore and Hong Kong.
●
"At The Market Offering"
or "ATM Offering" refers to the offering and sale of the Company's Class A Ordinary Shares, offered pursuant to the
prospectus supplement and the accompanying prospectus to the registration statement on Form F-3 (File No. 333-268873), in which H.C.
Wainwright & Co., LLC ("Wainwright"), acted as the Company's sales agent in accordance with certain at the market
offering agreement (the "Sales Agreement"), dated as of March 26, 2021, by and between the Company and Wainwright.
●
"cGCP" refers to Current Good Clinical Practice as adopted by the applicable regulatory authority.
●
"cGLP" refers to Current Good Laboratory Practice as adopted by the applicable regulatory authority.
●
"cGMP" refers to Current Good Manufacturing Practice as adopted by the applicable regulatory authority.
ii
●
"Class A Ordinary Shares" refers to the Company's Class A Ordinary Shares, par value $0.00001 per share.
●
"Class B Ordinary Shares" refers to the Company's Class B Ordinary Shares, par value $0.00001 per share.
●
"Company," "we" and "us" refer to Aptorum Group Limited, a Cayman Islands exempted company with limited liability whose principal place of business is in Hong Kong.
●
"CMC" refers to chemical, manufacturing and control.
●
"Covar" refers to Covar Pharmaceuticals Incorporated, a contract research organization engaged by the Company.
●
"CROs" refers to contract research organizations.
●
"CTA" refers to Clinical Trial Application.
●
"EEA" refers to the European Economic Area.
●
"EMA" refers to the European Medicines Agency.
●
"EMEA" refers to Europe, the Middle East and Africa.
●
"EPO" refers to the European Patent Organization or the European Patent Office operated by it.
●
"European Patent" refers to patents issuable by the EPO.
●
"EU" refers to the European Union.
●
"Exchange Act" refers to the U.S. Securities Exchange Act of 1934, as amended.
●
"FDA" refers to U.S. Food and Drug Administration.
●
"FDCA" refers to the U.S. Federal Food, Drug and Cosmetic Act.
●
"Fiscal year" refers to the period from January 31 of each calendar year to December 31 of the following calendar year.
●
"HKD" refers to Hong Kong Dollars.
●
"Hong Kong" or "H.K." refers to Hong Kong Special Administrative Region of the People's Republic of China.
●
"Hong Kong Doctors" refers to the doctors in Hong Kong under the employment of AML Clinic.
●
"IND" refers to Investigational New Drugs.
●
"IP" refers to intellectual property.
●
"IPO" or "Offering" means the initial public offering by the Company of 76,142 Class A Ordinary Shares consummated on December 17, 2018.
●
"Jurchen" refers to Jurchen Investment Corporation, a company wholly-owned by one of our directors and former CEO, Ian Huen, and a holding company of Aptorum Group.
●
"Lead Projects" refers to ALS-4, SACT-1 and Paths
Dx
Test (formerly known as RPIDD).
●
"Libra" refers to Libra Sciences Limited, a VIE in which we hold 97.27% economic interest and 31.51% voting power. Libra is incorporated under the laws of the Cayman Islands. We are not deemed as the primary beneficiary of Libra for accounting purposes.
●
"Major Patent Jurisdictions" refers to the United States, member states of the European Patent Organization and the People's Republic of China.
●
"Mios" refers to Mios Pharmaceuticals Limited, a consolidated VIE in which we indirectly hold 97.93% economic interest and 36.17% voting power. Aptorum is regarded as the primary beneficiary of Mios for accounting purposes.
iii
●
"Nativus" refers to Nativus Life Sciences Limited, a wholly-owned subsidiary of Aptorum Group.
●
"NMPA" refers to China's National Medical Products Administration and its predecessor, the China Food and Drug Administration.
●
"NDA" refers to a New Drug Application issued by the FDA.
●
"Ordinary Shares" refers to the Class A Ordinary Shares and Class B Ordinary Shares collectively.
●
"PRC" and "China" refer to the People's Republic of China.
●
"Registered Direct
    Offering" means the registered direct offering by the Company of 135,135 Class A Ordinary Shares and warrants to purchase up
    to 135,135 Class A Ordinary Share consummated on February 28, 2020.
●
"Restructure" refers to the Company's change from an investment fund with management shares and non-voting participating redeemable preference shares to a holding company with operating subsidiaries, effective as of March 1, 2017.
●
"Registration Statement" refers to the Company's Registration Statement on Form F-1 (File No. 333-227198) for the sale of up to 349,397 Class A Ordinary Shares (including Class A Ordinary Shares underlying certain warrants and a bond, as fully described therein) which initially filed on September 5, 2018 and became effective on December 3, 2018.
●
"R&D" refers to research and development.
●
"R&D Center" refers to an in-house pharmaceutical development center located in Hong Kong Science and Technology Park.
●
"Securities Exchange Commission," "SEC," "Commission" or similar terms refer to the Securities Exchange Commission.
●
"Sarbanes-Oxley Act" refers to the Sarbanes-Oxley Act of 2002.
●
"Scipio" refers to Scipio Life Sciences Limited, a consolidated VIE in which we indirectly hold 97.93% economic interest and 35.06% voting power. Aptorum is regarded as the primary beneficiary of Scipio for accounting purposes.
●
"Securities Act" refers to the Securities Act of 1933.
●
"UK" refers to the United Kingdom.
●
"United States," "U.S." and "US" refer to the United States of America.
●
"Videns" refers to Videns Incorporation Limited, a wholly-owned subsidiary of Aptorum Group.
●
"VIE" refers to a variable interest entity.
●
"US$," "U.S. dollars," or "dollars" are to the legal currency of the United States.
Discrepancies in any table
between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
This annual report on Form
20-F includes our audited consolidated balance sheets as of December 31, 2022 and 2021, and the related consolidated statements of operations
and comprehensive (loss) income, equity and cash flows for the years ended December 31, 2022, 2021 and 2020.
Our operations and equity
are funded in U.S. dollars and we currently incur the majority of our expenses in U.S. dollars or in H.K. dollars. H.K. dollar is currently
pegged to the U.S. dollar; however, we cannot guarantee that such peg will continue to be in place in the future. Our exposure to foreign
exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity and
limited revenue contracts dominated in H.K. dollars in certain PRC operating entities. We do not believe that we currently have any significant
direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial instruments.
iv
Part I
Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
AND ADVISERS
Not Applicable.
Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
Item 3. KEY INFORMATION
All share and per share amounts have been retroactively adjusted to reflect the reverse stock split
that occurred on January 23, 2023.
A. [Reserved]
B.
Capitalization and Indebtedness
Not applicable.
C.
Reasons for the Offer and Use of Proceeds
Not applicable.
D.
Risk Factors
Our business faces significant
risks. You should carefully consider all of the information set forth in this annual report on Form 20-F and in our other filings with
the United States Securities and Exchange Commission, or the SEC, including the following risk factors which we face and which are faced
by our industry. Our business, financial condition, results of operations and growth prospects could be materially adversely affected
by any of these risks. This report also contains forward-looking statements that involve risks and uncertainties. Our results could materially
differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below
and elsewhere in this annual report and our other SEC filings. See "Special Note Regarding Forward-Looking Statements" below.
Summary Risk Factors
The following summarizes some,
but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 3.D. "Risk Factors"
in this annual report for a more thorough description of these and other risks.
1
Risks Related to Doing Business in
Hong Kong
●
Risks relating to legal and regulatory risks associated with our operations in Hong Kong.
●
If we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.
●
The recent joint statement by the SEC, proposed rule changes submitted by Nasdaq, and an act passed by the U.S. Senate and the U.S. House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our offering, business operations, share price and reputation.
●
Our business, financial condition and results of operations, and/or the value of our Class A Ordinary Shares or our ability to offer or continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.
●
Our Class A Ordinary Shares may be delisted under the HFCA Act if the PCAOB is unable to inspect our auditors. The delisting of our Class A Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Furthermore, on December 29, 2022, a legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act"), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act (the "AHFCAA"), which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.
●
Even though our auditor is based in New York, New York and under full inspection by the PCAOB and that it is not currently subject to the determinations announced by the PCAOB on December 16, 2021, if any PRC law relating to the access of the PCAOB to auditor files were to apply to a company such as Marcum Asia CPAs LLP (formerly known as Marcum Bernstein & Pinchuk LLP) or its auditor, the PCAOB may be unable to fully inspect our auditor, which may result in our securities being delisted or prohibited from being traded "over-the-counter" pursuant to the HFCA Act and materially and adversely affect the value and/or liquidity of your investment.
●
The uncertainties with respect to the Chinese legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China with little advance notice could adversely affect us and limit the legal protections available to you and us.
Risks Related to the Preclinical and Clinical
Development of Our Drug Candidates
●
Risks relating to not generate sufficient revenue
●
Risks relating to uncertainty in preclinical development process
●
Risks relating to fail to identify additional drug candidates
●
Risks relating to conduct clinical trials in or outside the U.S.
Risks Related to Obtaining Regulatory Approval
for Our Drug Candidates
●
Risks relating to fail or delay to obtain regulatory approval
●
Risks relating to undesirable adverse event
●
Risks relating to fail to complete the 505(b)(2) pathway for the pediatric formulation
●
Risks relating to our third-party suppliers fail to comply with the FDA's good manufacturing practice regulations or fail to respond to an FDA Form 483 or subsequent Warning Letter
2
Risks Related to Commercialization of Our Drug
Candidates
●
Risks relating to fail to achieve market acceptance
Risks Related to Our IP
●
Risks relating to being unaware of others' pending patent applications
●
Risks relating to unable to protect and enforce our IP rights throughout the world
●
Risks relating to lawsuits for protecting our IP or against infringing IP rights of other parties
●
Risks relating to non-compliance with patent protection requirements or obligations in the license agreements
●
Risks relating to the terms and scope of our patents not sufficient to protect our candidates
●
Risks relating to unable to obtain or maintain rights of the developing technology through acquisitions or licenses
Risks Related to Our Reliance on Unrelated
Parties
●
Risks relating to manufacturers fail to provide sufficient quantities of clinical supply on our candidate at acceptable quality levels or prices
Risks Related to AML Clinic, Natural Supplements
and Diagnostic Technology
Risks Related to Our Industry, Business and
Operation
●
Risks relating to not complying with laws
●
Risks relating to difficulties in managing our growth
●
Risks relating to unable to collaborations, strategic alliances or acquisitions or enter into royalty-seeking or sublicensing arrangements
●
Risks relating to our disclosure controls and procedures and internal financial reporting controls
●
Risks relating to do business internationally
●
Risks relating to product liability lawsuits arise from clinical trials
●
Risks relating to inadequate insurance coverage
●
Risks relating to failure in safeguarding our computer network system
●
Risks relating to outbreak of the novel coronavirus disease, COVID-19, or other pandemic, epidemic or outbreak of an infectious disease
Risks Related to Our Corporate Structure
●
Risks relating to our Class B shareholders have higher voting rights
Risks Related to our Securities
●
Risks relating to certain existing shareholders have substantial influence over our Company and their interests may not be aligned with the interests of our other shareholders
●
Risks relating to conduct substantially all of our operations outside the United States
●
Risks relating to adopt certain home country practices or take advantage of certain reduced reporting requirements
3
Risks Related to the Preclinical and Clinical
Development of Our Drug Candidates
We currently do not generate revenue from
product sales and may never become profitable; unless we can raise more capital through additional financings, of which there can be no
guarantee, our principal source of revenue will be from AML Clinic, which may not be substantial.
Our ability to generate revenue
and become profitable depends upon our ability to successfully complete the development of, and obtain the necessary regulatory approvals
for, the drug candidates in our Lead Projects and any future drug candidates we may develop, as we do not currently have any drugs that
are available for commercial sale. We expect to continue to incur losses before commercialization of our drug candidates and any future
drug candidates. None of our drug candidates has been approved for marketing in the U.S., Europe, the PRC or any other jurisdictions and
may never receive such approval. Our ability to generate revenue and achieve profitability is dependent on our ability to complete the
development of our drug candidates and any future drug candidates we develop in our portfolio, obtain necessary regulatory approvals,
and have our drugs products under development manufactured and successfully marketed, of which there can be no guarantee. Although AML
Clinic commenced operations in June 2018 and we have received some revenue from such operations, even at full capacity, AML Clinic may
not bring enough revenue to support our operation and R&D. Thus, we may not be able to generate a profit until our drug candidates
become profitable.
Even if we receive regulatory
approval and marketing authorization for one or more of our drug candidates or one or more of any future drug candidates for commercial
sale, a potential product may not generate revenue at all unless we are successful in:
●
developing a sustainable and scalable manufacturing process for our drug candidates and any approved products, including establishing and maintaining commercially viable supply relationships with third parties;
●
launching and commercializing drug candidates following regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor;
●
obtaining market acceptance of our drug candidates as viable treatment options;
●
addressing any competing technological and market developments;
●
negotiating and maintaining favorable terms in any collaboration, licensing or other arrangement into which we may enter to commercialize drug candidates for which we have obtained required approvals and marketing authorizations; and
●
maintaining, protecting and expanding our portfolio of IP rights, including patents, trade secrets and know-how.
In addition, our ability to
achieve and maintain profitability depends on timing and the amount of expenses we will incur. Our expenses could increase materially
if we are required by the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities to perform studies in addition to those
that we currently have anticipated. Even if our drug candidates are approved for commercial sale, we anticipate incurring significant
costs associated with the commercial launch of these products.
Our ability to become and remain
profitable depends on our ability to generate revenue. Even if we are able to generate revenues from AML Clinic or the sale or sublicense
of any products we may develop or license, we may not become profitable on a sustainable basis or at all. Our failure to become and remain
profitable would decrease the value of our Company and adversely affect the market price of our Class A Ordinary Shares, which could impair
our ability to raise capital, expand our business or continue our operations.
4
AML Clinic's operations and the initial
commercialization of our NativusWell
®
(NLS-2) natural supplements may be our principal source of revenue for the foreseeable
future and most likely, without additional financing, such revenue will not be sufficient for us to carry out all of our plans.
As stated above, we have not
generated any revenue and do not foresee generating any revenue from our drug candidates in the near future. Effective as of March 2018,
we leased the property in Central, Hong Kong that is the home to AML Clinic, which commenced operations in June 2018. We have also launched
NativusWell
®
(NLS-2) in Hong Kong through HKTV Mall, a leading online shopping mall in Hong Kong, in September 2022, and
in China through one of the largest e-commerce platform in China, JD.com, in March 2023.
Until our therapeutic candidates
produce revenue, our principal source of revenue is from AML Clinic, but it is not sufficient by itself to fund our other operations;
even if we receive revenue from NativusWell
®
(NLS-2) natural supplements, it will not provide sufficient revenue. We believe
that available cash, together with the efforts from management plans and actions described elsewhere in this report, should enable the
Company to meet presently anticipated cash needs for at least the next 12 months after the date that the financial statements are issued
and the Company has prepared the consolidated financial statements on a going concern basis. However, the Company continues to have ongoing
obligations and it expects that it will require additional capital in order to execute its longer-term development plan. If the Company
encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures
to conserve liquidity, which could include, but not necessarily be limited to, deferring some of its research and seeking to dispose of
marketable securities. Management cannot provide any assurance that the Company will raise additional capital if needed.
Because we rely upon third parties to perform
the payment processing for our sales of on the e-commerce platforms, the failure or inability of the third party to provide these services
could impair our business and operation.
The third party payment service
providers such as UnionPay, Alipay and WeChat Pay are used by most e-commerce platforms in China for their convenience, reliability and
cost-effectiveness. However, the payment processing business is highly regulated, and it is subject to a number of risks that could materially
and adversely affect their abilities to provide payment processing services to us, including:
●
increased
regulatory focus and the requirement that it comply with numerous complex and evolving laws, rules and regulations;
●
increases in the costs to the third party, including
fees charged by banks to process funds through the third parties, which could result in increased costs to us and to our participants;
●
dissatisfaction with the third parties'
services;
●
a decline in the use of the third parties'
services generally which could result in increases in costs to users such as us and our participants;
●
the ability of the third parties to maintain
adequate security procedures to prevent the hacking or other unauthorized access to account and other information provided by us and the
participants who use the system;
●
system failures or failure to effectively scale
the system to handle large and growing transaction volumes;
●
the failure or inability of the third parties
to manage funds accurately or the loss of funds by the third parties, whether due to employee fraud, security breaches, technical errors
or otherwise; and
●
the failure or inability of these third parties
to adequately manage business and regulatory risks.
We rely on the convenience
and ease of use that third party's payment methods for our sales of NativusWell
®
(NLS-2) on the e-commerce platforms.
If the quality, utility, convenience or attractiveness of these payment services declines for any reason, the attractiveness of our product
could be materially impaired. If we need to migrate to other third-party payment services for any reason, the transition could require
considerable time and management resources, and the third-party payment services may not be as effective, efficient or well-received by
our clients. Further, our customers may be reluctant to use a different payment system.
5
Preclinical development is a long, expensive
and uncertain process, and we may terminate one or more of our current preclinical development programs.
Traditionally, drug discovery
and development is a time-consuming, costly and high-risk business. On average, the cost of launching a new drug is estimated to approach
US$2.6 billion and can take around 12 years to make it to the market (4 key benefits of drug repositioning. (n.d.). Retrieved from http://www.totalbiopharma.com/2012/07/04/4-key-benefits-drug-repositioning/).
Despite the huge expenditures, only approximately 1 in 1,000 potential drugs is graduated to human clinical trials after pre-clinical
testing in the United States, (Norman, G. A. Drugs, Devices, and the FDA: Part 1. JACC: Basic to Translational Science, 1(3), 170-179,
2016) and nearly 86.2% of drug candidates entering phase 1 trials fails to achieve drug approval. (Wong C. H., Siah K. W. & Lo A.
W. (2019, April), "Estimation of clinical trial success rates and related parameters," retrieved from https://academic.oup.com/biostatistics/article/20/2/273/4817524).
Even after a drug is commercialized, there are just too many factors affecting the sales of pharmaceutical products, including unmet need/burden
of disease (68.2%), clinical efficacy (47.3%), comparator choice (36.4%), safety profile (36.4%), and price (35.5%) (Sendyona, S., Odeyemi,
I., & Maman, K. "Perceptions and factors affecting pharmaceutical market access: Results from a literature review and survey
of stakeholders in different settings" Journal of Market Access & Health Policy, 4(1), 31660, 2016). In the end, on average,
only 20% of approved new drugs generate revenues that exceed the average R&D investment. (Rosenblatt, M. (2014, December 19) "The
Real Cost of "High-Priced" Drugs," retrieved from https://hbr.org/2014/11/the-real-cost-of-high-priced-drugs). We may
determine that certain preclinical product candidates or programs do not have sufficient potential to warrant the allocation of resources
toward them. Accordingly, we may elect to terminate our programs for and, in certain cases, our licenses to, such product candidates or
programs. If we terminate a preclinical program in which we have invested significant resources, we will have expended resources on a
program that will not provide a full return on our investment and missed the opportunity to have allocated those resources to potentially
more productive uses.
Management has discretion to terminate the
development of any of our projects at any time.
In light of the costs, both
in time and expense, as well as the preclinical results and general business considerations, management may decide not to continue developing
a particular preclinical program without announcement. Management will always base its decision on what it believes to be the most efficient
use of the Company's resources to provide the most value to its shareholders. As a result, investors may not always be aware of
the termination of a previously announced study or trial. The Company will continue to provide update on its active preclinical projects
in its SEC filings and/or press releases, as appropriate.
We may not be successful in our efforts
to identify or discover additional drug candidates. Due to our limited resources and access to capital, we must continue to prioritize
development of certain drug candidates; such decisions may prove to be wrong and may adversely affect our business.
Although we intend to explore
other therapeutic opportunities in addition to the drug candidates that we are currently developing, we may fail to identify other drug
candidates for a number of reasons. For example, our research methodology may be unsuccessful in identifying potential drug candidates
or those we identify may be shown to have harmful side effects or other undesirable characteristics that make them unmarketable or unlikely
to receive regulatory approval.
Research programs to pursue
the development of our drug candidates for additional indications and to identify new drug candidates and disease targets require substantial
technical, financial and human resources whether or not we ultimately are successful. Our research programs may initially show promise
in identifying potential indications and/or drug candidates, yet fail to yield results for clinical development for a number of reasons,
including but not limited to:
●
the research methodology used may not be successful in identifying potential indications and/or drug candidates;
6
●
potential drug candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective drugs; or
●
it may take greater human and financial resources to identify additional therapeutic opportunities for our drug candidates or to develop suitable potential drug candidates through internal research programs than we will possess, thereby limiting our ability to diversify and expand our drug portfolio.
Because we have limited financial
and managerial resources, we have chosen to focus at present on our three Lead Projects, which may ultimately prove to be unsuccessful.
As a result of this focus, we may forego or delay pursuit of opportunities with other drug candidates, or for other indications that later
prove to have greater commercial potential or a greater likelihood of success. Even if we determine to pursue alternative therapeutic
or diagnostic drug candidates, these other drug candidates or other potential programs may ultimately prove to be unsuccessful. In short,
our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
Accordingly, there can be
no assurance that we will ever be able to develop suitable potential drug candidates through internal research programs. This could materially
adversely affect our future growth and prospects.
If we encounter difficulties enrolling patients
in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Although we obtained CTA/FDA
approval to initiate clinical trials for our Lead Projects, there can be no assurance, timely completion of clinical trials in accordance
with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who meet the trial criteria
and remain in the trial until its conclusion. We may experience difficulties enrolling and retaining appropriate patients in our clinical
trials for a variety of reasons, including but not limited to:
●
the size and nature of the patient population;
●
patient eligibility criteria defined in the clinical protocol;
●
the size of study population required for statistical analysis of the trial's primary endpoints;
●
the proximity of patients to trial sites;
●
the design of the trial and changes to the design of the trial;
●
our ability to recruit clinical trial investigators with the appropriate competencies and experience;
●
competing clinical trials for similar therapies or other new therapeutics exist and will reduce the number and types of patients available to us;
●
clinicians' and patients' perceptions as to the potential advantages and side effects of the drug candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating;
●
our ability to obtain and maintain patient consents;
●
patients enrolled in clinical trials may not complete a clinical trial; and
●
the availability of approved therapies that are similar to our drug candidates.
Even if we are able to enroll
a sufficient number of patients in our clinical trials, delays in patient enrollment may result in increased costs or may affect the timing
or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance
the development of our drug candidates.
7
Clinical drug development involves a lengthy
and expensive process and could fail at any stage of the process. We have limited experience in conducting clinical trials and results
of earlier studies and trials may not be reproduced in future clinical trials.
For our drug candidates, clinical
testing is expensive and can take many years to complete, while failure can occur at any time during the clinical trial process. The results
of studies in animals and early clinical trials of our drug candidates may not predict the results of later-stage clinical trials. Drug
candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through
studies in animals and initial clinical trials. In some instances, there can be significant variability in safety and/or efficacy results
between different trials of the same drug candidate due to numerous factors, including changes in trial procedures set forth in protocols,
differences in the size and type of the patient populations (including genetic differences), patient adherence to the dosing regimen and
the patient dropout rate. Results in later trials may also differ from earlier trials due to a larger number of clinical trial sites and
additional countries and languages involved in such trials. In addition, the design of a clinical trial can determine whether its results
will support approval of a drug candidate, and flaws in the design of a clinical trial may not become apparent until the clinical trial
is well advanced and significant expense has been incurred.
A number of companies in the
pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of demonstrated
efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Clinical trials of potential products often
reveal that it is not practical or feasible to continue development efforts. Furthermore, if the trials we conduct fail to meet their
primary statistical and clinical endpoints, they will not support the approval from the FDA, NMPA, EMA, Health Canada or other comparable
regulatory authorities for our drug candidates. If this occurs, we would need to replace the failed study with new trials, which would
require significant additional expense, cause substantial delays in commercialization and materially adversely affect our business, financial
condition, cash flows and results of operations.
If clinical trials of our drug candidates
fail to demonstrate safety and efficacy to the satisfaction of the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities,
or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable
to complete, the development and commercialization of our drug candidates.
Before applying for and obtaining
regulatory approval for the sale of any of our drug candidates, we must conduct extensive clinical trials to demonstrate the safety and
efficacy of our drug candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete
and may fail. A failure of one or more of our clinical trials can occur at any stage of testing and successful interim results of a clinical
trial do not necessarily predict successful final results.
We and our CROs are required
to comply with current Good Clinical Practices ("cGCP") requirements, which are regulations and guidelines enforced by the
FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities for all drugs in clinical development. Regulatory authorities
enforce these cGCP through periodic inspections of trial sponsors, principal investigators and trial sites. Compliance with cGCP can be
costly and if we or any of our CROs fail to comply with applicable cGCP, the clinical data generated in our clinical trials may be deemed
unreliable and the FDA, NMPA, EMA, Health Canada or comparable regulatory authorities may require us to perform additional clinical trials
before approving our marketing applications.
We may experience numerous
unexpected events during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or
commercialize our drug candidates, including but not limited to:
●
regulators, institutional review boards ("IRBs") or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
●
clinical trials of our drug candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon drug development programs;
●
the number of patients required for clinical trials of our drug candidates may be larger than we anticipate, enrollment may be insufficient or slower than we anticipate or patients may drop out at a higher rate than we anticipate;
8
●
our contractors and investigators may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
●
we might have to suspend or terminate clinical trials of our drug candidates for various reasons, including a lack of clinical response or a determination that participants are being exposed to unacceptable health risks;
●
regulators, IRBs or ethics committees may require that we or our investigators suspend or terminate clinical research for various reasons, including non-compliance with regulatory requirements;
●
the cost of clinical trials of our drug candidates may be greater than we anticipate;
●
the supply or quality of our drug candidates or other materials necessary to conduct clinical trials of our drug candidates may be insufficient or inadequate; and
●
our drug candidates may cause adverse events, have undesirable side effects or other unexpected characteristics, causing us, our investigators, or regulators to suspend or terminate the trials.
If we are required to conduct
additional clinical trials or other testing of our drug candidates beyond those that we currently contemplate, if we are unable to successfully
complete clinical trials of our drug candidates or other testing, if the results of these trials or tests are not positive or are only
modestly positive or if they raise safety concerns, we may:
●
be delayed in obtaining regulatory approval for our drug candidates;
●
not obtain regulatory approval at all;
●
obtain approval for indications that are not as broad as intended;
●
have a drug removed from the market after obtaining regulatory approval;
●
be subject to additional post-marketing testing requirements;
●
be subject to restrictions on how a drug is distributed or used; or
●
be unable to obtain reimbursement for use of a drug.
Delays in testing or approvals
may result in increases in our drug development costs. We do not know whether any clinical trials will begin as planned, will need to
be restructured, or will be completed on schedule, or at all. Clinical trials may produce negative or inconclusive results. Moreover,
these trials may be delayed or proceed less quickly than intended. Delays in completing our clinical trials will increase our costs, slow
down our drug candidate development and approval process, and jeopardize our ability to commence product sales and generate revenues and
we may not have sufficient funding to complete the testing and approval process. Any of these events may significantly harm our business,
financial condition and prospects, lead to the denial of regulatory approval of our drug candidates or allow our competitors to bring
drugs to market before we do, impairing our ability to commercialize our drugs if and when approved.
Significant clinical trial
delays also could shorten any periods during which we have the exclusive right to commercialize our drug candidates or allow our competitors
to bring products to market before we do, impair our ability to commercialize our drug candidates and may harm our business and results
of operations.
We may in the future conduct clinical trials
for our drug candidates in sites outside the U.S. and the FDA may not accept data from trials conducted in such locations.
We may in the future conduct
certain of our clinical trials outside the U.S. Although the FDA may accept data from clinical trials conducted outside the U.S. for our
New Drug Application ("NDA"), acceptance of this data is subject to certain conditions imposed by the FDA. There can be no
assurance the FDA will accept data from any of the clinical trials we conduct outside the U.S. If the FDA does not accept the data from
any of our clinical trials conducted outside the U.S., it would likely result in the need for additional clinical trials in the U.S.,
which would be costly and time-consuming and could delay or prevent the commercialization of any of our drug candidates.
9
Risks Related to Obtaining Regulatory Approval
for Our Drug Candidates
The regulatory approval processes of the
FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities are lengthy, time-consuming and inherently unpredictable, and
if we are ultimately unable to obtain regulatory approval for our current drug candidates or any future drug candidates we may develop,
our business will be substantially harmed.
We cannot commercialize drug
candidates without first obtaining regulatory approval to market each drug from the FDA, NMPA, EMA, Health Canada or comparable regulatory
authorities. Before obtaining regulatory approvals for the commercial sale of any drug candidate for a target indication, we must demonstrate
in studies in animals and well-controlled clinical trials, and, with respect to approval in the United States and other regulatory agencies,
to the satisfaction of the FDA, NMPA, EMA, Health Canada or comparable regulatory authorities, that the drug candidate is safe and effective
for use for that target indication and that the manufacturing facilities, processes and controls are adequate.
The time required to obtain
approval from the FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities is unpredictable but typically takes many
years following the commencement of studies in animals and clinical trials and depends upon numerous factors, including the substantial
discretion of the regulatory authorities.
In addition, approval policies,
regulations or the type and amount of clinical data necessary to gain approval can differ among regulatory authorities and may change
during the course of the development of a drug candidate. We have not obtained regulatory approval for any drug candidate. It is possible
that neither our existing drug candidates nor any drug candidates we may discover or acquire for development in the future will ever obtain
regulatory approval. Even if we obtain regulatory approval in one jurisdiction, we may not obtain it in other jurisdictions.
Our drug candidates could
fail to receive regulatory approval from any of the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities for many
reasons, including but not limited to:
●
disagreement with regulators regarding the design or implementation of our clinical trials;
●
failure to demonstrate that a drug candidate is safe and effective or safe, pure and potent for its proposed indication;
●
failure of clinical trial results to meet the level of statistical significance required for approval;
●
failure to demonstrate that a drug candidate's clinical and other benefits outweigh its safety risks;
●
disagreement with regulators regarding our interpretation of data from studies in animals or clinical trials;
●
insufficiency of data collected from clinical trials of our drug candidates to support the submission and filing of a New Drug Application ("NDA"), or other submission or to obtain marketing approval;
●
the FDA, NMPA, EMA, Health Canada or a comparable regulatory authority's finding of deficiencies related to the manufacturing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies; and
●
changes in approval policies or regulations that render our preclinical studies and clinical data insufficient for approval.
10
Any of the FDA, NMPA, EMA,
Health Canada or other comparable regulatory authorities may require more information, including additional preclinical studies or clinical
data, to support approval, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development
program. If we were to obtain approval, regulatory authorities may approve any of our drug candidates for fewer or more limited indications
than we request. Regulatory authorities also may grant approval contingent on the performance of costly post-marketing clinical trials,
or may approve a drug candidate with a label that is not desirable for the successful commercialization of that drug candidate. In addition,
if our drug candidate produces undesirable side effects or involves other safety issues, the FDA may require the establishment of a Risk
Evaluation Mitigation Strategy ("REMS"), or NMPA, EMA, Health Canada or other comparable regulatory authorities may require
the establishment of a similar strategy. Such a strategy may, for instance, restrict distribution of our drug candidates, require patient
or physician education, or impose other burdensome implementation requirements on us.
Regulatory approval may be substantially
delayed or may not be obtained for one or all of our drug candidates if regulatory authorities require additional time or studies to assess
the safety or efficacy of our drug candidates.
We currently do not have any
drug candidates that have gained approval for sale by the FDA, NMPA or EMA, Health Canada or other regulatory authorities in any other
country, and we cannot guarantee that we will ever have marketable drugs. Despite SACT-1 having been granted orphan drug status, this
is not an approval for sale by the FDA. Our business is substantially dependent on our ability to complete the development of, obtain
marketing approval for and successfully commercialize drug candidates in a timely manner. We cannot commercialize drug candidates without
first obtaining marketing approval from the FDA, NMPA, EMA, Health Canada and comparable regulatory authorities. In the U.S., we hope
to file INDs for the drug candidates from our Lead Projects and, subject to the approval of IND, Phase 1 clinical trials in humans. Even
if we are permitted to commence such clinical trials, they may not be successful and regulators may not agree with our conclusions regarding
the data generated by our clinical trials.
We may be unable to complete
development of our drug candidates or initiate or complete development of any future drug candidates we may develop on our projected schedule.
While we believe that our existing cash will likely enable us to complete the preclinical development of at least one of our current Lead
Projects, the full clinical development, manufacturing and launch of that drug candidate, will take significant additional time and likely
require funding beyond the existing cash. In addition, if regulatory authorities require additional time or studies to assess the safety
or efficacy of our drug candidates, we may not have or be able to obtain adequate funding to complete the necessary steps for approval
for our drug candidates or any future drug candidates.
Preclinical studies in animals
and clinical trials in humans to demonstrate the safety and efficacy of our drug candidates are time-consuming, expensive and take several
years or more to complete. Delays in preclinical or clinical trials, regulatory approvals or rejections of applications for regulatory
approval in the U.S., Europe, the PRC or other markets may result from many factors, including but not limited to:
●
our inability to obtain sufficient funds required to conduct or continue a trial, including lack of funding due to unforeseen costs or other business decisions;
●
regulatory reports for additional analysts, reports, data, preclinical studies and clinical trials;
●
failure to reach agreement with, or inability to comply with conditions imposed by the FDA, NMPA, EMA, Health Canada or other regulators regarding the scope or design of our clinical trials;
●
regulatory questions regarding interpretations of data and results and the emergence of new information regarding our drug candidates or other products;
●
delay or failure in obtaining authorization to commence a clinical trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial;
●
withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care or the ineligibility of a site to participate in our clinical trials;
●
unfavorable or inconclusive results of clinical trials and supportive non-clinical studies, including unfavorable results regarding effectiveness of drug candidates during clinical trials;
●
difficulty in maintaining contact with patients during or after treatment, resulting in incomplete data;
●
our inability to obtain approval from IRBs or ethics committees to conduct clinical trials at their respective sites;
●
our inability to enroll and retain a sufficient number of patients who meet the inclusion and exclusion criteria in a clinical trial;
11
●
our inability to conduct a clinical trial in accordance with regulatory requirements or our clinical protocols;
●
clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, withdrawing from or dropping out of a trial, or becoming ineligible to participate in a trial;
●
failure of our clinical trial managers to satisfy their contractual duties or meet expected deadlines;
●
manufacturing issues, including problems with manufacturing or timely obtaining from third parties sufficient quantities of a drug candidate for use in a clinical trial;
●
ambiguous or negative interim results, or results that are inconsistent with earlier results;
●
feedback from the FDA, NMPA, EMA, Health Canada, an IRB, data safety monitoring boards, or comparable entities, or results from earlier stage or concurrent studies in animals and clinical trials, regarding our drug candidates, including which might require modification of a trial protocol;
●
unacceptable risk-benefit profile or unforeseen safety issues or adverse side effects; and
●
a decision by the FDA, NMPA, EMA, Health Canada, an IRB, comparable entities, or the Company, or recommendation by a data safety monitoring board or comparable regulatory entity, to suspend or terminate clinical trials at any time for safety issues or for any other reason.
Changes in regulatory requirements
and guidance may also occur, and we may need to amend clinical trial protocols submitted to applicable regulatory authorities to reflect
these changes. Amendments may require us to resubmit clinical trial protocols to IRBs or ethics committees for re-examination, which may
increase the costs or time required to complete a clinical trial.
If we experience delays in
the completion of, or the termination of, a clinical trial, of any of our drug candidates, the commercial prospects of our drug candidates
will be harmed, and our ability to generate product sales revenues from any of those drug candidates will be delayed. In addition, any
delay in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process, and jeopardize
our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects
significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may
also ultimately lead to the denial of regulatory approval of our drug candidates.
If we are required to conduct
additional clinical trials or other studies with respect to any of our drug candidates beyond those that we initially contemplated, if
we are unable to successfully complete our clinical trials or other studies or if the results of these studies are not positive or are
only modestly positive, we may be delayed in obtaining regulatory approval for that drug candidate, we may not be able to obtain regulatory
approval at all or we may obtain approval for indications that are not as broad as intended. Our product development costs will also increase
if we experience delays in testing or approvals, and we may not have sufficient funding to complete the testing and approval process.
Significant clinical trial delays could allow our competitors to bring their products to market before we do and impair our ability to
commercialize our drugs, if and when approved. If any of this occurs, our business will be materially harmed.
Our drug candidates may cause undesirable
adverse events or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved
label, or result in significant negative consequences following any regulatory approval.
Undesirable adverse events
caused by our drug candidates or any future drug candidates we may develop could cause us or regulatory authorities to interrupt, delay
or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, NMPA, EMA,
Health Canada or other comparable regulatory authorities. Results of our potential clinical trials could reveal a high and unacceptable
severity or prevalence of adverse effects. In such event, our trials could be suspended or terminated and the FDA, NMPA, EMA, Health Canada
or other comparable regulatory authorities could order us to cease further development of, or deny approval of, our drug candidates for
any or all target indications. Drug-related adverse events could also affect patient recruitment or the ability of enrolled subjects to
complete the trial, could result in potential product liability claims and may harm our reputation, business, financial condition and
business prospects significantly.
12
Additionally, if any of our
current or future drug candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such
drugs, a number of potentially significant negative consequences could result, including but not limited to:
●
suspending the marketing of the drug;
●
having regulatory authorities withdraw approvals of the drug;
●
adding warnings on the label;
●
developing a REMS for the drug or, if a REMS is already in place, incorporating additional requirements under the REMS, or to develop a similar strategy as required by a comparable regulatory authority;
●
conducting post-market studies;
●
being sued and held liable for harm caused to subjects or patients; and
●
damage to our reputation.
Any of these events could
prevent us from achieving or maintaining market acceptance of the particular drug candidate, if approved, and could significantly harm
our business, results of operations and prospects.
Even if we receive regulatory approval for
our drug candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant
additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems
with our drug candidates.
If our drug candidates or
any future drug candidates we develop are approved, they will be subject to ongoing regulatory requirements for manufacturing, labeling,
packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy,
and other post-market information, including both federal and state requirements in the United States and requirements of comparable regulatory
authorities outside of the United States.
Manufacturers and manufacturers'
facilities are required to comply with extensive requirements from the FDA, NMPA, EMA, Health Canada and comparable regulatory authorities,
including, in the United States, ensuring that quality control and manufacturing procedures conform to cGMP regulations. As such, our
contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments
made in any NDA, other marketing application, and previous responses to inspection observations. Accordingly, we and others with whom
we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and
quality control.
Any regulatory approvals that
we receive for our drug candidates may be subject to limitations on the approved indicated uses for which the drug may be marketed or
to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials
and surveillance to monitor the safety and efficacy of the drug candidate. The regulatory authorities may also require risk management
plans or programs as a condition of approval of our drug candidates (such as REMS of the FDA and risk-management plan of the EMA), which
could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to
ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA,
NMPA, EMA, Health Canada or a comparable regulatory authority approves our drug candidates, we will have to comply with requirements including,
for example, submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with
cGCP and cGMP, for any clinical trials that we conduct post-approval.
13
The FDA may impose consent
decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the
drug reaches the market. Later discovery of previously unknown problems with our drug candidates, including adverse events of unanticipated
severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements,
may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies
to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences
include, among other things:
●
restrictions on the marketing or manufacturing of our drug candidates, withdrawal of the product from the market, or voluntary or mandatory product recalls;
●
fines, untitled or warning letters, or holds on clinical trials;
●
refusal by the FDA to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals;
●
product seizure or detention, or refusal to permit the import or export of our drug candidates; and
●
injunctions or the imposition of civil or criminal penalties.
The FDA strictly regulates
marketing, labeling, advertising and promotion of products that are placed on the market. Companies may promote drugs only for the approved
indications and in accordance with the provisions of the approved label and may not promote drugs for any off-label use, such as uses
that are not described in the product's labeling and that differ from those approved by the regulatory authorities. However, physicians
may prescribe drug products for off-label uses and such off-label uses are common across some medical specialties. Thus, they may, unbeknownst
to us, use our product for an "off label" indication for a specific treatment recipient. The FDA, NMPA, EMA, Health Canada
and other regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and if we are
found to be out of compliance with the requirements and restrictions imposed on us under those laws and restrictions, we may be subject
to significant liability, including civil and administrative remedies as well as criminal sanctions, and the off-label use of our products
may increase the risk of product liability claims. In addition, management's attention could be diverted from our business operations
and our reputation could be damaged.
The policies of the FDA, NMPA,
EMA, Health Canada and other regulatory authorities may change and we cannot predict the likelihood, nature or extent of government regulation
that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt
to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance,
we may lose any regulatory approval that we may have obtained and we may not achieve or sustain profitability.
Despite FDA's consent for us to pursue
the 505(b)(2) development pathway for SACT-1, we may be unable to successfully complete the 505(b)(2) pathway for the pediatric formulation
of SACT-1 to treat neuroblastoma as planned, which would materially impact our likelihood of obtaining FDA approval.
Even though the FDA is allowing
us to pursue the 505(b)(2) regulatory pathway for our product candidates, we will need to conduct additional clinical trials, provide
additional data and information and meet additional standards for regulatory approval. If this were to occur, the time and financial resources
required to obtain FDA approval for our product candidates would likely substantially increase. We cannot assure you that we will receive
the requisite or timely approvals for commercialization of such product candidate. Any failure to obtain regulatory approval of our product
candidates would significantly limit our ability to generate revenues, and any failure to obtain such approval for all of the indications
and labeling claims we deem desirable could reduce our potential revenues.
14
If we or our third-party suppliers fail
to comply with the FDA's good manufacturing practice regulations or fail to adequately, timely, or sufficiently respond to an FDA
Form 483 or subsequent Warning Letter, this could impair our ability to market our products in a cost-effective and timely manner and
could result in FDA enforcement action.
We and our third-party suppliers
are required to comply with the FDA's Current Good Manufacturing Practices (cGMP) which covers the methods and documentation of
the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products.
The FDA audits compliance with the cGMP and related regulations through periodic announced and unannounced inspections of manufacturing
and other facilities. The FDA may conduct these inspections or audits at any time. If, during the inspection, FDA identifies issues which,
in FDA's judgment, may constitute violations of the Federal Food, Drug, and Cosmetic Act or FDA's regulations, the FDA inspector
may issue an FDA Form 483 listing these observations.
Note that if an entity does
not address observations found in an FDA Form 483 to FDA's satisfaction, the FDA could take enforcement action, including any of
the following sanctions:
●
untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
●
customer notifications or recall, detention or seizure of our product;
●
operating restrictions or partial suspension or total shutdown of production;
●
refusing or delaying our requests for pre-market approval of new products;
●
withdrawing pre-market approvals that have already been granted;
●
refusal to grant export approval for our product; or
●
criminal prosecution.
Any of the foregoing actions
could have a material adverse effect on our reputation, business, financial condition and operating results.
Risks Related to Commercialization of Our Drug
Candidates
Even if any of our drug candidates receive
regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in
the medical community necessary for commercial success.
After we complete clinical
trials and receive regulatory approval for any of our drug candidates, which may not happen for some time, we recognize that such candidate(s)
may ultimately fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.
We may not be able to achieve or maintain market acceptance of our products over time if new products or technology are introduced that
are more favorably received than our products, are more cost effective or render our drug obsolete. We will face competition with respect
to our drug candidates from other pharmaceutical companies developing products in the same disease/therapeutic area and specialty pharmaceutical
and biotechnology companies worldwide. Many of the companies against which we may be competing have significantly greater financial resources
and expertise in research and development, manufacturing, animal testing, conducting clinical trials, obtaining regulatory approvals and
marketing approval for drugs than we do. Physicians, patients and third-party payors may prefer other novel products to ours, which means
that we may not generate significant sales revenues for that product and that product may not become profitable. The degree of market
acceptance of our drug candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to:
●
clinical indications for which our drug candidates are approved;
●
physicians, hospitals, and patients considering our drug candidates as a safe and effective treatment;
●
the potential and perceived advantages of our drug candidates over alternative treatments;
15
●
the prevalence and severity of any side effects;
●
product labeling or product insert requirements of the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities;
●
limitations or warnings contained in the labeling approved by the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities;
●
the timing of market introduction of our drug candidates as well as competitive drugs;
●
the cost of treatment in relation to alternative treatments and their relative benefits;
●
the availability of adequate coverage, reimbursement and pricing by third-party payors and government authorities;
●
lack of experience and financial and other limitations on our ability to create and sustain effective sales and marketing efforts or ineffectiveness of our sales and marketing partners; and
●
changes in legislative and regulatory requirements that could prevent or delay regulatory approval of our drug candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any drug candidates for which we obtain regulatory approval.
We depend substantially on the success of
the drug candidates being researched as our current Lead Projects. If we are unable to license or sublicense, sell or otherwise commercialize
our drug candidates, or experience significant delays in doing so, our business will be materially harmed.
Our business and the ability
to generate revenue related to product sales, if ever achieved, will depend on the successful development, regulatory approval and licensing
or sublicensing or other commercialization of our drug candidates or any other drug candidates we may develop. We have invested a significant
amount of financial resources in the development of our drug candidates and we may invest in other drug candidates. The success of our
drug candidates and any other potential drug candidates will depend on many factors, including but not limited to:
●
successful enrollment in, and completion of, studies in animals and clinical trials;
●
other parties' ability in conducting our clinical trials safely, efficiently and according to the agreed protocol;
●
receipt of regulatory approvals from the FDA, NMPA, EMA, Health Canada and other comparable regulatory authorities for our drug candidates;
●
our ability to establish commercial manufacturing capabilities by making arrangements with third-party manufacturers;
●
reliance on other parties to conduct our clinical trials swiftly and effectively;
●
launch of commercial sales of our drug candidates, if and when approved;
●
obtaining and maintaining patents, trade secrets and other IP protection and regulatory exclusivity, as well as protecting our rights in our own IP;
●
ensuring that we do not infringe, misappropriate or otherwise violate patents, trade secrets or other IP rights of other parties;
●
obtaining acceptance of our drug candidates by doctors and patients;
●
obtaining reimbursement from third-party payors for our drug candidates, if and when approved;
●
our ability to compete with other drug candidates and drugs; and
●
maintenance of an acceptable safety profile for our drug candidates following regulatory approval, if and when received.
16
We may not achieve regulatory
approval and commercialization in a timely manner or at all. Significant delays in obtaining approval for and/or to successfully commercialize
our drug candidates would materially harm our business and we may not be able to generate sufficient revenues and cash flows to continue
our operations.
Risks Related to Our IP
A significant portion of our IP portfolio
currently includes pending patent applications that have not yet been issued as granted patents and if the pending patent applications
covering our product candidates fail to be issued, our business will be adversely affected. If we or our licensors are unable to obtain
and maintain patent protection for our technology and drugs, our competitors could develop and commercialize technology and drugs similar
or identical to ours, and our ability to successfully commercialize our technology and drugs may be adversely affected.
Our success depends largely
on our ability to obtain and maintain patent protection and other forms of IP rights for the composition of matter, method of use
and/or method of manufacture for each of our drug candidates. Failure to obtain, maintain protection, enforce or extend adequate patent
and other IP rights could materially adversely affect our ability to develop and market one or more of our drug candidates. We also rely
on trade secrets and know-how to develop and maintain our proprietary and IP position for each of our drug candidates. Any failure to
protect our trade secrets and know-how with respect to any specific drug and diagnostics technology candidate could adversely affect the
market potential of that potential product.
As of the date of this report,
the Company has, through its licenses, obtained rights to patents and patent applications covering some or all its drug and diagnostics
technology candidates that have been filed in major jurisdictions such as the United States, member states of the European Patent Organization
(the "EPO") and the PRC (collectively, "Major Patent Jurisdictions"), as well as in other countries. We have also
filed a number of provisional applications to establish earlier filing dates for certain of our other ongoing researches, the specifics
of which are currently proprietary and confidential. To the extent we do not seek or obtain patent protection in a particular jurisdiction,
we may not have commercial incentive to seek marketing authorization in such jurisdiction. Nonetheless, other parties might enter those
markets with generic versions or copies of our products and received regulatory approval without having significantly invested in their
own research and development costs compared to the Company's investment. For more information about our IP portfolio, please refer
to the Intellectual Property section below.
With respect to issued patents
in certain jurisdictions, for example in the U.S. and under the EPO, we may be entitled to obtain a patent term extension to extend the
patent expiration date provided we meet the applicable requirements for obtaining such patent term extensions. We have sought to support
our proprietary position by working with our licensors in filing patent applications in the names of the licensors in the United States
and through the PCT, related to the Lead Projects and certain other drug candidates. In the future, we intend to file patent applications
on supplemental or improvement IP derived from the licensed technologies, where those IP would be solely or jointly owned by the Company
pursuant to the terms of respective license agreements. Filing patents covering multiple technologies in multiple countries is time-consuming
and expensive, and we may not have the resources file and prosecute all necessary or desirable patent applications in a timely manner.
It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain
patent protection.
We cannot be certain that
patents will be issued or granted with respect to patent applications that are currently pending, or that issued or granted patents will
not later be found to be invalid or unenforceable.
17
The patent position of biotechnology
and pharmaceutical companies is generally uncertain because it involves complex legal and factual considerations. The standards applied
by the EPO, the U.S. Patent and Trademark Office, or USPTO, and foreign patent offices in granting patents are not always applied uniformly
or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable
in biotechnology and pharmaceutical patents. Consequently, patents may not issue from our pending patent applications and even if they
do issue, such patents may not issue in a form that effectively prevents others from commercializing competing products. As such, we do
not know the degree of future protection that we will have on our proprietary products and technology.
Additionally, the issuance
of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts
or patent offices in the United States and abroad. Even if patents do successfully issue and even if such patents cover our drug candidates,
other parties may initiate, for patents filed before March 16, 2013 (i.e., the enactment of the America Invents Act), interference or
re-examination proceedings, for patents filed on or after March 16, 2013, post-grant review,
inter partes
review, nullification
or derivation proceedings, in court or before patent offices, or similar proceedings challenging the validity, enforceability or scope
of such patents, which may result in the patent claims being narrowed or invalidated. Successful defense of its patents can constitute
a material factor in a company's expenses. According to an article published by BlueIron (https://finance.yahoo.com/news/current-patent-litigation-costs-between-120200165.html),
depending on the value at stake, the American Intellectual Property Law Association's "2019 Report of the Economic Survey"
reported the average costs of a patent litigation are between $2.3 million to $4.0 million.
In addition, the fact that
the Company has exclusive rights to prevent others from using a patented invention does not necessarily mean that the Company
itself will have the unrestricted right to use that invention. Other parties may obtain ownership or licenses to patents or other
IP rights that cover the manufacture, use or sale of our current or future products (or elements thereof). This may enable such other
parties to enforce their patents or IP rights against us, and may, as a result, affect the commercialization of our products or exploitation
of our own technology. We endeavor to identify early patents and patent applications which may block development of a product or
technology and minimize this risk by conducting prior art searches before and during the projects. However, relevant documents may be
overlooked, yet-to-be published or missed, which may in turn impact on the freedom to commercialize the relevant asset. In such cases,
we may not be in a position to develop or commercialize products or drug candidates unless we successfully pursue litigation to nullify
or invalidate the other IP rights concerned, or enter into a license agreement with the IP right holder, if available on commercially
reasonable terms.
If we are unable to obtain and maintain
the appropriate scope for our patents, our competitors could develop and commercialize technology and drugs similar or identical to ours,
and our ability to successfully commercialize our technology and drugs may be adversely affected.
We may not obtain sufficient
claim scope in those patents to prevent another party from competing successfully with our drug and diagnostics technology candidates.
Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent
competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our
patents by developing similar or alternative technology or drug and diagnostics technology candidates in a non-infringing manner. The
issuance of a patent is not conclusive as to its scope, validity or enforceability, and our patents may be challenged in the courts or
patent offices in the United States and abroad. Such challenges may result in patent claims being narrowed, invalidated or held unenforceable,
which could limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology
and drug and diagnostics technology candidates, or limit the duration of the patent protection of our technology and drug and diagnostics
technology candidates. Given the amount of time required for the development, testing and regulatory review of new drug and diagnostics
technology candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As
a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing drug and diagnostics technology
candidates similar or identical to ours.
Further, the issuance, scope,
validity, enforceability and commercial value of our and our current or future licensors' or collaboration partners' patent
rights are highly uncertain. Our and our licensors' pending and future patent applications may not result in patents being issued
which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies
and products.
18
We may not be able to protect and enforce
our IP rights throughout the world.
Our commercial success will
depend, in part, on our ability to maintain IP protection for our drug candidates in which we seek to develop and commercialize. While
we rely primarily upon a combination of patents, trademarks, trade secrets and other contractual obligations to protect the IP related
to our brands, products and other proprietary technologies, these legal means may afford only limited protection.
Filing and prosecuting patents
on drug candidates and defending the validity of the same (if challenged) in all countries throughout the world could be prohibitively
expensive for us, and our IP rights in countries outside the Major Patent Jurisdictions can be less extensive than those in the Major
Patent Jurisdictions. In addition, the laws of some countries in the rest of the world such as India do not protect IP rights to the same
extent as laws in the Major Patent Jurisdictions. Consequently, we may not be able to prevent other parties from practicing our inventions
in the rest of the world, despite our continued efforts in enforcing our IP rights through legal means. Competitors may use our technology
in jurisdictions where we have not or not yet obtained patent protection to develop their own drugs and further, may export otherwise
infringing drugs to non-U.S. jurisdictions where we have patent protection.
Our, our licensors'
or collaboration partners' patent applications cannot be enforced against other parties practicing the technology claimed in such
applications unless and until a patent issues from such applications, and then only to the extent the issued claims cover the technology.
In addition, patents and other IP rights also will not protect our technology, drug candidates if another party, including our competitors,
design around our protected technology, drug candidates without infringing, misappropriating or otherwise violating our patents or other
IP rights.
Moreover, currently and as
our R&D continues to progress, some of our patents and patent applications are or may be co-owned with another party. Some of our
licenses already provide that future-developed technologies (and any resulting patents) will be co-owned with the licensors and other
patents for technologies we may acquire or develop with other parties may also be jointly owned. If we are unable to obtain an exclusive
license to any such co-owners' interest in such patents or patent applications, such co-owners may be able to license their rights
to other persons, including our competitors, and our competitors could market competing products and technology, and we will be unable
to transfer or grant exclusive rights to potential purchasers or development partners of such co-owned technologies. In addition, we may
need the cooperation of any such co-owners of our patents in order to enforce such patents against other parties, and such cooperation
may not be provided to us. Any of the foregoing could limit the revenue we might generate from our patents or patent applications and
thus have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
Because patent applications
are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we or our licensors or
collaborators were or will be the first to file any patent application related to a drug and diagnostics technology candidate. Furthermore,
in the United States, if patent applications of other parties have an effective filing date before March 16, 2013, an interference
proceeding can be initiated by such other party to determine who was the first to invent any of the subject matter covered by the patent
claims of our applications. If patent applications of other parties have an effective filing date on or after March 16, 2013, in
the United States a derivation proceeding can be initiated by such other parties to determine whether our invention was derived from theirs.
Even where we have a valid
and enforceable patent, we may not be able to exclude others from practicing our invention where the other party can show that they used
the invention in commerce before our filing date or the other party benefits from a compulsory license. In addition, we may be subject
to other challenges regarding our exclusive ownership of our IP. If another party were successful in challenging our exclusive ownership
of any of our IP, we may lose our right to use such IP, such other party may be able to license such IP to other parties, including our
competitors, and our competitors could market competing products and technology. Any of the foregoing could have a material adverse effect
on our competitive position, business, financial conditions, results of operations, and prospects.
19
Many companies have encountered
significant problems in protecting and defending IP rights in jurisdictions outside Major Patent Jurisdictions. The legal systems of some
countries do not favor the enforcement of patents, trade secrets and other IP, which could make it difficult in those jurisdictions for
us to stop the infringement or misappropriation of our patents or other IP rights, or the marketing of competing drugs in violation of
our proprietary rights generally.
To date, we have not sought
to enforce any issued patents in any jurisdictions. Proceedings to enforce our patent and other IP rights in any jurisdictions could result
in substantial costs and divert our efforts and attention from other aspects of our business.
Furthermore, such proceedings
could put our patents at risk of being invalidated, held unenforceable, or interpreted narrowly, could put our patent applications at
risk of not issuing, and could provoke other parties to assert claims of infringement or misappropriation against us. We may not prevail
in any lawsuits that we initiate in jurisdictions where opposition proceedings are available and the damages or other remedies awarded,
if any, may not be commercially meaningful. The requirements for patentability may differ in certain countries, particularly developing
countries. Certain countries in Europe, the PRC, and developing countries including India, have compulsory licensing laws under which
a patent owner may be compelled to grant licenses to other parties. In those countries, we and our licensors may have limited remedies
if patents are infringed or if we or our licensors are compelled to grant a license to another party, which could materially diminish
the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our IP rights around
the world may be inadequate to obtain a significant commercial advantage from the IP that we develop.
We may become involved in lawsuits to protect
or enforce our IP, which could be expensive, time-consuming and unsuccessful. Our patent rights relating to our drug and diagnostics technology
candidates could be found invalid or unenforceable if challenged in court or before the USPTO or comparable non-U.S. authority.
Competitors may infringe our
patent rights or misappropriate or otherwise violate our IP rights. To counter infringement or unauthorized use, litigation may be necessary
in the future to enforce or defend our IP rights, to protect our trade secrets or determine the validity and scope of our own IP rights
or the proprietary rights of others. This can be expensive and time-consuming. Any claim that we assert against perceived infringers could
also provoke these parties to assert counterclaims against us alleging that we infringe their IP rights. Many of our current and potential
competitors have the ability to dedicate substantially greater resources to enforce and/or defend their IP rights than we can. Accordingly,
despite our efforts, we may not be able to prevent other parties from infringing upon or misappropriating our IP. Litigation could result
in substantial costs and diversion of management resources, which could harm our business and financial results. In addition, in an infringement
proceeding, a court may decide that patent rights or other IP rights owned by us are invalid or unenforceable, or may refuse to stop the
other party from using the technology at issue on the grounds that our patent rights or other IP rights do not cover the technology in
question. An adverse result in any litigation proceeding could put our patent, as well as any patents that may issue in the future from
our pending patent applications, at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the
substantial amount of discovery required in connection with IP litigation, there is risk that some of our confidential information could
be compromised by disclosure during this type of litigation.
If we initiate legal proceedings
against another party to enforce our patent, or any patents that may be issued in the future from our patent applications, that relates
to one of our drug and diagnostics technology candidates, the defendant could counterclaim that such patent rights are invalid or unenforceable.
In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace, and there
are numerous grounds upon which another party can assert invalidity or unenforceability of a patent. Parties may also raise similar claims
before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include ex parte
re-examination,
inter partes
review, post-grant review, derivation and equivalent proceedings in non-U.S. jurisdictions,
such as opposition proceedings. Such proceedings could result in revocation or amendment to our patents in such a way that they no longer
cover and protect our drug and diagnostics technology candidates. With respect to the validity of our patents, for example, there may
be invalidating prior art of which we, our patent counsel, and the patent examiner were unaware during prosecution. If a defendant were
to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection
on our drug and diagnostics technology candidates. Such a loss of patent protection could have a material adverse impact on our business.
20
We may not be able to prevent
misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights
as fully as in the United States. Furthermore, because of the substantial amount of discovery required in connection with IP litigation,
there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
We may be subject to claims challenging
the inventorship of our patents and other IP.
Although we are not currently
experiencing any claims challenging the inventorship of our patents or ownership of our IP, we may in the future be subject to claims
that former employees, collaborators or other parties have an interest in our patents or other IP as inventors or co-inventors. For example,
we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our drug
and diagnostics technology candidates and who have not clearly contracted to transfer or assign any rights they may have to the Company.
In addition, for our licensed patents, although a majority of our licensors have procured assignment forms and records from inventors
to affirm their ownership in the licensed IP, another party or former employee or collaborator of our licensors not named in the patents
may challenge the inventorship of claim an ownership interest in one or more of our or our licensors' patents. Litigation may
be necessary to defend against these and other claims challenging inventorship. If we fail in defending any such claims, in addition to
paying monetary damages, we may lose rights such as exclusive ownership of, or right to use, our patent rights or other IP. Such an outcome
could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result
in substantial costs and be a distraction to management and other employees.
If we are sued for infringing IP rights
of other parties, such litigation could be costly and time-consuming and could prevent or delay us from developing or commercializing
our drug candidates, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
Our commercial success depends
in part on our avoiding infringement of the patents and other IP rights of other parties. There is a substantial amount of litigation
involving patent and other IP rights in the biotechnology and pharmaceutical industries. Numerous issued patents, provisional patents
and pending patent applications, which are owned by other parties, exist in the fields in which we are developing drug candidates. As
the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our drug candidates may give
rise to claims of infringement of the patent rights of others.
Other parties may assert that
we are employing their proprietary technology without authorization. There may be other patents of which we are currently unaware with
claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our drug candidates.
Because patent applications can take many years to issue, there may be currently pending patent applications or provisional patents which
may later result in issued patents that our drug candidates may infringe. In addition, other parties may obtain patents in the future
and claim that use of our technology infringes upon these patents. If any other patents were held by a court of competent jurisdiction
to cover the manufacturing process of any of our drug candidates, any molecules formed during the manufacturing process or any final drug
itself, the holders of any such patents may be able to prevent us from commercializing such drug candidate unless we obtain a license
under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable. Similarly,
if any other patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or
methods of use, including combination therapy or patient selection methods, the holders of any such patent may be able to block our ability
to develop and commercialize the applicable drug candidate unless we obtain a license, limit our uses, or until such patent expires, or
is finally determined to be held invalid or unenforceable. In either case, such a license may not be available on commercially reasonable
terms or at all.
Other parties who bring successful
claims against us for infringement of their IP rights may obtain injunctive or other equitable relief, which could prevent us from developing
and commercializing one or more of our drug candidates. Defense of these claims, regardless of their merits, would involve substantial
litigation expense and be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement
or misappropriation against us, we may have to pay substantial damages, including treble damages and attorneys' fees in the case
of willful infringement, obtain one or more licenses from other parties, pay royalties or redesign our infringing drug candidates, which
may be impossible or require substantial time and monetary expenditure. In the event of an adverse result in any such litigation, or even
in the absence of litigation, we may need to obtain licenses from other parties to advance our research or allow commercialization of
our drug candidates. Any required license may not be available at all, or may not be available on commercially reasonable terms. In the
event that we are unable to obtain such a license, we would be unable to further develop and commercialize one or more of our drug candidates,
which could harm our business significantly. We may also elect to enter into license agreements in order to settle patent infringement
claims or resolve disputes prior to litigation, and any such license agreements may require us to pay royalties and other fees that could
significantly reduce our profitability for any product related to that patent and thus harm our business.
21
Even if resolved in our favor,
litigation or other legal proceedings relating to IP claims may cause us to incur significant expenses, and could distract our technical
personnel, management personnel, or both from their normal responsibilities. In addition, there could be public announcements of the results
of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be
negative, it could have a substantial adverse effect on the market price of our Class A Ordinary Shares. Such litigation or proceedings
could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing
or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings.
Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their
greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could
have a material adverse effect on our ability to compete in the marketplace.
There may be patent applications pending
of which we are not aware, but which cover similar products to the ones we are attempting to license or develop, which may result in lost
time and money, as well as litigation.
It is possible that we have
failed to identify relevant outstanding patents or applications. For example, U.S. applications filed before November 29, 2000 and
certain U.S. applications filed after that date that will not be filed outside the United States remain confidential until patents are
issued. Patent applications filed in the United States after November 29, 2000 and generally filed elsewhere are published approximately
18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority
date. Therefore, patent applications covering our products could have been filed by others without our knowledge. Additionally, pending
patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our products
or the use of our products. Holders of any such unanticipated patents or patent applications may actively bring infringement claims against
us, with the same potential litigation consequences as alluded to elsewhere in this annual report. Any of these events could require us
to divert substantial financial and management resources that we would otherwise be able to devote to our business.
Obtaining and maintaining our patent protection
depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent
agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Periodic maintenance fees
on any issued patent are due to be paid to the USPTO and other patent agencies in several stages over the lifetime of the patent. The
USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment, and
other similar provisions during the patent application process. Although an inadvertent lapse can in many cases be cured by payment of
a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment
or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance
events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within
prescribed time limits, non-payment of fees, and failure to properly submit documents requesting an extension of time. In any such event,
our competitors might be able to enter the market, which would have a material adverse effect on our business.
The terms of our patents may not be sufficient
to effectively protect our drug and diagnostics technology candidates and business.
In most countries in which
we file, including the United States, the term of an issued patent is generally 20 years from the earliest claimed filing date of a non-provisional
patent application in the applicable country. Although various extensions may be available, the life of a patent and the protection it
affords is limited. For example, depending upon the timing, duration and specifics of the FDA regulatory approval for our drug candidates,
one or more of our U.S. patents, if issued, might be eligible for limited patent term restoration under the Drug Price Competition and
Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent term extension
of up to five years as compensation for patent term lost during drug development and the FDA regulatory review process. Patent term extensions,
however, cannot extend the remaining term of a patent beyond a total of 14 years from the date of drug approval by the FDA, and only one
patent can be extended for a particular drug. The application for patent term extension is subject to approval by the USPTO, in conjunction
with the FDA. We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply
prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period
or the scope of patent protection afforded could be less than we request. If we are unable to obtain a patent term extension for a given
patent or the term of any such extension is less than we request, the period during which we will have the right to exclusively market
our drug will be that of the originally issued patents themselves.
22
Even if patents covering one
of our drug candidates are obtained, thereby giving us a period of exclusivity for manufacturing and marketing that drug, we will not
be able to assert such patent rights upon the expiration of the issued patents against potential competitors who may begin marketing generic
copies of our medications, and our business and results of operations may be adversely affected.
Changes in patent law in the United States
could diminish the value of patents in general, thereby impairing our ability to protect our drug and diagnostics technology candidates.
The United States has recently
enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope
of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to
increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty
with respect to the value of patents once obtained, if any. Depending on decisions by the U.S. Congress, the federal courts and the USPTO,
the laws and regulations governing patents in the United States could change in unpredictable ways that would weaken our ability to obtain
new patents, or to enforce our existing patents and patents that we might obtain in the future. For example, in a recent case,
Assoc.
for Molecular Pathology v. Myriad Genetics, Inc.
, the U.S. Supreme Court held that certain claims to naturally-occurring substances
are not patentable. Although we do not believe that any of the patents owned or licensed by us will be found invalid based on this decision,
future decisions by the courts, the U.S. Congress or the USPTO may impact the value of our patent rights. There could be similar changes
in the laws of foreign jurisdictions that may impact the value of our patent rights or our other IP rights.
In addition, recent patent
reform legislation in the U.S., including the Leahy-Smith America Invents Act, or the America Invents Act, could increase those uncertainties
and costs. The America Invents Act was signed into law on September 16, 2011, and many of the substantive changes became effective
on March 16, 2013. The America Invents Act reforms U.S. patent law in part by changing the U.S. patent system from a "first
to invent" system to a "first inventor to file" system, expanding the definition of prior art, and developing a post-grant
review system, thus changing the U.S. patent law in a way that may weaken our ability to obtain patent protection in the U.S. for those
applications filed after March 16, 2013. Further, the America Invents Act created new procedures to challenge the validity of issued
patents in the U.S., including post-grant review and
inter
partes review proceedings, which some other parties have
been using to cause the cancellation of selected or all claims of issued patents of competitors. For a patent with an effective filing
date of March 16, 2013 or later, a petition for post-grant review can be filed by another party in a nine-month window from issuance
of the patent. A petition for
inter partes
review can be filed immediately following the issuance of a patent if the
patent has an effective filing date prior to March 16, 2013. A petition for
inter partes
review can be filed after
the nine-month-period for filing a post-grant review petition has expired for a patent with an effective filing date of March 16,
2013 or later. Post-grant review proceedings can be brought on any ground of invalidity, whereas
inter partes
review
proceedings can only raise an invalidity challenge based on published prior art and patents. These adversarial actions at the USPTO review
patent claims without the presumption of validity afforded to U.S. patents in lawsuits in U.S. federal courts, and use a lower burden
of proof than used in litigation in U.S. federal courts. Therefore, it is generally considered easier for a competitor or other party
to have a U.S. patent invalidated in a USPTO post-grant review or
inter partes
review proceeding than invalidated in
a litigation in a U.S. federal court. If any of our patents are challenged by another party in such a USPTO proceeding, there is no guarantee
that we or our licensors or collaborators will be successful in defending the patent, which would result in our loss of the challenged
patent right.
If we are unable to protect the confidentiality
of our trade secrets, our business and competitive position would be harmed.
In addition to our issued
patents, provisional patent, and pending patent applications, we expect to rely on trade secrets, including unpatented know-how, technology
and other proprietary information, to maintain our competitive position and protect our drug and diagnostics technology candidates. We
seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties that have access
to them, such as our employees, corporate collaborators, outside scientific collaborators, sponsored researchers, contract manufacturers,
consultants, advisors and other parties. We also enter into confidentiality and invention or patent assignment agreements with our employees
and consultants. However, any of these parties may breach such agreements and disclose our proprietary information, and we may not be
able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret
can be difficult, expensive and time-consuming, and the outcome is unpredictable. If trade secrets which are material to our business
were to be obtained by a competitor, our competitive position would be harmed.
23
We may be subject to claims that our employees
have wrongfully used or disclosed alleged trade secrets of their former employers.
Although we try to ensure
that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that
we or these employees have used or disclosed IP, including trade secrets or other proprietary information, of any such employee's
former employer. In addition, while we typically require our employees, consultants and contractors who may be involved in the development
of IP to execute agreements assigning such IP to us, we may be unsuccessful in executing such an agreement with each party who in fact
develops IP that we regard as our own, which may result in claims by or against us related to the ownership of such IP. We are not aware
of any threatened or pending claims that any of our projects involve misappropriated IP or other proprietary information, but in the future
litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages,
we may lose valuable IP rights. Even if we are successful in defending against such claims, litigation could result in substantial costs
and be a distraction to management.
We may be unable to execute on the optimal
development plan for one or more of our existing product candidates if we are unable to obtain or maintain necessary rights for some aspect
of the developing technology through acquisitions or licenses.
Our existing programs currently
use or may in the future use additional technologies subject to proprietary rights held by others, such as particular compositions or
methods of manufacture, treatment or use. The licensing and acquisition of IP rights is a competitive area, and more established companies
may pursue strategies to license or acquire such IP rights that we may consider necessary or useful. These established companies may have
a competitive advantage over us due to their size, cash resources and greater capabilities in clinical development and commercialization.
In addition, companies that
perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire IP rights
on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain or maintain licenses
or other rights from other parties to use IP of those parties, our business, financial condition and prospects for growth could suffer.
If we fail to comply with our obligations
in the agreements under which we license IP rights from other parties or otherwise experience disruptions to our business relationships
with our licensors, we could be required to pay monetary damages or could lose license rights that are important to our business.
Many of our projects (including
our Lead Projects) are based on IP which we have licensed from other parties. (See "Item 4. Information on the Company – B.
Business Overview – Intellectual Property") Certain of these license agreements impose diligence, development or commercialization
obligations on us, such as obligations to pay royalties on net product sales of our drug candidates once commercialized by us, to pay
a percentage of sublicensing revenues if the licensed product is sublicensed, to make other specified milestone and/or annual payments
relating to our drug candidates or to pay license maintenance and other fees, as well as obligations to pursue commercialization with
due diligence. Specifically, a number of our license agreements also require us to meet development timelines in order to maintain the
related license(s). In spite of our efforts, our licensors might conclude that we have materially breached our obligations under such
license agreements and might therefore seek to terminate the license agreements. If one of our licensors, despite our efforts, were to
be successful in terminating its agreement with us, we would not be able to continue to develop, manufacture or market any drug candidate
under that license agreements, and we could face claims for monetary damages or other penalties under that agreement. Such an occurrence
would diminish or eliminate the value of that project to our Company, even if we are able to negotiate new or reinstated agreements, which
may have less favorable terms. Depending on the importance of the IP and the related project, any such development could have a material
adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
Moreover, disputes may arise
regarding intellectual property subject to a licensing agreement, including:
●
the scope of rights granted under the license agreement and other interpretation-related issues;
●
the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
24
●
the sublicensing of patent and other rights under our collaborative development relationships;
●
our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
●
the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and
●
the priority of invention of patented technology.
In addition, the agreements
under which we currently license intellectual property or technology from other parties are complex, and certain provisions in such agreements
may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow
what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our
financial or other obligations under the relevant agreement, either of which (depending on the importance of the IP and the related project)
could have a material adverse effect on our business, financial condition, results of operations, and prospects. Moreover, if disputes
over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangement for a project
on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected drug and diagnostics technology
candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.
We may not have complete control of the
preparation, filing and prosecution of patent applications, or to maintain patents, licensed by us from other parties.
The Company has in-licensed,
and may in the future in-license patents owned or controlled by others for our use as part of our development plans. We also may out-license
or sublicense patents which we own or control in collaborations with others for development and commercialization of our products. In
either case, the continuing right to control the preparation, filing and prosecution of patent applications, or to maintain the patents,
covering technology under development is a matter for negotiation and we may not always be the party that obtains such control, in which
case we will be reliant on our licensors, collaboration partners or sublicensees for determining strategies with respect to those patents.
For our existing licenses, while we have an understanding with most of the licensors who maintain control over patent prosecution and
we have jointly appointed and engaged patent agents nominated by us under one or more of our licenses, we cannot guarantee that such licensors
or collaborators will always accept prosecution strategies proposed by us and/or our patent agents. Therefore, these patents and applications
may not be prosecuted and enforced in a manner consistent with the best interests of our business. If our current or future licensors
or collaboration partners fail to establish, maintain or protect such patents and other IP rights, such rights may be reduced or eliminated.
If our licensors or joint development partners are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement
of any patent rights, such patent rights could be compromised.
Risks Related to Our Reliance on Unrelated
Parties
We rely on unrelated parties to conduct
discovery and further improvement of our innovations and licensed technologies, as well as our preclinical studies and clinical trials.
If these unrelated parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain
regulatory approval for or commercialize our drug candidates, and our business could be substantially harmed.
We have relied upon and plan
to continue to rely upon CROs and collaborating institutions to monitor and manage data for our ongoing preclinical studies and programs.
We rely on these parties for execution of preclinical studies and clinical trials, and control only certain aspects of their activities.
Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal,
and regulatory requirements and scientific standards, and our reliance on the CROs and collaborating institutions does not relieve us
of our regulatory responsibilities. If CROs, collaborating institutions or clinical investigators do not successfully carry out their
contractual duties or obligations or meet expected deadlines, development of our product candidates could be delayed and our business
could be adversely affected.
25
In addition, our CROs and
collaborating institutions, are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory
procedures and the handling, use, storage, treatment and disposal of hazardous materials and waste. In the event of contamination or injury
resulting from our use of hazardous materials, we might be held liable for any resulting damages, and any liability could exceed our resources.
We could also be subject to civil or criminal fines and penalties, and significant associated costs.
If an IND for one of our drug candidates
requires significantly larger quantities of the candidate to be tested, we expect to rely on unrelated parties to manufacture supplies
of that candidate. If those unrelated parties fail to provide us with sufficient quantities of clinical supply on that candidate or fail
to do so at acceptable quality levels or prices, or fail to maintain required cGMP licenses, we may not be able to manufacture that candidate
in sufficient quantities to conduct the necessary human trials. Should the failure by the CRO occur in anticipation of or after marketing
approval of that candidate, we may be unable to generate as much revenue as rapidly (and such revenue may not be as profitable) as we
had anticipated.
The manufacture of many drug
products, particularly in commercial quantities, can be complex and may require significant expertise and capital investment, particularly
if the development of advanced manufacturing techniques and process controls are required. We intend to contract with outside contractors
to manufacture clinical supplies and process our drug candidates. We have not yet had our drug candidates to be manufactured or processed
on a commercial scale and may not be able to do so for any of our drug candidates.
As we expect to engage contract
manufacturers, the Company will be exposed to the following risks:
●
we might be unable to identify manufacturers on acceptable terms or at all because the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities must approve any manufacturers we determine to use and any potential manufacturer may be unable to satisfy federal, state or international regulatory standards;
●
although we would be choosing manufacturers with the type of experience most suitable for our drug candidates, it is possible that our contract manufacturers may not be able to execute unique manufacturing procedures and other logistical support requirements we have developed and they might require a significant amount of support from us to implement and maintain the infrastructure and processes required to manufacture our particular drug candidates;
●
our contract manufacturers might be unable to reproduce the quantity and quality of the drugs we need to meet our clinical and commercial needs within the time frames when we require those drugs;
●
our contract manufacturers may breach their contracts with us, including by not performing as agreed or not devoting sufficient resources to our drug candidates, or they may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products;
●
even if initially accepted by regulatory authorities, a manufacturer remains subject to ongoing periodic unannounced inspection by regulatory authorities to ensure strict compliance with cGMP and other government regulations, and our contract manufacturers may fail to comply with these regulations and requirements, resulting in rescission of cGMP licenses and our inability to continue using their services, requiring us to find a replacement manufacturer;
●
depending on the terms of our agreement with a manufacturer, we may not own, or may have to share, the IP rights to any improvements made by the manufacturer in the manufacturing process for our drug candidates; and
●
our contract manufacturers may have unacceptable or inconsistent product quality success rates and yields.
26
Each of these risks could
delay or prevent the completion of our clinical trials or the approval of any of our drug candidates by the FDA, NMPA, EMA, Health Canada
or other comparable regulatory authorities, result in higher costs or adversely impact commercialization of our drug candidates.
We are also responsible for
quality control by our manufacturers. We intend to rely on those unrelated-party manufactures to perform certain quality assurance tests
on our drug candidates prior to delivery to patients. If these tests are not appropriately done and test data are not reliable, patients
could be put at risk of serious harm and the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities could place significant
restrictions on our Company until deficiencies are remedied.
Manufacturers of drug products
often encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability
of the manufacturing process (including the absence of contamination). These problems include logistics and shipping, difficulties with
production costs and yields, quality control, including stability of the product, product testing, operator error, availability of qualified
personnel, as well as compliance with strictly enforced federal, state and non-U.S. regulations. Furthermore, if contaminants are discovered
in our supply of our drug candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended
period of time to investigate and remedy the contamination. It is possible that stability failures or other issues relating to the manufacture
of our drug candidates may occur in the future. Additionally, our manufacturers may experience manufacturing difficulties due to resource
constraints, or as a result of labor disputes or unstable political environments. If our manufacturers were to encounter any of these
difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our drug candidate to patients in
clinical trials would be jeopardized. Any delay or interruption in the manufacturing of clinical trial supplies could delay the completion
of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require
us to begin new clinical trials with additional costs or terminate clinical trials completely.
Review of changes in the manufacturing process
of our drug candidates could cause delays resulting from the need for additional regulatory approvals.
Changes in a process or procedure
for manufacturing one of our drug candidates, including a change in the location where the drug candidate is manufactured or a change
of a contract manufacturer, could require prior review by the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities
and approval of the manufacturing process and procedures in accordance with the FDA, NMPA, EMA, or Health Canada's regulations,
or comparable requirements. This review may be costly and time-consuming and could delay or prevent the launch of a product. The new facility
will also be subject to pre-approval inspection. In addition, we would have to demonstrate that the product made at the new facility is
equivalent to the product made at the former facility by physical and chemical methods, which are costly and time-consuming. It is also
possible that the FDA, NMPA, EMA, Health Canada or other comparable regulatory authorities may require clinical testing as a way to prove
equivalency, which would result in additional costs and delay.
Risks Related to AML Clinic
Failure to comply with all laws and regulations
applicable to the business of AML Clinic could have a material, adverse impact on the Company's business.
Operation of AML Clinic subjects
the Company to a variety of Hong Kong laws and regulations specific to companies and professionals in the business of delivering medical
care. We and our employees will be subject to licensing and professional qualifications that do not apply to our other businesses. Breach
of any of these laws, regulations or licensing requirements could subject the Company to significant fines and other penalties and possibly
damage the Company's reputation, which could have a material adverse effect on the Company's business.
27
Risks Related to Our Natural Supplements
We may be subject to government regulations
for natural supplements
From a regulatory perspective,
some of the Company's non-drug candidates (including those developed under the project company Nativus), may be regulated as natural
supplements, including NativusWell
®
(NLS-2). For those non-drug candidates that the Company plans to develop, they are
subject to extensive and rigorous domestic government regulation, including regulation by the FDA, the Centers for Medicare & Medicaid
Services, or CMS, other divisions of the U.S. Department of Health and Human Services, state and local governments and their respective
foreign equivalents. The FDA regulates natural supplements, cosmetics and drugs under different regulatory schemes.
For example, the FDA regulates
the processing, formulation, safety, manufacturing, packaging, labeling, advertising and distribution of natural supplements and cosmetics
under its natural supplement and cosmetic authority, respectively. The FDA also regulates the research, development, pre-clinical and
clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling, storage, approval, advertising, promotion,
sale, distribution, import and export of pharmaceutical products under various regulatory provisions. If any drug products we develop
are tested or marketed abroad, they will also be subject to extensive regulation by foreign governments, whether or not we have obtained
FDA approval for a given product and its uses. Such foreign regulation may be equally or more demanding than corresponding U.S. regulation.
Government regulation substantially
increases the cost and risk of researching, developing, manufacturing and selling products. Our failure to comply with these regulations
could result in, by way of example, significant fines, criminal and civil liability, product seizures, recalls, withdrawals, withdrawals
of approvals and exclusion and debarment from government programs. Any of these actions, including the inability of our hormone therapy
drug candidates to obtain and maintain regulatory approval, would have a materially adverse effect on our business, financial condition,
results of operations and prospects.
In addition, the FDA's
policies may change and additional government regulations may be issued that could prevent, limit, or delay regulatory approval of our
drug candidates, or impose more stringent product labeling and post-marketing testing and other requirements.
We
have launched and marketed NativusWell
®
(NLS-2) in Hong Kong through HKTV Mall, a leading online shopping mall in Hong
Kong in September 2022, and in China through one of the largest e-commerce platform in China, JD.com in March 2023. In Hong Kong, natural
supplements are defined as "health food" products. "Health food" containing medicines are subject to the Pharmacy
and Poisons Ordinance (Cap 138) and such "health food" containing Chinese medicines are regulated by the Chinese Medicine
Ordinance (Cap 549), where they must meet the requirements in respect of safety, quality and efficacy before they can be registered.
For other "health food"
products which cannot be classified as Chinese medicine or western medicine are regulated under the Public Health and Municipal Services
Ordinance (Cap 132) as general food products. The Public Health and Municipal Services Ordinance requires the manufacturers and sellers
of food to ensure that their products are fit for human consumption and comply with the requirements in respect of food safety, food standards
and labelling. In addition, all prepackaged food should bear labels which correctly list out the ingredients of the food under the Food
and Drugs (Composition and Labelling) Regulations (Cap 132W) under the Ordinance.
The NativusWell
®
(NLS-2) is made with the bioactive ingredient extracted Chinese yam powder and does not contain any western or Chinese medicine;
therefore, registration is not required under the local laws for marketing in Hong Kong. We will, however, ensure the compliance of the
Food and Drugs (Composition and Labelling) Regulations (Cap 132W) with by proper labelling in place.
Risks Related to Our Diagnostics Technology
Our products could in the future be subject
to additional regulation by the U.S. Food and Drug Administration or other domestic and international regulatory agencies, which could
increase our costs and delay our commercialization efforts, thereby materially and adversely affecting our business and results of operations.
The FDA has statutory authority
to assure that medical devices and in vitro diagnostics, including those where the Paths
Dx
Test technology may
be utilized, are safe and effective for their intended uses. Should the Paths
Dx
Test technology be utilized in U.S. as a Laboratory
Developed Test (LDT), the FDA has historically exercised its enforcement discretion and may not enforce applicable provisions of the FDC
Act and regulations with respect to LDTs. We believe the Paths
Dx
Test may not be subject to the FDA's enforcement of
its medical device regulations and the applicable FDC Act provisions.
28
However, if and when we utilize
the Paths
Dx
Test technology in the U.S., the FDA may disagree with our assessment that the Paths
Dx
Test falls within
the definition of an LDT and seek to regulate the Paths
Dx
Test as medical devices. If the FDA determines that our products
are subject to such requirements, we could be subject to enforcement action, including administrative and judicial sanctions, and additional
regulatory controls and submissions for the Paths
Dx
Test, all of which could be burdensome.
In the future, certain of
our products or related applications could be subject to additional FDA regulation. Even where a product is not subject to FDA clearance
or approval requirements, the FDA may impose restrictions as to the types of customers to which we can market and sell our products. Such
regulation and restrictions may materially and adversely affect our business, financial condition and results of operations. Other regulatory
regimes that do not currently present material challenges but that could in the future subject to regulations include biosecurity should
our Paths
Dx
Test technology be utilized in the U.S.
In addition, many countries
have laws and regulations that could affect our products and which could limit our ability to sell our products in those countries. The
number and scope of these requirements are increasing. We may not be able to obtain regulatory approvals in such countries or may incur
significant costs in obtaining or maintaining foreign regulatory approvals. For example, the European Union, or EU, is transitioning from
the existing European Directive 98/79/EC on in vitro diagnostic medical devices, or In Vitro Diagnostic Directive (IVDD), to the In Vitro
Diagnostic Device Regulation (EU) 2017/746 (IVDR), which imposes stricter requirements for the marketing and sale of medical devices,
including in the area of clinical evaluation requirements, quality systems and post-market surveillance. The IVDR is expected to become
effective in May 2022. It is likely that we will be impacted by this new regulation, either directly as a manufacturer of IVDs, or indirectly
as a supplier to customers who are placing IVDs in the EU market for clinical or diagnostic use. Complying with the requirements of the
IVDR may require us to incur significant expenditures. Failure to meet these requirements could adversely impact our business in the EU
and other regions that tie their product registrations or chemical regulations to the EU requirements.
Risks Related to Our Industry, Business and
Operation
If we do not comply with laws regulating
the protection of the environment and health and human safety, our business could be adversely affected.
Our research, development
and clinic operations involve the use of hazardous materials, chemicals and various radioactive compounds/radiation and AML Clinic may
create medical waste and radiation. Our R&D Center may maintain quantities of various flammable and toxic chemicals in our facilities
that are required for our research, development and manufacturing activities. We are subject to local laws and regulations governing the
use, manufacture, storage, handling and disposal of these hazardous materials and of medical waste at the jurisdictions where we operate
our clinic and research facilities, which are currently limited to Hong Kong. We believe our procedures for storing, handling and disposing
of these materials comply with the relevant guidelines and laws of the jurisdictions in which our facilities are located. Although we
believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations,
the risk of accidental contamination or injury from these materials cannot be eliminated. If an accident occurs, we could be held liable
for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and
regulations, including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of biohazardous materials
and medical waste.
Although we maintain workers'
compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of these
materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental
liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or
radioactive materials. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future.
We may incur substantial costs to comply with, and substantial fines or penalties, if we violate any of these laws or regulations.
29
Our future success depends on our ability
to retain our Chief Executive Officer, our scientific and clinical advisors, and other key executives and to attract, retain and motivate
qualified personnel.
We are highly dependent on
Darren Lui, our Chief Executive Officer, as well as, other principal members of our management teams, scientific teams as well as scientific
and clinical advisors. Although we have formal employment agreements, which we refer to as appointment letters, with all of our executive
officers, these agreements do not prevent our executives from terminating their employment with us at any time, subject to applicable
notice periods. Nevertheless, the loss of the services of any of these persons could impede the achievement of our research, development
and commercialization objectives.
To induce valuable employees
to remain at our Company, in addition to salary and cash incentives, we provide share incentive grants that vest over time. The
value to employees of these equity grants that vest over time may be significantly affected by movements in the price of our Class A Ordinary
Shares that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies. Although
we have appointment letters with our key employees, any of our employees could resign at any time, with 1-month to 3-months prior written
notice or with payment in lieu of notice.
Recruiting and retaining qualified
officers, scientific, clinical, sales and marketing personnel or consultants will also be critical to our success. In addition, we rely
on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our discovery and preclinical studies
development and commercialization strategy. The loss of the services of our executive officers or other key employees and consultants
could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully
implement our business strategy.
Furthermore, replacing executive
officers and key employees or consultants may be difficult and may take an extended period of time, because of the limited number of individuals
in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize
drug and diagnostics technology candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train,
retain or motivate these key personnel or consultants on acceptable terms given the competition among numerous pharmaceutical and biotechnology
companies for similar personnel.
We also experience competition
for the hiring of scientific and clinical personnel from universities and research institutions. Our consultants and advisors may be employed
by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability
to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.
We will need to increase the size and capabilities
of our organization, and we may experience difficulties in managing our growth.
As of the date of this annual
report, we have 18 full-time and 1 part-time employees. Of these, 6 full-time are engaged in research and development and laboratory operations,
7 full-time are engaged in general and administrative functions and 5 full-time and 1 part-time are engaged in the clinic operation. As
of the date of this annual report, 18 of our employees are located in Asia and 1 of our employees is located in Europe. In addition, we
have engaged and may continue to engage 66 independent contracted consultants and advisors to assist us with our operations. As our development
and commercialization plans and strategies develop, and as we have transitioned into operating as a public company, we will need to establish
and maintain effective disclosure and financial controls and make changes in our corporate governance practices. We will need to add a
significant number of additional managerial, operational, sales, marketing, financial and other personnel with the appropriate public
company experience and technical knowledge and we may not successfully recruit and maintain such personnel. Future growth will impose
significant added responsibilities on members of management, including:
●
identifying, recruiting, integrating, maintaining and motivating additional employees;
●
managing our internal development efforts effectively, including clinical, the FDA or other comparable regulatory authority review process for our drug and diagnostics technology candidates, while complying with our contractual obligations to contractors and others; and
●
improving our operational, financial and management controls, reporting systems and procedures.
30
Our future financial performance
and our ability to commercialize our drug candidates will depend, in part, on our ability to effectively manage our future growth, and
our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a
substantial amount of time to managing these growth activities.
We currently rely, and for
the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors and consultants for significant
input in selecting and evaluating new products to pursue. These independent organizations, advisors and consultants may not continue to
be available to us on a timely basis when needed, and in such case, we may not have the ability to find qualified replacements. In addition,
if we are unable to effectively manage our outsourced activities, or if the quality or accuracy of the services provided by consultants
is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory
approval of our drug candidates or otherwise advance our business. Furthermore, we may not be able to manage our existing consultants
or find other competent outside contractors and consultants on economically reasonable terms, if at all.
If we are not able to effectively
expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully
implement the tasks necessary to further develop and commercialize our drug and diagnostics technology candidates and, accordingly, may
not achieve our research, development and commercialization goals.
We intend to seek additional collaborations,
strategic alliances or acquisitions or enter into royalty-seeking or sublicensing arrangements in the future, but we may not realize the
benefits of these arrangements.
We intend to form or seek
strategic alliances, create joint ventures or collaborations, acquire complimentary products, IP rights, technology or businesses or enter
into additional licensing arrangements with unrelated parties that we determine may complement or augment our development and commercialization
efforts with respect to our drug and diagnostics technology candidates. Any of these relationships may require us to incur non-recurring
and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders, or disrupt our
management and business.
We will face significant competition
in seeking appropriate strategic partners and the negotiation process is likely to be time-consuming, costly and complex. Moreover, we
may not be successful in our efforts to establish a strategic partnership or another alternative arrangement for any of our drug and diagnostics
technology candidates because their state of development may be deemed to be too early for collaborative effort and others may not view
our drug candidates as having the requisite potential to demonstrate safety and efficacy. If and when we enter into an agreement with
a collaboration partner or sublicensee for development and commercialization of a drug or diagnostics technology candidate, we can expect
to relinquish some or all of the control over the future success of that drug candidate to the unrelated-party.
Further, even if we enter
into a collaboration involving any of our drug and diagnostics technology candidates, the arrangement will be subject to numerous risks,
which may include the following:
●
the collaborators will likely have significant discretion in determining the efforts and resources that they will apply to a collaboration;
●
the collaborator may ultimately choose not pursue development and commercialization of our drug or diagnostics technology candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in their strategic focus due to the acquisition of competitive drugs, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities;
31
●
the collaborator may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a drug or diagnostics technology candidate, repeat or conduct new clinical trials, or require a new formulation of a drug or diagnostics technology candidate for clinical testing;
●
the collaborator could independently develop, or develop with unrelated parties, drugs that compete directly or indirectly with our drugs or drug candidates;
●
the collaborator with marketing and distribution rights to one or more drugs may not commit sufficient resources to their marketing and distribution;
●
the collaborator may not properly maintain or defend our IP rights or may use our IP or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our IP or proprietary information or expose us to potential liability;
●
disputes may arise between us and the collaborator that cause the delay or termination of the research, development or commercialization of our drug and diagnostics technology candidates, or that result in costly litigation or arbitration that diverts management attention and resources;
●
the collaboration may be terminated and, if terminated, may result the Company needing additional capital to pursue further development or commercialization of the applicable drug and diagnostics technology candidates;
●
the collaborator may own or co-own IP covering our drugs that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such IP;
●
the collaboration may result in increased operating expenses or the assumption of indebtedness or contingent liabilities; and
●
the collaboration arrangement may result in the loss of key personnel and uncertainties in our ability to maintain key business relationships.
As a result, if we enter into
collaboration agreements and strategic partnerships or license our drugs, we may not be able to realize the benefit of such transactions,
which could delay our timelines or otherwise adversely affect our business. Following a strategic transaction or license, we may not achieve
the revenue or specific net income that justifies such transaction. If we are unable to reach agreements with a suitable collaborator
on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a drug or diagnostics technology candidate,
reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce
the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities
at our own expense.
If we fail to enter into collaborations,
we may seek to fund and undertake development or commercialization activities on our own, but we may not have sufficient funds or expertise
to undertake the necessary development and commercialization activities. In such a case, we may not be able to further develop our drug
and diagnostics technology candidates or bring them to market and generate product sales revenue, which would harm our business prospects,
financial condition and results of operations.
Our employees, independent contractors,
consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory
standards and requirements.
We are exposed to the risk
of fraud, misconduct or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors.
Misconduct by these parties could include intentional, reckless and negligent conduct that fails to: comply with the laws of the FDA and
other similar non-U.S. regulatory authorities; provide true, complete and accurate information to the FDA and other similar non-U.S. regulatory
authorities; comply with manufacturing standards we have established; comply with healthcare fraud and abuse laws in the United States
and similar non-U.S. fraudulent misconduct laws; or report financial information or data accurately or to disclose unauthorized activities
to us. If we obtain the FDA approval for any of our drug and diagnostics technology candidates and begin commercializing those drugs in
the United States, our potential exposure under U.S. laws will increase significantly and our costs associated with compliance with such
laws are also likely to increase. These laws may impact, among other things, our current activities with principal investigators of our
sponsored researches and research patients and our use of information obtained in the course of patient recruitment for clinical trials,
as well as proposed and future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare
items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent
fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing,
discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements
generally.
32
It is not always possible
to identify and deter misconduct by employees and other parties, and the precautions we take to detect and prevent this activity may not
be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions
or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are
not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including
the imposition of significant fines or other sanctions.
Our disclosure controls and procedures may
not prevent or detect all errors or acts of fraud.
Our disclosure controls and
procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange
Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC.
We believe that any disclosure
controls and procedures, or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized
override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud
may occur and not be detected, which would likely cause investors to lose confidence in our reported financial information. This
could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our Class
A Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse
of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil
or criminal sanctions. We may also be required to restate our financial statements from prior periods.
If we fail to establish and maintain proper
internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable regulations could
be impaired.
Pursuant to Section 404 of
the Sarbanes-Oxley Act, we are required to file a report by our management on our internal control over financial reporting, including
an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. However,
while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial
reporting issued by our independent registered public accounting firm. The presence of material weaknesses in internal control over financial
reporting could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our
financial reporting, which could require us to restate our operating results. In connection with the audit of our financial statements
for the year ended December 31, 2022, we and our independent registered public accounting firm identified one material weakness in our
internal control over financial reporting, as defined in the standards established by the Public Company Accounting Oversight Board of
the United States. The material weakness identified was the lack of dedicated resources to take responsibility for the finance and accounting
functions and the preparation of financial statements in compliance with generally accepted accounting principles in the United States,
or U.S. GAAP.
33
Since 2019, we took actions
to remediate the abovementioned material weakness:
●
provide trainings to staff regarding to the preparation of financial statements in compliance with generally accepted accounting principles in the United States;
●
change to a new and well-established accounting system to enhance effectiveness and financial and system control;
●
establish clear roles and responsibilities for accounting and financial reporting staff to address finance and accounting issues; and
●
continue to monitor the improvement on internal control over financial reporting.
However, since we are still
in the process of replenishing and building up a qualified finance and accounting team with sufficient dedicated resources, our management
assessed that the deficiency related to the lack of dedicated resources to take responsibility for the finance and accounting functions
and the preparation of financial statements in compliance with generally accepted accounting principles in the United States, or U.S.
GAAP, still existed as of December 31, 2022. We cannot assure you that we will not identify additional material weaknesses or significant
deficiencies in the future.
Our management concluded that
our internal controls over financial reporting were not effective as of December 31, 2022. Investors may lose confidence in our operating
results, the price of the Class A Ordinary Shares could decline and we may be subject to litigation or regulatory enforcement actions.
In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, the Class A Ordinary Shares may not be
able to remain listed on the NASDAQ Global Market.
We may market our products, if approved,
globally; if we do, we will be subject to the risk of doing business internationally.
We operate and expect to operate
in various countries, and we may not be able to market our products in, or develop new products successfully for, these markets. We may
also encounter other risks of doing business internationally including but not limited to:
●
unexpected changes in, or impositions of, legislative or regulatory requirements;
●
efforts to develop an international sales, marketing and distribution organization may increase our expenses, divert our management's attention from the acquisition or development of drug candidates or cause us to forgo profitable licensing opportunities in these geographies;
●
the occurrence of economic weakness, including inflation or political instability;
●
the effects of applicable non-U.S. tax structures and potentially adverse tax consequences;
●
differences in protection of our IP rights including patent rights of other parties;
●
the burden of complying with a variety of foreign laws including difficulties in effective enforcement of contractual provisions;
●
delays resulting from difficulty in obtaining export licenses, tariffs and other barriers and restrictions, potentially longer payment cycles, greater difficulty in accounts receivable collection and potentially adverse tax treatment; and
●
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad.
34
In addition, we are subject
to general geopolitical risks in foreign countries where we operate, such as political and economic instability and changes in diplomatic
and trade relationships, which could affect, among other things, customers' inventory levels and consumer purchasing, which could
cause our results to fluctuate and our net sales to decline. The occurrence of any one or more of these risks of doing business internationally,
individually or in the aggregate, could materially and adversely affect our business and results of operations.
If we engage in future acquisitions or strategic
partnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities,
and subject us to other risks.
We may evaluate various acquisitions
and strategic partnerships, including licensing or acquiring complementary products, IP rights, technology or businesses. Any potential
acquisition or strategic partnership may entail numerous risks, including, but not limited to:
●
increase in operating expenses and cash requirements;
●
the assumption of additional indebtedness or contingent liabilities;
●
the issuance of our equity securities;
●
assimilation of operations, IP and products of an acquired company, including difficulties associated with integrating new personnel;
●
the diversion of our management's attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;
●
retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships;
●
risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing drugs or drug and diagnostics technology candidates and regulatory approvals; and
●
our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
In addition, if we undertake
acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible
assets that could result in significant future amortization expense. Moreover, we may not be able to locate suitable acquisition opportunities
and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development
of our business.
If we fail to comply with the U.S. Foreign
Corrupt Practices Act ("FCPA"), or other anti-bribery laws, including the Bribery Act 2010 of the United Kingdom (UK
Bribery Act"), our reputation may be harmed and we could be subject to penalties and significant expenses that have a material adverse
effect on our business, financial condition and results of operations.
We are subject to the FCPA.
The FCPA and UK Bribery Act generally prohibits us from making improper payments to non-U.S. officials for the purpose of obtaining or
retaining business or other benefits. We are also subject to the anti-bribery laws of other jurisdictions, particularly the PRC. As our
business expands, the applicability of the FCPA and other anti-bribery laws to our operations will increase. Our procedures and controls
to monitor anti-bribery compliance may fail to protect us from reckless or criminal acts committed by our employees or agents. If we,
due to either our own deliberate or inadvertent acts or those of others, fail to comply with applicable anti-bribery laws, our reputation
could be harmed and we could incur criminal or civil penalties, other sanctions and/or significant expenses, which could have a material
adverse effect on our business, including our financial condition, results of operations, cash flows and prospects.
Our business and results of operations may
be negatively impacted by the UK's withdrawal from the EU.
On June 23, 2016, the UK held
a referendum in which a majority of voters approved an exit from the EU, or Brexit, and the UK formally left the EU on January 31, 2020.
There was a transition period during which EU pharmaceutical laws continued to apply to the UK, which expired on December 31, 2020. However,
the EU and the UK have concluded a trade and cooperation agreement, or TCA, which was provisionally applicable since January 1, 2021 and
has been formally applicable since May 1, 2021. The TCA includes specific provisions concerning pharmaceuticals, which include the mutual
recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not foresee wholesale
mutual recognition of UK and EU pharmaceutical regulations. At present, Great Britain has implemented EU legislation on the marketing,
promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol,
the EU regulatory framework will continue to apply in Northern Ireland). The regulatory regime in Great Britain therefore currently aligns
in the most part with EU regulations, however it is possible that these regimes will diverge in the future now that Great Britain's
regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.
For example, the new Clinical Trials Regulation which became effective in the EU on January 31, 2022 and provides for a streamlined clinical
trial application and assessment procedure covering multiple EU Member States has not been implemented into UK law, and a separate application
will need to be submitted for clinical trial authorization in the UK. In addition, as we are headquartered in the UK, it is possible that
Brexit may impact some or all of our current operations. For example, Brexit will impact our ability to freely move employees from our
headquarters in the UK to other locations in the EU. Furthermore, if other EU Member States pursue withdrawal, barrier-free access among
the EEA overall could be diminished or eliminated.
35
The long-term effects of Brexit
will depend in part on how the terms of the TCA continue to take effect in practice and the terms of any further agreements the UK makes
with the EU. Such a withdrawal from the EU is unprecedented, and it is unclear how the restrictions on the UK's access to the European
single market for goods, capital, services and labor, or single market, and the wider commercial, legal and regulatory environment, will
impact our future operations (including business activities conducted by third parties and contract manufacturers on our behalf) and clinical
activities in the UK in the long term.
If we commence clinical trials of one of
our drug or diagnostics technology candidates, and product liability lawsuits are brought against us, we may incur substantial liabilities
and the commercialization of such drug or diagnostics technology candidates may be affected.
If any of our drug or diagnostics
technology candidates enter clinical trials, we will face an inherent risk of product liability suits and will face an even greater risk
if we obtain approval to commercialize any drugs. For example, we may be sued if our drug candidates cause or are perceived to cause injury
or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may
include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the drug, negligence, strict
liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend
ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our drug
candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual
outcome, liability claims may result in:
●
decreased demand for our drugs;
●
injury to our reputation;
●
withdrawal of clinical trial participants and inability to continue clinical trials;
●
initiation of investigations by regulators;
●
costs to defend the related litigation;
●
a diversion of management's time and our resources;
●
substantial monetary awards to trial participants or patients;
●
product recalls, withdrawals or labeling, marketing or promotional restrictions;
●
loss of revenue;
●
exhaustion of any available insurance and our capital resources;
●
the inability to commercialize any drug candidate; and
●
a decline in the price of our Class A Ordinary Shares.
We shall seek to obtain the
appropriate insurance once our candidates are ready for clinical trial. However, our inability to obtain sufficient product liability
insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of
drugs we develop, alone or with collaborators. We currently do not have in place product liability insurance and although we plan to have
in place such insurance as and when the products are ready for commercialization, as well as insurance covering clinical trials, the amount
of such insurance coverage may not be adequate, we may be unable to maintain such insurance, or we may not be able to obtain additional
or replacement insurance at a reasonable cost, if at all. Our insurance policies may also have various exclusions, and we may be subject
to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement
that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital
to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such
indemnification may not be available or adequate should any claim arise.
Additionally, we may be sued
if the products that we commercialize, market or sell cause or are perceived to cause injury or are found to be otherwise unsuitable,
and may result in:
●
decreased demand for those products;
●
damage to our reputation;
●
costs incurred related to product recalls;
●
limiting our opportunities to enter into future commercial partnership; and
●
a decline in the price of our Class A Ordinary Shares.
36
Our insurance coverage may be inadequate
to protect us against losses.
We currently maintain property
insurance for our office premises (including two units of server and accessories). We hold employer's liability insurance generally
covering death or work-related injury of employees; we maintain "Office Care Plan Insurance" for those persons working in
our offices and "Medical Plan" for our employee. We hold public liability insurance covering certain incidents involving unrelated
parties that occur on or in the premises of the Company. We have directors and officers liability insurance. We do not have key-man life
insurance on any of our senior management or key personnel, or business interruption insurance. Our insurance coverage may be insufficient
to cover any claim for product liability, damage to our fixed assets or employee injuries. If any claims for damage are brought against
us, or if we experience any business disruption, litigation or natural disaster, we might incur substantial costs and diversion of resources.
Fluctuations in exchange rates could result
in foreign currency exchange losses
Our operations and equity
are funded in U.S. dollars and we currently incur the majority of our expenses in U.S. dollars or in H.K. dollars. H.K. dollar is currently
pegged to the U.S. dollar; however, we cannot guarantee that such peg will continue to be in place in the future. Our exposure to foreign
exchange risk primarily relates to the limited cash denominated in currencies other than the functional currencies of each entity and
limited revenue contracts dominated in H.K. dollars in certain Hong Kong operating entities. We do not believe that we currently have
any significant direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial
instruments.
If we are exposed to foreign
currency exchange risk as our results of operations, cash flows maybe subject to fluctuations in foreign currency exchange rates. For
example, if a significant portion of our clinical trial activities may be conducted outside of the United States, and associated costs
may be incurred in the local currency of the country in which the trial is being conducted, which costs could be subject to fluctuations
in currency exchange rates. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates
between particular foreign currencies and the U.S. dollar. A decline in the value of the U.S. dollar against currencies in countries in
which we conduct clinical trials could have a negative impact on our research and development costs. Foreign currency fluctuations are
unpredictable and may adversely affect our financial condition, results of operations and cash flows.
Our investments are subject to risks that
could result in losses.
We had unrestricted cash of
$1.88 million, $8.13 million, and $3.50 million as of December 31, 2022, 2021, and 2020, respectively. We may invest our cash in a variety
of financial instruments. All of these investments are subject to credit, liquidity, market and interest rate risk. Such risks, including
the failure or severe financial distress of the financial institutions that hold our cash, cash equivalents and investments, may result
in a loss of liquidity, impairment to our investments, realization of substantial future losses, or a complete loss of the investments
in the long-term, which may have a material adverse effect on our business, results of operations, liquidity and financial condition.
While we believe our cash position does not expose us to excessive risk, future investments may be subject to adverse changes in market
value.
We are exposed to risks associated with
our computer hardware, network security and data storage.
Similar to all other computer
network users, our computer network system is vulnerable to attack of computer virus, worms, trojan horses, hackers or other similar computer
network disruptive problems. Any failure in safeguarding our computer network system from these disruptive problems may cause breakdown
of our computer network system and leakage of confidential information of the Company. Any failure in the protection of our computer network
system from external threat may disrupt our operation and may damage our reputation for any breach of confidentiality to our customers,
which in turn may adversely affect our business operation and performance. In the event that our confidential information is stolen and
misused, we may become exposed to potential risks of losses from litigation and possible liability.
In addition, we are highly
dependent on our IT infrastructure to store research data and information and manage our business operations. We do not backup all data
on a real-time basis and the effectiveness of our business operations may be materially affected by any failure in our IT infrastructure.
If our communications and IT systems do not function properly, or if there is any partial or complete failure of our systems, we could
suffer financial losses, business disruption or damage to our reputation.
37
Business disruptions could seriously harm
our future revenue and financial condition and increase our costs and expenses.
Our operations, and those
of our research institution collaborators, CROs, suppliers and other contractors and consultants, could be subject to supply chain disruptions,
earthquakes, power shortages, telecommunications failures, damage from computer viruses, material computer system failures, water shortages,
floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business
interruptions. In addition, we partially rely on our research institution collaborators for conducting research and development of our
drug candidates, and they may be affected by government shutdowns or withdrawn funding. The occurrence of any of these business disruptions
could seriously harm our operations and financial condition and increase our costs and expenses. We rely on contract manufacturers to
produce and process our drug candidates. Our ability to obtain clinical supplies of our drug candidates could be disrupted if the operations
of these suppliers are affected by a man-made or natural disaster or other business interruption. A large portion of our contract manufacturer's
operations is located in a single facility. Damage or extended periods of interruption to our corporate or our contract manufacturer's
development or research facilities due to fire, natural disaster, power loss, communications failure, unauthorized entry or other events
could cause us to cease or delay development of some or all of our drug candidates.
We may be exposed to various risks related
to the regulatory environment of the pharmaceutical industry in the PRC.
We have sold NativusWell
®
through JD.com in China since 2023; we are the exclusive licensee to certain PRC patents directed to our drug candidates; and we
also intend to file application for certain products in the PRC. The pharmaceutical industry in the PRC is subject to comprehensive government
regulation and supervision, encompassing the approval, registration, manufacturing, packaging, licensing and marketing of new drugs. (See
"Item 4. Information on the Company – B. Business Overview – Regulations"). In recent years, the regulatory framework
in the PRC regarding the pharmaceutical industry has undergone significant changes, and we expect that it will continue to undergo significant
changes. Any such changes or amendments may result in increased compliance costs on our business or cause delays in or prevent the successful
development or commercialization of our drug candidates in the PRC and reduce the current benefits that we believe are available to us
from developing and manufacturing drugs in the PRC. Chinese authorities have become increasingly vigilant in enforcing laws in the pharmaceutical
industry and any failure by us or our partners to maintain compliance with applicable laws and regulations or obtain and maintain required
licenses and permits may result in the suspension or termination of our business activities in the PRC. We believe our strategy and approach
is aligned with the PRC government's policies, but we cannot ensure that our strategy and approach will continue to be aligned.
Changes in the political and
economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations
and may result in our inability to sustain our growth and expansion strategies. Our financial condition and results of operation in the
PRC could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable
to us, and consequently have a material adverse effect on our businesses, financial condition and results of operations.
If the U.S. Public Company Accounting Oversight
Board, or the PCAOB, is unable to inspect our auditors as required under the Holding Foreign Companies Accountable Act, the SEC will prohibit
the trading of our Class A Ordinary Shares. A trading prohibition for our Class A Ordinary Shares, or the threat of a trading prohibition,
may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections of our
auditors would deprive our investors of the benefits of such inspections.
The U.S. Holding Foreign Companies
Accountable Act, or the HFCA Act, was enacted into law on December 18, 2020. Under the HFCA Act, if the SEC determines that we have filed
audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive
years, the SEC will prohibit our securities, including our Class A Ordinary Shares, from
being traded on a U.S. national securities exchange, including NASDAQ, or in the over-the-counter trading market in the U.S. Furthermore,
on June 22, 2021, the U.S. Senate passed the AHFCAA, which, if signed into law, would amend the HFCA Act and require the SEC to prohibit
an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two consecutive
years instead of three consecutive years, thus reducing the time period for triggering the prohibition on trading. On September 22, 2021,
the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated
under the HFCA Act, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign
jurisdiction because of a position taken by one or more authorities in that jurisdiction. On November 5, 2021, the SEC approved the PCAOB's
Rule 6100, Board Determinations Under the Holding Foreign Companies Accountable Act. Rule 6100 provides a framework for the PCAOB to use
when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting
firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021,
the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to
registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm
that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by
an authority in foreign jurisdictions. The process for implementing trading prohibitions pursuant to the HFCA Acts will be based on a
list of registered public accounting firms that the PCAOB has been unable to inspect and investigate completely as a result of a position
taken by a non-U.S. government, or the Relevant Jurisdiction, and such identified auditors, the PCAOB Identified Firms.  The
first list of PCAOB Identified Firms was included in a release by the PCAOB on December 16, 2021, or the PCAOB December 2021 Release.
The SEC will review annual reports filed with it for fiscal years beginning after December 18, 2020 to determine if the auditor used for
such reports was so identified by the PCAOB, and such issuers will be designated as "Commission Identified Issuers" on a list
to be published by the SEC.  If an issuer is a Commission Identified Issuer for two consecutive years (which will be determined
after the second such annual report), the SEC will issue a trading order that will implement prohibitions described
above.
38
On December 29, 2022, the
Consolidated Appropriations Act, was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things,
an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering the prohibitions
under the HFCA Act from three years to two.
Our current independent
accounting firm, Marcum Asia CPAs LLP (formerly known as Marcum Bernstein & Pinchuk LLP), whose audit report is included in this
annual report on Form 20-F, is headquartered in Manhattan, New York, and was not included in the list of PCAOB Identified Firms in
the PCAOB December 2021 Release. Our ability to retain an auditor subject to PCAOB inspection and investigation, including but not
limited to inspection of the audit working papers related to us, may depend on the relevant positions of U.S. and Chinese
regulators. Marcum Asia CPAs LLP's audit working papers related to us are located in China. With respect to audits of
companies with operations in China, such as the Company, there are uncertainties about the ability of our auditor to fully cooperate
with a request by the PCAOB for audit working papers in China without the approval of Chinese authorities. If in the future Marcum
Asia CPAs LLP is included in the list of PCAOB Identified Firms and we are unable to retain a PCAOB-registered auditor subject to
PCAOB inspection and investigation, a trading prohibition for our Class A Ordinary Shares could be issued shortly after our filing
of the second consecutive annual report on Form 20-F for which we have retained a PCAOB Identified Firm.
If our Class A Ordinary Shares
are subject to a trading prohibition under the HFCA Act, the price of our Class A Ordinary Shares may be adversely affected, and the threat
of such a trading prohibition would also adversely affect their price. If we are unable to be listed on another securities exchange
that provides sufficient liquidity, such a trading prohibition may substantially impair your ability to sell or purchase our Class A Ordinary
Shares when you wish to do so. Furthermore, if we are able to maintain a listing of our Class A Ordinary Shares on a non-U.S. exchange,
investors owning our Class A Ordinary Shares may have to take additional steps to engage in transactions on that exchange, including establishing
non-U.S. brokerage accounts.
The HFCA Act also imposes
additional certification and disclosure requirements for Commission Identified Issuers, and these requirements apply to issuers in the
year following their listing as Commission Identified Issuers. The additional requirements include a certification that the issuer is
not owned or controlled by a governmental entity in the Relevant Jurisdiction, and the additional requirements for annual reports include
disclosure that the issuer's financials were audited by a firm not subject to PCAOB inspection, disclosure on governmental entities
in the Relevant Jurisdiction's ownership in and controlling financial interest in the issuer, the names of Chinese Communist Party,
or CCP, members on the board of the issuer or its operating entities, and whether the issuer's article's include a charter
of the CCP, including the text of such charter.
In addition to the issues
under the HFCA discussed above, the PCAOB's inability to conduct inspections in China and Hong Kong prevents it from fully evaluating
the audits and quality control procedures of the independent registered public accounting firm, consequently, investors would be deprived
of the benefits of such PCAOB inspections. Our current independent registered public accounting firm, Marcum Asia CPAs LLP, is headquartered
in Manhattan, New York, and has been inspected by the PCAOB on a regular basis with the last inspection in 2020. However, in the event
it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority
in a foreign jurisdiction, then such lack of inspection could cause trading in our securities to be prohibited under the HFCA Act, and
ultimately result in a determination by a securities exchange to delist our Class A Ordinary Shares.
39
The SEC could take the position that we
are an "investment company" subject to the extensive requirements of the Investment Company Act of 1940. Such a characterization
and the associated compliance requirements could have a material adverse effect on our business, financial condition, and results of operations.
Our business had historically
included passive healthcare related investments in early stage companies primarily in the United States. Although we are in the process
of liquidating those securities that remain in our portfolio, we still hold some such investments and these are included as assets of
our Company on a consolidated basis. As part of the Restructure, we resolved to exit such portfolio investments over an appropriate timeframe
and focus our resources on our current business. Since the date of the Restructure, we have not held ourselves out as an investment company
and we do not believe we are an "investment company" under the Investment Company Act of 1940. If the SEC or a court,
however, were to disagree with us, we could be required to register as an investment company. This would subject us to disclosure and
accounting rules geared toward investment companies, rather than operating companies, which may limit our ability to borrow money, issue
options, issue multiple classes of stock and debt, and engage in transactions with affiliates, and may require us to undertake significant
costs and expenses to meet the disclosure and regulatory requirements to which we would be subject as a registered investment company.
If
we are classified as a passive foreign investment company for U.S. federal income tax purposes, United States holders of our Class A
Ordinary Shares may be subject to adverse United States federal income tax consequences.
A
non-U.S. corporation will be a passive foreign investment company ("PFIC") for U.S. federal income tax purposes, for such
year, if either
●
At least 75% of its gross
    income for such year is passive income; or
●
The average percentage
    of our assets (determined at the end of each quarter) during such year which produce passive income or which are held for the production
    of passive income is at least 50%.
Passive
income generally includes dividends, interests, rents and royalties (other than rents or royalties derived from the active conduct of
a trade or business) and gains from the disposition of passive assets.
A
separate determination must be made after the close of each taxable year as to whether a non-U.S. corporation is a PFIC for that year.
For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets
of any entity in which it is considered to own at least 25% of the equity by value. Based on the current and anticipated value of our
assets, we believe we were a PFIC for U.S. federal income tax purposes for our taxable year ending December 31, 2022, and we may be a
PFIC for U.S. federal income tax purposes for our current taxable year ending December 31, 2023.
40
In
determining whether we are a PFIC, cash and investments are considered by the U.S. Internal Revenue Service ("IRS") to be
a passive asset. During our taxable year ending December 31, 2022, we believe that the amount of restricted and unrestricted cash we
had on hand and investments were greater than 50% of our total assets. The composition of our assets during the current taxable year
may cause us to continue to be classified as a PFIC. The determination of whether we will be a PFIC for our current taxable year or a
future year may depend in part upon how quickly we spend our liquid assets, and on the value of our goodwill and other unbooked intangibles
not reflected on our balance sheet, which may depend upon the market value of our Class A Ordinary Shares from time to time. Further,
while we will endeavor to use a classification methodology and valuation approach that is reasonable, the IRS may challenge our classification
or valuation of our goodwill and other unbooked intangibles for purposes of determining whether we are a PFIC in the current or one or
more future taxable years.
If
we are a PFIC for any taxable year during which a U.S. Holder owns our Class A Ordinary Shares or warrants, certain adverse U.S. federal
income tax consequences could apply to such U.S. Holder. As discussed under "Taxation – Material U.S. Federal Income Tax
Considerations for U.S. Holders – Passive Foreign Investment Company Rules", a U.S. Holder may be able to make certain tax
elections that would lessen the adverse impact of PFIC status; however, in order to make such elections the U.S. holder will usually
have to have been provided information about the company by us, and there is no assurance that the company will provide such information.
For
a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. holders if we were determined to be
a PFIC. (See "Item 10. Additional Information – E. Taxation – Material U.S. Federal Income Tax Considerations
for U.S. Holders – Passive Foreign Investment Company Rules")
Our
results of operation may be negatively affected should the 2019-nCov virus (Coronavirus) continue to spread on a wider scale.
Our
business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the outbreak of respiratory
illness caused by a novel coronavirus. Any outbreak of contagious diseases, and other adverse public health developments, particularly
in China, could have a material and adverse effect on our business operations. These could include disruptions or restrictions on our
ability to travel or to distribute our products, as well as temporary closures of our facilities or the facilities of our suppliers or
customers.
The
COVID-19 pandemic continues to rapidly evolve. The extent to which the outbreak impacts our business, preclinical studies and clinical
trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic
spread of the disease, the duration of the pandemic, travel restrictions and social distancing in various countries, business closures
or business disruptions and the effectiveness of actions taken to contain and treat the disease. If we or any of the third parties with
whom we engage were to experience shutdowns, undergo the compulsory universal testing by the HKSAR Government or other business disruptions,
our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted.
In
addition, the trading prices for our Class A Ordinary Shares and other biopharmaceutical companies have been highly volatile as a result
of the COVID-19 pandemic. As a result, we may face difficulties raising capital through sales of our securities or such sales may be
on unfavorable terms.
41
The
outbreak of the novel coronavirus disease, COVID-19, or other pandemic, epidemic or outbreak of an infectious disease may materially
and adversely impact our preclinical studies and clinical trials.
As
a result of the COVID-19 outbreak, or similar pandemics, we have and may in the future experience disruptions that could materially and
adversely impact our manufacturing, preclinical development activities, preclinical studies and planned clinical trial. Potential disruptions
include but are not limited to:
●
delays or difficulties
    in enrolling patients in our clinical trials, should the relevant clinical trials be approved;
●
delays or difficulties
    in initiating or expanding clinical trials, including delays or difficulties with clinical site initiation and recruiting clinical
    site investigators and clinical site staff;
●
increased rates of patients
    withdrawing from our clinical trials following enrollment as a result of contracting COVID-19 or other health conditions or being
    forced to quarantine;
●
diversion of healthcare
    resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and
    hospital staff supporting the conduct of our clinical trials;
●
interruption of key clinical
    trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by governments,
    employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject
    data and clinical study endpoints;
●
interruption or delays
    in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines for regulatory submission
    and trial initiation;
●
interruption or delays
    in our CROs and collaborators meeting expected deadlines or complying with regulatory requirements related to preclinical development
    activities, preclinical studies and planned clinical trials;
●
delays or disruptions in
    preclinical experiments and investigational new drug application-enabling or clinical trial application-enabling studies due to restrictions
    of on-site staff and unforeseen circumstances at contract research organizations and vendors;
●
interruption of, or delays
    in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production
    slowdowns or stoppages and disruptions in delivery systems;
●
limitations on our ability
    to recruit and hire key personnel due to our inability to meet with candidates because of travel restrictions and "shelter
    in place" orders;
42
●
limitations on employee
    resources that would otherwise be focused on the conduct of our preclinical studies and clinical trials, including because of sickness
    of employees or their families or the desire of employees to avoid contact with large groups of people; and
●
interruption or delays
    to our sourced discovery and clinical activities.
Risks
Related to Our Corporate Structure
One
of our directors controls a majority of our voting shares.
One
of our Non-Executive Directors and former CEO, Mr. Ian Huen, and his affiliates, over which he is deemed to have control and/or have
substantial influence, has voting rights with respect to an aggregate of 2,068,627 Ordinary Shares, on an as converted basis (462,480
Class A Ordinary Shares and 1,606,147 Class B Ordinary Shares), representing approximately 71% of the voting power of our outstanding
ordinary shares as of the date hereof. As a result, Mr. Huen has the ability to control the outcome of matters submitted to our
shareholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of
our assets. Additionally, in the event that Mr. Huen controls our company at the time of his death, control may be transferred to a person
or entity that he designates as his successor. As a board member, Mr. Huen owes a fiduciary duty to our shareholders and must act
in good faith in a manner he reasonably believes to be in the best interests of our shareholders. As a shareholder, even a controlling
shareholder, Mr. Huen is entitled to vote his shares, and shares over which he has voting control as a result of voting agreements,
in his own interests, which may not always be in the interests of our shareholders generally.
As
a "controlled company" under the rules of the NASDAQ Global Market, we may choose to exempt our company from certain corporate
governance requirements that could have an adverse effect on our public shareholders.
Our
directors and officers beneficially own a majority of the voting power of our outstanding Class A Ordinary Shares. Under the Rule 4350(c)
of the NASDAQ Global Market, a company of which more than 50% of the voting power is held by an individual, group or another company
is a "controlled company" and may elect not to comply with certain corporate governance requirements, including
the requirement that a majority of our directors be independent, as defined in the NASDAQ Global Market Rules, and the requirement that
our compensation and nominating and corporate governance committees consist entirely of independent directors. Although we do not intend
to rely on the "controlled company" exemption under the Nasdaq listing rules, we could elect to rely on this exemption in
the future. If we elect to rely on the "controlled company" exemption, a majority of the members of our board of directors
might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely
of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during
any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded
to shareholders of companies that are subject to all of the NASDAQ Global Market corporate governance requirements. Our status as a controlled
company could cause our Class A Ordinary Share to look less attractive to certain investors or otherwise harm our trading price.
We
may not be able to consolidate the financial results of some of our affiliated companies or such consolidation could materially adversely
affect our operating results and financial condition.
The
Company has three VIEs which are incorporated under the laws of Cayman Islands and conduct operations in Hong Kong. The Company currently
consolidates two of those VIEs since the Group has a variable interest in them and is determined to be the primary beneficiary of those
two VIEs under U.S. GAAP. This determination is based on whether the Group has a variable interest (or combination of variable interests)
that provides the Company with (a) the power to direct the activities that most significantly impact the VIEs' economic performance
and (b) the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. The Group continually
reassesses whether it is the primary beneficiary of a VIE throughout the entire period the Group is involved with the VIE. According
to those standards, we determined that we have the power to manage and make decisions that affect Mios and Scipio's research and
development activities, which activities most significantly impact Mios and Scipio's economic performance. However, we do not have
such power over Libra's research and development activities, which activities most significantly impact Libra's economic
performance. Accordingly, we determined that we are the primary beneficiary of Mios and Scipio, but not the primary beneficiary of Libra.
As a result, Mios and Scipio's financial results are consolidated in our consolidated financial statements. In the event that in
the future the VIEs no longer meet the definition of a VIE, or we are deemed not to be the primary beneficiary of the VIE for accounting
purpose, we would not be able to consolidate line by line that VIE's financial results in our consolidated financial statements.
Also, if in the future an affiliate company becomes a VIE and we become the primary beneficiary of it for accounting purposes, we would
be required to consolidate that entity's financial results in our consolidated financial statements. If such entity's financial
results were negative, this could have a corresponding negative impact on our operating results.
43
The
economic substance legislation of the Cayman Islands may adversely impact us or our operations.
The
Company is subject to Cayman Islands economic substance legislation ("ESA") requiring that where the Company carries on a
relevant activity (as defined in the ESA) it must maintain economic substance within the Cayman Islands, including adequate premises
and employees within the Cayman Islands. As an entity subject to the ESA, the Company is required to assess its operations to determine
the required compliance (if any) with the ESA, to file an annual notification with the Cayman Islands Registrar of Companies disclosing
whether the Company is carrying out any relevant activities within the meaning of the ESA and an annual return with the Department of
International Tax Co-Operation. Where applicable, the Company must establish that its operations satisfy the economic substance requirements
of the ESA. The Company is required to monitor its operations to ensure it remains in compliance with all requirements under the ESA.
Failure to satisfy these requirements may subject the Company to penalties under the ESA.
EU
AML High-Risk Third Countries List
On
March 13, 2022, the European Commission ("EC") updated its list of 'high-risk third countries' ("EU AML
List") identified as having strategic deficiencies in their anti-money laundering/counter-terrorist financing regimes to add nine
countries, including the Cayman Islands. The EC has noted it is committed to there being a greater alignment between the EU AML List
and the FATF listing process. The addition of the Cayman Islands to the EU AML List is a direct result of the inclusion of the Cayman
Islands on the FATF grey list in February 2021. It is unclear how long this designation will remain in place and what ramifications,
if any, the designation will have for the Company.
The
Financial Action Task Force has increased monitoring of the Cayman Islands.
In
February 2021, the Cayman Islands was added to the Financial Action Task Force ("FATF") list of jurisdictions whose anti-money
laundering practices are under increased monitoring, commonly referred to as the "FATF grey list." When the FATF places a
jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies
within agreed timeframes and is subject to increased monitoring during that timeframe. In its October 2021 and October 2022 plenary,
the FATF recognized the progress made by the Cayman Islands to improve its anti-money laundering and counter-terrorist financing regime.
Despite this recognition, it is still unclear how long this designation will remain in place and what ramifications, if any, the designation
will have for the Company.
44
Risks
Related to our Securities
If
we fail to comply with the continued listing requirements of NASDAQ, we would face possible delisting, which would result in a limited
public market for our shares and make obtaining future debt or equity financing more difficult for us.
On
February 8, 2023, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the "
Staff
")
of the Nasdaq Stock Market LLC ("
Nasdaq
") notifying the Company that the Company does not meet the minimum Market
Value of Publicly Held Shares ("
MVPHS
") of $5,000,000 for the previous 30 consecutive business days. The Nasdaq deficiency
letter has no immediate effect on the listing of the Company's Class A Ordinary Shares, and its Class A Ordinary Shares will continue
to trade on The Nasdaq Global Market under the symbol "APM" at this time.
In
accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has been given 180 calendar days, or until August 7, 2023, to regain compliance
with Rule 5450(b)(1)(C). If at any time before August 7, 2023, the MVPHS closes at $5,000,000 or more for a
minimum
of
ten consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance and the matter will
be closed.
If
the Company does not regain compliance with Rule 5450(b)(1)(C) by August 7, 2023, the Company will receive written notification that
its securities are subject to delisting and the Company may appeal the delisting determination to a Hearing's Panel. Alternatively,
the Company may consider applying to transfer the Class A Ordinary Shares to The Nasdaq Capital Market. The Company intends to remain
on the Nasdaq Global Market and will actively monitor its MVPHS and will consider available options to resolve the deficiency and regain
compliance with Rule 5450(b)(1)(C).
If
the Company fails to regain compliance with any other listing rules when required in the future, we could be subject to suspension and
delisting proceedings. If our securities lose their status on the Nasdaq Capital Market, our securities would likely trade in the over-the-counter
market. If our securities were to trade on the over-the-counter market, selling our securities could be more difficult because smaller
quantities of securities would likely be bought and sold, transactions could be delayed, and security analysts' coverage of us
may be reduced. In addition, in the event our securities are delisted, broker-dealers have certain regulatory burdens imposed upon them,
which may discourage broker-dealers from effecting transactions in our securities, further limiting the liquidity of our securities.
These factors could result in lower prices and larger spreads in the bid and ask prices for our securities. Such delisting from the NASDAQ
Capital Market and continued or further declines in our share price could also greatly impair our ability to raise additional necessary
capital through equity or debt financing, and could significantly increase the ownership dilution to shareholders caused by our issuing
equity in financing or other transactions.
Class
A Ordinary Shares eligible for future sale may adversely affect the market price of our Class A Ordinary Shares if the shares are successfully
listed on NASDAQ or other stock markets, as the future sale of a substantial amount of outstanding Class A Ordinary Shares in the public
marketplace could reduce the price of our Class A Ordinary Shares.
The market price of our Class
A Ordinary Shares could decline as a result of sales of substantial amounts of our Class A Ordinary Shares in the public market, or the
perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future
offerings of our Class A Ordinary Shares. An aggregate of 1,719,522 Class A Ordinary Shares are outstanding as of the date of this annual
report. 860,989 of the Class A Ordinary Shares are freely transferable without restriction or further registration under the Securities
Act. The remaining Class A Ordinary Shares will be "restricted securities" as defined in Rule 144. These Class A Ordinary
Shares may be sold without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities
Act.
45
A
sale or perceived sale of a substantial number of our Ordinary Shares may cause the price of our Class A Ordinary Shares to decline.
If
our shareholders sell substantial amounts of our Class A Ordinary Shares in the public market, the market price of our Class A Ordinary
Shares could fall. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and
investors to short our Class A Ordinary Shares. These sales also may make it more difficult for us to sell equity or equity-related securities
in the future at a time and price that we deem reasonable or appropriate.
Issuances
by us of additional securities, could affect ownership and voting rights over us. In addition, the issuance of preferred shares, or options
or warrants to purchase those preferred shares, could negatively impact the value of the Ordinary Shares as the result of preferential
dividend rights, conversion rights, redemption rights and liquidation provisions granted to the stockholders of such preferred shares.
From
time to time, we may issue in public or private sales additional securities to third party investors. Such securities may provide holders
with ownership and voting rights that could provide the holders thereof with substantial influence over our business. Any preferred shares
that may be issued shall have such rights, preferences, privileges and restrictions as may be designated from time-to-time by our board,
including preferential dividend rights, voting rights, conversion rights, redemption rights and liquidation provisions. There cannot
be any assurance that we will not issue preferred securities with rights and preferences that are more beneficial than those provided
to our Ordinary Shares.
We
have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to
the value of our shares.
We
have never paid any cash dividends on our Class A Ordinary Shares and do not anticipate paying any cash dividends on our Class A Ordinary
Shares in the foreseeable future, and any return on investment may be limited to the value of our Class A Ordinary Shares. We plan to
retain any future earnings to finance growth.
Our
dividend policy is subject to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial
condition, capital requirements and other factors. There is no assurance that our Board of Directors will declare dividends even if we
are profitable. Under Cayman Islands law, dividends may be declared and paid only out of funds legally available therefor, namely out
of either profit or our share premium account, and provided further that a dividend may not be paid if this would result in our Company
being unable to pay its debts as they fall due in the ordinary course of business and the realizable value of assets of our Company will
not be less than the sum of our total liabilities, other than deferred taxes as shown on our books of account, and our capital.
Our
Class B Ordinary Shares have greater voting power than our Class A Ordinary Shares and certain existing shareholders have substantial
influence over our Company and their interests may not be aligned with the interests of our other shareholders.
We
have a dual-class voting structure consisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of
Class A Ordinary Shares are entitled to one vote per share, and holders of Class B Ordinary Shares are entitled to one hundred votes
per share, which can cause the holders of Class B Ordinary Shares to have an unbalanced, higher concentration of voting power. Our management
team as a group beneficially owns over 1.8 million Class B Ordinary Shares representing approximately 81% voting power. As a result,
until such time as their collective voting power is below 50%, our management team as a group of controlling shareholders have substantial
influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets,
election of directors and other significant corporate actions. They may take actions that are not in the best interests of us or our
other shareholders. These corporate actions may be taken even if they are opposed by our other shareholders. Further, concentration of
ownership of our Class B Ordinary Shares may discourage, prevent or delay the consummation of change of control transactions that shareholders
may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. Future issuances
of Class B Ordinary Shares may also be dilutive to the holders of Class A Ordinary Shares. As a result, the market price of our Class
A Ordinary Shares could be adversely affected.
46
Shareholders
who hold shares of Class B Ordinary Shares, including our executive officers and their affiliates, hold approximately 99% of the
voting power of our outstanding ordinary shares. Because of the one hundred-to-one voting ratio between our Class B and Class A
Ordinary Shares, the holders of our Class B Ordinary Shares will collectively continue to control a majority of the combined voting
power of our Ordinary Shares and therefore be able to control all matters submitted to our shareholders for approval, so long as the
Class B Ordinary Shares represent at least 1.0% of all outstanding shares of our Ordinary Shares.
Raising
additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technology
or drug and diagnostics technology candidates.
We
may seek additional funding through a combination of equity offerings, debt financings, collaborations, licensing arrangements, strategic
alliances and marketing or distribution arrangements. To the extent that we raise additional capital through the sale of equity or convertible
debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect
your rights as a holder of our Class A Ordinary Shares. The incurrence of additional indebtedness or the issuance of certain equity securities
could result in increased fixed payment obligations, and could also result in certain additional restrictive covenants, such as limitations
on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license IP rights and other
operating restrictions that could adversely impact our ability to conduct our business. In addition, issuance of additional equity securities,
or the possibility of such issuance, may cause the market price of our Class A Ordinary Shares to decline. In the event that we enter
into collaborations or licensing arrangements to raise capital, we may be required to accept unfavorable terms, including relinquishing
or licensing to another party on unfavorable terms our rights to technology or drug and diagnostics technology candidates that we otherwise
would seek to develop or commercialize ourselves or potentially reserve for future potential arrangements when we might be able to achieve
more favorable terms.
Since
we are a Cayman Islands exempted company, the rights of our shareholders may be more limited than those of shareholders of a company
organized in the United States.
Our
corporate affairs are governed by our Third Amended and Restated Memorandum and Articles of Association (as may be amended from time
to time) ("Memorandum and Articles"), the Companies Act (2023 Revision) of the Cayman Islands (the "Companies Law")
and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors are to a large extent governed by the common law of the Cayman Islands. This common
law is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which
has persuasive, but not binding, authority on a court in the Cayman Islands. Under the laws of some jurisdictions in the United
States, majority and controlling shareholders generally have certain fiduciary responsibilities to the minority shareholders. Shareholder
action must be taken in good faith, and actions by controlling shareholders which are obviously unreasonable may be declared null and
void. Cayman Islands law protecting the interests of minority shareholders may not be as protective in all circumstances as the law protecting
minority shareholders in some U.S. jurisdictions. In addition, the circumstances in which a shareholder of a Cayman Islands company may
sue the company derivatively, and the procedures and defenses that may be available to the company, may result in the rights of shareholders
of a Cayman Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders
may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The Cayman Islands courts are also
unlikely to recognize or enforce judgments from U.S. courts based on certain liability provisions of U.S. securities laws that are penal
in nature. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of
the Cayman Islands will generally recognize and enforce non-penal judgment of a foreign court of competent jurisdiction for a liquidated
sum without retrial on its merits which is not obtained in a manner contrary to public policy in the Cayman Islands and in respect of
which there are no concurrent proceedings in the Cayman Islands. This means, even if shareholders were to sue us successfully, they may
not be able to recover anything to make up for the losses suffered.
Furthermore,
our directors have the power to take certain actions without shareholder approval which would require shareholder approval under the
laws of most U.S. jurisdictions. For example, the directors of a Cayman Islands company, without shareholder approval, may implement
a sale of any assets, property, part of the business, or securities of the Company.
While
Cayman Islands law allows a dissenting shareholder to express the shareholder's view that a court sanctioned reorganization of
a Cayman Islands company would not provide fair value for the shareholder's shares, Cayman Islands statutory law does not specifically
provide for shareholder appraisal rights on a merger or consolidation of a company. This may make it more difficult for you to assess
the value of any consideration you may receive in a merger or consolidation or to require that the acquirer gives you additional consideration
if you believe the consideration offered is insufficient. However, Cayman Islands' statutory law does provide a mechanism for a
dissenting shareholder in a merger or consolidation to apply to the Grand Court for a determination of the fair value of the dissenter's
shares, if it is not possible for the Company and the dissenter to agree a fair price within the time limits prescribed.
47
Shareholders
of Cayman Islands exempted companies, such as our Company, have no general rights under Cayman Islands' law to inspect corporate
records and accounts or to obtain copies of lists of shareholders. Our directors have discretion under our Memorandum and Articles to
determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged
to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any
facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
Lastly,
under the law of the Cayman Islands, there is little statutory law for the protection of minority shareholders. The principal protection
under statutory law is that shareholders may bring an action to enforce the constituent documents of the corporation, our Memorandum
and Articles. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the memorandum
and articles of association.
There
are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common
law of the Cayman Islands for business companies is limited. Under the general rule pursuant to English company law known as the rule
in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of
its shareholders who express dissatisfaction with the conduct of the company's affairs by the majority or the board of directors.
However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents
of the company. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions
of the company's memorandum and articles of association, then the courts will grant relief. Generally, the areas in which the courts
will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not
capable of ratification by the majority; (2) acts that constitute fraud on the minority where the wrongdoers control the company; (3)
acts that infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied
with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded
minority shareholders under the laws of many states in the United States subject to limited exceptions, under Cayman Islands Law a minority
shareholder may not bring a derivative action against directors. Our Cayman Islands' counsel has advised us that they are aware
of one recent as yet unreported derivative action having been brought in a Cayman Islands' court. Class actions are not recognized
in the Cayman Islands, but groups of shareholders with identical interests may bring representative proceedings, which are similar.
As
a result, you may be limited in your ability to protect your interests if you are harmed in a manner that would otherwise enable you
to sue in a United States federal court. In addition, shareholders of Cayman Islands companies may not have standing to initiate a shareholder
derivative action in U.S. federal courts.
As
a result of all of the above, shareholders of our Company may have more difficulty in protecting their interests in the face of actions
taken by management, members of the board of directors or controlling shareholders than they would have as shareholders of a public U.S.
company.
You
may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited
because we are incorporated under Cayman Islands law, we currently conduct substantially all of our operations outside the United States
and some of our directors and executive officers reside outside the United States.
We
are incorporated in the Cayman Islands and currently conduct substantially all of our operations outside the United States through our
subsidiaries. Some of our directors and executive officers reside outside the United States and a substantial portion of their assets
are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against
these individuals in the Cayman Islands, the United Kingdom or in Hong Kong, in the event that you believe that your rights have been
infringed under the securities laws of the United States or otherwise. Even if you are successful in bringing an action of this kind,
the laws of the Cayman Islands, the United Kingdom and Hong Kong may render you unable to enforce a judgment against our assets or the
assets of our directors and officers. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States,
the United Kingdom or Hong Kong, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment
of a foreign court of competent jurisdiction without retrial on the merits if such judgment is final, for a liquidated sum, not in the
nature of taxes, a fine or penalty, is not inconsistent with a Cayman Islands' judgment in respect of the same matters, and was
not obtained in a manner which is contrary to public policy. In addition, a Cayman Islands court may stay proceedings if concurrent proceedings
are being brought elsewhere.
48
As
a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ
significantly from the NASDAQ Global Market corporate governance listing standards. These practices may afford less protection to shareholders
than they would enjoy if we complied fully with corporate governance listing standards.
As
a foreign private issuer, we are permitted to take advantage of certain provisions in the NASDAQ Global Market listing rules that allow
us to follow Cayman Islands law for certain governance matters. Certain corporate governance practices in the Cayman Islands may differ
significantly from corporate governance listing standards as, except for general fiduciary duties and duties of care, Cayman Islands
law has no corporate governance regime which prescribes specific corporate governance standards. We may follow Cayman Islands corporate
governance practices in lieu of the corporate governance requirements of the Nasdaq Global Market in respect of the following. For instance,
Cayman law does not require that we obtain shareholder approval to issue 20% or more of our outstanding Ordinary Shares in a private
offering nor we make our interim results available to shareholders, although as a NASDAQ listed company we are required to publicly file
interim results for the first six months of our fiscal year. Therefore, our shareholders may be afforded less protection than they otherwise
would have under corporate governance listing standards applicable to U.S. domestic issuers.
We
are an emerging growth company within the meaning of the Securities Act and will take advantage of certain reduced reporting requirements.
We
are an "emerging growth company," as defined in the JOBS Act and take advantage of certain exemptions from various requirements
applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company.
As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information
they may deem important.
The
JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards
until such date that a private company is otherwise required to comply with such new or revised accounting standards. The Company has
elected to use the extended transition period for complying with new or revised accounting standard under Section 102(b)(2) of the Jobs
Act, that allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public
and private companies until those standards apply to private companies.
Risks
Related to Doing Business in Hong Kong
Our
company currently only has limited operations to sell its NativusWell
®
through one of mainland China's largest e-commerce
platforms. Accordingly, the laws and regulations of the PRC do not currently have any material impact on our business, financial condition
and results of operations. However, if certain PRC laws and regulations were to become applicable to a company such as us in the future,
the application of such laws and regulations may have a material adverse impact on our business, financial condition and results of operations
and our ability to offer or continue to offer securities to investors, any of which may cause the value of our Class A Ordinary Shares,
to significantly decline or become worthless. See the following risk factors of "Our business, financial condition and results
of operations, and/or the value of our Class A Ordinary Shares or our ability to offer or continue to offer securities to investors may
be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us"
and "The PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws
of PRC must conduct their business activities. If we were to become subject to such direct influence or discretion, it may result in
a material change in our operations and/or the value of your Class A Ordinary Shares, which would materially affect the interests of
investors."
Political
risks associated with conducting business in Hong Kong.
Most
of our operations are based in Hong Kong. Accordingly, our business operations and financial conditions will be affected by the political
and legal developments in Hong Kong. During the period covered by the financial information incorporated by reference into and included
in this Report, we maintain substantially most of our operations in Hong Kong. Any adverse economic, social and/or political conditions,
material social unrest, strike, riot, civil disturbance or disobedience, as well as significant natural disasters, may affect the market
may adversely affect the business operations of our operations. Hong Kong is a special administrative region of the PRC and the basic
policies of the PRC regarding Hong Kong are reflected in the Basic Law (the "Hong Kong Basic Law" or the "Basic Law"),
namely, Hong Kong's constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative
and independent judicial powers, including that of final adjudication under the principle of "one country, two systems".
However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the
future. Since our operation is based in Hong Kong, any change of such political arrangements may pose immediate threat to the stability
of the economy in Hong Kong, thereby directly and adversely affecting our results of operations and financial positions.
49
Under
the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, Hong Kong is exclusively in charge
of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As
a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. Based on certain recent development
including the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region
issued by the Standing Committee of the PRC National People's Congress in June 2020, the U.S. State Department has indicated that
the United States no longer considers Hong Kong to have significant autonomy from China and Former President Trump signed an executive
order and Hong Kong Autonomy Act ("HKAA") to remove Hong Kong's preferential trade status and to authorize the U.S.
administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the
erosion of Hong Kong's autonomy. The United States may impose the same tariffs and other trade restrictions on exports from Hong
Kong that it places on goods from mainland China. These and other recent actions may represent an escalation in political and trade tensions
involving the U.S., China and Hong Kong, which could potentially harm our business.
Given
the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our business operations, which
could in turn adversely and materially affect our business, results of operations and financial condition. It is difficult to predict
the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative
actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price
of our Ordinary Shares could be adversely affected.
If
we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have
to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation
and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.
Recently,
U.S. public companies that have substantially all of their operations in China, including Hong Kong, have been the subject of intense
scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the
scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective
internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases,
allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese
companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject
to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It
is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on our company, our business and our stock
price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have
to expend significant resources to investigate such allegations and/or defend our company. This situation will be costly and time consuming
and distract our management from growing our company.
The
recent joint statement by the SEC, proposed rule changes submitted by Nasdaq, and an act passed by the U.S. Senate and the U.S. House
of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments
could add uncertainties to our offering, business operations, share price and reputation.
U.S.
public companies that have substantially all of their operations in China and Hong Kong have been the subject of intense scrutiny, criticism
and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism
and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over
financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.
On
April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint
statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including
China, including Hong Kong, reiterating past SEC and PCAOB statements on matters including the difficulty associated with inspecting
accounting firms and audit work papers in China and Hong Kong and higher risks of fraud in emerging markets and the difficulty of bringing
and enforcing SEC, Department of Justice and other U.S. regulatory actions, including in instances of fraud, in emerging markets generally.
On
May 20, 2020, the U.S. Senate passed the HFCA Act requiring a foreign company to certify it is not owned or controlled by a foreign government
if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the
PCAOB is unable to inspect the company's auditors for three consecutive years, the issuer's securities are prohibited to
trade on a national exchange. On December 2, 2020, the U.S. House of Representatives approved the HFCA Act.
50
On
May 21, 2021, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating
in a "Restrictive Market", (ii) prohibit Restrictive Market companies from directly listing on Nasdaq Capital Market, and
only permit them to list on Nasdaq Global Select or Nasdaq Global Market in connection with a direct listing and (iii) apply additional
and more stringent criteria to an applicant or listed company based on the qualifications of the company's auditors.
On
March 24, 2021, the SEC announced the adoption of interim final amendments to implement the submission and disclosure requirements of
the HFCA Act. In the announcement, the SEC clarifies that before any issuer will have to comply with the interim final amendments, the
SEC must implement a process for identifying covered issuers. The announcement also states that the SEC staff is actively assessing how
best to implement the other requirements of the HFCA Act, including the identification process and the trading prohibition requirements.
On
June 22, 2021, the U.S. Senate passed the AHFCAA, which, if signed into law, would amend the HFCA Act and require the SEC to prohibit
an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to the PCAOB inspections for two
consecutive years instead of three consecutive years.
On
September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining,
as contemplated under the HFCA Act, whether the board of directors of a company is unable to inspect or investigate completely registered
public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On
December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.
On
December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered
public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities
in those jurisdictions.
On
December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden. The Consolidated Appropriations Act contained,
among other things, an identical provision to AHFCAA, which reduce the number of consecutive non-inspection years required for triggering
the prohibitions under the HFCA Act from three years to two.
The
lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the
auditors based in China. As a result, investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB
to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firm's audit
procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could
cause investors and potential investors in our Class A Ordinary Shares to lose confidence in our audit procedures and reported financial
information and the quality of our financial statements.
51
Our auditor, Marcum Asia CPAs
LLP, as the auditor of companies that are traded publicly in the U.S. and registered with the PCAOB, are subject to laws in the U.S.,
pursuant to which the PCAOB conducts regular inspections to assess their compliance with the applicable professional standards. Marcum
Asia CPAs LLP is headquartered in Manhattan, New York, and have been inspected by the PCAOB on a regular basis, with the last inspections
in 2020, and Marcum Asia CPAs LLP is not subject to the determinations announced by the PCAOB on December 16, 2021.
However,
the recent developments would add uncertainties to our ability to offer or continue to offer securities and we cannot assure you whether
the national securities exchange we apply to for listing or regulatory authorities would apply additional and more stringent criteria
to us after considering the effectiveness of our auditor's audit procedures and quality control procedures, adequacy of personnel
and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. In addition, the HFCA Act, as
amended, which requires that the PCAOB be permitted to inspect an issuer's public accounting firm within two years, may result
in the delisting of our Company or prohibition of trading in our Class A Ordinary Shares in the future if the PCAOB is unable to inspect
our accounting firm at such future time.
On
August 26, 2022, the China Securities Regulatory Commission, the MOF, and the PCAOB signed the Protocol governing inspections and investigations
of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate
registered public accounting firms headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol
disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has
the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to
secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and
voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate
the PCAOB's access in the future, the PCAOB Board will consider the need to issue a new determination.
As
a result of this scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese and Hong Kong companies
sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder
lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what
effect this sector-wide scrutiny, criticism and negative publicity will have on us, our ability to offer or continue to offer securities,
business and our share price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true
or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation will
be costly and time consuming and distract our management from developing our growth. If such allegations are not proven to be groundless,
we and our business operations will be severely affected and you could sustain a significant decline in the value of our share.
Nasdaq
may apply additional and more stringent criteria for our continued listing because our insiders hold a large portion of our listed securities.
Nasdaq
Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and
Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing
of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs
that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though
the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to
deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to:
(i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or
an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company's
audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company's
listed securities; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S.
shareholders, operations, or members of the board of directors or management. The insiders of our Company hold a large portion of the
company's listed securities. Therefore, we may be subject to the additional and more stringent criteria of Nasdaq for our continued
listing, which might result in deficiency letters or inquiries that will take management's time away from focusing on our operations.
52
Our
business, financial condition and results of operations, and/or the value of our Class A Ordinary Shares or our ability to offer or continue
to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable
to a company such as us.
We
currently do not have or intend to have any subsidiary or any contractual arrangement to establish a variable interest entity structure
with any entity in mainland China. All of our operating entities are in jurisdictions outside of mainland China, including all three
of our VIEs which are incorporated under the laws of Cayman Islands and conduct operations in Hong Kong. However, as our principal place
of business is in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing or future laws
of the PRC become applicable to a company such as us, it will not have a material adverse impact on our business, financial condition
and results of operations and/or our ability to offer or continue to offer securities to investors, any of which may cause the value
of such securities to significantly decline or be worthless.
Except
for the Basic Law, the national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied
locally by promulgation or local legislation. National laws that may be listed in Annex III are currently limited under the Basic Law
to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong
Kong. National laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III and
so do not apply directly to Hong Kong.
The
laws and regulations in the PRC are evolving, and their enactment timetable, interpretation and implementation involve significant uncertainties.
To the extent any PRC laws and regulations become applicable to us, we may be subject to the risks and uncertainties associated with
the legal system in the PRC, including with respect to the enforcement of laws and the possibility of changes of rules and regulations
with little or no advance notice. We currently do not have plan to expand our operation or acquire any operation in the mainland China.
However, we may also become subject to the laws and regulations of the PRC to the extent we commence business and customer facing operations
in mainland China as a result of any future acquisition, expansion or organic growth.
The
PRC government exerts substantial influence and discretion over the manner in which companies incorporated under the laws of PRC must
conduct their business activities. If we were to become subject to such direct influence or discretion, it may result in a material change
in our operations and/or the value of our Class A Ordinary Shares, which would materially affect the interest of the investors.
The
PRC legal system is evolving rapidly and the PRC laws, regulations, and rules may change quickly with little advance notice. In particular,
because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential
nature of these decisions, the interpretation of these laws, rules and regulations may contain inconsistences, the enforcement of which
involves uncertainties. The PRC government has exercised and continues to exercise substantial control over many sectors of the PRC economy
through regulation and/or state ownership. Government actions have had, and may continue to have, a significant effect on economic conditions
in the PRC and businesses which are subject to such government actions.
53
We
have business operations in Hong Kong, with limited operations to sell its NativusWell
®
through e-commerce in mainland
China, and we directly, or indirectly via our subsidiaries, own equity interests in our operating entities, none of which are located
in mainland China, although all three of our VIEs are incorporated under the laws of Cayman Islands and conduct operations in Hong Kong.
Our principal executive offices are located in Europe, but our principal place of business is in Hong Kong, a special administrative
region of China. The PRC government currently does not exert direct influence and discretion over the manner in which we conduct our
business activities outside of mainland China, however, there is no guarantee that we will not be subject to such direct influence or
discretion in the future due to changes in laws or other unforeseeable reasons or as a result of our future expansion or acquisition
of operations in mainland China. See "- Our business, financial condition and results of operations, and/or the value of our Class
A Ordinary Shares or our ability to offer or continue to offer securities to investors may be materially and adversely affected to the
extent the laws and regulations of the PRC become applicable to a company such as us."
We
currently do not have plans to expand our operation or acquire any operation in the mainland China. However, if we were to become subject
to the direct intervention or influence of the PRC government at any time due to changes in laws or other unforeseeable reasons or as
a result of our future development, expansion or acquisition of operations in the PRC, it may require a material change in our operations
and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure
to comply. In addition, the market prices of our Class A Ordinary Shares could be adversely affected as a result of anticipated negative
impacts of any such government actions, as well as negative investor sentiment towards Hong Kong-based companies subject to direct PRC
government oversight and regulation, regardless of our actual operating performance. There can be no assurance that the Chinese government
would not intervene in or influence our operations at any time.
We
were not required to obtain permission from the PRC government to list on a U.S. securities exchange, however there is no guarantee that
this will continue to be the case in the future in relation to the continued listing of our securities on a securities exchange outside
of the PRC, or even when such permission is obtained, it will not be subsequently denied or rescinded. Any actions by the PRC government
to exert more oversight and control over offerings (including of businesses whose primary operations are in Hong Kong) that are conducted
overseas and/or foreign investments in Hong Kong-based issuers could significantly limit or completely hinder our ability to offer or
continue to offer securities to investors and cause the value of our securities, including our Class A Ordinary Shares, to significantly
decline or be worthless.
The
enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the "Hong Kong National
Security Law") could impact our Hong Kong holding subsidiary.
On
June 30, 2020, the Standing Committee of the PRC National People's Congress adopted the Hong Kong National Security Law. This law
defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories
of offences - secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national
security - and their corresponding penalties. On July 14, 2020, the former U.S. President Donald Trump signed the Hong Kong Autonomy
Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities who are determined
to have materially contributed to the erosion of Hong Kong's autonomy. On August 7, 2020 the U.S. government imposed HKAA-authorized
sanctions on eleven individuals, including former HKSAR chief executive Carrie Lam. On October 14, 2020, the U.S. State Department submitted
to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to "the failure
of the Government of China to meet its obligations under the Joint Declaration or the Basic Law." The HKAA further authorizes secondary
sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant
transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect the foreign financial
institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult
to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. If our Hong
Kong subsidiaries are determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, our
business operations, financial position and results of operations could be materially and adversely affected.
54
The
Hong Kong legal system embodies uncertainties which could limit the availability of legal protections.
As
one of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong's
Basic Law. The Basic Law ensured Hong Kong will retain its own currency (Hong Kong Dollar), legal system, parliamentary system and people's
rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function with a high degree of autonomy.
The Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary
and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English
common law system.
However,
if the PRC attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong's
common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could,
in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality
protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect
of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation
or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections
available to us, including our ability to enforce our agreements with our customers.
There
remain some uncertainties as to whether we will be required to obtain approvals from Chinese authorities to list on the U.S. exchanges
and offer or continue to offer securities in the future, and if required, we cannot assure you that we will be able to obtain such approval.
The
Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the "M&A Rules"), adopted by six
PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through
acquisitions of PRC domestic companies and controlled by PRC companies or individuals to obtain the approval of the China Securities
Regulatory Commission ("CSRC") prior to the listing and trading of such special purpose vehicle's securities on an
overseas stock exchange.
We
are also aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market,
enhancing supervision over mainland-China-based companies listed overseas using variable interest entity structure, adopting new measures
to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. For example, on July 6, 2021, the
General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document
to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among
other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation,
to enhance supervision over mainland-China-based companies listed overseas, and to establish and improve the system of extraterritorial
application of the PRC securities laws.
On
December 28, 2021, the Cyberspace Administration of China ("CAC"), and other PRC authorities promulgated the Cybersecurity
Review Measures, which took effect on February 15, 2022. In addition, the Cybersecurity Law, which was adopted by the Standing Committee
of the National People's Congress on November 7, 2016 and came into force on June 1, 2017, and the Cybersecurity Review Measures,
or the "Review Measures", provide that personal information and important data collected and generated by a critical information
infrastructure operator in the course of its operations in mainland China must be stored in mainland China, and if a critical information
infrastructure operator purchases internet products and services that affect or may affect national security, it should be subject to
national security review by the CAC together with competent departments of the State Council. In addition, for critical information infrastructure
operators, or the "CIIOs", that purchase network-related products and services, the CIIOs shall declare any network-related
product or service that affects or may affect national security to the Office of Cybersecurity Review of the CAC for cybersecurity review.
Due to the lack of further interpretations, the exact scope of what constitutes a "CIIO" remains unclear. Further, the PRC
government authorities may have wide discretion in the interpretation and enforcement of these laws. In addition, the Review Measures
stipulates that any online platform operators holding more than one million users/users' individual information shall be subject
to cybersecurity review before listing abroad. As of the date of the annual report, neither we nor our subsidiaries have received any
notice from any authorities identifying us or our subsidiaries as a CIIO or requiring us or our subsidiaries to undertake a cybersecurity
review by the CAC. Further, as of the date of the annual report, neither we nor our subsidiaries have been subject to any penalties,
fines, suspensions, or investigations from any competent authorities for violation of the regulations or policies that the CAC has issued.
55
On
June 10, 2021, the Standing Committee of the National People's Congress promulgated the Data Security Law, which took effect on
September 1, 2021. The Data Security Law requires that data shall not be collected by theft or other illegal means, and it also provides
for a data classification and hierarchical protection system. The data classification and hierarchical protection system protects data
according to its importance in economic and social development, and the damages it may cause to national security, public interests,
or the legitimate rights and interests of individuals and organizations if the data is falsified, damaged, disclosed, illegally obtained
or illegally used, which protection system is expected to be built by the state for data security in the near future. On November 14,
2021, CAC published the Regulations on the Data Security Administration Draft, or the "Data Security Regulations Draft",
to solicit public opinion and comments. Under the Data Security Regulations Draft, an overseas initial public offering to be conducted
by a data processor processing the personal information of more than one million individuals shall apply for a cybersecurity review.
Data processor means an individual or organization that independently makes decisions on the purpose and manner of processing in data
processing activities, and data processing activities refers to activities such as the collection, retention, use, processing, transmission,
provision, disclosure, or deletion of data. Currently we do not expect the Review Measures to have an impact on the business and operations
of our Hong Kong subsidiaries, because (i) our Hong Kong subsidiaries are incorporated and operating in Hong Kong without any subsidiary
or variety interest entity ("VIE") structure in mainland China, and it is unclear whether the Review Measures shall be applied
to a Hong Kong company; (ii) as of the date of the annual report, our Hong Kong subsidiaries have not collected or stored personal information
of any individual clients of mainland China; and (iii) as of the date of this annual report, our Hong Kong subsidiaries have not been
informed by any PRC governmental authority of any requirement that it file for a cybersecurity review for the offering. Based on laws
and regulations currently in effect in the PRC as of the date of this annual report, we believe our Hong Kong subsidiaries are not required
to pass the cybersecurity review of the CAC in order to list our Class A Ordinary Shares in the U.S.
In
addition, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the
Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing
procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial
public offerings or listing application. If a PRC company fails to complete required filing procedures or conceals any material fact
or falsifies any major content in its filing documents, such PRC company may be subject to administrative penalties, such as order to
rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable
persons may also be subject to administrative penalties, such as warnings and fines. In addition, on February 24, 2023, the CSRC, together
with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China,
revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which
was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or
the Provisions. The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration
of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as
is consistent with the Trial Measures. The revised Provisions require that, including but not limited to (a) a domestic company that
plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities
including securities companies, securities service providers and overseas regulators, any documents and materials that contain state
secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file
with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through
its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities
service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security
or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations. As of the date of this
annual report, we have not received any formal inquiry, notice, warning, sanction, or objection from the CSRC with respect to the listing
of our Class A Ordinary Shares. However, there remains significant uncertainty as to the enactment, interpretation and implementation
of regulatory requirements related to overseas securities offerings and other capital markets activities. If it is determined that we
are subject to the Trial Measures for the listing of the Ordinary Shares on the Nasdaq, we may fail to obtain required approval, complete
required filing or meet such requirements in a timely manner or at all, or completion could be rescinded. Any failure or perceived failure
of us to fully comply with such new regulatory requirements could significantly limit or completely hinder our ability to offer or continue
to offer securities to investors, cause significant disruption to our business operations, and severely damage our reputation, which
could materially and adversely affect our financial condition and results of operations and could cause the value of our securities to
significantly decline or be worthless.
If
we are determined to be subject to the Draft Rules Regarding Overseas Listings, we cannot assure you that we will be able to receive
clearance of such filing requirements in a timely manner, or at all, even though we believe that none of the situations that would clearly
prohibit overseas listing and offering applies to us. Based on laws and regulations currently in effect in the PRC as of the date of
this annual report, we believe our Hong Kong subsidiaries are not required to obtain regulatory approval from the CSRC in order to list
our Class A Ordinary Shares in the U.S.
56
Since
these proposed rules, statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation
making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified
or promulgated, if any. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder
our ability to offer or continue to offer the Class A Ordinary Shares, cause significant disruption to our business operations, severely
damage our reputation, materially and adversely affect our financial condition and results of operations, and cause the Class A Ordinary
Shares to significantly decline in value or become worthless.
As
of the date of this annual report, we believe are not required to obtain approvals from the PRC authorities to operate our business or
list on the U.S. exchanges and offer or continue to offer securities; specifically, we are currently not required to obtain any permission
or approval from the CSRC, the CAC or any other PRC governmental authority to operate our business or to list our securities on a U.S.
securities exchange or issue securities to foreign investors. However, if we and our Hong Kong subsidiaries (i) do not receive or maintain
such approval, should the approval be required in the future by the PRC government, (ii) inadvertently conclude that such approval is
not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such approval in the future,
our operations and financial condition could be materially adversely affected, and our ability to offer or continue to offer securities
to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline
in value and become worthless.
Nevertheless,
since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making
bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or
promulgated, if any. It is also highly uncertain what potential impact such modified or new laws and regulations will have on Aptorum
Group's daily business operations, our ability to accept foreign investments and the listing of our Class A Ordinary Shares on
a U.S. or other foreign exchanges. If there is significant change to current political arrangements between mainland China and Hong Kong,
the PRC government intervenes or influences operations of companies operated in Hong Kong like us, or exerts more control through change
of laws and regulations over offerings conducted overseas and/or foreign investment in issuers like us, it may result in a material change
in our operations and/or the value of the securities we are registering for sale or could significantly limit or completely hinder our
ability to offer or continue to offer securities to investors and cause the value of our Class A Ordinary Shares to significantly decline
or become worthless.
It
may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within China.
Shareholder
claims or regulatory investigations that are common in the United States generally are difficult to pursue as a matter of law or practicality
in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations
or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities
regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the
securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanisms.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities
regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed
interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator
to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting
your interests.
Our
auditor's audit working papers are located in PRC. In the event that the U.S. regulators carry out investigation on us and there
is a need to conduct investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry
out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation
with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism
established with the securities regulatory authority of the PRC.
57
Item
4. INFORMATION ON THE COMPANY
A.
History and Development of the Company
Aptorum
was incorporated under the laws of the Cayman Islands on September 13, 2010. Our share capital is $100,000,000.00 divided into 9,999,996,000,000
Class A Ordinary Shares with a nominal or par value of $0.00001 each and 4,000,000 Class B Ordinary Shares with a nominal or par value
of $0.00001 each.
Aptorum
is not a Chinese operating company. Aptorum is a Cayman Islands holding company with operations conducted through our subsidiaries and
the variable interest entities (VIEs). We have determined that we have three VIEs, namely, Libra, Mios and Scipio, according to the U.S.
GAAP. In accordance with ASC 810, we concluded that we are the primary beneficiary of two VIEs, Mios and Scipio, therefore, are able
to consolidate their financial statements into ours. Mios and Scipio are incorporated under the laws of the Cayman Islands and conduct
operations in Hong Kong. Our corporate structure is based on the equity ownership and control we have over our subsidiaries and the consolidated
VIEs. Our corporate structure was not set up to be used to provide investors with exposure to foreign investment in China-based companies
where Chinese law prohibits direct foreign investment in the operating companies. Foreign investment can be made directly into the VIEs,
however, your investments into Aptorum are made into the Cayman Islands holding company, not any of our VIEs, and you may never own any
equity into the VIEs or any other subsidiary.
Aptorum
Therapeutics Limited, a Cayman Islands company with limited liability, entered into two concerted action agreements ("Concerted
Action Agreements"), with Peace Range Limited, a shareholder of the two consolidated VIEs, on December 30, 2021.
Pursuant
to the two Concerted Action Agreements, Peace Range Limited and Aptorum Therapeutics Limited agreed to act in concert and give the same
expression of intentions in regard with (1) exercising voting rights at shareholders' meetings; (2) making proposals to shareholder's
meetings; (3) nominating candidates of directors and supervisors; (4) making material decisions for the consolidated VIEs (save for the
administrative and managerial duty of work being managed by the board of directors and executives of the consolidated VIEs); (5) exercising
the rights as shareholders of the consolidated VIEs in accordance with their articles of association and other relevant agreements or
documents between the consolidated VIEs and other related parties; (6) performing the obligations as shareholders of the consolidated
VIEs in accordance with the articles of association and other relevant agreements or documents between the consolidated VIEs and other
related parties; and (7) exercising other rights granted to shareholders of the consolidated VIEs under laws, administrative regulations,
other normative documents, and the articles of association of the consolidated VIEs. The Concerted Action Agreements are governed by
and interpreted in accordance with the laws of Hong Kong. The copies of the Concerted Action Agreements were filed as exhibits 4.47 and
4.48 to the Form 20-F filed on April 29, 2022. The Concerted Action Agreements are governed by the laws of Hong Kong. The "acting
in concert" agreements like the Concerted Actions Agreements with substantially the same nature have been tested in the courts
in Hong Kong. The Hong Kong courts will enforce unless the agreements are unenforceable for other reason(s) such as the agreements are,
among others, illegal or made to mislead others, or for the purpose of avoidance of legal requirements and lack a bona fide business
purpose. We do not believe that the Concerted Actions Agreements fall within the exceptions that will make them unenforceable in Hong
Kong courts." (Please see the risk factor section, "Risks Related to our Corporate Structure" and "Risks Related
to Doing Business in Hong Kong" for more information about the VIEs).
Our
current business consists of "therapeutics" and "non-therapeutics" segments, all of which we operate through
our subsidiaries (See the ownership chart on page 67).
We
refer to our therapeutics segment as Aptorum Therapeutics Group, which is operated through Aptorum's wholly-owned subsidiary, Aptorum
Therapeutics Limited, a Cayman Islands exempted company with limited liability, whose principal place of business is in Hong Kong and
whose subsidiaries (who we sometimes refer to herein as project companies) are based in the United Kingdom, Singapore and Hong Kong.
58
We
refer to our non-therapeutics segment as Aptorum Non-Therapeutics Group. The Non-Therapeutics Group consists of: (i) diagnostics projects
including Paths
Dx
Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology, (ii) natural
supplements including NativusWell
®
, and (iii) AML Clinic. Paths
Dx
Test technology is currently under co-development
with A*STAR. The sale of natural supplements is operated through Nativus Life Sciences Limited ("Nativus"), a subsidiary
of Aptorum Therapeutics Limited incorporated in the Cayman Islands. The Group's outpatient clinic is operated through our subsidiary,
Aptorum Medical Limited, which is a Hong Kong-based company incorporated in the Cayman Islands with an office in Central, Hong Kong.
On
September 25, 2020, Aptorum, via its subsidiaries, enters into a series of transactions with Accelerate Technologies Pte. Ltd.'s
("Accelerate Technologies"), the commercialization arm of the Singapore Agency for Science, Technology and Research ("A*STAR"),
in relation to the research and development of Paths
Dx
Test, a novel molecular-based rapid pathogen identification and detection
diagnostics technology, through its subsidiaries. Specifically, Paths Diagnostics Pte. Limited (formerly known as Aptorum Innovations
Holding Pte. Limited), one of the Company's subsidiaries, entered into an Exclusive Licence Agreement with Accelerate Technologies
to co-develop the Paths
Dx
Test technology. The term of the Exclusive Licence Agreement is described in Exhibit 4.62 on Form
20-F filed with the SEC on April 19, 2021. Furthermore, Accelerate Technologies, the inventors of the Paths
Dx
Test technologies
in A*STAR ("Founding Scientists"), Paths Diagnostics Pte. Limited, and Paths Innovations Limited (formerly known as Aptorum
Innovations Holding Limited), a wholly owned subsidiary of the Company, entered into a Share Subscription & Shareholders Agreement
on the same day to subscribe ordinary shares of Paths Diagnostics Pte. Limited. The shares are subscribed and issued in two tranches,
the first tranche has taken place at closing of the Share Subscription & Shareholders Agreement, while the second tranche will take
place after the certain first milestone is met. The total number of shares subscribed by the shareholders under the Share Subscription
& Shareholders Agreement is around 2.7 million. After the two tranches of subscription, Aptorum, Accelerate Technologies and the
Founding Scientists are expected to control 71.23%, 14.25% and 9.53% of the share of Paths Diagnostics Pte. Limited respectively, with
4.99% of the shares reserved for its employee share plan.
APTUS
CAPITAL LIMITED, which has since been renamed to AENEAS CAPITAL LIMITED, was always under the direct ownership of Jurchen and not under
the ownership chain of Aptorum Group. However, Aptus Asia Financial Holdings Limited ("AAFH"), which has since been renamed
to Aeneas Group Limited, was transferred out of the Aptorum Group on November 10, 2017 to be held directly by Jurchen Investment Corporation
and that subsequently, APTUS CAPITAL LIMITED was then transferred to be under AAFH.
On
May 4, 2017, Mr. Huen transferred all of the ordinary shares in the Company he owned (in the amount of 2,230,760) to Jurchen, a company
incorporated in the British Virgin Islands and wholly-owned by Mr. Huen. On October 13, 2017, as part of the Conversions (as defined
below) the ordinary shares held by Jurchen were redesignated as 223,076 Class A Ordinary Shares and 2,007,684 Class B Ordinary Shares.
On
February 21 and March 1, 2017, the Company's board of directors and shareholders resolved to restructure the Company from an investment
fund with management shares and non-voting participating redeemable preference shares to a holding company with operating subsidiaries,
respectively (the "Restructuring Plan").
59
According
to the Restructuring Plan, the 256,571.12 then issued participating shares with par value of $0.01 ("Participating Shares")
were redeemed and 4,743,418.88 unissued Participating Shares were cancelled;   following such redemption and cancellation,
we no longer have any Participating Shares authorized or issued. Additionally, the Company authorized a class of securities consisting
of 10,000,000 ordinary shares, par value $10.00 per share and issued 2,565,711 ordinary shares to our original investors.
During
the period March 1, 2017 through October 13, 2017, an aggregate of 220,703 ordinary shares were issued at a price of approximately $39
per share in a private placement we described as a "Series A" offering. Each investor of the Series A offering, in addition
to a subscription agreement, signed a shareholder agreement, which set forth the basic governance terms of the Company, as well as our
capital structure. The shareholders agreement was terminated in October 2017.
On October 13, 2017, ordinary resolutions were passed at an extraordinary
general meeting of the Company approving (the "Conversions"): (i) converting 7,213,587 of authorized but unissued ordinary
shares into 5,457,362 authorized but unissued Class A Ordinary Shares, par value of $10.00 per share and 1,756,225 authorized but unissued
Class B Ordinary Shares, par value of $10.00 per share, respectively; (ii) converting 2,493,085 ordinary shares held by three shareholders
into an aggregate of 249,309 Class A Ordinary Shares and 2,243,776 Class B Ordinary Shares; and (iii) converting 293,330 ordinary shares
held by 24 shareholders into an aggregate 293,330 Class A Ordinary Shares. Following these issuances, we had 27 shareholders of record.
On
October 19, 2017, we changed our name from APTUS Holdings Limited to our current name, Aptorum Group Limited.
On
March 23, 2018, Jurchen transferred 44,615 Class A Ordinary Shares and 401,537 Class B Ordinary Shares to CGY Investments Limited, a
company incorporated in Hong Kong and which we deem Mr. Darren Lui jointly controls and/or of which he has substantial influence on the
disposition rights and voting rights of such shares. Following this transfer, Jurchen owns approximately 33% and 72% of our Class
A Ordinary Shares and Class B Ordinary Shares, respectively.
On
December 17, 2018, the Company consummated its IPO of 76,142 Class A Ordinary Shares. The Registration Statement was declared effective
by the U.S. Securities and Exchange Commission on December 3, 2018 (the "Effective Date"). The shares were sold at a price
of $158 per share, generating gross proceeds to the Company of approximately $12,030,420.
On
May 26, 2021, the Company entered into a private placement shares purchase agreement with Jurchen, issuing 138,793 Class A Ordinary Shares,
par value $10 per share, at $28.82 per share, representing a 10% premium to the last closing price of the Company's Class A Ordinary
Shares on the NASDAQ stock exchange on that date. The Company received aggregate gross proceeds of $4,000,000 from the purchase of these
shares. Following the purchase, Mr. Huen's total shareholding represented 55.52% of the total issued share capital of the Company.
On
January 23, 2023, the Company effectuated a ten-for-one share consolidation of its authorized share capital, such that every 10 Class
A Ordinary Shares, par value of US$1.00 per share, in the authorized share capital of the Company (including issued and unissued share
capital) be consolidated into 1 Class A Ordinary Share, par value of US$10.00 per share, and that every 10 Class B Ordinary Shares, par
value of US$1.00 per share in the authorized share capital of the Company (including issued and unissued share capital) be consolidated
into 1 Class B Ordinary Share, par value of US$10.00 per share (the "Share Consolidation" or "Reverse Split").
On
February 21, 2023, the shareholders of the Company approved a merger of the Company with Aptorum Group Cayman Limited, a newly established
wholly owned subsidiary of the Company, whereby the Company was the surviving company, on the terms of the plan of merger that includes
the change in par value in the authorized shares of the Company from $10 to $0.00001. In addition, among other things, the shareholders
approved to increase the voting rights of the Class B Ordinary Shares from 10 votes per share to 100 votes per share, and to increase
the number of Class A Ordinary Shares authorized to 9,999,996,000,000 shares, par value $0.00001 each. These corporate actions were effective
as of February 21, 2023.
Over
the past three years, we have invested approximately $0.5 million towards our principal capital expenditures, which include laboratory
equipment, premises, leasehold improvements, and medical and other equipment.
60
The
following diagram illustrates our corporate structure as of the date of this annual report:
Note 1: Both Mios Pharmaceuticals
Limited ("Mios") and Scipio Life Sciences Limited ("Scipio") issued Class A and Class B ordinary shares to various
parties; for each such entity, each Class A ordinary share is entitled to 1 vote and 1 share of economic interest of the respective company,
while each Class B ordinary share is entitled to 10 votes and 0.001 share of economic interest of the respective company.
As
of the date of this annual report, we indirectly hold 97.93% economic interest and 36.17% voting power in Mios, and 97.93% economic interest
and 35.06% voting power in Scipio. An independent third party shareholder, Peace Range Limited, holds 0.15% economic interest and 63.61%
voting power in Mios, and 0.15% economic interest and 64.72% voting power in Scipio. The remaining shareholders hold 1.92% economic interest
and 0.22% voting power in Mios, and 1.92% economic interest and 0.22% voting power in Scipio respectively. Our ownership interest in
these entities is through direct equity ownership and not through any contractual arrangements.
61
Note
2: Dr. Clark Cheng, an Executive Director of Aptorum Group, holds the remaining 10% shareholding of Aptorum Medical Limited.
Note
3: Angen Funds Limited, a company designated by an investor of ALS series projects, holds the remaining 20% shareholding of Acticule
Life Sciences Limited.
Note
4: Accelerate Technologies Pte. Ltd., the commercialization arm of the Singapore Agency for Science, Technology and Research ("A*STAR"),
hold 15% shareholding of Paths Diagnostics Pte. Limited. The inventors of Paths
Dx
Test technologies in A*STAR hold the remaining
10% of shareholding of Paths Diagnostics Pte. Limited.
Note
5: An investor of project VLS-2 holds the remaining 10% shareholding of mTor (Hong Kong) Limited.
Currently,
we conduct the majority of our operations through the following subsidiaries: Aptorum Therapeutics Limited, Acticule Life Sciences Limited,
Nativus Life Sciences Limited, Aptorum Medical Limited and Paths Diagnostics Pte. Limited. All investments into our company are into
the parent company, Aptorum Group Limited, a Cayman Islands exempted company with limited liability whose principal place of business
is in Hong Kong; you may never hold direct equity interests in our subsidiaries or the VIEs.
In accordance with the provisions
of Accounting Standards Codification ("ASC") 810, Consolidation, we consolidate any VIE of which we are regarded as the primary
beneficiary for accounting purposes. The typical condition for a controlling financial interest ownership is holding a majority of the
voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements
that do not involve controlling voting interests. On December 30, 2021, Libra (formerly known as Aptorum Pharmaceutical Development Limited),
Mios and Scipio, issued Class A and Class B ordinary shares to various parties; for each such entity, each Class A ordinary share is entitled
to 1 vote and 1 share of economic benefit of the respective company, while each Class B ordinary share is entitled to 10 votes and 0.001
share of economic benefit of the respective company. Following such share issuances, the Group lost its majority voting rights in each
of these three companies and only holds 48.33%, 48.39% and 48.36% economic interest in Libra, Mios and Scipio, respectively. However,
the Group still holds a majority of each of these three company's outstanding Class A ordinary shares and therefore will absorb/receive
portions of these entities' expected losses or residual returns. In addition, none of these three companies have sufficient equity
to sustain its own activities, and they have two classes of ordinary shares which have different rights, benefits and obligations. We
determined that all these three companies are VIEs. On December 31, 2021, Libra, Mios and Scipio further issued Class A ordinary shares
to the Group in exchange of certain projects licenses. Upon these share issuances, the Group was holding 97.27% economic interest and
31.51% voting power in Libra, 97.93% economic interest and 36.17% voting power in Mios, and 97.93% economic interest and 35.06% voting
power in Scipio, respectively.
We
have considered each of these entity's Memorandum and Article of Association and their respective board of directors (the sole
director of each of Mios and Scipio is an executive director of the Group), and determined that we have the power to manage and make
decisions that affect Mios and Scipio's research and development activities, which activities most significantly impact Mios and
Scipio's economic performance. However, we do not have such power over Libra's research and development activities, which
activities most significantly impact Libra's economic performance. Accordingly, we determined that we are regarded as the primary
beneficiary of Mios and Scipio for accounting purposes, but not the primary beneficiary of Libra.
62
Emerging
Growth Company Status
We
are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"), and
we are eligible to take advantage of certain exemptions from various reporting and financial disclosure requirements that are applicable
to other public companies, that are not emerging growth companies, including, but not limited to, (1) not being required to comply with
the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and (3) exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage
of these exemptions.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. As a result, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We
could remain an emerging growth company for up to five years, or until the earliest of (1) the last day of the first fiscal year in which
our annual gross revenues exceed $1.235 billion, (2) the date that we become a "large accelerated filer" as defined in Rule
12b-2 under the Exchange Act, which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceeds $700
million as of the last business day of our most recently completed second fiscal quarter and we have been publicly reporting for at least
12 months, or (3) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
Foreign
Private Issuer Status
We
are a foreign private issuer within the meaning of the rules under the Exchange. As such, we are exempt from certain provisions applicable
to United States domestic public companies. For example:
●
we are not required to
    provide as many Exchange Act reports, or as frequently, as a domestic public company;
●
for interim reporting,
    we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic
    public companies;
●
we are not required to
    provide the same level of disclosure on certain issues, such as executive compensation;
●
we are exempt from provisions
    of Regulation FD aimed at preventing issuers from making selective disclosures of material information;
●
we are not required to
    comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security
    registered under the Exchange Act; and
●
we are not required to
    comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities
    and establishing insider liability for profits realized from any "short-swing" trading transaction.
B.
Business Overview
Overview
of our Company
Aptorum
is not a Chinese operating company. Aptorum is a Cayman Islands holding company with operations conducted through our subsidiaries and
the variable interest entities (VIEs). We have determined that we have three VIEs, namely, Libra, Mios and Scipio, according to the U.S.
GAAP. All three of the VIEs are incorporated in Cayman Islands and operate in Hong Kong. In accordance with ASC 810, we concluded that
we are the primary beneficiary of two VIEs, Mios and Scipio, therefore, are able to consolidate their financial statements into ours.
Our corporate structure is based on the equity ownership and control we have over our subsidiaries and the consolidated VIEs. Our corporate
structure was not set up to be used to provide investors with exposure to foreign investment in China-based companies where Chinese law
prohibits direct foreign investment in the operating companies. Foreign investment can be made directly into Mios and Scipio; however,
your investments into Aptorum are made into the Cayman Islands holding company, not any of the consolidated VIEs, and you may never own
any equity into the VIEs or any other subsidiary.
63
Since
the consolidated VIEs operate in Hong Kong, they face various legal and operational risks and uncertainties associated with doing business
in Hong Kong. Our current corporate structure does not contain any variable interest entity in mainland China and we do not have intention
establishing any VIEs in mainland China in the future. However, if in the future there is any significant change to the current political
arrangements between mainland China and Hong Kong and mainland China's expanded authority in Hong Kong result in the PRC regulatory
authorities disallowing our current corporate structure, or if in the future our structure were to contain a VIE and the mainland PRC
regulatory authorities expand to Hong Kong and disallow our corporate structure, it would likely result in a material adverse change
in the VIE's operations, and the value of our securities may decline significantly in value or become worthless.
Although
currently we do not have any business operations or VIE in mainland China and we believe that the laws and regulations of the PRC applicable
in China do not currently have any material impact on our business, financial condition or results of operations, we face risks and uncertainties
associated with the complex and evolving PRC laws and regulations and as to whether and how the recent PRC government statements and
regulatory developments, such as those relating to VIE, data and cyberspace security, and anti-monopoly concerns, would be applicable
to a company such as Mios and Scipio given their substantial operations in Hong Kong and the Chinese government's significant oversight
authority over the conduct of business in Hong Kong.
In
light of China's recent expansion of authority in Hong Kong, we are subject to the risks of uncertainty about any future actions
of the PRC government or authorities in Hong Kong. The Chinese government may intervene or influence our current and future operations
in Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves.
We believe that, on the basis that we currently do not have any business operations in mainland China, we currently are not required
to obtain approvals from Chinese authorities to operate our business or list on the U.S. exchanges and offer securities; specifically,
none of Mios or Scipio is currently required to obtain any permission or approval from the China Securities Regulatory Commission ("CSRC"),
Cyberspace Administration of China ("CAC") or any other PRC governmental authority to operate its business or for us to continue
to list our securities on a U.S. securities exchange or issue securities to foreign investors. However, there is no assurance that there
will not be any changes in the economic, political and legal environment in Hong Kong in the future. Should the PRC government choose
to affect operations of any company with any level of operations in Hong Kong, or should certain PRC laws and regulations or these statements
or regulatory actions become applicable to the VIEs in the future. Such governmental actions: (i) could significantly limit or completely
hinder our ability to continue our operations; (ii) could significantly limit or hinder our ability to offer or continue to offer our
Class A Ordinary Shares to investors; and (iii) may cause the value of our Class A Ordinary Shares to significantly decline or be worthless.
We
are also aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market,
enhancing supervision over mainland Chinese companies listed overseas using variable interest entity structure, adopting new measures
to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Nevertheless, since these statements
and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond
and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any.
It is also highly uncertain what the potential impact such modified or new laws and regulations will have on the VIEs' daily business
operation, and the continued listing of our Class A Ordinary Shares on a U.S. or other foreign exchanges. If any or all of the foregoing
were to occur, it may significantly limit or completely hinder our ability to complete this offering or cause the value of our Class
A Ordinary Shares to significantly decline or become worthless. See "Risk Factors - Risks Related to Our Corporate Structure"
and "Risk Factors - Risks Relating to Doing Business in Hong Kong".
64
In
addition, our Class A Ordinary Shares may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign
Companies Accountable Act, as amended (the "HFCA Act") if the Public Company Accounting Oversight Board (United States) (the
"PCAOB") is unable to inspect our auditors for two consecutive years beginning in 2021. Our auditor, Marcum Asia CPAs LLP,
have been inspected by the PCAOB on a regular basis, with the last inspections in 2020, and Marcum Asia CPAs LLP is not subject to the
determinations announced by the PCAOB on December 16, 2021. If trading in our Class A Ordinary Shares is prohibited under the HFCA Act
in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine
to delist our Class A Ordinary Shares and trading in our Class A Ordinary Shares could be prohibited. While our auditor is based in the
U.S. and is registered with the PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable to
inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of
inspection could cause trading in our Ordinary Shares to be prohibited under the HFCA Act, and ultimately result in a determination by
a securities exchange to delist our Ordinary Shares. On August 26, 2022, the PCAOB signed a Statement of Protocol (the "SOP")
Agreement with the CSRC and China's Ministry of Finance. The SOP Agreement, together with two protocol agreements (collectively,
"SOP Agreements"), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking
the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland
China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion
to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December
15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting
firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should
PRC authorities obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB Board will consider the need
to issue a new determination.
Cash
Transfers and Dividend Distribution
Our
management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies
and procedures among our departments and the operating entities. Majority of the cash are managed by a few of the subsidiaries of Aptorum
Group. Each department or operating entity initiates a cash request by putting forward a payment requisition form, which explains the
specific amount and timing of cash requested, and submitting it to designated management members of our Company, based on the amount
and the nature of payment. The designated management member examines and approves the cash transfer based on the sources of cash and
the priorities of the needs, and submit it to the cashier specialists of our finance department for a second review. Other than the above,
we currently do not have other cash management policies or procedures that dictate how funds are transferred.
We
are permitted under the laws of Cayman Islands to provide funding to our subsidiaries and the consolidated VIEs through loans or capital
contributions without restrictions on the amount of the funds. Under the Cayman Islands law, the VIEs are permitted to pay a dividend
on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result
in the consolidated VIEs being unable to pay its debts due in the ordinary course of business.
As
of the date of this annual report, none of our subsidiaries or the consolidated VIEs have made any dividends or distributions to our
Company and our Company has not made any dividends or distributions to our shareholders. We intend to keep any future earnings to finance
the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future. Subject to the
passive foreign investment company ("PFIC") rules, the gross amount of distributions we make to investors with respect to
our Class A Ordinary Shares (including the amount of any taxes withheld therefrom) will be taxable as a dividend, to the extent that
the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
On
December 31, 2021, Mios and Scipio has issued Class A ordinary shares to Aptorum Therapeutics Limited, in exchange of Aptorum Therapeutics
Limited's granting of license of certain patents to each of them. Other than this, there has been no transfer of cash or other
assets occurred between us, our subsidiaries, and the consolidated VIEs.
65
Business
Overview
We
are a clinical stage biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutic assets to
treat diseases with unmet medical needs, particularly in oncology (including orphan oncology indications) and infectious diseases. The
pipeline of Aptorum is also enriched through (i) the establishment of drug discovery platforms that enable the discovery of new therapeutics
assets through, e.g. systematic screening of existing approved drug molecules, and microbiome-based research platform for treatments
of metabolic diseases; and (ii) the co-development of Paths
Dx
Test, a novel molecular-based rapid pathogen identification
and detection diagnostics technology, with Accelerate Technologies Pte Ltd, commercialization arm of the Singapore's Agency for
Science, Technology and Research.
In
addition to the above main focus, we are also pursuing therapeutic projects in neurology, gastroenterology, metabolic disorders, women's
health and other disease areas. We also have projects focused on natural supplements for women undergoing menopause and experiencing
related symptoms. We also opened a medical clinic, AML Clinic, in June 2018.
Our
goal is to develop a broad range of novel and repurposed therapeutics and diagnostics technology across a wide range of disease/therapeutic
areas. Key components of our strategy for achieving this goal include: (for details of our strategy, See "Business Overview –
Our Strategy")
●
Developing therapeutic
    and diagnostic innovations across a wide range of disease/therapeutic areas;
●
Selectively expanding our
    portfolio with potential products that may be able to attain orphan drug designation and/or satisfy current unmet medical needs;
●
Collaborating with leading
    academic institutions and CROs;
●
Expanding our in-house
    pharmaceutical development center;
●
Leveraging our management's
    expertise, experience and commercial networks;
●
Obtaining and leveraging
    government grants to fund project development.
We
have devoted a substantial portion of the proceeds from our offerings, to our Lead Projects. Our Lead Projects are ALS-4, SACT-1 and
Paths
Dx
Test. In January 2022, we announced that we completed Phase 1 clinical trial for ALS-4 and Phase 1 clinical trial
for assessing relative bioavailability and food effect of SACT-1. No serious adverse events were observed and there were no relevant
clinical changes in respect of vital signs. In March 2023, we announced that we completed the Pre-IND discussions with the US FDA on
ALS-4. With the positive feedback on the overall development strategy from the US FDA, we are proceeding towards the IND submission
of ALS-4. In March 2023, we also announced the completion of the End of Phase 1 (EOP1) meeting with the US FDA. The FDA generally
agreed with the chemistry-manufacturing-control (CMC) strategy and our proposed clinical development plan for SACT-1 Phase 1/2
trials. In 2023, we expect to be able (i) to submit IND application to the US FDA seeking to initiate a Phase 2 clinical study to
assess the efficacy of ALS-4 in patients and (ii) submit a clinical protocol to the US FDA seeking to initiate our planned Phase
1b/2a trial for SACT-1, subject to regulatory review. We commenced clinical validation of our molecular based Paths
Dx
Test and will continue to undergo validations during 2023, in parallel with its pre-commercialization process in 2023.
66
Our
current business consists of "therapeutics" and "non-therapeutics" segments. However, our focus is on the therapeutics
segments. Because of the risks, costs and extended development time required for successful drug development, we have determined to pursue
projects within our non-therapeutics segments, such as AML Clinic and NativusWell
®
, to provide some interim revenue, as
well as diagnostics technology that may be brought to market and generate revenue more quickly.
Therapeutics
Segment
. In our therapeutics segment ("Aptorum Therapeutics Group"), we are currently seeking to develop various
drug molecules (including projects seeking to use extracts or derivatives from natural substances to treat diseases) and certain technologies
for the treatment of human disease conditions to tackle unmet needs, in particular, two of our Lead Projects targeting infectious disease
and cancer (including orphan oncology indications). In addition to our main areas of focus above, we are also pursuing therapeutic projects
in neurology, gastroenterology, metabolic disorders, women's health and other disease areas. Aptorum Therapeutics Group is operated
through Aptorum's wholly-owned subsidiary, Aptorum Therapeutics Limited, a Cayman Islands exempted company with limited liability,
whose principal place of business is in Hong Kong and whose subsidiaries (who we sometimes refer to herein as project companies) are
based in the United Kingdom, Singapore and Hong Kong.
Non-Therapeutics
Segment
. The non-therapeutics segment ("Aptorum Non-Therapeutics Group") encompasses three businesses: (i) diagnostics
projects including Paths
Dx
Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology,
(ii) natural supplements including NativusWell
®
, and (iii) AML Clinic. Paths
Dx
Test technology is currently
under co-development with A*STAR. The core objectives of Paths
Dx
Test are to rapidly and accurately identify and detect existing
or emerging unknown pathogens (including DNA/RNA-based viruses such as coronavirus, antibiotic-resistant bacteria, fungi, etc.), in a
cost-effective, unbiased and broad-spectrum manner, through liquid biopsy (patients' blood samples and is potentially adaptable
for other sample types), genome sequencing and artificial intelligence driven software analytics. A key objective is also to develop
Paths
Dx
Test to leverage existing and emerging Next-Generation Sequencing platforms for pathogenic genome sequencing analysis.
The sale of natural supplements is operated through Nativus Life Sciences Limited ("Nativus"), a subsidiary of Aptorum Therapeutics
Limited. The production of Aptorum Group's dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada
and is marketed under the brand name NativusWell
®
; we are selling NativusWell
®
online through HKTV Mall,
JD.com and NativusWell
®
website. The outpatient clinic is operated through our subsidiary, Aptorum Medical Limited. Effective
as of March 2018, we leased office space in Central, Hong Kong as the home to AML Clinic. AML Clinic commenced operations under the name
of Talem Medical in June 2018.
Prior
to March 2017, the Company had pursued passive healthcare related investments in early stage companies primarily in the United States.
However, we have since ceased pursuing further passive investment operations and intend to exit all such portfolio investments over an
appropriate timeframe to focus resources on our current business.
On
September 25, 2020, Aptorum, via its subsidiaries, enters into a series of transactions with Accelerate Technologies Pte. Ltd.'s
("Accelerate Technologies"), the commercialization arm of the Singapore Agency for Science, Technology and Research ("A*STAR"),
in relation to the research and development of Paths
Dx
Test, a novel molecular-based rapid pathogen identification and detection
diagnostics technology, through its subsidiaries. Specifically, Paths Diagnostics Pte. Limited, one of the Company's subsidiaries,
entered into an Exclusive Licence Agreement with Accelerate Technologies to co-develop the Paths
Dx
Test technology. The term
of the Exclusive Licence Agreement is described in Exhibit 4.62 on Form 20-F filed with the SEC on April 19, 2021. Furthermore, Accelerate
Technologies, the inventors of the Paths
Dx
Test technologies in A*STAR ("Founding Scientists"), Paths Diagnostics
Pte. Limited, and Paths Innovations Limited, a wholly owned subsidiary of the Company, entered into a Share Subscription & Shareholders
Agreement on the same day to subscribe ordinary shares of Paths Diagnostics Pte. Limited. The shares are subscribed and issued in two
tranches, the first tranche has taken place at closing of the Share Subscription & Shareholders Agreement, while the second tranche
will take place after the certain first milestone is met. The total number of shares subscribed by the shareholders under the Share Subscription
& Shareholders Agreement is around 2.7 million. After the two tranches of subscription, Aptorum, Accelerate Technologies and the
Founding Scientists are expected to control 71.23%, 14.25% and 9.53% of the share of Paths Diagnostics Pte. Limited respectively, with
4.99% of the shares reserved for its employee share plan.
67
On
December 30, 2020, Paths Innovations Limited, one of the Company's wholly-owned subsidiaries, entered into an Evaluation Agreement
with Illumina Inc ("Illumina"). Pursuant to the agreement, Paths Innovations Limited will evaluate the data and performance
of Illumina's sequencing technology based on the workflow of Paths
Dx
Test, a novel molecular-based rapid pathogen identification
and detection diagnostics technology, at Paths Innovations Limited's Singapore based evaluation site.
Our
Strategy
Although
we plan to continue the development and improvement of a broad range of novel therapeutics and diagnostics across a wide range of disease/therapeutic
areas, over the next 24-36 months we plan to concentrate on development of our Lead Projects, maintaining our AML Clinic and sale of
natural supplements.
We
believe that execution of this strategy will position the Company to catalyze the development and improvement of a broad range of novel
and repurposed therapeutics and diagnostics across a wide range of disease/therapeutic areas. Failure to achieve positive results in
at least one of the programs for a Lead Project could have a material adverse effect on the Company's prospects and business.
To
achieve this goal, we are implementing the following strategies:
●
Developing
therapeutic and diagnostic innovations across a wide range of disease/therapeutic areas.
We are currently developing drug candidates
in several disease/therapeutic areas. We believe that by diversifying our research efforts, it would increase the likelihood that at
least one of our projects will achieve clinical success and therefore add value to the Company. As of date of this annual report, the
Company is developing 10 projects covering therapeutic assets, diagnostic assets, and natural supplements, in broad range of areas across
infectious diseases, cancers (including rare oncology indications), neurology, gastroenterology, metabolic disorders and women's
health. The 10 projects are comprised of 10 exclusively licensed projects (including Lead Project ALS-4 being exclusively licensed from
the University of Hong Kong and Paths
Dx
Test being exclusively licensed from A*STAR) and 7 proprietary projects developed
by our scientists (including Lead Project SACT-1). Our initial focus will be on developing our Lead Projects, but intend to continue
developing our other current projects and may seek new licensing opportunities where we determine that the market potential justifies
the additional commitment of our limited resources.
●
Selectively
expanding our portfolio with potential products that may be able to attain orphan drug designation and/or satisfy current unmet medical
needs.
We have selected innovations for development which we believe are of superior scientific quality, whilst taking into
account the potential market size and demand for same, for example, taking into consideration whether the relevant product can satisfy
significant unmet medical needs. In particular, Aptorum Group Limited has established a Scientific Advisory Board, which helped us to
select our current projects and which we expect will provide input from a scientific perspective towards any future opportunities for
acquiring or licensing life science innovations. We intend to continue expanding our line of projects under development, and subject
to our financial and other resource limitations, exploring acquisitions or licenses of additional products which may be able to attain
orphan drug designations (e.g., rare types of cancer) or satisfy significant unmet medical needs and that show strong preclinical and/or
early clinical data to provide promising opportunities for clinical and commercial success.
●
Collaborating
with leading academic institutions and CROs.
In building and developing our product portfolio, we believe that accessing external
innovation, expertise and technology through collaboration with leading academic institutions and CROs is a vital and cost-efficient
strategy. We have established strong relationships with leading academic institutions around the world and expect to continue to strengthen
our collaborations by, for example, seeking to provide their affiliated Principal Investigators resources through sponsorship to conduct
further research in specialty fields of interest and association with personnel connected to our current project companies, in exchange
for obtaining for the Company the first right to negotiate for an exclusive license to any resulting innovations. In addition, we have
entered and will continue to actively source arrangements with pharmaceutical companies, in most cases in roles as contract research
organizations, to streamline the development of our projects. This may include outsourcing part of the preclinical, clinical studies
and clinical supplies manufacturing to externally accredited cGLP, cGMP and cGCP standard contract research organizations or laboratories
in order to attain the required studies for submission to the regulatory authorities as part of the clinical development plan. (See "Item
4. Information on the Company – B. Business Overview – Arrangements with Other Parties")
68
●
Expanding
our in-house pharmaceutical development center.
We believe collaborations between the R&D Center and the scientists engaged
in work for our project companies will enhance clinical and commercial potential of the projects. In addition, we will assist the project
companies by engaging external pharmaceutical companies and/or contract research organizations to outsource any part of the preclinical
or clinical development work that cannot be performed by the R&D Center in order to obtain the resources necessary for our development
process.
●
Leveraging
our management's expertise, experience and commercial networks.
We believe the combination of our management's expertise
and experience, with their academic and commercial networks make us an effective platform for advancing healthcare innovations towards
clinical studies and commercialization in key global markets. We have assembled a management team with global experience and an extensive
record of accomplishments in medical research, consulting and financing, and identification and acquisition of pharmaceutical and biopharmaceutical
drug candidates. Our Head of Research and Development also has extensive experiences in drug development. We also employ key management
personnel with banking and financial experience, which enhances our capability to establish the most efficient financial structure for
the development of our programs.
●
Obtaining
and leveraging government grants to fund project development.
Governments across the world pays close attention to the development
of the biotechnology sector and provides support and funding. We intend to aggressively seek government support from the governments
in the United States, the United Kingdom, Hong Kong, Singapore and elsewhere for our product development and to facilitate the development
of some of our projects.
Arrangements
with Other Parties
As
mentioned above, part of our business model includes collaborating with research entities such as academic institutions and CROs, as
well as highly regarded experts in their respective fields. We engage these entities and researchers either for purposes of exploring
new innovations or advancing preclinical studies of our existing licensed drug candidates. Although the financial cost of these arrangements
does not represent a material expense to the Company, the relationships we can access through, specifically, sponsored research arrangements
("SRAs") with academic institutions and organizations can provide significant value for our business; for example, we may
decide whether to continue development of certain early-staged projects and/or out-license a project based on the data and results from
research governed by SRAs. However, as of the date of this annual report, we do not consider the particulars of any of our SRAs to be
material to the success of our current business plans.
Our
drug discovery programs are based upon licenses from universities and are mainly conducted in universities via SRAs. As for the development
of our drug candidates, our R&D Center conducts part of the CMC work. However, since our current facilities are not cGMP, cGLP or
cGCP qualified, we will have to rely on CROs to conduct that type of work, if and when our drug candidates reach the level of development
that requires such qualification.
Lead
Projects, Natural Supplements and Other Projects under Development
We
are actively operating and managing the development of our drug candidates through various subsidiaries. Each candidate is being researched
in a subsidiary with a medical/scientific area of focus related to the drug candidate in development. We refer to these as our "Project
Companies" and their products or areas of focus as our Lead Projects (i.e., ALS-4, SACT-1 and Paths
Dx
Test), our natural
supplements (i.e., NativusWell
®
) or Other Projects under Development (as defined below). The selection of a drug candidate
is based on our estimate of the market potential for that candidate, the scientific expertise required to develop it, and our overall
corporate strategy, including our ability to commit personnel and future investment to that candidate.
69
To
pursue a number of our current projects, our Project Companies have entered into standard license agreements with various universities
and licensing entities customized to the nature of each project. These license agreements largely contain the same terms, as is typically
seen in license agreements for an early-stage life science invention; such terms include a worldwide license with licensed field comprising
indications in the intended treatment areas, having upfront payments, certain royalty rates, sublicensing royalties, as well as provisions
for payments upon occurrence of development and/or regulatory milestones. Under the license agreements, the Project Company must also
adhere to certain diligence obligations (which may include specific diligence) and the types of activities or achievements that will
satisfy those diligence obligations. Additionally, our Project Company may or may not be required to obtain prior consent from the licensor
to sublicense the invention. The license terms of our Lead Projects are discussed in detail below.
Generally
speaking, pharmaceutical development consists of preclinical and clinical phases. The preclinical phase can further sub-divided into
the following stages:
●
Target Identification
    & Selection
: The target is the naturally existing cellular or modular structure that appears to have an important role in
    a particular disease pathway and will be targeted by the drug that will subsequently be developed. Target validation techniques for
    different disease areas can be very different but typically include from in vitro and in silico methods through to the use of whole
    animal models.
●
Lead Discovery
:
    Following "Target Identification & Selection," compound screening assays are developed as part of the Lead Discovery.
    'Lead' molecules can mean slightly different things to different researches or companies, but in this annual report,
    we refer to Lead Discovery as the process of identifying one or more small molecules with the desired activity against the identified
    targets. Leads can be identified through one or more approaches, which can depend on the target and what, if any, previous knowledge
    exists.
●
Lead Optimization
:
    In this stage of the drug discovery process, the aim is to produce a preclinical drug candidate by maintaining the desired and favorable
    properties in the lead compounds, while repairing or reducing deficiencies in their structures. For example, to optimize the chemical
    structures to improve, among others, efficacy, reduce toxicity, improve metabolism, absorption and pharmacokinetic properties.
●
CTA-Enabling Studies
:
    Includes all the essential studies such as GLP toxicology studies, pharmacology and efficacy, pharmacokinetics, in vitro metabolism,
    CMC studies, and the data of which are used for CTA submission.
●
IND-Enabling Studies
:
    Includes all the essential studies such as GLP toxicology studies, pharmacology and efficacy, pharmacokinetics, in vitro metabolism,
    CMC studies, and the data of which are used for IND submission.
●
In vitro validation
:
    At this stage, the efficacy and safety of a drug candidate are assessed at cellular levels.
●
In vivo validation
:
    At this stage, the efficacy, safety and pharmacokinetic of a drug candidate are assessed in animal models.
●
IND Preparation and
    Submission
: Preparation of a package of documents for different sections such as CMC, clinical, nonclinical, etc. and getting
    them reviewed, approved and final checked and followed by submission to regulatory agencies.
70
Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:
●
Phase 1.
Phase
    1 includes the initial introduction of an investigational new drug into humans. These studies are closely monitored and may be conducted
    in patients, but are usually conducted in healthy volunteer subjects. These studies are designed to determine the metabolic and pharmacologic
    actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.
    During Phase 1, sufficient information about the drug's pharmacokinetics and pharmacological effects should be obtained to
    permit the design of well-controlled, scientifically valid, Phase 2 studies. Phase 1 studies also evaluate drug metabolism, structure-activity
    relationships, and the mechanism of action in humans. These studies also determine which investigational drugs are used as research
    tools to explore biological phenomena or disease processes. The total number of subjects included in Phase 1 studies varies with
    the drug, but is generally in the range of twenty to eighty.
●
Phase 2.
Phase
    2 includes the early controlled clinical studies conducted to obtain some preliminary data on the effectiveness of the drug for a
    particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common
    short-term side effects and risks associated with the drug. Phase 2 studies are typically well-controlled, closely monitored, and
    conducted in a relatively small number of patients, usually involving several hundred people.
●
Phase 3.
Phase
    3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness
    of the drug has been obtained in Phase 2, and are intended to gather the additional information about effectiveness and safety that
    is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies are designed to provide an adequate basis
    for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies
    usually include several hundred to several thousand people.
Our
non-therapeutics projects can be sub-divided into the following stages:
●
Development and Experimentation
:
    Early development work for proof-of-concept.
●
Product Optimization
:
    The practice of making changes or adjustments to a product to make it more desirable.
●
Clinical Validation
:
    Confirming the performance of a technology using clinical/patient samples.
●
Pre-commercialization
    preparation
: The logistics that need to be accomplished before commercialization.
●
Formulation
: Preparation
    of a marketed dosage form from active ingredients and excipients/additives.
●
Commercialization
:
    The process of introducing a new product or production method into commerce—making it available on the market.
71
Another
subsidiary, Aptorum Medical Limited ("AML"),
1
is our vehicle for developing our business of delivering medical
services in the form of AML Clinic.
We
anticipate allocating approximately 20% of our resources to develop projects other than our Lead Projects (such other projects being
referred to herein as "Other Projects under Development"), with a strong focus on NativusWell
®
, and AML Clinic.
The production of Aptorum Group's dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada and is
marketed under the brand name NativusWell
®
; we are selling NativusWell
®
online through HKTV Mall, JD.com
and NativusWell
®
website. AML Clinic is expected to provide us with a modest amount of revenue. Even though NativusWell
®
achieves commercial sales, revenue from these products alone will not be sufficient for us to carry out all of our plans, but it
will assist with name recognition and supplement our income while we develop our Lead Projects.
1
Clark
    Cheng, our Chief Medical Officer and an Executive Director, owns 10% of Aptorum Medical Limited as of the date of this annual report.
72
Lead
Projects
After
consideration of various factors, such as time and resources required for further development, potential success rate and market size,
the Group decided to focus the majority of its resources on ALS-4 and SACT-1 and Paths
Dx
as the current Lead Projects. The
Group will continue to invest some of its resources to develop other projects, including those previously classified as Lead Projects.
ALS-4:
Small molecule for the treatment of bacterial infections caused by Staphylococcus aureus including but not limited to Methicillin-resistant
Staphylococcus aureus ("MRSA")
Just
as certain strains of viruses, such as human immunodeficiency virus ("HIV") and influenza have developed resistance to drugs
developed to treat them, certain bacteria such as
Staphylococcus aureus
,
Mycobacterium tuberculosis
and
Pseudomonas
aeruginosa
have become "superbugs", having developed resistance to many, if not all, of the existing drugs available
to treat them, rendering those treatments ineffective in many instances. MRSA is one such bacterium, a gram-positive bacterium that is
genetically different from other strains of Staphylococcus aureus. Staphylococcus aureus and MRSA can cause a variety of problems ranging
from skin infections and sepsis to pneumonia and bloodstream infections. It is estimated that about one out of every three people (33%)
carry Staphylococcus aureus in their nose, usually without any illness; about two in a hundred (2%) carry MRSA (source: https://www.cdc.gov/mrsa/tracking/index.html).
Both adults and children may carry MRSA.
Most
MRSA infections occur in people who have been in hospital or other health care settings, such as nursing homes and dialysis centers (source:
https://www.mayoclinic.org/diseases-conditions/mrsa/symptoms-causes/syc-20375336), which is known as Healthcare-Associated MRSA ("HA-MRSA").
HA-MRSA infections are typically associated with invasive procedures or devices, such as surgeries, intravenous tubing or artificial
joints. Another type of MRSA infection, known as Community-Associated MRSA ("CA-MRSA"), has occurred in wider community among
healthy people. It often begins as a painful skin boil and spreads by skin-to-skin contact. About 85% of serious, invasive MRSA infections
are healthcare associated infections (https://www.cdc.gov/media/pressrel/2007/r071016.htm). The incidence of CA-MRSA varies according
to population and geographic location. In the U.S., more than 94,000 people develop serious MRSA infection and about 19,000 patients
die as a result each year (https://www.cdc.gov/media/pressrel/2007/r071016.htm). According to the US Centers for Disease Control and
Prevention ("CDC"), Staphylococcus aureus, including MRSA, caused about 11% of healthcare-associated infections in 2011 (source:
http://www.healthcommunities.com/mrsa-infection/incidence.shtml). Each year in the U.S., around one out of every twenty-five hospitalized
patients contracts at least one infection in the hospital (N Engl J Med. 2014, 27;370(13):1198-208). In the U.S., there were over 80,000
invasive MRSA infections and 11,285 related deaths in 2011 (source: https://edition.cnn.com/2013/06/28/us/mrsa-fast-facts/index.html).
Indeed, severe MRSA infections most commonly occur during or soon after inpatient medical care. More than 290,000 hospitalized patients
are infected with Staphylococcus aureus and of these staphylococcal infections, approximately 126,000 are related to MRSA (source: http://www.healthcommunities.com/mrsa-infection/incidence.shtml).
73
ALS-4
is a small drug molecule which appears to target the products produced by bacterial genes that facilitate the successful colonization
and survival of the bacterium in the body or that cause damage to the body's systems. These products of bacterial genes are referred
to as "virulence expression." Targeting bacterial virulence is an alternative approach to antimicrobial therapy that offers
promising opportunities to overcome the emergence and increasing prevalence of antibiotic-resistant bacteria.
Professor
Richard Kao from The University of Hong Kong (who is also the Founder and Principal Investigator of Acticule and Inventor of ALS-1, ALS-2,
ALS-3 and ALS-4) initiated a high throughput approach for screening compounds which are active against virulence expression, which resulted
in the discovery of ALS-1, ALS-2, ALS-3 and ALS-4.
ALS-4
targets an enzyme essential for Staphylococcus aureus (including MRSA) survival in vivo. This enzyme is involved in the production of
Staphyloxanthin, a carotenoid pigment produced by Staphylococcus aureus including MRSA, and is responsible for the characteristic golden
color. This pigment has proven to be an important factor in promoting bacterial invasion as well as rendering the bacteria resistant
to attack from reactive oxygen species (ROS) and neutrophils. In other words, pigmented bacteria have increased resistance to the host's
immune defenses. ALS-4 may have particular value if it can be shown to be an effective therapy in situations where a Staphylococcus aureus
infection is resistant to available antibiotics (i.e., where the pathogen is MRSA).
In
a study by the inventor, Prof. Richard Kao, ALS-4 demonstrates potent activity against Staphylococcus aureus pigment formation in vitro,
as indicated in Figure 1, with an IC
50
(IC
50
is defined as the concentration of a drug which inhibits
half of the maximal response of a biochemical process. In this case, inhibition of the formation of the golden pigment is the response)
equal to 20 nM.
Figure
1
Figure
1: In vitro pigment inhibition by compound ALS-4: Inhibition of staphyloxathin (the golden pigment in
S. Aureus
) in the presence
of increasing concentrations of ALS-4
74
Efficacy
of ALS-4 in a MRSA Wound Infection Mouse Model
A
study conducted by a third-party contract research organization, assessed ALS-4's effect in the healing of open wounds infected
with MRSA in a mouse model. Compared with topical dosing of 2% Mupirocin and oral dosing of Linezolid at 100mg/kg twice a day, oral dosing
of ALS-4 at 30mg/kg twice a day showed statistically significant improvement in wound healing. Specifically, at the end of the study
on Day 7, ALS-4 exhibited 63.8% of wound closure compared with 48.4% for oral Linezolid and 43.2% for topical Mupirocin 2%. The results
are further illustrated in the graph below.
Figure
2
*
Unpaired
student's t-test, p<0.05
Figure
2: Result of study on ALS-4's effect in the healing of open wounds infected with MRSA in a mouse model
Efficacy
of ALS-4 in a Bacteraemia Mouse Model
In
a further round of
in vivo
studies, conducted by a third-party contract research organization, in a non-lethal MRSA
bacteraemia mouse model, the mice were orally administered with different doses of ALS-4 from 0.3 to 30mg/kg twice a day for 7 days,
compared to those who received vancomycin only group (3mg/kg of vancomycin administered intravenously) and a no treatment control group.
At
the conclusion of the study on Day 7, ALS-4 brought a statistically significant reduction in bacterial counts in major organs such as
the kidneys, lungs, liver and spleen compared with the no drug control and vancomycin only groups (unpaired student's t-test, p<0.05).
This is in addition to the previous
in vivo
results announced in February 2020, whereby ALS-4 demonstrated on a statistically
significant basis better survival rates (56% vs 0% control group) in the lethal MRSA bacteraemia rat model (Figure 3a) and higher reduction
of bacterial load (by 99.5% against the control group) in the non-lethal MRSA bacteraemia rat model (Figure 3b).
75
Figure
3a
Figure
3a: Oral Formulation of ALS-4 in an MRSA Survival Study
Figure
3b
Figure
3b: Oral Formulation of ALS-4 in a Non-Lethal Bacteremia Model
CFU
= Colony Forming Unit, a unit used to estimate the number of viable bacteria in a sample
A
Clinical Trial Application ("CTA") was submitted with the Public Health Agency of Canada (Health Canada) to conduct a Phase
1 clinical trial of ALS-4, an orally administered small molecule drug for the treatment of infections caused by Staphylococcus aureus
including Methicillin-resistant Staphylococcus aureus (MRSA) in Q4 2020. ALS-4 received clearance from Health Canada regarding the CTA
to initiate a Phase 1 clinical study in January 2021. In March 2021, we announced dosing the first human subject in its Phase 1 clinical
trial evaluating ALS-4. In January 2022, we further announced the completion of our Phase I clinical trial for ALS-4. The first-in-human
Phase 1 trial was a randomized, double-blinded, placebo-controlled, single and multiple ascending dose study designed to evaluate safety,
tolerability, and pharmacokinetics of orally administered ALS-4 in healthy male and female adult volunteers. The single-ascending dose
studies (SAD) and multiple-ascending dose studies (MAD) have been completed for a total of 72 healthy subjects and no subjects were dropped
from the studies. There were no serious adverse events observed and no relevant clinical changes in respect of vital signs. In March
2023, we announced the completion of the Pre-IND discussions with the US FDA. The Pre-IND discussions focused on overall development
plan in preparation for the IND application of ALS-4 targeting Acute Bacterial Skin and Skin Structure Infections (ABSSSI) initially.
76
With
the positive feedback on the overall development strategy from the US FDA, we are proceeding towards the IND submission of ALS-4 seeking
to initiate a Phase 2 clinical study to assess the efficacy of ALS-4 in patients in 2023.
Patent
License
On
October 18, 2017, the Company's subsidiary, Acticule, entered into an exclusive license agreement with Versitech Limited, the licensing
entity of HKU, for ALS-4. Subsequently on June 7, 2018, the parties entered into a first amendment to the exclusive license agreement, and
on July 10, 2019, the parties entered into a second amendment to the license agreement.
On
January 11, 2019, Acticule and Versitech Limited entered into a second license agreement for ALS-4, where Acticule exclusively licensed
the intellectual property rights on certain HKU-owned improvements to the original licensed invention.
Under
the exclusive license agreements, we were granted an exclusive, royalty-bearing, sublicensable licenses to develop, make, have made,
use, sell, offer for sale and import products that are covered by the licensed patents (as described below). The territory of the licenses
is worldwide and the field of the licenses is for treatment or prevention of bacterial infections caused by Staphylococcus aureus including
MRSA and bacterial virulence.
We
paid an upfront fee upon entering into the license agreements. We are required to pay less than 10% of the net sales of the licensed
products sold by us or our affiliates as royalties, as well as a low teens percentage of sublicense royalties that we receive from our
sublicensees, if any. In addition, we agreed to pay to the licensor aggregate regulatory milestones of up to US$1 million subject to
the following achievements: submission of investigational new drug application; completion of phase 1, 2 and 3 clinical trials; and submission
of new drug application; grant of regulatory approval. We also agreed to pay to the licensor aggregate sales milestones of up to US$7.8
million subject to the following achievement: first commercial sale; and annual net sales exceeding US$100 million in one jurisdiction.
Pursuant
to the license agreements, Acticule became the exclusive licensee of 2 pending U.S. non-provisional patent applications and 2 PCT applications
(now expired). Prior to the expiration of the PCT applications, we filed national phase applications in member states of the PCT including
Europe, PRC and 12 other jurisdictions. The claimed inventions are described as: "Compounds Affecting Pigment Production and Methods
for Treatment of Bacterial Diseases."
Four (4) US patents and two (2) Israeli patents have been granted by
the United States Patent and Trademark Office and the Israel Patent office respectively.
Acticule
has the right to grant sublicenses to third parties under the license agreements without prior approval from Versitech Limited and to
assign the agreements to any successor to the business related to the licenses. In the event that Acticule makes an improvement to the
licensed technologies, so long as the improvement does not incorporate any licensed patents, Acticule will be the owner to such improvement,
subject to a non-exclusive royalty-free license being granted back to Versitech Limited for academic and research purposes only.
The
exclusive license agreements shall be in effect until the expiration of all licensed patents (please refer to the patent expiration dates
under "Item 4. Information on the Company – B. Business Overview – Intellectual Property"). Acticule may terminate
the licenses at any time with 6-month written notice in advance. Either party may terminate the agreements upon a material breach by
other party.
77
SACT-1:
A Repurposed Drug for the Treatment of Neuroblastoma
Drug
repurposing is a strategy for identifying new indications for approved or investigational drugs that are outside the scope of the original
medical uses. It is often viewed as a lower-cost method for drug commercialization, as it is based on already-approved drugs (which has
been proven to be safe for human use by the respective governing regulatory agency) and explores new target indications. (Ashburn, T.
T. & Thor, K. B. Drug repositioning: identifying and developing new uses for existing drugs. Nat. Rev. Drug Discov. 3, 673–683,
2004).
One
of the advantages of drug repurposing is a lower development risk due to safety and toxicity, as well as other properties related to
water solubility, absorption, distribution and metabolism, as the safety and CMC profiles of marketed drugs are usually well-established.
Due to the same reason, the development time is also shortened because there is no need to repeat the whole spectrum of the safety assessment.
As a result, the drug repurposing approach appears to be attractive due to its superior risk management, smaller capital investment and
quicker financial return. (Sudeep Pushpakom, et. al. Drug repurposing: progress, challenges and recommendations. Nat. Rev. Drug Discov.
18, 41-58, 2019)
The
cost of bringing a repurposed drug is estimated to be around US$300 million, which is only one-tenth of the development cost for a new
drug. (Nosengo, N. Can you teach old drugs new tricks? Nature. 534, 314-316, 2016).
In
summary, drug repurposing offers the following advantages:
●
Well-established safety
    profiles: The development risk for new indications can be substantially reduced by applying existing drugs that are approved or have
    been shown to be safe in large scale late-stage trials. Since safety accounts for approximately 30% of drug failures in clinical
    trials, this is a key advantage that repositioned drugs can harness to great effect. (The benefits of drug repositioning. (n.d.).
    Retrieved from https://www.ddw-online.com/the-benefits-of-drug-repositioning-1779-201104/)
●
Time-saving: As repositioned drugs can rely on existing data, including efficacy and toxicity studies, the process is usually faster than de novo development. Developing a new chemical entity (NCE) can take 10 to 17 years, depending on indications. (Roin, B. N. Solving the Problem of New Uses, 2013). For a drug repositioning company, the development process from compound identification to launch can be around 3 to 8 years. (Walker, N. (2017, December 07). Accelerating Drug Development Through Repurposing, Repositioning and Rescue. Retrieved from https://www.pharmoutsourcing.com/Featured-Articles/345076-Accelerating-Drug-Development-Through-Repurposing-Repositioning-and-Rescue/)
●
Cost-saving: Along with
    time-saving, money-saving is also a key benefit. The cost to relaunch a repositioned drug averages $8.4 million, whereas to relaunch
    a new formulation of an existing drug in its original indication costs an average $41.3 million. Given that the average cost of launching
    a new chemical entity (NCE) is more than $1.3 billion, successfully bringing a repositioned drug to market seems to cost approximately
    160 times less than the current standard of NCE development. Even if this differential is off by a hundred times or more, from the
    purely financial perspective, repositioning is in a completely different league of investment needed to create a new drug product
    in the market. (https://www.ddw-online.com/the-benefits-of-drug-repositioning-1779-201104/)
●
Potential for out-licensing:
    Pharmaceutical companies are said to be exploring new models to out-license some of their clinical drug candidates that may have
    been shelved for pure business reasons unrelated to safety or efficacy, even though they have met their endpoints and have proven
    themselves to be safe. If such drugs were to be repositioned, the pharmaceutical company increases the attractiveness of these drugs
    and gives itself more options to find interested buyers. (https://www.ddw-online.com/the-benefits-of-drug-repositioning-1779-201104/)
●
Lower failure rate: According
    to BCC Research, approval rates for repurposed drugs are close to 30%, which is greater than the approval rate for new drug applications.
    (Front Oncol. 2017; 7: 273)
One
of the major limitations of the current drug repurposing and repositioning practice is that there is a lack of a systematic way to identify
and reinvestigate drugs that are approved and/or have failed approval.
78
SACT-1 is the first repurposed drug candidate to be developed under
the Smart-ACT
®
drug discovery platform. SCAT-1 is one of the Company's proprietary technologies. Our first targeted
indication is neuroblastoma. Neuroblastoma is a rare form of cancer, and classified as an orphan disease, that forms in certain types
of nerve tissue and most frequently in the adrenal glands as well as spine, chest, abdomen or neck, predominantly in children, especially
for those aged 5 years and below. For the high-risk group, which is close to 20% (Annu Rev Med. 2015; 66: 49–63.) of total new patient
population per year, the 5-year survival rate of this condition is around 40-50% as observed by the American Cancer Society (https://www.cancer.org/cancer/neuroblastoma/detection-diagnosis-staging/survival-rates.html).
The current high drug treatment cost for high risk patients can average USD200,000 per regimen (all 6 cycles) (https://www.cadth.ca/sites/default/files/pcodr/Reviews2019/10154DinutuximabNeuroblastoma_fnEGR_NOREDACT-ABBREV_Post_26Mar2019_final.pdf).
In addition, most pediatric patients often do not tolerate or survive the relevant chemotherapy stage which, subject to further clinical
studies, may be positively addressed by the SACT-1 candidate due to the potential synergistic effects when applied with standard chemotherapy.
In
our studies, SACT-1 has been shown to be effective against numerous neuroblastoma cell lines, of which 2 are MYCN-amplified cells, which
represent the high-risk neuroblastoma patient group. In addition, by using a bliss score as a quantitative measure of the extent of drug
interaction, Aptorum Group has seen a high and robust synergism between SACT-1 and traditional chemotherapy in vitro (Figure 4), indicating
a potential efficacy enhancement/dose reduction of the chemotherapy.
Figure
4
Figure
4: synergism between SACT-1 and traditional chemotherapy in vitro
In
addition, in our study, the maximum tolerable dose of SACT-1 in a rodent model was determined to be higher than 400mg/kg. Compared with
the MTD of standard chemotherapy such as paclitaxel (20-30mg/kg) (Clin Cancer Res. 5(11):3632-8) and cisplatin (6mg/kg) (BMC Cancer 17:
684 (2017)), the safety profile of SACT-1 appears to be very impressive. Based on our internal observations of pre-existing information
from approved products, (subject to FDA's approval and on a case-by-case basis, a 505(b)(2) Application can rely in part on existing
information from approved products (such as the FDA's previous findings on safety and efficacy) or products in literature (such
as data available). However, typically speaking, the applicant is nonetheless required to carry out a Phase 1 bridging study to compare
the Reference Listed Drug and reference the established safety and efficacy information), SACT-1 also exhibits a well-established safety
profile: at 150mg/day, the death rate was 0% in prior clinical studies with no dosage related adverse events (Table 1). In addition,
the pharmacokinetic profile of SACT-1 has also been reported (Table 2).
79
Table
1: Safety Profiles of SACT-1 in Human Clinical Trials
Table
2: The pharmacokinetic Profile of SACT-1 in Humans
We
have developed a pediatric formulation of SACT-1 to better address the needs of neuroblastoma patients who are exclusively children younger
than 5. Positive data from our latest internal
in vivo
studies show significant activity against neuroblastoma tumor
reduction when treated with the compound SACT-1 in combination with standard of care (SOC) chemotherapy.
Separately,
we also screened SACT-1 for its
in vitro
activity against over 300 cancer cell lines and showed positive results in
a number of cancer types including in particular colorectal cancer, leukemia and lymphoma, etc. Similar to our previous findings against
neuroblastoma cell lines, SACT-1 exhibits similar anti-tumor efficacy across one or more other major cancer types, including but not
limited to colorectal cancer, leukemia and lymphoma cell lines. As a result, in addition to treating neuroblastoma, SACT-1 may have potential
applications in the treatment of other cancers. Based on this discovery, we plan to carry out further
in vivo
studies
to study the efficacy of SACT-1 over other types of cancers to maximize the potential of SACT-1. Based on the initial 22 day data of
a recent study we conducted in a xenograft mouse model of neuroblastoma, SACT-1 was orally administered daily at 60mg/kg in combination
of SOC chemotherapy brought a statistically significant tumor shrinkage (unpaired student's t-test, p<0.01) from Day 15 to Day
22, compared to the control group which received SOC only. The combination reduced the tumor size by up to 54.2% in the first 22 days
compared with the control (SOC only). SACT-1 appears to be effective in accelerating the effect of the SOC in early time points (from
Day 1 - 7 vs control). This further supports our earlier
in vitro
observation that SACT-1 promotes tumor DNA damage
and tumor cell death.
80
Figure
5
Figure
5: 22 days data of
in vivo
studies in a xenograft mouse model of neuroblastoma
**
Unpaired student's
    t-test, p<0.01, n=8 (based on initial 22 days period)
In
September 2021, we announced that we received clearance from the US FDA regarding the IND application to initiate clinical trials of
SACT-1. In January 2022, we further announced that the completion of our Phase I clinical trial for assessing relative bioavailability
and food effect of SACT-1, and no serious adverse events were observed. SACT-1's Phase 1 clinical trial is an Open-label Randomized,
Single Cross Over Bioavailability and Food Effect Study of SACT-1 in healthy adult volunteers. In additions, the US FDA has granted Orphan
Drug Designation to SACT-1 in January 2022. In March 2023, we further announced the completion of the End of Phase 1 (EOP1) meeting with
the US FDA on SACT-1. The EOP1 meeting was focused on gaining alignment with the US FDA regarding the clinical and regulatory pathway
for SACT-1 for the treatment of neuroblastoma in pediatric patients aged 2-18. The FDA generally agreed with the chemistry-manufacturing-control
(CMC) strategy and our proposed clinical development plan for Phase 1/2 trials.
We
are on track to submit an IND application to the US FDA in 2023 seeking to initiate our planned Phase 1b/2a trial for SACT-1.
Patent
License
In
January 2022, the US Patent and Trademark Office has granted the first patent regarding Aptorum's SACT-1 (through Aptorum's
subsidiary) repurposed drug for the treatment of various cancers including but not limited to neuroblastoma (US Patent 11,166,952). Another
US patent (US Patent 11,571,422)  was granted in February 2023, and altogether the SACT-1 patent portfolio has Nine (9) active national
phase patent applications all over the world.
81
Paths
Dx
Test: A novel molecular-based rapid pathogen identification and detection diagnostics technology
Infectious
disease diagnostic standard of care (SOC) often involves techniques that are slow (e.g., bacterial culturing takes several days) or expensive
(e.g., current pathogen diagnostic sequencing solutions are not comprehensive, are expensive, and often inaccessible to physicians).
Although infectious disease diagnosis capabilities have been improving in recent years, there are still issues with the public health
capacity to control infectious disease threats.
Infectious
disease diagnostic standard of care (SOC) does not necessarily provide the physician a comprehensive diagnosis or report. Most point
of care diagnostic solutions, while rapid, screen only for a single pathogen and only focus on common and widespread pathogens (e.g.,
HIV). Thus, for infectious disease patients in developed nations that present with an uncommon, novel or emerging pathogen threat, diagnosis
is often slow (2-5 days) and inconclusive leaving time for pathogen spread and increased patient suffering and/or death.
Paths
Dx
Test is a rapid infectious disease diagnostic test that we believe will be potentially able to identify all pathogens in a patient's
sample, both known and unknown, by employing Next Generation Sequencing (NGS). The goal of Paths
Dx
Test is to cost-effectively
return a 99% accurate result within 24-48 hours. Our internal results show that, in principle, Paths
Dx
Test can identify pathogens
such as viruses (e.g. COVID-19/SARS-CoV-2) or any other known or emerging infectious disease event in one test (e.g., DNA or RNA-based
pathogens). With these properties, Paths
Dx
Test is expected to track the infectome landscape (e.g., tracking mutations), rapidly
identify antibiotic resistant microbials in the process, and be more affordable than current NGS-based diagnostic platforms, which will
make it a superior product to those currently on the market.
Preliminary
data from our internal studies, which have not been verified or confirmed by third parties, presented below demonstrate additional points
of innovation and proof of concept feasibility data.
Case
Study #1
:
We examined a bio banked blood sample from a patient with a diagnosed Hepatitis B infection (Figure 6). Our technology
successfully detected the presence of Hepatitis B, as well as additional pathogens.
Figure
6
Figure
6: Aptorum's technology successfully confirmed a known Hepatitis B diagnosis in a bio banked sample.
82
Case
Study #2
:
A patient was undergoing chemotherapy and developed a severe lung infection that was refractory to first-line antibiotics
but eventually responded to the traditional trial and error approach. Using our technology, we found that 10% of all reads came from
Leuconostoc, a Gram+ bacteria (Figure 7). Importantly, Leuconostoc was not identified by physicians, demonstrating that our technology
can identify pathogens that allude a traditional diagnosis.
Figure
7
Figure
7: Aptorum's technology identified pathogen(s) that allude the traditional diagnostic approach.
Paths
Dx
Test has the revolutionary potential to cover simultaneously over 1300 pathogens due to the unbiased approach in analyzing pathogen
genome information and caters to patients who are infected with multi-strains of pathogen. The technology can be updated through our
software analytics on an ongoing basis as further pathogenic genome sequences are updated through public databases, ensuring that it
is up-to-date on new and emerging pandemic threats.
Paths
Dx
Test is currently undergoing Clinical Validation to confirm the performance of Paths
Dx
Test using clinical/patient samples.
Paths
Dx
Test will continue to undergo validations during 2023, in parallel with its pre-commercialization process in 2023.
Patent
License and Application
On
September 25, 2020, the Company's subsidiary, Paths Diagnostics Pte. Limited, entered into an exclusive licence agreement with
Accelerate Technologies Pte Ltd, the commercialization arm of the Singapore's Agency for Science, Technology and Research ("A*STAR"),
to co-develop Paths
Dx
Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology. No
upfront fee or royalty on net sales is payable under the license agreements, although we are required to pay a mid-teens to mid-twenties
percentage of sublicense revenue that we receive from our sublicensees, if any. In addition, we agreed to pay to the licensor aggregate
development milestones of up to US$250,000. When specific development milestone is reached, we are also required to satisfy certain diligence
obligations, including recruitment of staff, establishment of relationship with potential customers and exercise commercially reasonable
efforts in selling the Licensed Products.
83
We
filed two (2) US provisional patent applications and one (1) Singapore patent application was filed in 2021, but subsequently abandoned.
In addition, one (1) US non-provisional patent application was filed on October 8, 2021 and we entered two (2) Paris Convention (PCT)
applications on February 24, 2022 and January 7, 2023 respectively. The claimed inventions are described as: "Unbiased And Simultaneous
Amplification Method For Preparing A Double-Stranded DNA Library From A Sample Of More Than One Type Of Nucleic Acid" and "Method
of Degrading Nucleic Acids and Associated Compositions."
Statistical
Significance
The
term statistical significance is to define the probability that a measured difference between two groups (e.g. two treatment groups,
treatment versus control groups) is the result of a real difference in the tested variations and not the result of chance. It means that
the result of a test does not appear randomly or by chance, but because of a specific change that is tested, so it can be attributed
to a specific cause.
The
confidence level indicates to what percentage the test results will not commit a type 1 error, the false positive. A false positive occurs
when a change in the result is due to randomness (or other noise) and not the change in variations. At a 95% confidence level (p = 0.05),
there is a 5% chance that the test results are due to a type 1 error. 95% has become the standard and usually be the minimum confidence
level for the tests. To make the test more stringent, a 99% confidence level (p = 0.01) is also commonly employed, which means that there
is a 1% chance that the test results are due to a type 1 error.
In
other words, a p value represents the confidence level. For example, if the p-value for a test is < 0.05, it means that there is less
than 5% chance the difference between two groups is due to random error or by chance. If the p-value is < 0.01, it means that there
is less than 1% chance the difference between two groups is due to random error or by chance.
We
employed statistical testing to compare different treatment groups in animal studies simply for proof of concept and to aid internal
decision making for further development. We do not intend to use this standard for any regulatory submission. The US FDA or other regulatory
agencies may not necessarily employ the same statistical standard to assess the efficacy in clinical trials, the results of which would
be submitted for regulatory approval. Although a p-value of 0.05 has become the standard, the US FDA or other regulatory agencies
may also individualize their efficacy standard for different clinical programs based on the indications, the purpose of a clinical trial,
among others.
FDA
Application Status
As
of the date of this the annual report, we received CTA and IND approvals for ALS-4 and SACT-1 from Health Canada and the US FDA to initiate
human clinical trial. We have not submitted other applications for IND to the FDA or other regulatory agencies.
Other
Projects under Development
The
following provides additional detail regarding Other Projects under Development. As noted elsewhere in this report, based on certain
criteria, we sometimes cease work on certain projects to focus on projects we believe are more promising. We have discontinued the development
of certain candidates because patent applications protecting such technologies could not be obtained from USPTO, so we decided to focus
our capital and efforts on other candidates. We typically discontinue the development of a candidate because the expected result could
not be generated, so we focus our capital and efforts on our other candidates. The patents and patent applications covering the Other
Projects are either owned by the Company or have been in-licensed.
On
April 20, 2021, the Company's subsidiary, Aptorum Therapeutics Limited, entered into an Option Agreement with Yale University to
evaluate the certain classes of autoimmune anti-inflammatory drug. The agreement ends on July 14, 2022.
84
SACT-COV19:
Drug repurposing for the treatment of infections caused by COVID-19
SACT-COV19
is a drug repurposing program for the treatment of infections caused by COVID-19. We have completed initial screening under the Smart-ACT
®
platform to select, out of more than 2,600 small drug molecules that were previously approved for other indications, at least 3
potential candidates for further preclinical investigation against the new coronavirus disease, COVID-19. We are collaborating with Toronto
based Covar Pharmaceuticals and University of Oxford, and have also entered into agreement with the University of Hong Kong's Microbiology
Department to conduct further preclinical investigation of the selected candidates prior to seeking approval from regulatory agencies
to initiate clinical trials on suitable candidates.
Drug
candidates from the SACT-COV19 program are currently undergoing in vitro validation.
ALS-1:
Small molecule intended for the treatment of viral infections caused by Influenza virus A
Professor
Richard Kao, the Inventor of ALS-1, was the first to identify viral nucleoproteins (NP) as an effective drug target (Nature Biotechnology.
28:600-605) We are exploring ALS-1 as a potential treatment for viral infections caused by Influenza virus A.
It
is our hypothesis that Influenza A NP is an essential protein for the proliferation of the influenza virus. ALS-1 targets NP and triggers
the aggregation of NP and this prevents the aggregated NP from entering the nucleus. In an animal study published by the inventor, Prof.
Richard Kao, in Nature Biotechnology (28 (6): 600, 2010), after treating with ALS-1, 50% of the mice receiving two doses of ALS-1 (100
μl of 2.3 mg/ml ALS-1) per day for 7 days survived for more than 21 days compared with 100% mortality in the treatment-free control
group within 7 days. In addition, about a 10x reduction of viral load in the lungs of the ALS-1-treated mice was observed compared to
the untreated control group. The animal study results suggest that ALS-1 has the potential to be developed into a useful anti-influenza
therapeutic.
ALS-1
is designed to target a broad range of NP variants, a novel therapeutic target. Compared with the currently marketed antiviral drugs
for which the viruses have acquired extensive resistance, ALS-1 acts on a completely different therapeutic target.
ALS-1
is currently undergoing Lead Optimization to optimize its drug-like properties.
ALS-2/
3: Small molecules for the treatment of bacterial infections caused by Staphylococcus aureus including MRSA
ALS-2/3
is a potential class of next generation small molecules targeting bacterial virulence for the treatment of bacterial infections caused
by Staphylococcus aureus including MRSA. In a recent paper published by the inventor, Professor Richard Kao from The University of Hong
Kong (also the Founder and Principal Investigator of Acticule), in PNAS (115(310: 8003, 2018), ALS-2/3 suppresses the expression of multiple
virulence factors in Staphylococcus aureus simultaneously. In a lethal infection mouse model, compared with the vehicle group, ALS-2/3
protected against Staphylococcus aureus for all the mice in the group, with significant differences between the treatment and control
groups [P = 0.0057, by log-rank (Mantel-Cox) test].
ALS-2/3
small molecules are currently at the Lead Optimization stage to optimize its drug-like properties.
85
NLS-1:
A Derivative of Epigallocatechin-3-Gallate ("Pro-EGCG") for the treatment of Endometriosis
NLS-1,
a drug molecule derived from natural products (green tea), is currently under development for the treatment of endometriosis, a disease
in which the tissue that normally lines the uterus (endometrium) grows outside the uterus.
NLS-1
acts as an anti-angiogenic to offer a potential novel treatment of endometriosis. In a paper published by the inventors in Angiogenesis
(16:59, 2013), NLS-1 brought a statistically significantly reduction in the lesion size and weight compared with EGCG and the control
without any treatment in an experimental endometriosis mouse model (Student t-test, p < 0.05). In addition, the inhibition by NLS-1
in all of the angiogenesis parameters was statistically significantly greater than that by EGCG (Student t-test, p < 0.05). In addition,
NLS-1 significantly (Student t-test, p < 0.05) reduces the lesion size in both prevention and treatment group compared with both saline
and EGCG groups. Moreover, NLS-1 also had better bioavailability and greater antioxidation and anti-angiogenesis capacities compared
with EGCG. As a follow-up study in an animal model of endometriosis, orally administered NLS-1 reduced the lesion size significantly
better than oral EGCG (p<0.05-0.001 at week 3- 8, ANOVA) and other hormone-based therapy such as intramuscular GnRH analog (p<0.05
at week 4-8, ANOVA) and other synthetic anti-angiogenesis agents such as intraperitoneal PTK787 (p<0.05-0.01 at week 4-8, ANOVA).
Regarding safety, there was no signs of stress to NLS-1 administration were observed during the treatment period. No significant weight
change was observed over the course of the experiment. Histological examination revealed no obvious reproductive effects on ovarian follicles
and endometrial glands under NLS-1 treatments. Also, vascularization of the ovaries and the uterus was not affected in the NLS-1 treatment
group.
We
are currently undergoing some activities to enable NLS-1 to enter IND-enabling studies. Besides, we are exploring possibilities to develop
a non-drug formulation for NLS-1.
On
May 6, 2021, we announced that we entered into an agreement with Exeltis ("Exeltis") (a division of the global pharmaceutical
group Insud Pharma) to develop, manufacture and commercialize NLS-1 in the following territories: the European Union and Latin America
(with an option to expand the collaboration to the United States). This novel candidate is intended to target woman's health and
gynecological conditions, such as endometriosis or related conditions. Under this agreement, Aptorum Group will retain the development
rights in other jurisdictions in the world, as well as the right to develop the novel candidate into a drug product. Commercialization
of the product is subject to relevant regulatory approvals in their respective jurisdictions.
Aptorum
Medical Limited - AML Clinic
Incorporated
in August 2017, Aptorum Medical Limited is a Hong Kong-based company incorporated in Cayman Islands focused on delivering premium healthcare
and clinic services. AML can draw on the expertise of many of the region's most experienced medical practitioners, and is committed
to providing a comprehensive cross-functional facility for healthcare professionals to practice evidence-based medicine and offer high-quality
medical services to their patients. We also intend that AML will offer to conduct clinical trials of both the Company's and third
parties' new drug products.
Effective
as of March 2018, we leased office space in Central, Hong Kong, the commercial and financial heart of Hong Kong, as the home to AML Clinic.
We operate the AML Clinic under the name of Talem Medical. AML Clinic commenced operation in June 2018.
The
renovated medical center is staffed by our group of medical professionals and offers state-of-the-art facilities. Initially we expect
to focus our expertise on treatment of chronic diseases resulting from modern sedentary lifestyles and an aging population.
86
Natural
supplement
NLS-2:
NativusWell
®
, a Bioactive Ingredient (DOI) in Chinese Yam for the Relief of Menopausal Symptoms as a Natural Supplement.
NativusWell
®
(NLS-2) is a natural supplement made with the bioactive ingredient extracted Chinese yam powder containing "DOI", which
is Aptorum Group's non-hormonal approach intended to meet certain growing consumer nutritional trends and concerns. It is estimated
that 1.2 billion women worldwide will be menopausal or postmenopausal by the year 2030
1
. The global woman's health supplement
market for menopausal symptoms is projected to reach over USD$50bn by 2025 with a CAGR rate of 16.4% (2016-2025)
2
. Initially,
the supplement will be commercialized and sold in Hong Kong; the Company is seeking regulatory clearance to market the product in other
major jurisdictions. We previously entered into a regional distribution and marketing agreement, but have since decided to commercialize
NLS-2 through our own efforts.
The
production of Aptorum Group's dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada and is marketed
under the brand name NativusWell
®
; we are selling it online through HKTV Mall, JD.com and NativusWell
®
website.
NativusWell
®
tablets are natural, non-hormonal supplements containing DOI. The yam powder with DOI utilizes a non-hormonal approach that is
intended to boost the general wellness of women undergoing menopause. Third party scientific studies indicate that DOI, the naturally
occurring bioactive ingredient in Chinese yam, appears to stimulate estradiol biosynthesis, induce estradiol and progesterone secretion
and increase bone density, thereby potentially counteracting the progression of osteoporosis
3
, one of the common symptoms
associated with menopause
4
.
Competition
Our
industry is highly competitive and subject to rapid and significant change. While we believe that our development and commercialization
experience, scientific knowledge and industry relationships provide us with competitive advantages, we face competition from pharmaceutical
and biotechnology companies, including specialty pharmaceutical companies, and generic drug companies, academic institutions, government
agencies and research institutions.
There
are a number of large pharmaceutical and biotechnology companies that currently market and sell drugs or are pursuing the development
of drugs for the diagnosis and treatment of diseases for which we are developing products or technology. Moreover, a number of additional
drugs are currently in clinical trials and may become competitors if and when they receive regulatory approval.
1
World Health Technical
    Report Series. Research on the Menopause in the 1990's. Geneva, Switzerland: World Health Organization; 1996.
2
https://www.grandviewresearch.com/press-release/global-isoflavones-market
3
https://www.ke.hku.hk/story/innovation/the-magic-of-chinese-yam-for-treatment-of-menopausal-syndrome;
    see also, Scientific Reports, 5-10179.
4
https://www.everydayhealth.com/menopause/osteoporosis-and-menopause.aspx
87
Many
of our competitors have longer operating histories, better name recognition, stronger management capabilities, better supplier relationships,
a larger technical staff and sales force and greater financial, technical or marketing resources than we do. Mergers and acquisitions
in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our
competitors. Our commercial opportunity could be reduced or eliminated if our competitors develop or market products or other novel therapies
that are more effective, safer or less costly than our current drug candidates, or any future drug candidates we may develop, or obtain
regulatory approval for their products more rapidly than we may obtain approval for our current drug candidates or any such future drug
candidates. Our success will be based in part on our ability to identify, develop and manage a portfolio of drug candidates that are
safer and more effective than competing products.
Inflation
Inflation
affects us by generally increasing our cost of labor and research and development costs, the way it does to all labor and research costs.
However, we do not anticipate that inflation will materially affect our business in the foreseeable future.
Seasonality
We
believe our operation and sales do not experience seasonality.
Employees
As
of the date of this the annual report, we have 18 full-time and 1 part-time employees. Of these, 6 full-time are engaged in research
and development and laboratory operations, 7 full-time are engaged in general and administrative functions and 5 full-time and 1 part-time
are engaged in the clinic operation. As of the date of this annual report, 18 of our employees are located in Asia and 1 of our employees
is located in Europe. In addition, we have engaged and may continue to engage 66 independent contracted consultants and advisors to assist
us with our operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have
never experienced any employment related work stoppages, and we consider our relations with our employees to be good.
Intellectual
Property
The
technologies underlying our various research and development projects are the subject of various patents and patent applications claiming,
in certain instances, composition of matter and, in other instances, methods of use. Prosecution, maintenance and enforcement of these
patents, as well as those on any future protectable technologies we may acquire, are and will continue to be an important part of our
strategy to develop and commercialize novel medicines, as described in more detail below. Through entering into license agreements with
their owners, we have obtained exclusive rights to these patents, applications and related know-how in the U.S. and certain other countries
to develop, manufacture and commercialize the products using or incorporating the protected inventions that are described in this annual
report and that are expected to contribute significant value to our business. The technologies protected by these patents may also for
the basis for the development of other products.
In
addition to licensed intellectual property, our in-house science team has been actively developing our own proprietary intellectual property.
No non-provisional patent application has yet been filed in the Company's own name for the Lead Projects. We have, however,
filed a number of provisional applications to establish earlier filing dates for certain of our other ongoing researches, the specifics
of which are currently proprietary and confidential.
The
U.S. patent system permits the filing of provisional and non-provisional patent applications (i.e., a regular patent application). A
non-provisional patent application is examined by the USPTO, and can mature into a patent once the USPTO determines that the claimed
invention meets the standards for patentability. On the other hand, a provisional patent application is not examined for patentability,
and automatically expires 12 months after its filing date. As a result, a provisional patent application cannot mature into a patent.
Provisional
applications are often used, among other things, to establish an earlier filing date for a subsequent non-provisional patent application.
The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.
The
effective filing date of a non-provisional patent application is used by the USPTO to determine what information is prior art when it
considers the patentability of a claimed invention. If certain requirements are satisfied, a non-provisional patent application can claim
the benefit of the filing date of an earlier filed provisional patent application. As a result, the filing date accorded by the provisional
patent application may supersede information that otherwise could preclude the patentability of an invention.
88
A
provisional patent application is not eligible to become an issued patent unless, among other things, we file a non-provisional patent
application within 12 months of the filing date of the provisional patent application. If we do not timely file a non-provisional
patent application claiming priority to said provisional application, we may lose our priority date with respect to our provisional patent
applications. Further, if any (self or by others) publication of the invention is made after such priority date, and if we do not file
a non-provisional application claiming priority to said provisional application, our invention may become unpatentable.
Moreover,
we cannot predict whether such future patent applications will result in the issuance of patents that effectively protect any of our
product candidates or will effectively prevent others from commercializing competitive products.
We
do not expect to incur material expenses in the prosecution of the provisional applications or other licensed patent applications. We
expect to fund the patent costs from our cash and restricted cash.
The
value of our drug products will depend significantly on our ability to obtain and maintain patent and other proprietary protection for
those products, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and
proprietary rights of other parties.
As
of the date hereof, we are the patentee of a number of provisional and non-provisional patent applications, both on our proprietarily
developed projects and improvement to our in-licensed projects.
The
following table sets forth a list of our patent rights under the exclusive licenses as of the date of this annual report related to our
Lead Projects, ALS-4 and Paths
Dx
Test; on the other hand, our other Lead Project, SACT-1 is a proprietary technology not subject
to any license agreement:
Project
    Company / Project name
License
    Agreement
Licensor(s)
Licensee
Licensed
    / IP Rights
Patent
    Expiration Dates
Acticule / ALS-4
Exclusive
    Patent License Agreement, dated October 18, 2017
First
    Amendment to Exclusive License Agreement, dated June 7, 2018
Second
    Amendment to Exclusive License Agreement dated July 10, 2019
Exclusive
    Patent License Agreement dated January 11, 2019
Versitech Limited
Acticule Life Sciences
    Limited
Exclusive
    licensee: 2 pending U.S. applications (16/867,540 and 17/006,985), 1 pending European applications (EP18835238.9), 1 pending PRC
    application (CN201880048674.5), 12 pending applications in other foreign jurisdictions including Australia, Brazil, Canada, Chile,
    Eurasia, Hong Kong, Israel, Japan, Korea, Malaysia, New Zealand, Singapore
The
    licensed IP rights include granted patents in the U.S. and pending patent applications in the U.S., Europe, PRC and other foreign
    jurisdictions.
The
    U.S. patents will expire in 2038; any other patent based on the pending application, if granted, will have a 20-year patent term
    from 2018.
Paths
Dx
Test
Exclusive Patent License
    Agreement, dated September 25, 2020
Accelerate Technologies
    Pte Ltd
Paths Diagnostics Pte.
    Limited
Exclusive licensee: 4 U.S.
    patents US7635566, US8241850, US9920355, US10472667, 1 European patent EP3224374, 1 Great Britain patent GB2532749
The U.S. patents will expire
    in 2027, 20282034 and 2037 respectively. The UK patent will expire in 2034. The European patent will expire in 2035.
Because
of the extensive time required for clinical development and regulatory review of a drug we may develop, it is possible that, before any
of our drug candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization,
thereby reducing any advantage of any such patent. If appropriate, the Company may seek to extend the period during which it has exclusive
rights to a product by pursuing patent term extensions and marketing exclusivity periods that are available from the regulatory authorities
of certain countries (including the United States) and the EPO.
89
Even
though the Company has certain patent rights, the ability to obtain and maintain protection of biotechnology and pharmaceutical products
and processes such as those we intend to develop and commercialize involves complex legal and factual questions. No consistent policy
regarding the breadth of claims allowed in such patents has emerged to date in the U.S. The scope of patent protection outside the United
States is even more uncertain. Changes in the patent laws or in interpretations of patent laws in the United States and other countries
have diminished (and may further diminish) our ability to protect our inventions and enforce our IP rights and, more generally, could
affect the value of IP.
While
we have already secured rights to a number of issued patents directed to our drug candidates, we cannot predict the breadth of claims
that may issue from the pending patent applications and provisional patents that we have licensed or that we have filed. Substantial
scientific and commercial research has been conducted for many years in the areas in which we have focused our development efforts, which
has resulted in other parties having a number of issued patents, provisional patents and pending patent applications relating to such
areas. The patent examiner in any particular jurisdiction may take the view that prior issued patents and prior publications render our
patent claims "obvious" and therefore unpatentable or require us to reduce the scope of the claims for which we are seeking
patent protection.
In
addition, patent applications in the United States and elsewhere generally are not available to the public until at least 18 months from
the priority date, and the publication of discoveries in the scientific or patent literature frequently occurs substantially later than
the date on which the underlying discoveries were made. Therefore, patent applications relating to drugs similar to our drug candidates
may have already been filed, which (if they result in issued patents) could restrict or prohibit our ability to commercialize our drug
candidates.
The
biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other IP rights. Our ability
to prevent competition for our drug candidates and technologies will depend on our success in obtaining patents containing substantial
and enforceable claims for those candidates and enforcing those claims once granted. With respect to any applications which have not
yet resulted in issued patents, there can be no assurance that meaningful claims will be obtained. Even issued patents may be challenged
or invalidated. If others have prepared and filed patent applications in the United States that also claim technology to which we have
filed patent applications or otherwise wish to challenge our patents, we may have to participate in interferences, post-grant reviews,
inter parties reviews, derivation or other proceedings in the USPTO and other patent offices to determine issues such as priority of
claimed invention or validity of such patent applications as well as our own patent applications and issued patents. Patents may also
be circumvented, and our competitors may be able to independently develop and commercialize similar drugs or mimic our technology, business
model or strategy without infringing our patents. The rights granted under any issued patents may not provide us with proprietary protection
or competitive advantages against competitors with similar technology.
We
may rely, in some limited circumstances, on unpatented trade secrets and know-how to protect aspects of our technology. However, it is
challenging to monitor and prevent the disclosure of trade secrets. We seek to protect our proprietary trade secrets and know-how, in
part, by entering into confidentiality agreements with consultants, scientific advisors and contractors and invention assignment agreements
with our employees. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical
security of our premises and physical and electronic security of our information technology systems. While we have confidence in these
individuals, organizations and systems, agreements or security measures may be breached, giving our competitors knowledge of our trade
secrets and know-how, and we may not have adequate remedies for any such breach, in which case our business could be adversely affected.
Our trade secrets will not prevent our competitors from independently discovering or developing the same know-how. Although our agreements
with our consultants, contractors or collaborators require them to provide us only original work product and prohibit them from incorporating
or using IP owned by others in their work for us, if they breach these obligations, disputes may arise as to the rights in any know-how
or inventions that arise from their work.
Our
commercial success will also depend in part on not infringing the proprietary rights of other parties. Although we seek to review the
patent landscape relevant to our technologies on an ongoing basis, we may become aware of a new patent which has been issued to others
with claims covering or related to aspects of one of our drug candidate. The issuance of such a patent could require us to alter our
development plans for that candidate, redesign the candidate, obtain a license from the patent holder or cease development. Our inability
to obtain a license to proprietary rights that we may require to develop or commercialize any of our drug candidates would have a material
adverse impact on us.
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Trademarks
As
of the date of this annual report, we own trademark registrations covering the trade names and logos of Aptorum and our subsidiaries,
including but not limited to "APTORUM", "
APTORUM THERAPEUTICS
,"
"
VIDENS LIFE SCIENCES,
" "ACTICULE LIFE SCIENCES," "NATIVUS
LIFE SCIENCES," "NativusWell," "TALEM" in jurisdictions Hong Kong, EU and the United Kingdom and PRC. Furthermore,
we are in the process of applying for registration of trademarks in jurisdictions including the U.S., EU, the United Kingdom, Australia
and PRC.
We
also own certain unregistered trademark rights.
All
other trade names, trademarks and service marks of other companies appearing in this annual report are the property of their respective
holders. Solely for convenience, the trademarks and trade names in annual report are referred to without the
®
and
™
symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest
extent under applicable law, their rights thereto. We do not intend our use or display of other companies' trademarks and trade
names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Regulations
Government
authorities in the United States at the federal, state and local level and in other countries extensively regulate, among other things,
the research and clinical development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping,
promotion, advertising, distribution, post-approval monitoring and reporting, marketing, pricing, export and import of drug products
("Regulated Products"), such as those we are developing. Generally, before a new Regulated Product can be marketed, considerable
data demonstrating its quality, safety and efficacy must be obtained, organized to address the requirements of and in the format specific
to each regulatory authority, submitted for review and approved by the regulatory authority. This process is very lengthy and expensive,
and success is uncertain.
Regulated
Products are also subject to other federal, state and local statutes and regulations in the United States and other countries, as applicable.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes
and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable regulatory
requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative
or judicial sanctions. These sanctions could include, among other actions, the regulatory authority's refusal to approve pending
applications, withdrawal of an approval, clinical holds, untitled or warning letters, voluntary product recalls or withdrawals from the
market, product seizures, total or partial suspension of production or distribution, injunctions, disbarment, fines, refusals of government
contracts, restitution, disgorgement, or civil or criminal penalties. Any such administrative or judicial enforcement action could have
a material adverse effect on us.
As
AML Clinic and part of the Company's principal place of business is in Hong Kong, the Company is subject to various Hong Kong laws
and regulation covering its business activities there, described in further detail below. Also, the Company anticipates that, if it obtains
marketing approval for any of its drug candidates, it intends to focus its marketing and sales efforts primarily in three regions: the
United States, Canada, Europe and PRC. The regulatory framework for each of these regions is described below.
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U.S.
Drug Development Process
The
process of obtaining regulatory approvals and maintaining compliance with appropriate federal, state and local statutes and regulations
requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any
time during the product development process, approval process, or after approval, may subject an applicant to administrative or judicial
sanctions or lead to voluntary product recalls. Administrative or judicial sanctions could include the FDA's refusal to approve
pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, product seizures, total or partial suspension
of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
The process required by the FDA before a drug may be marketed in the United States generally involves the following:
●
completion of non-clinical
    laboratory tests, preclinical studies according to cGLP and manufacturing of clinical supplies according to cGMP;
●
submission to the FDA of
    an IND, which must become effective before human clinical trials may begin;
●
approval by an independent
    IRB, at each clinical site before each trial may be initiated;
●
performance of adequate
    and well-controlled human clinical trials according to cGCP, to establish the safety and efficacy of the proposed product for its
    intended use;
●
preparation and submission
    to the FDA of an NDA, for a drug;
●
satisfactory completion
    of an FDA advisory committee review, if applicable;
●
satisfactory completion
    of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess
    compliance with cGMP; and
●
payment of user fees and
    the FDA review and approval of the NDA.
The
testing and approval process requires substantial time, effort and financial resources and we cannot be certain that any approvals for
our drug candidates, or any future drug candidates we may develop, will be granted on a timely basis, if at all.
Once
a drug candidate is identified for development, it enters the non-clinical testing stage. Non-clinical tests include laboratory evaluations
of product chemistry, toxicity, formulation and stability, as well as preclinical studies. An IND sponsor must submit the results of
the non-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the
FDA as part of the IND prior to commencing any testing in humans. An IND sponsor must also include a protocol detailing, among other
things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to be used
in monitoring safety, and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation.
Some non-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt
by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold
within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical
trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or
non-compliance, and may be imposed on all products within a certain class of products. The FDA also can impose partial clinical holds,
for example, prohibiting the initiation of clinical trials for certain duration or for certain doses.
All
clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with cGCP regulations. These
regulations include the requirement that all research subjects provide informed consent in writing before their participation in any
clinical trial. Further, an IRB representing each institution participating in a clinical trial must review and approve the plan for
any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least
annually. An IRB is responsible for protecting the rights of clinical trial subjects and considers, among other things, whether the risks
to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also
approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his
or her legal representative and must monitor the clinical trial until completed. Each new clinical protocol and any amendments to the
protocol must be submitted to the FDA for review, and to the IRBs for approval. Protocol detail, among other things, includes the objectives
of the clinical trial, testing procedures, sublease selection and exclusion criteria, and the parameters to be used to monitor subject
safety.
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Human
clinical trials are typically conducted in three sequential phases that may overlap or be combined:
●
Phase 1.
Phase
    1 includes the initial introduction of an investigational new drug into humans. These studies are closely monitored and may be conducted
    in patients, but are usually conducted in healthy volunteer subjects. These studies are designed to determine the metabolic and pharmacologic
    actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.
    During Phase 1, sufficient information about the drug's pharmacokinetics and pharmacological effects should be obtained to
    permit the design of well-controlled, scientifically valid, Phase 2 studies. Phase 1 studies also evaluate drug metabolism, structure-activity
    relationships, and the mechanism of action in humans. These studies also determine which investigational drugs are used as research
    tools to explore biological phenomena or disease processes. The total number of subjects included in Phase 1 studies varies with
    the drug, but is generally in the range of twenty to eighty.
●
Phase 2.
Phase
    2 includes the early controlled clinical studies conducted to obtain some preliminary data on the effectiveness of the drug for a
    particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common
    short-term side effects and risks associated with the drug. Phase 2 studies are typically well-controlled, closely monitored, and
    conducted in a relatively small number of patients, usually involving several hundred people.
●
Phase 3.
Phase
    3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness
    of the drug has been obtained in Phase 2, and are intended to gather the additional information about effectiveness and safety that
    is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies are designed to provide an adequate basis
    for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies
    usually include several hundred to several thousand people.
Progress
reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety reports must be submitted
to the FDA and clinical investigators within 15 calendar days for serious and unexpected suspected adverse events, any clinically important
increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator's brochure, or any
findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug candidate. Additionally,
a sponsor must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction no later than 7 calendar days after
the sponsor's receipt of the information. There is no assurance that Phase 1, Phase 2 and Phase 3 testing can be completed successfully
within any specified period, or at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds,
including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend
or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB's
requirements or if the product has been associated with unexpected serious harm to subjects.
Concurrent
with clinical trials, companies usually complete additional preclinical studies and must also develop additional information about the
chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in
accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product
drug and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final
product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that
the product drug does not undergo unacceptable deterioration over its shelf life.
The
results of product development, non-clinical studies and clinical trials, together with other detailed information regarding the manufacturing
process, analytical tests conducted on the product, proposed labeling and other relevant information, are submitted to the FDA as part
of an NDA requesting approval to market the new drug. The FDA reviews all NDAs submitted within 60 days of submission to ensure that
they are sufficiently complete for substantive review before it accepts them for filing. If the submission is accepted for filing, the
FDA begins an in-depth substantive review.
The
approval process is lengthy and difficult and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied
or may require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately
decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the
FDA may interpret data differently than we interpret the same data. The FDA will issue a complete response letter if the agency decides
not to approve the NDA in its present form. The complete response letter usually describes all of the specific deficiencies that the
FDA identified in the NDA that must be satisfactorily addressed before it can be approved. The deficiencies identified may be minor,
for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response
letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete
response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or
withdraw the application or request an opportunity for a hearing.
93
If
after such review a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages
or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require
that certain contraindications, warnings or precautions be included in the product labeling. Any products for which we receive the FDA
approval would be subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting
of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution
requirements, complying with certain electronic records and signature requirements and complying with the FDA promotion and advertising
requirements. In addition, the FDA may require post-approval studies, including Phase 4 clinical trials, to further assess a product's
safety and effectiveness after NDA approval and may require testing and surveillance programs to monitor the safety of approved products
that have been commercialized. The FDA also may conclude that an NDA may only be approved with a Risk Evaluation and Mitigation Strategy
designed to mitigate risks through, for example, a medication guide, physician communication plan, or other elements to assure safe use,
such as restricted distribution methods, patient registries and other risk minimization tools.
Post-Approval
Requirements
Any
products for which we receive the FDA approval are subject to continuing regulation by the FDA, including, among other things, record-keeping
requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product
sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with the FDA
promotion and advertising requirements. The FDA strictly regulates labeling, advertising, promotion and other types of information on
products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions
of the approved label. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable
time, resources and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior
the FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional
labeling claims, are also subject to further the FDA review and approval.
The
FDA may withdraw a product approval if compliance with regulatory requirements is not maintained or if problems occur after the product
reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product's marketing
or even complete withdrawal of the product from the market. Further, the failure to maintain compliance with regulatory requirements
may result in administrative or judicial actions, such as fines, untitled or warning letters, holds on clinical trials, product seizures,
product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions
on marketing or manufacturing, injunctions or consent decrees, or civil or criminal penalties, or may lead to voluntary product recalls.
Patent
Term Restoration and Marketing Exclusivity
Because
drug approval can take an extended period of time, there may be limited remaining life for the patents covering the approved drug, meaning
that the company has limited time to use the patents to protect the sponsor's exclusive rights to make, use and sell that drug.
In such a case, U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration
Act of 1984, commonly referred to as the Hatch-Waxman Act. The Hatch-Waxman Act permits a patent restoration term of up to five years
as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration
cannot extend the remaining term of a patent beyond a total of 14 years from the product's approval date.
In
addition, the FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to
gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new
drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity
period, the FDA may not accept for review an abbreviated new drug application ("ANDA") or a 505(b)(2) Application submitted
by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data
required for approval.
In
the future, if appropriate, we intend to apply for restorations of patent term and/or marketing exclusivity for some of our products;
however, there can be no assurance that any such extension or exclusivity will be granted to us.
94
Disclosure
of Clinical Trial Information
Sponsors
of clinical trials of the FDA-regulated products, including drugs are required to register and disclose certain clinical trial information,
which is publicly available at www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation,
study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are
also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed
until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain
knowledge regarding the progress of development programs.
Pharmaceutical
Coverage, Pricing and Reimbursement
Much
of the revenue generated by new Regulated Products depends on the willingness of third-party payors to reimburse the price of the product.
Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
In the United States, sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the
availability of coverage and reimbursement from third-party payors. Third-party payors include government authorities, managed care providers,
private health insurers and other organizations. The process for determining whether a payor will provide coverage for a product may
be separate from the process for setting the reimbursement rate that the payor will pay for the product. Third-party payors may limit
coverage to specific products on an approved list, or formulary, which is not required to include all of the FDA-approved products for
a particular indication. Moreover, a payor's decision to provide coverage for a product does not imply that an adequate reimbursement
rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize
an appropriate return on our investment in product development.
Third-party
payors are increasingly challenging the price and examining the medical necessity and cost- effectiveness of medical products and services,
in addition to their safety and efficacy. To obtain coverage and reimbursement for any product that might be approved for sale, we may
need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of any products,
in addition to the costs required to obtain regulatory approvals. Our product candidates may not be considered medically necessary or
cost-effective. If third-party payors do not consider a product to be cost-effective compared to other available therapies, they may
not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow
a company to sell its products at a profit.
The
U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth
of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic
products for branded prescription drugs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions
with existing controls and measures, could limit payments for pharmaceuticals.
Even
if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable
coverage policies and reimbursement rates may be implemented in the future. Unfavorable coverage or reimbursement policies regarding
any of the Company's products would have a material adverse impact on the value of that product.
Other
Healthcare Laws and Compliance Requirements
If
we obtain regulatory approval of our products, we may be subject to various federal and state laws targeting fraud and abuse in the healthcare
industry. These laws may impact, among other things, our proposed sales, marketing and education programs. In addition, we may be subject
to patient privacy regulation by both the federal government and the states in which we conduct our business.
Patient
Protection and the Affordable Care Act
The
Affordable Care Act, enacted in March 2010, includes measures that have or will significantly change the way health care is financed
in the United States by both governmental and private insurers. Among the provisions of the Affordable Care Act of greatest importance
to the pharmaceutical industry are the following:
●
The Medicaid Drug Rebate
    Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of
    the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer's
    outpatient drugs furnished to Medicaid patients. The Affordable Care Act increased pharmaceutical manufacturers' rebate liability
    on most branded prescription drugs from 15.1% of the average manufacturer price to 23.1% of the average manufacturer price, added
    a new rebate calculation for line extensions of solid oral dosage forms of branded products, and modified the statutory definition
    of average manufacturer price. The Affordable Care Act also expanded the universe of Medicaid utilization subject to drug rebates
    by requiring pharmaceutical manufacturers to pay rebates on Medicaid managed care utilization and expanding the population potentially
    eligible for Medicaid drug benefits.
95
●
In order for a pharmaceutical
    product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government
    agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The Affordable
    Care Act expanded the types of entities eligible to receive discounted 340B pricing.
●
The Affordable Care Act
    imposed a requirement on manufacturers of branded drugs to provide a 50% discount off the negotiated price of branded drugs dispensed
    to Medicare Part D patients in the coverage gap (i.e., the "donut hole").
●
The Affordable Care Act
    imposed an annual, non-deductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned
    among these entities according to their market share in certain government healthcare programs, although this fee does not apply
    to sales of certain products approved exclusively for orphan indications.
In
addition to these provisions, the Affordable Care Act established a number of bodies whose work may have a future impact on the market
for certain pharmaceutical products. These include the Patient-Centered Outcomes Research Institute, established to oversee, identify
priorities in, and conduct comparative clinical effectiveness research, the Independent Payment Advisory Board, which has authority to
recommend certain changes to the Medicare program to reduce expenditures by the program, and the Center for Medicare and Medicaid Innovation
within the Centers for Medicare and Medicaid Services, to test innovative payment and service delivery models to lower Medicare and Medicaid
spending.
These
and other laws may result in additional reductions in healthcare funding, which could have a material adverse effect on customers for
our product candidates, if we gain approval for any of them. Although we cannot predict the full effect on our business of the implementation
of existing legislation or the enactment of additional legislation pursuant to healthcare and other legislative reform, we believe that
legislation or regulations that would reduce reimbursement for, or restrict coverage of, our products could adversely affect how much
or under what circumstances healthcare providers will use our product candidates if we gain approval for any of them.
Canadian
Regulation
In
Canada, our pharmaceutical product candidates and our research and development activities are primarily regulated by the
Food
and Drugs Act
and the rules and regulations thereunder, which are enforced by Health Canada. Health Canada regulates, among
other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution,
post-approval monitoring, marketing and import and export of pharmaceutical products. Drug approval laws require licensing of manufacturing
facilities, carefully controlled research and testing of products, government review and approval of experimental results prior to giving
approval to sell drug products. Regulators also typically require that rigorous and specific standards such as Good Manufacturing Practices
(GMP), Good Laboratory Practices, or GLP, and Good Clinical Practices, or GCP, are followed in the manufacture, testing and clinical
development, respectively, of any drug product. The processes for obtaining regulatory approvals in Canada, along with subsequent compliance
with applicable statutes and regulations, require the expenditure of substantial time and financial resources.
96
The
principal steps required for drug approval in Canada is as follows:
Preclinical
Toxicology Studies
Non-clinical studies
are conducted
in vitro
and in animals to evaluate pharmacokinetics, metabolism and possible toxic effects to provide
evidence of the safety of the drug candidate prior to its administration to humans in clinical studies and throughout development. Such
studies are conducted in accordance with applicable laws and GLP.
Initiation
of Human Testing
In
Canada, the process of conducting clinical trials with a new drug cannot begin until we have received a NOL (No objection Letter) from
Health Canada, typically within 30 days (during Covid the 30 days extended to 45 days) of a CTA submission. Similar regulations apply
in Canada to a CTA as to an IND in the United States. Once approved, two key factors influencing the rate of progression of clinical
trials are the rate at which patients can be enrolled to participate in the research program and whether effective treatments are currently
available for the disease that the drug is intended to treat. Patient enrollment is largely dependent upon the incidence and severity
of the disease, the treatments available and the potential side effects of the drug to be tested and any restrictions for enrollment
that may be imposed by regulatory agencies.
Clinical
Trials
Similar
regulations apply in Canada regarding clinical trials as in the United States. In Canada, Research Ethics Boards, or REBs, instead of
IRBs, are used to review and approve clinical trial plans. Clinical trials involve the administration of an investigational new drug
to human subjects under the supervision of qualified investigators in accordance with current Good Clinical Practices, or cGCP, requirements,
which include review and approval by REBs. Clinical trials are conducted under protocols detailing, among other things, the objectives
of the trial, the trial procedures, the parameters to be used in monitoring safety and the efficacy criteria to be evaluated and a statistical
analysis plan. Human clinical trials are typically conducted in three sequential phases, as discussed above in similar context to government
regulation in the United States.
The
manufacture of investigational drugs for the conduct of human clinical trials is subject to current Good Manufacturing Practice, or cGMP,
requirements. Investigational drugs and active pharmaceutical ingredients imported into Canada are also subject to regulation by Health
Canada relating to their labeling and distribution. Post authorization requirements include reporting of serious adverse events and clinical
trial site inspection program. Phase 1, Phase 2 and Phase 3 clinical trials are subject to a clinical trial application (CTA) for each
phase of study. Furthermore, in Canada, Health Canada or the sponsor may suspend or terminate a clinical trial at any time on various
grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an REB can suspend
or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the REB's
requirements or if the drug has been associated with unexpected serious harm to subjects. Additionally, some clinical trials are overseen
by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee.
This group regularly reviews accumulated data and advises the study sponsor regarding the continuing safety of trial subjects, potential
trial subjects and the continuing validity and scientific merit of the clinical trial. We may also suspend or terminate a clinical trial
based on evolving business objectives or competitive climate.
New
Drug Submission (NDS)
Upon
successful completion of Phase 3 clinical trials, in Canada the company sponsoring a new drug then assembles all the preclinical and
clinical data and other testing relating to the product's pharmacology, chemistry, manufacture, and controls, and submits it to
Health Canada as part of a New Drug Submission, or NDS. The NDS is then reviewed by Health Canada for approval to market the drug.
97
As
part of the approval process, an additional application for a Drug Establishment License (DEL) 90 days prior the NDS submission to Health
Canada to initiate review and inspection of the facility or the facilities at which the drug is manufactured are compliant with GMP requirements.
Health Canada will not approve the product unless compliance with cGMP—a quality system regulating manufacturing—is satisfactory
and the NDS contains data that provide substantial evidence that the drug is safe and effective in the indication studied. In addition,
before approving an NDS, Health Canada will typically inspect one or more clinical sites to assure compliance with GCP.
The
testing and approval process for an NDS requires substantial time, effort and financial resources, and may take several years to complete.
Data obtained from preclinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which
could delay, limit or prevent regulatory approval. Health Canada may not grant approval of an NDS on a timely basis, or at all. In Canada,
NDSs are subject to user fees and these fees are typically increased annually to reflect inflation.
Even
if Health Canada approves a product candidate, the relevant authority may limit the approved indications for use of the product candidate,
require that contraindications, warnings or precautions be included in the product labeling, including a black box warning, require that
post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug's safety after approval, require
testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution
restrictions or other risk management mechanisms.
Health
Canada may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After
approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling
claims, are subject to further testing requirements, notification, and regulatory authority review and approval. Further, should new
safety information arise, additional testing, product labeling or regulatory notification may be required.
European
Union Regulation
Regulation
in the European Union
The
process governing approval of medicinal products in the EU generally follows the same lines as in the United States. It entails satisfactory
completion of pharmaceutical development, non-clinical studies and adequate and well-controlled clinical trials to establish the safety
and efficacy of the medicinal product for each proposed indication. It also requires the submission to relevant competent authorities
for clinical trials authorization and to the European Medicines Authority, or EMA, for a marketing authorization application, or MAA,
and granting of a marketing authorization by these authorities before the product can be marketed and sold in the EU.
Clinical
Trial Approval
Pursuant
to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC on cGCP, a system for the approval of clinical
trials in the EU (the equivalent of the IND process in the United States) has been implemented through national legislation of the EU
member states. Under this system, an applicant must obtain approval from the competent national authority of an EU member state in which
the clinical trial is to be conducted or in multiple EU member states if the clinical trial is to be conducted in a number of EU member
states. Furthermore, the applicant may only start a clinical trial at a specific study site after the independent ethics committee has
issued a favorable opinion. The clinical trial application, or CTA, must be accompanied by an investigational medicinal product dossier
with supporting information prescribed by Directive 2001/20/EC and Directive 2005/28/EC and corresponding national laws of the EU member
states and further detailed in applicable guidance documents.
In
April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the current Clinical Trials Directive
2001/20/EC. It is expected that the new Clinical Trials Regulation will apply in 2019. It will overhaul the current system of approvals
for clinical trials in the EU. Specifically, the new regulation, which will be directly applicable in all EU member states, aims at simplifying
and streamlining the approval of clinical trials in the EU. For instance, the new Clinical Trials Regulation provides for a streamlined
application procedure using a single entry point and strictly defined deadlines for the assessment of clinical trial applications.
98
Marketing
Authorization
To
obtain a marketing authorization for a product under the EU regulatory system (the equivalent of the NDA process in the United States),
an applicant must submit an MAA, either under a centralized procedure administered by the EMA or one of the procedures administered by
competent authorities in EU member states (decentralized procedure, national procedure, or mutual recognition procedure). A marketing
authorization may be granted only to an applicant established in the EU. Regulation (EC) No. 1901/2006 provides that prior to obtaining
a marketing authorization in the EU, an applicant must demonstrate compliance with all measures included in an EMA-approved Pediatric
Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class
waiver, or a deferral for one or more of the measures included in the PIP.
The
centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU
member states. Pursuant to Regulation (EC) No. 726/2004, the centralized procedure is compulsory for specific products, including for
medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products
and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer.
For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for
which a centralized process is in the interest of patients, the centralized procedure may be optional.
Under
the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established by the EMA is responsible for
conducting the assessment of a product to define its risk/benefit profile. Under the centralized procedure, the maximum timeframe for
the evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided
by the applicant in response to questions of the CHMP. Accelerated evaluation may be granted by the CHMP in exceptional cases, when a
medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic
innovation.
If
the CHMP accepts such a request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP may revert
to the standard time limit for the centralized procedure if it determines that it is no longer appropriate to conduct an accelerated
assessment.
Periods
of Authorization and Renewals
A
marketing authorization is valid for five years, in principle, and it may be renewed after five years on the basis of a reevaluation
of the risk benefit balance by the EMA or by the competent authority of the authorizing Member State. To that end, the marketing authorization
holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy,
including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization
ceases to be valid. Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the
competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period.
Any authorization that is not followed by the placement of the drug on the EU market (in the case of the centralized procedure) or on
the market of the authorizing Member State within three years after authorization ceases to be valid.
99
Regulatory
Requirements after Marketing Authorization
Following
approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing,
marketing, promotion and sale of the medicinal product. These include compliance with the EU's stringent pharmacovigilance or safety
reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed. In addition, the
manufacturing of authorized products, for which a separate manufacturer's license is mandatory, must also be conducted in strict
compliance with the EMA's cGMP requirements and comparable requirements of other regulatory bodies in the EU, which mandate the
methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. Finally,
the marketing and promotion of authorized products, including industry-sponsored continuing medical education and advertising directed
toward the prescribers of drugs and/or the general public, are strictly regulated in the EU under Directive 2001/83EC, as amended.
Orphan
Drug Designation and Exclusivity
Regulation
(EC) No. 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission
if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically
debilitating condition affecting not more than five in ten thousand persons in the EU when the application is made, or (2) a life-threatening,
seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the
drug in the EU would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must
demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been
authorized in the EU or, if such method exists, the drug has to be of significant benefit compared to products available for the condition.
An
orphan drug designation provides a number of benefits, including fee reductions, regulatory assistance and the possibility to apply for
a centralized EU marketing authorization. Marketing authorization for an orphan drug leads to a ten-year period of market exclusivity.
During this market exclusivity period, neither the EMA nor the European Commission or the EU member states can accept an application
or grant a marketing authorization for a "similar medicinal product." A "similar medicinal product" is defined
as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and
which is intended for the same therapeutic indication. The market exclusivity period for the authorized therapeutic indication may, however,
be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan
drug designation because, for example, the product is sufficiently profitable not to justify market exclusivity.
PRC
Regulation
We
are selling NativusWell
®
through JD.com in PRC. In order to protect our potential market in the PRC, we have obtained
an exclusive license of certain PRC patents directed to certain of the drug candidates that we are developing and are currently seeking
approval of additional patent and other IP filings in the PRC. Seeking IP approval in the PRC subjects us to some of the rules and practices
of the PRC government. Since the Company intends eventually to market its products in the PRC, at least some of our drug candidates may
become subject to regulatory approval and marketing authorization in the PRC.
Permission
Required from the PRC Authorities
As
of the date of this annual report, we are not required to obtain approvals from the PRC authorities to operate our business or list on
the U.S. exchanges and offer or continue to offer securities; specifically, we are currently not required to obtain any permission or
approval from the CSRC, the CAC or any other PRC governmental authority to operate our business or to list our securities on a U.S. securities
exchange or issue securities to foreign investors. The laws and regulations of mainland China do not currently have any material impact
on our business, financial condition or results of operations and we are currently not subject to the PRC government's direct influence
or discretion over the manner in which we conduct our business activities outside of the mainland China.
100
Nevertheless,
we are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations
in certain areas in mainland China with little advance notice, including cracking down on illegal activities in the securities market,
enhancing supervision over mainland Chinese companies listed overseas using a VIE structure, adopting new measures to extend the scope
of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new,
it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws
or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what
potential impact such modified or new laws and regulations will have on Aptorum Group's daily business operations, its ability
to accept foreign investments and the listing of our Class A Ordinary Shares on a U.S. or other foreign exchange. If there is significant
change to current political arrangements between mainland China and Hong Kong, the PRC government intervenes or influences operations
of companies operated in Hong Kong like us, or exerts more control through change of laws and regulations over offerings conducted overseas
and/or foreign investment in issuers like us, it may result in a material change in our operations and/or the value of the securities
we are registering for sale or could significantly limit or completely hinder our ability to offer or continue to offer securities to
investors and cause the value of our Class A Ordinary Shares to significantly decline or become worthless. (Please see the risk factor
section, "Risks Related to our Corporate Structure" and "Risks Related to Doing Business in Hong Kong" for more
information).
Hong
Kong Regulation
The
operations of AML Clinic and sales of NativusWell
®
in Hong Kong are subject to certain general laws and regulations in
relation to clinic medical professionals, trade description and safety of consumer goods, medical advertisement and importation, exportation,
dealing in and sale of pharmaceutical products and drugs.
Medical
Clinics Ordinance
The
Medical Clinics Ordinance provides for the registration, control and inspection of medical clinics. It requires a medical clinic to be
registered, with name and address and other prescribed particulars. "Medical clinic" means any premises used or intended
to be used for the medical diagnosis or treatment of persons suffering from, or believed to be suffering from, any disease, injury or
disability of mind or body, with specific exceptions, including private consulting rooms used exclusively by registered medical practitioners
in the course of their practice on their own account and not bearing any title or description which includes the word "clinic"
or "polyclinic" in the English language.
The
application of registration may be refused if:
(i)
the income derived or to
    be derived from the establishment or operation of the clinic is not, or will not be, applied solely towards the promotion of the
    objects of the clinic; or
(ii)
any portion of such income,
    except payment of remuneration to employed registered medical practitioners, nurses and menial servants, will be paid by way of dividend,
    bonus or otherwise howsoever by way of profit to the applicant himself, or to any persons properly so employed, or to any other persons
    howsoever.
We
do not believe that the Medical Clinic Ordinance is applicable to the business of our Company and its subsidiaries, having considered,
among others, the following:
(iii)
the legislative intent
    behind the Medical Clinics Ordinance was to provide for registration of non-profit making clinics;
(iv)
the Food and Health Bureau
    of Hong Kong published a consultation document, "Regulation of Private Healthcare Facilities" in 2014 which specifically
    states that the Medical Clinics Ordinance and the Code of Practice For Clinics Registered Under The Medical Clinics Ordinance (Chapter
    343 of the Laws of Hong Kong) set out the regulatory framework for non-profit-making medical clinics and that other private healthcare
    facilities, such as ambulatory medical centers and clinics operated by medical groups or individual medical practitioners, are not
    subject to direct statutory control beyond the regulation of an individual's professional practice; and
(v)
our business is one which
    makes and intends to continue making profit as a listed entity. The payment of bonuses to some of our Hong Kong Doctors is clearly
    a reflection of the profit-making nature of our business.
Hence,
we do not believe that AML Clinic is required to be registered under the Medical Clinics Ordinance.
101
Waste
Disposal Ordinance
The
Waste Disposal Ordinance (Chapter 354 of the Laws of Hong Kong) ("WDO") and the Waste Disposal (Clinical Waste) (General)
Regulation (Chapter 354O of the Laws of Hong Kong) (the "WDR") provide for, among others, the control and regulation of the
production, storage, collection and disposal of clinical waste.
Under
the WDO, clinical waste means waste consisting of any substance, matter or thing generated in connection with:
●
a dental, medical, nursing
    or veterinary practice;
●
any other practice, or
    establishment (howsoever described), that provides medical care and services for the sick, injured, infirm or those who require medical
    treatment;
●
dental, medical, nursing,
    veterinary, pathological or pharmaceutical research; or
●
a dental, medical, veterinary
    or pathological laboratory practice,
and
which consists wholly or partly of any of the materials specified in one or more of the groups listed below:
●
used or contaminated sharps;
●
laboratory waste;
●
human and animal tissues;
●
infectious materials;
●
dressings; and
●
such other wastes as specified
    by the Director of the Environmental Protection Department ("EPD") of Hong Kong.
Given
the medical services provided by AML Clinic and the research works in our R&D Center may produce used or contaminated sharps such
as syringes and needles as well as dressings, we are subject to WDO, WDR and the Code of Practice.
Public
Health and Municipal Services Ordinance
We
have launched NativusWell
®
(NLS-2) in Hong Kong. In Hong Kong, natural supplements are defined as "health food"
products. "Health food" containing medicines are subject to the Pharmacy and Poisons Ordinance (Cap 138) and such "health
food" containing Chinese medicines are regulated by the Chinese Medicine Ordinance (Cap 549), where they must meet the requirements
in respect of safety, quality and efficacy before they can be registered.
For
other "health food" products which cannot be classified as Chinese medicine or western medicine are regulated under the Public
Health and Municipal Services Ordinance (Cap 132) as general food products. The Public Health and Municipal Services Ordinance requires
the manufacturers and sellers of food to ensure that their products are fit for human consumption and comply with the requirements in
respect of food safety, food standards and labelling. In addition, all prepackaged food should bear labels which correctly list out the
ingredients of the food under the Food and Drugs (Composition and Labelling) Regulations (Cap 132W) under the Ordinance.
The
NativusWell
®
(NLS-2) is made with the bioactive ingredient extracted Chinese yam powder and does not contain any western
or Chinese medicine; therefore, registration is not required under the local laws for marketing in Hong Kong. We will, however, ensure
the compliance of the Food and Drugs (Composition and Labelling) Regulations (Cap 132W) with by proper labelling in place.
102
Rest
of the World Regulation
For
other countries in the world, the requirements governing the conduct of clinical trials, medical product licensing, pricing and reimbursement
vary from country to country. In all cases if clinical trials are required, they must be conducted in accordance with cGCP requirements
and the applicable regulatory requirements and the ethical principles having their origin in the Declaration of Helsinki.
If
we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal
of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
C.
Our Structure
See
"Item 4. Information on the Company – A. History and Development of the Company."
D.
Property, plants and equipment
We
have several operating leases for offices, laboratories and clinic. Our offices are located in London, New York and Hong Kong.
Our
office space in London consists of approximately 172 square feet under a lease that commenced in August 2019, last renewed in December
2022, expires in May 2023 and has a rent of $4,183 per month. Our office space in New York consists of approximately 95 square feet under
a lease that commenced in February 2020, which will automatically renew until 1 month's notice for termination, and has a rent
of $2,041 per month. Our facilities in Hong Kong consists of: (i) 2,021 square feet lab space under a lease that commenced in March 2020,
renewed in March 2023 and expires in March 2026, that carries an initial monthly rent of $6,348 and which is used for the center for
R&D; (ii) 1,177 square feet office space under a lease that commenced in March 2023 and expires in March 2026, with a monthly rent
of $3,471, (the "HKSTP Office Space"); (iii) 3,173 square feet space under a lease that commenced in March 2018, renewed
in March 2022 and expires in March 2024 with an initial monthly rent of $24,408 (the "AML Lease", which is home to AML Clinic);
and (iv) 70 square feet office space under a lease that commenced in September 2022 and expires in August 2023 with a monthly rent of
$423.
Payments
under operating leases are expensed on a straight-line basis over the periods of the respective leases, and the terms of the leases do
not contain rent escalation, contingent rent, and renewal or purchase options.
We
believe our current facilities are sufficient to meet our needs.
Item
4A. UNRESOLVED STAFF COMMENTS
Not
applicable.
Item
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated
financial statements and their related notes included in this annual report.
For
purposes of Item 5, reference to the "We", "Our", "Ours" or "Group" means Aptorum Group
Limited and all of its subsidiaries.
103
This
annual report includes consolidated financial statements for the years ended December 31, 2022, 2021, and 2020. However, as permitted
by Instruction 6 to Item 5 of Form 20-F, a discussion of the changes in our results of operations for the years ended December 31, 2020
and 2019 has been omitted from this annual report, but may be found in "Item 5. Operating And Financial Review And Prospects" in
our annual report on Form 20-F for the year ended December 31, 2020, filed with the SEC on April 19, 2021.
This
annual report contains forward-looking statements that are based on our management's beliefs and assumptions and on information
currently available to us. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
You
can identify these forward-looking statements by words or phrases such as "may," "will," "expect,"
"anticipate," "aim," "estimate," "intend," "plan," "believe,"
"potential," "continue," "is/are likely to" or other similar expressions. We have based these forward-looking
statements largely on our current expectations and projections about future events and financial trends that we believe may affect our
financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other
things, statements relating to:
●
our goals and strategies;
●
our future business development,
    financial conditions and results of operations;
●
our expectations regarding
    demand for and market acceptance of our products once available;
●
our expectations regarding
    our development and commercialization of our therapeutics;
●
competition in our industry;
    and
●
relevant government policies
    and regulations relating to our industry.
You
should thoroughly read this annual report and the documents that we refer to in this annual report with the understanding that our actual
results in the future may be materially different from or worse than what we expect. We qualify all of our forward-looking statements
by these cautionary statements. Other sections of this annual report include additional factors which could adversely affect our business
and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time
and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors
on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Important risks and factors that could cause our actual results to be materially different
from our expectations are generally set forth in "Item 3. Key Information—D. Risk Factors" and elsewhere in this annual
report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.
The
forward-looking statements made in this annual report relate only to events or information as of the date on which these statements are
made in this annual report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date of this annual report. You should not rely upon forward-looking statements as
predictions of future events.
A.
Operating Results
Overview
We
are a clinical stage biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutic assets to
treat diseases with unmet medical needs, particularly in oncology (including orphan oncology indications) and infectious diseases. The
pipeline of Aptorum is also enriched through (i) the establishment of drug discovery platforms that enable the discovery of new therapeutics
assets through, e.g. systematic screening of existing approved drug molecules, and microbiome-based research platform for treatments
of metabolic diseases, and (ii) the co-development of Paths
Dx
Test, a novel molecular-based rapid pathogen identification
and detection diagnostics technology, with Accelerate Technologies Pte Ltd, commercialization arm of the Singapore's Agency for
Science, Technology and Research.
104
In
addition to the above main focus, we are also pursuing therapeutic projects in neurology, gastroenterology, metabolic disorders, women's
health and other disease areas. We also have projects focused on natural supplements for women undergoing menopause and experiencing
related symptoms. We also opened a medical clinic, AML Clinic, in June 2018.
Based
on our evaluation of preliminary data and our consideration of a number of factors including substantial unmet needs, benefits over existing
therapies, potential market size, competition in market, the Company decides how to prioritize its resources among projects. Overall,
our rationale for selecting Lead Projects is not based on any mechanical formula or rigid selection criteria, but instead focused on
a combination of the factors and individual attributes of the Lead Projects themselves. See "Item 3. Key Information—D. Risk
Factors— Risks Related to the Preclinical and Clinical Development of Our Drug Candidates— "Preclinical development
is a long, expensive and uncertain process, and we may terminate one or more of our current preclinical development programs."
and "Management has discretion to terminate the development of any of our projects at any time."
Our
current business consists of "therapeutics" and "non-therapeutics" segments. However, our focus is on the therapeutics
segments. Because of the risks, costs and extended development time required for successful drug development, we have determined to pursue
projects within our non-therapeutics segments, such as AML Clinic and NativusWell
®
, to provide some interim revenue, as
well as diagnostics technology that may be brought to market and generate revenue more quickly.
Therapeutics
Segment
. In our therapeutics segment ("Aptorum Therapeutics Group"), we are currently seeking to develop various
drug molecules (including projects seeking to use extracts or derivatives from natural substances to treat diseases) and certain technologies
for the treatment of human disease conditions to tackle unmet needs, in particular, two of our Lead Projects targeting infectious disease
and cancer (including orphan oncology indications). In addition to our main areas of focus above, we are also pursuing therapeutic projects
in neurology, gastroenterology, metabolic disorders, women's health and other disease areas. Aptorum Therapeutics Group is operated
through Aptorum's wholly-owned subsidiary, Aptorum Therapeutics Limited, a Cayman Islands exempted company with limited liability,
whose principal place of business is in Hong Kong and whose subsidiaries (who we sometimes refer to herein as project companies) are
based in the United Kingdom, Singapore and Hong Kong.
Non-Therapeutics
Segment
. The non-therapeutics segment ("Aptorum Non-Therapeutics Group") encompasses three businesses: (i) diagnostics
projects including Paths
Dx
Test, a novel molecular-based rapid pathogen identification and detection diagnostics technology,
(ii) natural supplements including NativusWell
®
, and (iii) AML Clinic. Paths
Dx
Test technology is currently
under co-development with A*STAR. The core objectives of Paths
Dx
Test are to rapidly and accurately identify and detect existing
or emerging unknown pathogens (including DNA/RNA-based viruses such as coronavirus, antibiotic-resistant bacteria, fungi, etc.), in a
cost-effective, unbiased and broad-spectrum manner, through liquid biopsy (patients' blood samples and is potentially adaptable
for other sample types), genome sequencing and artificial intelligence driven software analytics. A key objective is also to develop
Paths
Dx
Test to leverage existing and emerging Next-Generation Sequencing platforms for pathogenic genome sequencing analysis.
The sale of natural supplements is operated through Nativus Life Sciences Limited ("Nativus"), a subsidiary of Aptorum Therapeutics
Limited. The production of Aptorum Group's dioscorea opposita bioactive nutraceutical tablets has commenced production in Canada
and is marketed under the brand name NativusWell
®
; we are selling NativusWell
®
online through HKTV Mall,
JD.com and NativusWell
®
website. The outpatient clinic is operated through our subsidiary, Aptorum Medical Limited. Effective
as of March 2018, we leased office space in Central, Hong Kong as the home to AML Clinic. AML Clinic commenced operations under the name
of Talem Medical in June 2018.
105
Our
goal is to develop a broad range of novel and repurposed therapeutics and diagnostics technology across a wide range of disease/therapeutic
areas. Key components of our strategy for achieving this goal include: (for details of our strategy, See "Item 4. Information on
the Company – B. Business Overview – Our Strategy")
●
Developing therapeutic
    and diagnostic innovations across a wide range of disease/therapeutic areas;
●
Selectively expanding our
    portfolio with potential products that may be able to attain orphan drug designation and/or satisfy current unmet medical needs;
●
Collaborating with leading
    academic institutions and CROs;
●
Expanding our in-house
    pharmaceutical development center;
●
Leveraging our management's
    expertise, experience and commercial networks;
●
Obtaining and leveraging
    government grants to fund project development.
We
have devoted a substantial portion of the proceeds from our offerings to our Lead Projects. Our Lead Projects are ALS-4, SACT-1 and Paths
Dx
Test. In January 2022, we announced that we have completed Phase 1 clinical trial for ALS-4 and Phase 1 clinical trial for assessing
relative bioavailability and food effect of SACT-1. No serious adverse events observed and no relevant clinical changes in respect of
vital signs. In March 2023, we announced the completion of the Pre-IND discussions with the US FDA on ALS-4. With the positive feedback
on the overall development strategy from the US FDA, we are proceeding towards the IND submission of ALS-4. In March 2023, we also announced
that the completion of the End of Phase 1 (EOP1) meeting with the US FDA. The FDA generally agreed with the chemistry-manufacturing-control
(CMC) strategy and our proposed clinical development plan for SACT-1 Phase 1/2 trials. In 2023, we expect to be able (i) to submit IND
application to the US FDA seeking to initiate a Phase 2 clinical study to assess the efficacy of ALS-4 in patients and (ii) submit a
clinical protocol to the US FDA seeking to initiate our planned Phase 1b/2a trial for SACT-1, subject to regulatory review. We commenced
clinical validation of our molecular based Paths
Dx
Test and will continue to undergo validations during 2023, in parallel
with its pre-commercialization process in 2023.
Potential
Take-Over
On
March 27, 2023, we entered into a non-binding Letter of Intent and Term Sheet to acquire ("Transaction") 100% of URF Holding
Group Limited and its underlying businesses (collectively "U Group"). Currently, it is contemplated that the Transaction
will occur via a reverse takeover of the Company, which would result in the continued listing of the combined entity on Nasdaq.
The
Transaction is subject to, among other things, the execution of a mutually agreeable definitive agreement, completion of due diligence,
fairness opinions, stockholder approvals, if necessary, delivery of relevant financial statements, board of directors and special committee
approvals and satisfaction of all regulatory and Nasdaq approvals, where relevant. There can be no assurance that a definitive agreement
will be entered into or that the proposed transaction will be consummated on the terms set forth herein or at all. Therefore, it is possible
that the Transaction may never occur.
106
The
foregoing is only a brief description of the Transaction and does not purport to be a complete description of the proposed terms of the
Transaction and is qualified in its entirety by reference to the Term Sheet attached hereto as an exhibit and the definitive documents,
if materialized.
At
the Market Offering
On March 26, 2021, the Company
entered into an at the market offering agreement (the "Sales Agreement"), with H.C. Wainwright & Co., LLC, acting
as our sales agent (the "Sales Agent"), relating to the sale of our Class A Ordinary Shares, offered pursuant to the prospectus
supplement and the accompanying prospectus to the registration statement on Form F-3 (File No. 333-268873) (such offering, the "ATM
Offering", or "At The Market Offering"). In accordance with the terms of the Sales Agreement, we may offer and sell
shares of our Class A Ordinary Shares having an aggregate offering price of up to $15,000,000 from time to time through the Sales Agent
under such prospectus supplement and the accompanying prospectus. As of the date of this annual report, we have issued 7,875 Class A Ordinary
Shares pursuant to the ATM Offering.
Private
Placement Offering
Sales
of Class A Ordinary Shares
On
May 26, 2021, the Company entered into a private placement shares purchase agreement with Jurchen, issuing 138,793 Class A Ordinary Shares,
par value $10 each, at $28.82 per share, representing a 10% premium to the last closing price of the Company's Class A Ordinary
Shares on the NASDAQ stock exchange on that date. The Company received aggregate gross proceeds of $4,000,000 from the purchase of these
shares.
Sales
of convertible notes
On
December 9, 2022, Aptorum Group Limited entered into a Securities Purchase Agreement (the "Agreement") with Aenco Technologies
Ltd ("Note holder"), a Cayman Islands company that is indirectly 34.56% effectively owned by our non-executive director and
major shareholder, Ian Huen. Since Mr. Huen is an affiliate of the Company, the Agreement and the transaction contemplated therein has
been approved by the audit committee of the board of directors of the Company, which only consists of independent directors.
Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $3,000,000 (the "Note"). The Note is
unsecured, convertible into the Company's restricted Class A Ordinary Shares at the Note holder option. The Notes will have a maturity
date of 12 months subject to the Note holder's extension, a bullet interest rate of 7% per annum, and a conversion price of $12
per Class A Ordinary share ("Conversion Price"). The Company shall have an obligation to repay the principal amount and interest
of the Note on the maturity date in cash or in unregistered Class A Ordinary Shares or a combination of such at the Company's discretion.
The shares used to meet a repayment would be valued at the Conversion Price. In April 2023, the Note was fully converted into 250,000
Class A Ordinary Shares.
107
Factors
Affecting our Results of Operations
Research
and Development Expenses
We
believe our ability to successfully develop innovative drug candidates will be the primary factor affecting our long-term competitiveness,
as well as our future growth and development. Creating high quality global first-in-class or best-in-class drug candidates requires significant
investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments
in this area. As a result of this commitment, our pipeline of drug candidates has been steadily advancing. For more information on the
nature of the efforts and steps necessary to develop our drug candidates, see Item 4.B. "Business Overview— Lead Projects,
Natural Supplements and Other Projects under Development."
Our
drug candidates are still in development, and we have incurred and will continue to incur significant research and development costs
for pre-clinical studies and clinical trials. We expect that our research and development expenses will significantly increase in future
periods in line with the advancement and expansion of the development of our drug candidates.
Research
and development expenses include:
●
employee and consultant
    compensation related expenses, including salaries, benefits and share based compensation expenses;
●
expenses incurred for payments
    to CROs, investigators and clinical trial sites that conduct our clinical studies;
●
the cost of acquiring IP
    rights which did not meet the criteria of capitalization under the U.S. GAAP;
●
cost associated with sponsored
    research programs with various universities and research institutions
●
facilities, depreciation,
    and other expenses, which include office leases and other overhead expenses; and
●
costs associated with patent
    applications.
Research
and development expenses incurred totaled $9.2 million, $10.9 million and $11.6 million for the years ended December 31, 2022, 2021 and
2020, respectively, representing approximately 49.0%, 52.4%, and 54.7% of our total operating expenses for the respective period.
We
have been able to fund the research and development expenses for our drug candidates through a range of sources, including the proceeds
raised from our public offering and follow-on offerings on Nasdaq, private placement to other investors and line of credit facilities
from shareholders, related parties and banks.
This
diversified approach to funding allows us to not depend on any one method of funding for our research and development activities, thereby
reducing the risk that sufficient financing will be unavailable as we continue to accelerate the development of our drug candidates.
108
RESULTS
OF OPERATIONS
Results
of Operations for the Years ended December 31, 2022 and 2021
Financial
statements and information are presented for the years ended December 31, 2022 and 2021.
The
following table summarizes our results of operations for the years ended December 31, 2022 and 2021.
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Revenue
Healthcare services income
$
1,295,889
$
1,541,778
Operating expenses
Cost of healthcare services
(1,215,824
)
(1,459,924
)
Research and development expenses
(9,219,595
)
(10,869,642
)
General and administrative fees
(5,220,405
)
(5,409,302
)
Legal and professional fees
(2,888,140
)
(2,617,834
)
Other operating expenses
(261,038
)
(392,511
)
Total expenses
(18,805,002
)
(20,749,213
)
Other income (loss), net
Loss on investments in marketable securities, net
(134,134
)
(8,031,595
)
Gain on long-term investments
5,588,051
-
Loss on investments in derivatives, net
-
(4,289
)
Gain on use of digital currencies
-
4,918
Gain on derecognition of non-financial assets
-
75,000
Interest income (expense), net
146,588
(93,601
)
Loss on disposal of subsidiaries
-
(3,638
)
Sundry income
383,506
146,347
Total other income (loss), net
5,984,011
(7,906,858
)
Net loss
(11,525,102
)
(27,114,293
)
Impact
of COVID-19 Outbreak
On
January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International Concern"
and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include
restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The
coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial
markets of many countries, including the geographical area in which the Group operates. While the closures and limitations on movement,
domestically and internationally, are expected to be temporary, if the outbreak continues on its current trajectory the duration of the
supply chain disruption could reduce the availability, or result in delays, of materials or supplies to and from the Group, which in
turn could materially interrupt the Group's business operations. There was no material negative impact on the Group's 2022
and 2021 consolidated result of operations. However, given the speed and frequency of the continuously evolving developments with respect
to this pandemic, the Group cannot reasonably estimate the magnitude of the impact to its consolidated results of operations in the future.
We have taken every precaution possible to ensure the safety of our employees.
Additionally,
it is reasonably possible that estimates made in the consolidated financial statements have been, or will be, materially and adversely
impacted in the near term as a result of these conditions, including losses on investments; impairment losses related to long-lived assets
and current obligations.
109
Revenue
Healthcare services income
was $1,295,889 and $1,541,778 for the years ended December 31, 2022 and 2021, which related to the service income derived from the AML
clinic. The decrease in revenue was mainly due to the number of patients decreased when compared to last year due to one of the general
practitioner did not provide service in our clinic in 2022.
Cost of healthcare services
Cost of healthcare services
was $1,215,824 and $1,459,924 for the years ended December 31, 2022 and 2021, which related to the cost incurred by the AML clinic. The
decrease in cost of healthcare services was in line with the decrease in revenue.
Research
and development expenses
The
following table sets forth a summary of our research and development expenses for the years ended December 31, 2022 and 2021. The decrease
in research and development expenses was mainly due to the decrease in contracted research organizations services as we are in a planning
process for Phase 2 of our lead projects which does not require many services from contracted research organizations.
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Research and Development Expenses:
Payroll expenses
$
1,305,363
$
1,320,020
Contracted research organizations services
1,709,927
4,569,538
Sponsored research
17,061
248,865
Amortization and depreciation
1,064,012
961,447
Consultation
4,423,963
3,214,824
Loss on disposal of an intangible asset
205,189
-
Other R&D expenses
494,080
554,948
Total Research and Development Expenses
$
9,219,595
$
10,869,642
Year Ended
December 31,
2022
Year Ended
December 31,
2021
R&D expenses by projects
ALS-4
$
4,055,717
$
5,430,177
SACT-1
2,660,840
3,702,955
NLS-2
1,028,656
934,869
Other projects
1,474,382
801,641
Total
$
9,219,595
$
10,869,642
General
and administrative fees
The
following table sets forth a summary of our general and administrative expenses for the years ended December 31, 2022 and 2021. The decrease
in general and administration fees was mainly due to decrease in payroll expenses due to decrease in number of staff.
Year Ended
December 31,
2022
Year Ended
December 31,
2021
General and Administrative Fees:
Payroll expenses
$
3,793,367
$
3,951,421
Rent and rates
265,558
288,806
Travelling expenses
158,357
21,857
Amortization and depreciation
143,498
231,131
Insurance
546,675
555,159
Advertising and marketing expenses
98,082
95,953
Other expenses
214,868
264,975
Total General and Administrative Fees
5,220,405
5,409,302
110
Legal
and professional fees
For
the years ended December 31, 2022 and 2021, the legal and professional fees were $2,888,140 and $2,617,834, respectively. The increase
in legal and professional fees was mainly due to more consulting services engaged during 2022.
Other
operating expenses
For
the years ended December 31, 2022 and 2021, the other operating expenses was $261,038 and $392,511, respectively. The decrease in other
operating expenses was mainly due to an impairment loss on other receivables in 2021 while there were no such expenses in 2022.
Other
income (loss), net
For the years ended December 31, 2022 and 2021, the other income (loss),
net was $5,984,011 and $(7,906,858), respectively. The other income, net in 2022 was mainly consists of gain on long-term investments
and government subsidies; while the other loss, net in 2021 was mainly consists of loss on investment in marketable securities, net.
Net
loss attributable to Aptorum Group Limited
For
the years ended December 31, 2022 and 2021, net loss attributable to Aptorum Group Limited (excluding net loss attributable to non-controlling
interests) was $9,799,560 and $25,048,389, respectively.
Results
of Operations for the Years ended December 31, 2021 and 2020
Financial
statements and information are presented for the years ended December 31, 2021 and 2020.
The
following table summarizes our results of operations for the years ended December 31, 2021 and 2020.
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Revenue
Healthcare services income
$
1,541,778
$
911,509
Operating expenses
Cost of healthcare services
(1,459,924
)
(1,015,023
)
Research and development expenses
(10,869,642
)
(11,586,923
)
General and administrative fees
(5,409,302
)
(4,853,488
)
Legal and professional fees
(2,617,834
)
(2,854,225
)
Other operating expenses
(392,511
)
(877,391
)
Total expenses
(20,749,213
)
(21,187,050
)
Other (loss) income, net
(Loss) gain on investments in marketable securities, net
(8,031,595
)
25,241,556
Loss on investments in derivatives, net
(4,289
)
(199,031
)
Gain on use of digital currencies
4,918
-
Gain on derecognition of non-financial assets
75,000
-
Interest expense, net
(93,601
)
(243,628
)
Rental income
-
30,894
Loss on disposal of subsidiaries
(3,638
)
-
Sundry income
146,347
365,917
Total other (loss) income, net
(7,906,858
)
25,195,708
Net (loss) income
(27,114,293
)
4,920,167
111
Revenue
Healthcare
services income was $1,541,778 and $911,509 for the years ended December 31, 2021 and 2020, which related to the service income derived
from the AML clinic. The increase in revenue was mainly due to the number of patients increased when compared to last year.
Cost
of healthcare services
Cost
of healthcare services was $1,459,924 and $1,015,023 for the years ended December 31, 2021 and 2020, which related to the cost incurred
by the AML clinic. The increase in cost of healthcare services was mainly due to the number of patients increased when compared to last
year.
Research
and development expenses
The
following table sets forth a summary of our research and development expenses for the years ended December 31, 2021 and 2020. The decrease
in research and development expenses was mainly due to less sponsored research to universities in current period, partly offset by the
increase in contracted research organizations services and consultation due to the development progress of our lead projects.
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Research and Development Expenses:
Payroll expenses
$
1,320,020
$
1,145,550
Contracted research organizations services
4,569,538
4,184,285
Sponsored research
248,865
1,561,273
Amortization and depreciation
961,447
986,836
Consultation
3,214,824
2,906,222
Other R&D expenses
554,948
515,413
Impairment loss of intangible assets
-
200,000
Milestone payment
-
87,344
Total Research and Development Expenses
$
10,869,642
$
11,586,923
Year Ended
December 31,
2021
Year Ended
December 31,
2020
R&D expenses by projects
ALS-4
$
5,430,177
$
6,673,591
SACT-1
3,702,955
2,333,137
NLS-2
934,869
688,151
Other projects
801,641
1,892,044
Total
$
10,869,642
$
11,586,923
112
General
and administrative fees
The
following table sets forth a summary of our general and administrative expenses for the years ended December 31, 2021 and 2020. The increase
in general and administration fees was mainly due to increase in bonus expenses to our directors, employees, external consultants and
advisors. The increase is partly offset by a significant decrease in travelling expenses due to the outbreak of COVID-19.
Year Ended
December 31,
2021
Year Ended
December 31,
2020
General and Administrative Fees:
Payroll expenses
$
3,951,421
$
3,255,274
Rent and rates
288,806
366,615
Travelling expenses
21,857
140,019
Amortization and depreciation
231,131
347,824
Insurance
555,159
509,593
Advertising and marketing expenses
95,953
55,430
Other expenses
264,975
178,733
Total General and Administrative Fees
5,409,302
4,853,488
Legal
and professional fees
For
the years ended December 31, 2021 and 2020, the legal and professional fees were $2,617,834 and $2,854,225, respectively. The decrease
in legal and professional fees was mainly due to less one-off professional services engaged during 2021.
Other
operating expenses
For
the years ended December 31, 2021 and 2020, the other operating expenses was $392,511 and $877,391, respectively. The decrease in other
operating expenses was mainly due to an impairment loss and loss on disposal of fixed assets in 2020 while there were no such expenses
in 2021, and decreased exchange loss during 2021.
Other
(loss) income, net
For
the years ended December 31, 2021 and 2020, the other (loss) income, net was $(7,906,858) and $25,195,708, respectively. The other
loss, net in 2021 was mainly consists of loss on investment in marketable securities, net; while the other income, net in 2020 was mainly
derived from gains on investment in marketable securities.
Net
(loss) income attributable to Aptorum Group Limited
For
the years ended December 31, 2021 and 2020, net (loss) income attributable to Aptorum Group Limited (excluding net loss attributable
to non-controlling interests) was $(25,048,389) and $6,311,340, respectively.
B.
Liquidity and Capital Resources
In April 2022, the Group accepted
a banking facilities agreement offered by a bank. According to the banking facilities agreement, the bank offers a revolving loan of up
to $3 million to the Group. The Group may draw down from the revolving loan at any time through the day immediately preceding 12 months
of the agreement effective date. Interest will be payable on demand on the outstanding loans at the rate of either Hong Kong Interbank
Offered Rate ("HIBOR") plus 1.5% per annum for loan in Hong Kong Dollars, or Secured Overnight Financing Rate ("SOFR")
compounded rate plus 1.5% per annum for loan in the United State Dollars. The loan is secured by a charge over deposits of up to $3 million
when the Group draw down. As of the date of this annual report, the Group has drawn down $3 million from the banking facility,
113
The Group reported a net loss of $11,525,102 and net operating cash
outflow of $12,318,965 for the year ended December 31, 2022. In addition, the Group had an accumulated deficit of $65,337,075 as of December
31, 2022. The Group's operating results for future periods are subject to numerous uncertainties and it is uncertain if the Group
will be able to reduce or eliminate its net losses for the foreseeable future. If management is not able to generate significant revenues
from its product candidates currently in development, the Group may not be able to achieve profitability.
The Group's principal
sources of liquidity have been cash and line of credit facilities from related parties and banks. As of the date of this annual report,
the Group has approximately $1.4 million of restricted and unrestricted cash (excluded $3 million time deposits pledged to a loan), and
$9.5 million of undrawn line of credit facilities from related parties. In addition, the Group maintains its operating costs at a level
through strictly cost control and budget until the completion of the reverse takeover transaction.
The Group believes that available cash, together with the efforts from
aforementioned management plan and actions, should enable the Group to meet current anticipated cash needs for at least the next 12 months
after the date of this annual report are issued and the Group has prepared the consolidated financial statements on a going concern basis.
We may, however, need additional capital in the future to fund our continued operations. If we determine that our cash requirements exceeds
the amount of cash and cash equivalents we have at the time, we may seek to issue equity or debt securities or obtain credit facilities.
The issuance and sale of additional equity or convertible debts would result in further dilution to our shareholders. The incurrence of
indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We
cannot assure you the financing will be available in amounts or on terms acceptable to us, if at all.
Condensed
Summary of Cash Flows for the Years Ended December 31, 2022 and 2021
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Net cash used in operating activities
$
(12,318,965
)
$
(14,651,633
)
Net cash provided by investing activities
2,444,896
16,507,039
Net cash provided by financing activities
6,625,462
2,780,725
Net (decrease) increase in cash and restricted cash
(3,248.607
)
4,636,131
Operating
activities
Net
cash used in operating activities amounted to $12.3 million and $14.7 million for the years ended December 31, 2022 and 2021. The decrease
in net cash used in operating activities is mainly due to our net loss excluding non-cash items decreased by $2.0 million.
Investing
activities
Net
cash provided by investing activities amounted to $2.4 million and $16.5 million for the year ended December 31, 2022 and 2021. The decrease
in net cash provided by investing activities was due to there was a proceeds from disposal of investment in marketable securities of
$20.1 million in 2021, partly offset by a loan provided to a related party of $3.4 million in 2021 and a repayment of loan from a related
party of $3.0 million in 2022.
Financing
activities
Net
cash provided by financing activities amounted to $6.6 million and $2.8 million for the year ended December 31, 2022 and 2021. The increase
in net cash provided by financing activities was due to there was a loan repayment due to related parties of $5.5 million in 2021, partly
offset.by decrease in total proceeds from issuance of shares, warrants and debts by $1.6 million.
Condensed
Summary of Cash Flows for the Years Ended December 31, 2021 and 2020
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Net cash used in operating activities
$
(14,651,633
)
$
(15,931,913
)
Net cash provided by investing activities
16,507,039
1,842,164
Net cash provided by financing activities
2,780,725
12,421,932
Net increase (decrease) in cash and restricted cash
4,636,131
(1,667,817
)
114
Operating
activities
Net
cash used in operating activities amounted to $14.7 million and $15.9 million for the years ended December 31, 2021 and 2020. The decrease
in net cash used in operating activities is mainly due to our decreased operating expenses by $0.5 million and the decreased in changes
in other receivables and prepayment by $1.1 million.
Investing
activities
Net
cash provided by investing activities amounted to $16.5 million and $1.8 million for the year ended December 31, 2021 and 2020. The increase
in net cash provided by investing activities was due to the proceeds from disposal of investment in marketable securities of $20.1 million
in 2021, partly offset by a loan provided to a related party of $3.4 million.
Financing
activities
Net
cash provided by financing activities amounted to $2.8 million and $12.4 million for the year ended December 31, 2021 and 2020. The decrease
in net cash provided by financing activities was due to the decrease in net proceeds from issuance of Class A Ordinary Shares and warrants
by $12.8 million, partly offset by the increase in loan received from related parties of $2.5 million.
CAPITAL
EXPENDITURES
Our capital expenditures were $0.2 million, $0.1 million and $0.2 million
for the years ended December 31, 2022, 2021 and 2020, respectively. These capital expenditures were incurred primarily for investments
in facilities, leasehold improvements, equipment and technology.
COMMITMENTS
The
following table sets forth our contractual obligations as of December 31, 2022.
Payment Due by Period
Total
less than
one year
One to
three years
Three to
five years
US$
US$
US$
US$
Operating lease commitments
373,124
314,690
58,434
-
Debt obligations
3,700,110
3,087,000
613,110
-
Total
4,073,234
3,401,690
671,544
-
Operating
lease commitments
We
have several operating leases for office, laboratories and clinic. Operating lease commitments reflect our obligation to make payments
under these operating leases.
Debt
obligations
Debt
obligations reflects (i) outstanding principal obligations under a revolving loan of up to $3 million offered by a bank, and (ii) outstanding
principal obligations due to Aeneas Group Limited, a wholly-owned subsidiary of Aeneas Limited, under a line of credit arrangement.
115
The
Group can access up to a total $3 million under a revolving loan offered by HSBC. The revolving loan arrangement will be matured on June
26, 2023, and the interest on the outstanding principal indebtedness is at the rate of either Hong Kong Interbank Offered Rate ("HIBOR")
plus 1.5% per annum for loan in Hong Kong Dollars, or Secured Overnight Financing Rate ("SOFR") compounded rate plus 1.5%
per annum for loan in the United State Dollars. The loan is secured by a charge over deposits of up to $3 million when the Group draw
down.
The
Group can access up to a total $12 million under a line of credit offered by Aeneas Group Limited. The line of credit was originally
mature on August 12, 2022. The Group and Aeneas Group Limited has mutually agreed to extend the line of credit arrangement further 3
years to August 12, 2025. The interest on the outstanding principal indebtedness is at the rate of 8% per annum. The Group may early
repay, in whole or in part, the principal indebtedness and all interest accrued at any time prior to the maturity date without the prior
written consent of the lender and without payment of any premium or penalty.
CONTINGENT
PAYMENT OBLIGATIONS
We
have entered into agreements with independent third parties for purchasing office and laboratory equipment. As of December 31, 2022,
we had non-cancellable purchase commitments of $50,075.
We
have additional contingency payment obligations under each of the license agreements, such as milestone payments, royalties, research
and development funding, if certain condition or milestone is met.
Milestone
payments are to be made upon achievements of certain conditions, such as Investigational New Drugs ("IND") filing or U.S.
Food and Drug Administration ("FDA") approval, first commercial sale of the licensed products, or other achievements. The
aggregate amount of the milestone payments that we are required to pay up to different achievements of conditions and milestones for
all the license agreements signed as of December 31, 2021 are below:
Amount
Drug molecules: up to the conditions and milestones of
Preclinical to IND filing
$
222,564
From entering phase 1 to before first commercial sale
20,336,410
First commercial sale
14,282,051
Net sales amount more than certain threshold in a year
65,769,231
Subtotal
$
100,610,256
Diagnostics technology: up to the conditions and milestones of
Before FDA approval
$
205,554
$
100,815,810
For
the years ended December 31, 2022, 2021 and 2020, the Group incurred $nil, $nil and $129,203 milestone payments, respectively. For the
years ended December 31, 2022, 2021 and 2020, the Group did not incur any royalties or research and development funding, respectively.
C.
Research and Development, Patents and Licenses, etc.
As
of the date of this annual report, the Company has 10 exclusively licensed technologies in the area of neurology, infectious diseases,
gastroenterology, oncology, diagnostics and natural health. In addition, the Company is actively developing 7 proprietary technologies.
For
the years ended December 31, 2022, 2021, and 2020, the Group incurred $9,219,595, $10,869,642, and $11,586,923, respectively, on research
and development expenses.
D.
Trend Information
Other
than as disclosed elsewhere in this annual report, we are not aware of any material recent trends in production, sales and inventory,
the state of the order book and costs and selling prices since our last fiscal year. We are also unaware of any known trends, uncertainties,
demands, commitments or events for the year ended December 31, 2022 that are reasonably likely to have a material adverse effect on our
revenues, net income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily
to be indicative of future operating results or financial conditions.
116
E.
Critical Accounting Estimates
Our
consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities
in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other
assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities. Changes in the economic environment, financial markets, and any other parameters used in determining
such estimates could cause actual results to differ. We believe that the following estimates involve the most significant judgments used
in the preparation of our financial statements. The critical accounting estimates should be read in conjunction with our risk factors
as disclosed in "Item 3. Key Information—D. Risk Factors." See note 3 to our consolidated financial statements for
the year ended December 31, 2022 for more information. Out of our significant accounting policies, which are described in Note 3—Summary
of Significant Accounting Policies of our consolidated financial statements included elsewhere in this Form 20-F, certain accounting
policies are deemed "critical," as they require management's highest degree of judgment, estimates and assumptions,
including (i) impairment of long-lived assets; (ii) share based compensation, and (iii) Provision of income tax and valuation allowance
for deferred tax asset.
Impairment
of long-lived assets
We
review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may no longer be recoverable. When these events occur, we measure impairment by comparing the carrying value of the long-lived assets
to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. The sum
of the expected undiscounted cash flow is sensitive to key assumption such as projected revenue and research and development expenses,
which are required management's judgement. For the year ended December 31, 2022, we recorded $205,189 loss on disposal of a patented
license in research and development expenses. For the year ended December 31, 2021, no impairment loss was recorded. For the year ended
December 31, 2020, we recorded $330,445 of impairment loss of buildings in other operating expenses, and $200,000 impairment loss of
an unpatented license in research and development expenses.
Share
based compensation
We
use the fair value method of accounting for our stock options granted to directors, employees, external consultants and advisors to measure
the cost services received in exchange for the share based awards. Determining the appropriate valuation model and estimating the fair
values of share option grants requires the input of subjective assumptions, including expected stock price volatility, risk-free interest
rate, expected term from grant date, dividend rate, and dilution factor. The expected volatility assumption is based partially upon the
historical volatility of our Class A ordinary shares, which may or may not be a true indicator of future volatility. The assumptions
used in calculating the fair values of share option grants represent management's best estimates, but these estimates involve inherent
uncertainties and the application of judgment. As a result, if factors change and different assumptions are used, share-based compensation
expense could be significantly different from what we recorded in the current period. Share-based compensation expense is recognized
on a graded vesting basis, net of actual forfeitures in the period. In connection with the grant of share options to employees and non-employees,
we recorded share-based compensation charges of $1,123,122 and $523,877, respectively, for the year ended December 31, 2022, $1,203,000
and $479,460, respectively, for the year ended December 31, 2021, $1,191,957 and $286,608, respectively, for the year ended December
31, 2020.
Provision
of income tax and valuation allowance for deferred tax asset
Significant
judgment is required in determining income tax expense based on tax laws in the various jurisdictions in which we operate. In calculating
our effective income tax rate, estimates are required regarding the timing and amount of taxable and deductible items which will adjust
the pre-tax income or loss reported in various tax jurisdictions. Through our interpretation of local tax regulations, adjustments to
pre-tax income or loss for income or loss reported in various tax jurisdictions are reflected within various tax filings. Although we
believe that our estimates and judgments discussed herein are reasonable, actual results may be materially different than the estimated
amounts.
We
record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. Significant
judgment is required in determining the valuation allowance. In assessing the need for a valuation allowance, we consider all sources
of taxable income, including projected future taxable income, reversing taxable temporary differences and ongoing tax planning strategies.
If it is determined that we are able to realize deferred tax assets in excess of the net carrying value or to the extent we are unable
to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a
corresponding increase or decrease to earnings. As of December 31, 2022 and 2021, we have made fully valuation allowance to deferred
tax assets with amount of $15.7 million and $12.6 million, respectively.
117
Item
6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Senior Management
Below
is a list of our directors, senior management and any employees upon whose work we are dependent as of the date of this annual report,
and a brief account of the business experience of each of them. The business address for the directors and officers of Aptorum Group
Limited is 17 Hanover Square, London, W1S 1BN, United Kingdom.
In July 2022, Ms. Sabrina Khan resigned from her position as our Chief
Financial Officer, due to personal reasons. Mr. Martin Siu replaced Ms. Khan as the Company's Head of Finance on that same date.
Mr. Lui was appointed Chief
Executive Officer ("CEO"), effective June 1, 2022. Mr. Lui succeeds Mr. Ian Huen, who was stepping down as Chief Executive
Officer, but will remain on the Company's board as a non-executive director on the same effective date.
Name
Age
Position
Executive Officers
Darren Lui
42
Chief Executive Officer, Chief Accounting Officer and Executive Director
Clark Cheng
43
Chief Medical Officer and Executive Director
Martin Siu
44
Head of Finance
Thomas Lee
50
Head of Research and Development
Non-Management Directors
Ian Huen
43
Founder and Non-Executive Director
Charles Bathurst
67
Independent Non-Executive Director and Chair of Audit Committee
Mirko Scherer
54
Independent Non-Executive Director
Justin Wu
53
Independent Non-Executive Director and Chair of Compensation Committee
Douglas Arner
53
Independent Non-Executive Director and Chair of Nominating and Corporate Governance Committee
Executive
Officers
MR.
DARREN LUI
,
CEO, Chief Accounting Officer, and Executive Director
Mr.
Darren Lui is the CEO, Chief Accounting Officer, and an Executive Director of Aptorum Group Limited. Mr. Lui was previously the founder,
director and responsible officer of Varengold Capital Securities Limited and Varengold Capital Asset Management Limited in Hong Kong,
with subsidiaries operating brokerage, asset management, and investment businesses in Asia established since January 2015.
Prior
to this, he was a Director within the Fixed Income Group of Barclays Capital, where he spent over nine years from September 2005 to February
2014 developing and establishing their London, Singapore and New York teams. From September 2002 to August 2005 he was qualified as a
Chartered Accountant with Ernst & Young LLP (London), specializing in capital markets advisory.
Mr.
Lui graduated with First-Class Honors from Imperial College, London with a BSc degree in Biochemistry in June 2002. He is a Chartered
Accountant (ICAS), accredited with Chartered Financial Analyst designation, and an Associate of Chartered Institute of Securities &
Investments (UK).
118
DR.
CLARK CHENG, Chief Medical Officer and Executive Director, Aptorum Group Limited
Executive
Director, Aptorum Medical Limited
Dr.
Clark Cheng is the Chief Medical Officer and Executive Director of Aptorum Group Limited; he is also an executive director of Aptorum
Medical Limited (one of the Company's subsidiaries); Dr. Cheng also serves as a director of several other of our subsidiaries.
Prior to this appointment, Dr. Cheng served as the Operations Director since 2009 of Raffles Medical Group, and the company's Deputy
General Manager since 2011, representing an expanded role in the region. During his employment with Raffles Medical Group, he practiced
as a full-time medical administrator to mainly overlook Raffles Medical Hong Kong operations and also supported its development in the
PRC headquarter.
Dr.
Cheng received his medical training at the University College London, UK, in 2005 and completed his foundation year training at The Royal
Free Hospital in 2007. Pursuing his career in surgery, he obtained his membership of the Royal College of Surgeons of Edinburgh in 2009
and commenced his training in Orthopaedics where he practiced as Specialist Registrar at the National University Hospital, Singapore,
with special interest in Traumatology of the lower limbs. In 2011, he also obtained his Master in Business & Administration
with distinction from Tippie College of Business, University of Iowa, US.
Dr.
Cheng is an active member of the Singapore Chamber of Commerce, and appears regularly as a guest speaker for The Open University of Hong
Kong, The Airport Authority Hong Kong and other corporate events.
MR.
MARTIN SIU, Head of Finance
Mr.
Martin Siu is the Head of Finance of Aptorum Group Limited since July 2022. Prior to that, Mr. Siu supported over 8 listed companies
and licensed corporations in Asia as consultant, advisor and financial manager. Extensively experienced in audit and financial strategy,
he worked in the field of audit for over 18 years, also led a professional team to provide strategic consultancy services to sizable
corporate clients specialized in audit, compliance, risk management, financial reporting and fund raising. Mr. Siu is a certified public
accountant and graduated with a BBA (Hons) in Accounting at City University of Hong Kong in 2001.
DR.
THOMAS LEE, Head of Research and Development
Dr.
Thomas Lee serves as the Head of R&D of Aptorum Group Limited since April 1, 2019; he is also the Chairman of our Scientific Advisory
Board. Dr. Lee served as Chief Executive Officer and Chief Scientific Officer of Aptorum Therapeutics Limited, a wholly-owned therapeutics
subsidiary of Aptorum Group Limited from January 2018 to March 2019. Prior to that, Dr. Lee served as an Assistant Professor in the School
of Pharmacy, Faculty of Medicine, The Chinese University of Hong Kong from August 2013 to January 2018. Dr. Lee's key area of research
involves drug delivery with specialties including: formulation development of poorly soluble compounds, oral delivery, Nanotechnology,
and similar fields.
Prior
to academia, Dr. Lee accumulated big-pharma experience from the decade he spent at two multinational pharmaceutical companies in the
U.S. From November 2008 to July 2013, Dr. Lee worked at Celgene Corporation as a Senior Scientist of the Formulations Research &
Development. From June 2003 to November 2008, Dr. Lee worked at Novartis Pharmaceuticals Corporation, as a Principal Scientist.
Dr.
Lee graduated with B.Pharm. (Hons) Degree from The Chinese University of Hong Kong in December 1995, and received his Ph.D. in Pharmaceutical
Sciences (Drug Delivery) from the University of Wisconsin-Madison in the U.S in May 2003.
119
Non-Executive
Directors
MR.
IAN HUEN, Founder and Non-Executive Director
Mr.
Ian Huen is the Founder and a Non-Executive Director of Aptorum Group Limited. Mr. Huen served as Chief Executive Officer and Executive
Director of Aptorum Group Limited from October 2017 to May 2022. He has extensive experience in global asset management and previously
covered the U.S. healthcare sector as an equity research analyst at Janus Henderson Group plc (formerly known as Janus Capital). Mr.
Huen was the financial advisor in the sale of Seng Heng Bank Limited (Macau) to Industrial and Commercial Bank of China in 2007 and was
appointed as the vice president of the Board of General Meeting in Industrial and Commercial Bank of China (Macau) Capital Limited in
March 2007 for a term of 12 years until March 2019.
As
a trustee board member of the Dr. Stanley Ho Medical Development Foundation, Mr. Huen facilitates advisory, development funding, access
to research resources across Asia and continues to establish relationships with leading academic institutions to propel innovations in
healthcare.
Mr.
Huen graduated from Princeton University with an A.B. degree in Economics in June 2001, earned a MA in Comparative and Public History
from CUHK in June 2016. Mr. Huen is also a Chartered Financial Analyst ("CFA").
MR.
CHARLES BATHURST
Mr.
Bathurst is an Independent Non-Executive Director of Aptorum Group Limited, chairs the Audit Committee and is a member of both the Compensation
Committee and the Nominating and Corporate Governance Committee. He has over 47 years' experience of management and senior executive
roles across the financial services, technology and healthcare industries. In 2011, he set up his own independent consultancy service,
Summerhill Advisors Limited, advising on management structure, business development, financial reporting, internal audit controls and
compliance to both emerging and multinational companies. Today he holds Non-Executive and Advisory board positions on fast-growing companies
in healthcare, technology and financial services.
Prior
to establishing Summerhill, he served as a Director for J.O. Hambro Investment Management from September 2008 to August 2011, where he
oversaw the restructuring and commercialization of a range of in-house investment funds. He was appointed to the management board and
supervised reporting teams including Business development, accounting, regulatory reporting and internal controls.
From
April 2004 to March 2008, Mr. Bathurst served in multiple roles at Old Mutual Asset Managers (UK), including being a member of the senior
management team and head of international sales. Duties included business development, launching new investment funds, recruitment, establishing
and supervision of regulatory and financial reporting teams, as well as ensuring compliance with funds' regulatory requirements
and corporate governance standards.
Prior
to this, Mr. Bathurst was an advisor to Lion Capital Advisors Limited from April 2003 to March 2004, and from June 2002 to March 2003
business development consultant reporting to the board of management of LCF Rothschild Asset Management Limited.
From
April 1995 to March 2002, Mr. Bathurst joined a newly formed alternative investment management team at Credit Agricole Asset Management,
establishing the London Branch as the Managing Director in 1998. He was responsible for the recruitment and development strategy for
marketing, sales, investment, financial reporting, compliance and regulatory controls and investor relations.
Between
the period of September 1989 and December 1994, Mr. Bathurst worked for GNI, the largest futures and options execution and clearing broker
on the London International Financial Futures Exchange, where he focused on marketing to European and Middle East financial institutions.
In 1991, he joined a new management team to launch a series of specialist investment funds while serving as the Head of Sales and Product
Development.
Mr.
Bathurst graduated from the Royal Military Academy Sandhurst in November 1974 and commissioned into the British Army serving in the UK
and Germany.
120
DR.
MIRKO SCHERER
Dr.
Mirko Scherer is an Independent Non-Executive Director of Aptorum Group Limited. Dr. Scherer has been serving as the Chief Executive
Officer at CoFeS China (formerly known as "TVM Capital China") in Hong Kong since March 2015. CoFeS China focuses on cross-border
activities in the life science industry between China and the West. CoFeS China acts as a bridge between China and the West, assisting
Chinese investors and pharmaceutical companies accessing western innovations, while collaborating with innovative life science companies
from the West to enter the fast-growing China market.
Dr.
Scherer has served on the Board of the Frankfurt Stock Exchange from 2005 to 2007 and has been a board member of the Stichting Preferente
Aandelen QIAGEN since 2004. From August 2016 through July 2018, Dr. Scherer served as a Non-Executive board member of Quantapore Inc.
and from April 2015 through September 2017, he was a director of China BioPharma Capital I, (GP).
Dr.
Scherer is an experienced biotechnology executive and has led numerous financing M&A and licensing transactions, in both public and
private markets, in Europe and the U.S. for over 20 years. He consulted MPM Capital for the period between July 2012 and December 2014.
Dr. Scherer was also a co-founder and partner of KI Kapital from November 2008 to February 2014, a company which was specialized in providing
consultation in life science industry.
Prior
to working in the venture capital industry, Dr. Scherer co-founded GPC Biotech (Munich and Princeton, NJ) and served as the Chief Financial
Officer from October 1997 to December 2007. GPC Biotech engaged in numerous pharmaceutical alliances with companies such as Sanofi Aventis,
Boehringer Ingelheim, Altana (now part of Takeda), Yakult, and Pharmion (now part of Celgene). Over the past 20 years, Dr. Scherer has
established an extensive network in the U.S., European, and China's biotechnology and venture capital industry. Prior to his time
at GPC Biotech, Dr. Scherer worked as a consultant from May 1993 to June 1994 at the Boston Consulting Group.
Dr.
Scherer earned a Doctorate in Finance from the European Business School in Oestrich-Winkel/Germany in 1998, a MBA from Harvard Business
School in June 1996, and a degree in Business Administration from the University of Mannheim/Germany in February 1993.
PROFESSOR
JUSTIN WU
Professor
Justin Wu is an Independent Non-Executive Director of Aptorum Group Limited. He also has been serving as the Chief Operating Officer
of CUHK Medical Centre since August 2018. He served as the Associate Dean (Development) of the Faculty of Medicine at CUHK from July
2014 to June 2018 and the Associate Dean (Clinical) of the Faculty of Medicine at CUHK from December 2012 to July 2014, and has been
serving a Professor in the Department of Medicine and Therapeutics since 2009, also the Director of the S. H. Ho Center for Digestive
Health, a research center specializing in functional gastrointestinal diseases, reflux and motility disorders, and digestive endoscopy.
Active in research publications and assessments, Professor Wu served as the International Associate Editor of American Journal of Gastroenterology
("AJG"), and Managing Editor of Journal of Gastroenterology and Hepatology ("JGH"). He is also the Secretary
General of the Asian Neurogastroenterology and Motility Association ("ANMA"), and Secretary General of the Asia Pacific Association
of Gastroenterology ("APAGE").
Professor
Wu has won a number of awards including the Emerging Leader in Gastroenterology Award by the JGH Foundation, and the Vice Chancellor's
Exemplary Teaching Award at CUHK. Aside from his expertise in gastroenterology, Professor Wu has an extensive interest in the development
of Integrative Medicine in Hong Kong. He is the Founding Director of the Hong Kong Institute of Integrative Medicine, working closely
with the School of Chinese Medicine to develop an integrative model at an international level. The institute aims at maximizing the strength
of Western and Chinese medicine to provide a safe and effective integrative treatment to patients.
Professor
Wu served as a consultant and an advisory board member for Takeda Pharmaceutical, AstraZeneca, Menarini, Reckitt Benckiser and Abbott
Laboratory. He earned his Bachelor of Medicine and Bachelor of Surgery Degree (1993), and his Doctor of Medicine Degree (2000) from CUHK.
Additionally, he attained Fellowships of the Royal College of Physicians of Edinburgh and London in 2007 and 2012 respectively, Fellowship
of the Hong Kong College of Physicians in 2002, Fellowship of the Hong Kong Academy of Medicine in 2002, and has been an American Gastroenterological
Association Fellow since 2012.
121
PROFESSOR
DOUGLAS ARNER
Professor
Douglas W. Arner is an Independent Non-Executive Director of Aptorum Group Limited. Douglas is the Kerry Holdings Professor in Law and
Director and co-founder of the Asian Institute of International Financial Law at the University of Hong Kong, as well as Faculty Director
and co-founder of the LLM in Compliance and Regulation, LLM in Corporate and Financial Law, and Law, Innovation, Technology and Entrepreneurship
(LITE) Programmes. He served as Head of the HKU Department of Law from 2011 to 2014 and as Co-Director of the Duke University-HKU Asia-America
Institute in Transnational Law from 2005 to 2016. Douglas has published eighteen books and more than 200 articles, chapters and reports
on international financial law and regulation, most recently Reconceptualising Global Finance and its Regulation (Cambridge 2016) (with
Ross Buckley and Emilios Avgouleas) and The RegTech Book (Wiley 2019 (Janos Barberis and Ross Buckley). His recent papers are available
on SSRN at https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=524849, where he is among the top 75 authors in the world by total
downloads. Professor Arner led the development of Introduction to FinTech – launched with edX in May 2018 and now with over 80,000
learners spanning the world – and the foundation of the edx-HKU Online Professional Certificate in FinTech. He is a Senior Visiting
Fellow of Melbourne Law School, University of Melbourne, a non-executive director of NASDAQ and Euronext listed Aptorum Group and an
Advisory Board Member of the Centre for Finance, Technology and Entrepreneurship (CFTE). Professor Arner was an inaugural member of the
Hong Kong Financial Services Development Council (2013-2019) and has served as a consultant with, among others, the World Bank, Asian
Development Bank, APEC, Alliance for Financial Inclusion, and European Bank for Reconstruction and Development. He has lectured, co-organised
conferences and seminars and been involved with financial sector reform projects around the world. Professor Arner has been a visiting
professor or fellow at Duke, Harvard, the Hong Kong Institute for Monetary Research, IDC Herzliya, McGill, Melbourne, National University
of Singapore, University of New South Wales, Shanghai University of Finance and Economics, and Zurich, among others. Professor Arner
is the Senior Regulatory & Strategic Advisor of Aeneas Group, a multi-disciplinary financial services institution with technology-driven
growth initiatives.
He
holds a BA from Drury College (where he studied literature, economics and political science) in 1992, a JD (cum laude) from Southern
Methodist University in 1995, an LLM (with distinction) in banking and finance law from the University of London (Queen Mary College)
in 1996, and a PhD from the University of London in 2005.
B.
Compensation of Executive Directors and Executive Officers
The following table sets forth all cash compensation paid by us, as
well as certain other compensation paid or accrued, in fiscal 2022 to each of the following named executive officers. The total amount
was $3.6 million in 2022. A total 977,614 options were awarded to executive directors and executive officers in 2022. This amount does
not include business travel, relocation, professional and business association dues, and expenses reimbursed to such persons, and other
benefits commonly reimbursed or paid by companies in our industry. In addition to the compensation included in the table below, which
covers the fiscal year ended December 31, 2022, we issued an aggregate of 226,153 options to the persons included in the table below since
January 1, 2023 through the date of this report. (See "Item 6. Directors, Senior Management and Employees – E. Share Ownership")
On
June 1, 2022, Mr. Huen resigned as Chief Executive Officer but remains on the Company's board as a non-executive director. The
base salary of Mr. Huen has been adjusted to HK$213,200 (approximately US$27,333 per month) effective from the same date.
The
base salary of Mr. Martin Siu was set forth in an Operations Services & Secondment Agreement between Aptus Management Limited and
MG Consultancy Limited ("MG"), through which Mr. Siu provides his services. MG charges an initial monthly fee of approximately
USD7,600, which may be increased to approximately USD12,700 during the term of the agreement.
The
Board also determined to issue Dr. Cheng a discretionary cash bonus equal to one-month his base salary.
122
The
base salary of all directors and senior officer remains unchanged in 2023.
Name and Principal Position
Fiscal
Year
Salary
($)
(1)
Bonus
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
(9)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Darren Lui
(3)
( CEO and CAO)
2022
214,051
6,667
149,694
200,000
2,308
-
572,720
Clark Cheng
(4) (5)
(CMO)
2022
334,018
28,615
205,829
275,000
10,255
119
(5)
853,836
Thomas Lee
(6)
(Head of R&D)
2022
237,308
19,744
187,118
250,001
14,123
-
708,294
Martin Siu
(7)
(Head of Finance)
2022
43,672
-
-
-
-
-
43,672
Ian Huen
(2)
(former CEO)
2022
133,846
11,092
299,388
400,001
962
-
845,289
Sabrina Khan
(8)
(former CFO)
2022
170,246
69,533
138,467
185,000
9,553
-
572,799
(1)
The Appointment Letters
    provide salaries in HKD; for purposes of this table, we used a conversion ratio of HKD7.80 to USD1.00 to determine the salary in
    USD.
(2)
Mr. Huen is the founder
    of Aptorum Group and served as the Chief Executive Officer from October 2017 to May 2022. On June 1, 2022, Mr. Huen resigned as Chief
    Executive Officer but remains on the Company's board as a non-executive director.
(3)
Mr. Lui was appointed as
    the Chief Executive Officer and Chief Accounting Officer on June 1, 2022. Before that, Mr. Lui served as Chief Business Officer and
    President of Aptorum Group from October 2017 to May 2022, and Chief Business Officer from October 2017 to October 2019.  CGY
    is 50% held by Seng Fun Yee (Mr. Lui's spouse), 25% held by Mandy Lui (Mr. Lui's sister) and 25% held by Adrian Lui (Mr.
    Lui's brother). Mr. Lui controls and/or has substantial influence on the disposition and voting rights of the shares held by
    his spouse, but no such control over the shares held by his sister or brother. Hence, for the purposes of this filing and disclosure,
    50% of the consulting service fee and share options are deemed as Mr. Lui's compensation.
(4)
Dr. Cheng was appointed
    as the Chief Medical Officer of Aptorum Group on January 2, 2018. Dr. Cheng is the sole director and shareholder of ACC Medical Limited.
    Hence, for the purposes of this filing and disclosure, the consulting service fee and share options granted to ACC Medical Limited
    are deemed as Dr. Cheng's compensation.
(5)
Pursuant
    to Dr. Cheng's appointment letter, Dr. Cheng received a share bonus of 526 ordinary shares of AML, representing 5% of AML's
    issued and outstanding ordinary shares (the "Share Bonus") in 2018. Based on the Company's financial position and
    Dr. Cheng's performance, on each anniversary of Dr. Cheng's employment commencement date, the Share Bonus is eligible
    to increase by 1% of AML's then issued and outstanding ordinary share count per year up to a maximum additional amount of 5%
    of AML's then issued and outstanding ordinary share count by the 5
th
anniversary from his employment commencement
    date. As of the date of this annual report, Dr. Cheng received a total of 1,111 ordinary shares of AML, representing 10% of AML's
    issued and outstanding ordinary shares; during fiscal 2022, Dr. Cheng received 119 ordinary shares with cash value of which is USD119;
    during fiscal 2023, Dr. Cheng received 122 ordinary shares with cash value of which is USD122.
(6)
Dr. Lee was appointed as
    the Head of Research & Development of Aptorum Group on April 1, 2019. Before that, he was the Chief Executive Officer and Chief
    Scientific Officer of Aptorum Therapeutics Limited, a wholly owned therapeutics subsidiary of Aptorum Group Limited from January
    2018 to March 2019. The monthly salary of Dr. Lee was adjusted to HK$154,000 (approximately US$19,744) since January 1, 2022.
(7)
Mr. Siu was appointed as
    Head of Finance of Aptorum Group from July 2022.
(8)
Miss Khan served as the
    Chief Financial Officer of Aptorum Group from October 2017 to October 2022.
(9)
Represents deferred bonuses
    provided to directors and executive officers, which will be vested after 9.5 months – 21.5 months vesting period.
123
Compensation
of Non-executive Directors
The following table sets forth information for the fiscal year ended
December 31, 2022, regarding the compensation of our non-executive directors who at December 31, 2022, were not also named executive officers.
A total 89,556 options were awarded to non-executive directors in 2022. In addition to the compensation included in the table below,
which covers the fiscal year ended December 31, 2022, we issued an aggregate of 24,616 Class A Ordinary Shares awards to the persons included
in the table below since January 1, 2023 through the date of this report.
Name
Fees Earned
or Paid
in Cash
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Non-qualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Ian Huen
(6)
191,333
-
-
-
-
-
191,333
Charles Bathurst
(1)
47,509
(2)
-
22,455
30,001
-
-
99,965
Mirko Scherer
(3)
31,673
-
22,455
30,001
-
-
84,129
Justin Wu
(4)
31,673
-
22,455
30,001
-
-
84,129
Douglas Arner
(5)
31,673
-
22,455
30,001
-
-
84,129
(1)
Mr.
Bathurst was appointed as one of our directors as of October 2017 and is entitled to receive $50,676 annually for his combined services
as a director and a committee member effective from January 1, 2022.
(2)
Mr.
Bathurst's appointment Letter provides his salary in GBP. For purposes of this table, we used a conversion ratio of GBP0.8 to USD1.00
to determine his salary in USD; however, the ultimate amount paid is based on the actual rate as of the relevant pay day at the end of
each month.
(3)
Dr.
Scherer was appointed as one of our directors as of October 2017 and is entitled to receive $31,673 annually for his services as a director
effective from January 1, 2022.
(4)
Professor
Wu was appointed as one of our directors as of October 2017 and is entitled to receive $31,673 annually for his combined services as
a director and a committee member effective from January 1, 2022.
(5)
Professor
Arner's appointment as one of our directors became effective as of April 1, 2018, and is entitled to receive $31,673 annually for
his combined services as a director and a committee member effective from January 1, 2022.
(6)
On
June 1, 2022, Mr. Huen resigned as Chief Executive Officer but remain on the Company's board as a non-executive director. His base
salary has been adjusted to HK$213,200 (approximately US$27,333 per month)
2017
Share Option Plan
On October 13, 2017, we adopted the 2017 Share Option Plan (the "Option
Plan") and on November 5, 2021, we amended the Option Plan. Under the Option Plan, up to an aggregate of 550,000 Class A Ordinary
Shares (subject to subsequent adjustments described more fully below) may be issued pursuant to awards under the Option Plan. Subsequent
adjustments include that on each January 1, starting with January 1, 2020, an additional number of shares equal to the lesser of (A) 2%
of the outstanding number of Class A Ordinary Shares (on a fully diluted basis) on the immediate preceding December 31, and (B) such lower
number of Class A Ordinary Shares as may be determined by the board of directors, subject in all cases to adjustments as provided in Section
10 of the Option Plan. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions as determined by
the board of directors.
124
We
adopted the Option Plan to provide additional incentives to selected directors, officers, employees and consultants, and enable our Company
to obtain and retain the services of these individuals. The Option Plan will enable us to grant options, restricted shares or other awards
to our directors, employees and consultants. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions
as determined by the board of directors.
21,853 options were granted on March 15, 2019 to directors, employees,
external consultants and advisors of the Group. One-half of each option grant vests on January 1, 2020 and expires on December 31, 2030,
and the other half vests on January 1, 2021 and expires on December 31, 2031. The exercise price is $129.1 per share, which was based
on the closing price of the shares traded on the NASDAQ stock exchange on the trading day preceding the grant date.
53,694 options were granted on March 16, 2020 to directors, employees,
external consultants and advisors of the Group. One-half of each option grant vests on January 1, 2021 and expires on December 31, 2031
and the other half vests on January 1, 2022 and expires on December 31, 2032. The exercise price is $29.9 per share, which was based on
the average closing price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant
date.
14,896 options were granted on June 1, 2020 to directors and employees
of the Group. Nearly one-half of each option grant vests on December 1, 2020 and expires on November 30, 2030 and the remaining vests
on January 1, 2021 and expires on December 31, 2031. The exercise price is US$31.1 per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.
2,748 options were granted on August 10, 2020 to Dr. Weiss, which will
be vested on August 10, 2021 and expires on August 9, 2032. The exercise price is $36.4 per share, which was based on the average closing
price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.
75,235 options were granted on March 11, 2021 to directors, employees,
external consultants and advisors of the Group with an exercise price of $27.6 per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.
36,796 options
vest on January 1, 2022 and expire on December 31, 2032; 36,808 options vest on January 1, 2023 and expire on December 31, 2033; 906 options
vest on June 8, 2021 and expire on June 7, 2032; and 725 options vest on July 14, 2021 and expire on July 13, 2032.
153,146
options were granted on March 8, 2022 to directors, employees, external consultants and advisors of the Group with an exercise price
of $13.4 per share, which was based on the average closing price of the shares traded on the NASDAQ stock exchange for the five trading
days immediately preceding the grant date.
74,881 options vest on January 1, 2023 and expire on December 31, 2033; 74,906
options vest on January 1, 2024 and expire on December 31, 2034; 1,866 options vest on June 8, 2022 and expire on June 7, 2033; and 1,493
options vest on July 14, 2022 and expire on July 13, 2033.
226,153 options were granted
on March 31, 2023 to directors and employees of the Group with an exercise price of $2.68 per share, which was based on the last closing
price of the shares traded on the NASDAQ stock exchange on the grant date. Besides, 136,200 shares awards were granted on March 31, 2023
to directors, employees and external consultants. All options vests on October 1, 2023 and expires on September 30, 2033.
125
C.
Board Practices
Board
of Directors
Our
Board of Directors currently consists of seven members, all of whom were elected pursuant to our current Memorandum and Articles. Our
nominating and governance committee and board of directors will consider a broad range of factors relating to the qualifications and
background of nominees, which may include diversity and is not limited to race, gender or national origin. We have no formal policy regarding
board diversity. Our nominating and governance committee's and board of directors' priority in selecting board members is
identification of persons who will further the interests of our shareholders through his or her established record of professional accomplishment,
the ability to contribute positively to the collaborative culture among board members, knowledge of our business, understanding of the
competitive landscape and professional and personal experiences and expertise relevant to our growth strategy.
Committees
of the Board of Directors
Our
Board of Directors has established an audit committee, a compensation committee and a nominating and corporate governance committee,
each of which operates pursuant to a separate charter adopted by our Board of Directors. The composition and functioning of all of our
committees will comply with all applicable requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection
Act, the NASDAQ Global Market and SEC rules and regulations. Our Board of Directors may establish other committees from time to time.
Audit
Committee
Charles
Bathurst, Douglas Arner and Justin Wu currently serve on the audit committee, which is chaired by Charles Bathurst. Our Board of Directors
has determined that each member of the audit committee is "independent" for audit committee purposes as that term is defined
in the rules of the SEC and the applicable rules of the NASDAQ Global Market. The audit committee's responsibilities include:
●
selecting and appointing
    our independent registered public accounting firm, and approving the audit and permitted non-audit services to be provided by our
    independent registered public accounting firm;
●
evaluating the performance
    and independence of our independent registered public accounting firm;
●
monitoring the integrity
    of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements
    or accounting matters;
●
reviewing the adequacy
    and effectiveness of our accounting and internal control policies and procedures;
●
establishing procedures
    for the receipt, retention and treatment of accounting-related complaints and concerns;
●
reviewing and discussing
    with the independent registered public accounting firm the results of our year-end audit, and recommending to our Board of Directors,
    based upon such review and discussions, whether our financial statements shall be included in our annual report on Form 20-F;
●
reviewing all related party
    transactions for potential conflict of interest situations and approving all such transactions; and
●
reviewing the type and
    presentation of information to be included in our earnings press releases, as well as financial information and earnings guidance
    provided by us to analysts and rating agencies.
126
Audit
Committee Financial Expert
We
have one financial expert as of the date of this report. Our Board of Directors has determined that Mr. Charles Bathurst, Chair of our
audit committee, qualifies as an "audit committee financial expert" as defined in the SEC rules and satisfies the financial
sophistication requirements of The NASDAQ Global Market.
Compensation
Committee
Charles
Bathurst, Douglas Arner and Justin Wu currently serve on the compensation committee, which is chaired by Justin Wu. Our Board of Directors
has determined that each member of the compensation committee is "independent" as that term is defined in the applicable
rules of the NASDAQ Global Market. The compensation committee's responsibilities include:
●
reviewing the goals and
    objectives of our executive compensation plans, as well as our executive compensation plans in light of such goals and objectives;
●
evaluating the performance
    of our executive officers in light of the goals and objectives of our executive compensation plans and recommending to our Board
    of Directors with respect to the compensation of our executive officers;
●
reviewing the goals and
    objectives of our general compensation plans and other employee benefit plans as well as our general compensation plans and other
    employee benefit plans in light of such goals and objectives;
●
retaining and approving
    the compensation of any compensation advisors;
●
reviewing all equity-compensation
    plans to be submitted for shareholder approval under the NASDAQ listing rules, and reviewing and approving all equity-compensation
    plans that are exempt from such shareholder approval requirement;
●
evaluating the appropriate
    level of compensation for board and board committee service by non-employee directors; and
●
reviewing and approving
    description of executive compensation included in our annual report on Form 20-F.
Nominating
and Corporate Governance Committee
Charles
Bathurst, Douglas Arner and Justin Wu currently serve on the nominating and corporate governance committee, which is chaired by Professor
Arner. Our Board of Directors has determined that each member of the nominating and corporate governance committee is "independent"
as that term is defined in the applicable rules of the NASDAQ Global Market. The nominating and corporate governance committee's
responsibilities include:
●
assisting our Board of
    Directors in identifying prospective director nominees and recommending nominees for election by the shareholders or appointment
    by our Board of Directors;
●
advising the board of directors
    periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with
    applicable laws and regulations, and making recommendations to our Board of Directors on all matters of corporate governance and
    on any corrective action to be taken;
●
overseeing the evaluation
    of our Board of Directors; and
●
recommending members for
    each board committee of our Board of Directors.
127
Scientific
Advisory Board
s
We
restructured the Scientific Assessment Committee into a newly formed Scientific Advisory Board. The Scientific Advisory Board shall help
the Company sharpen its focus on innovation and technological advancements and address critical scientific challenges in our research
and development; it will provide overall advise on the scientific development of the company. As of the date of this annual report, we
have 29 members on this board.
In
light of the Company's focus on developing treatment for infectious diseases, we have established a second scientific advisory
board, i.e., the Infectious Diseases Scientific Advisory Board in April 2020. As of the date hereof, the Infectious Diseases Scientific
Advisory Board has 4 members.
Family
Relationships
There
is no family relationship among any of our directors or executive officers.
Duties
of Directors
Under
Cayman Islands law, our directors have a duty to act honestly, in good faith and bona fide with a view to our best interests. Our directors
also have a duty to exercise the care, diligence and skills that a reasonably diligent person would exercise in comparable circumstances.
In fulfilling their duty of care to us, our directors must ensure compliance with our Memorandum and Articles. We have the right to seek
damages if a duty owed by our directors is breached.
The
functions and powers of our Board of Directors include, among others:
●
appointing officers and
    determining the term of office of the officers;
●
authorizing the payment
    of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;
●
exercising the borrowing
    powers of the company and mortgaging the property of the company;
●
executing checks, promissory
    notes and other negotiable instruments on behalf of the company; and
●
maintaining or registering
    a register of mortgages, charges or other encumbrances of the company.
Terms
of Directors and Officers
There
is no Cayman Islands law requirement that a director must hold office for a certain term and stand for re-election unless the resolutions
appointing the director impose a term on the appointment. The Memorandum and Articles provide that we have a staggered board of
directors consisting of three classes of directors, with directors serving staggered three-year terms. Our Board of Directors is divided
into three classes of directors. At each annual general meeting of shareholders, one class of directors will be elected for a three-year
term to succeed the class whose terms are then expiring, to serve from the time of election and qualification until the third annual
meeting following their election or until their earlier death, resignation or removal, starting with the Annual General Meeting of Shareholders
to be held in December 2023. The Company's Board has initially designated the three classes to contain the directors set forth
below. Shareholders will only elect the Class I directors at the Company's next Annual General Meeting; the Class III and II directors
will be deemed to have been re-elected at the February 2023 Special Meeting and shall not be required to stand for re-election until
the years specified below.
Name
    & Class
Positions
Expiration of Director
    Term/Re-Election Year
Class
    III
Darren
    Lui
Chief
    Executive Officer,
Chief Accounting Officer & Executive Director
2025
Clark
    Cheng
Chief
    Medical Officer & Executive Director
2025
Class
    II
Ian
    Huen
Non-Executive
    Director
2024
Class
    I
Charles
    Bathurst
Independent
    Non-Executive Director
December
    2023
Mirko
    Scherer
Independent
    Non-Executive Director
December
    2023
Justin
    Wu
Independent
    Non-Executive Director
December
    2023
Douglas
    Arner
Independent
    Non-Executive Director
December
    2023
128
We
do not have any age limit requirements relating to our director's term of office.
Our
Memorandum and Articles also provide that our directors may be removed by the directors or ordinary resolution of the shareholders, and
that any vacancy on our Board of Directors, including a vacancy resulting from an enlargement of our Board of Directors (which shall
not exceed any maximum number stated therein), may be filled by ordinary resolution or by vote of a majority of our directors then in
office.
Employment
Agreements
We
have entered into agreements with our executive officers. Each of our executive officers is employed for a specified time period, which
will be renewed upon both parties' agreement. We may terminate the employment for cause, at any time, without notice or remuneration,
for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance
of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order,
fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties.
Each
executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or
disclose to any person, corporation or other entity without written consent, any confidential information. Each executive officer has
also agreed to assign to our group all his or her all inventions, improvements, designs, original works of authorship, formulas, processes,
compositions of matter, computer software programs, databases, mask works, concepts and trade secrets.
D.
Employees
As
of the date of this annual report, we have 18 full-time and 1 part-time employees. Of these, 6 full-time are engaged in research and
development and laboratory operations, 7 full-time are engaged in general and administrative functions and 5 full-time and 1 part-time
are engaged in the clinic operation. As of the date of this annual report, 18 of our employees are located in Asia and 1 of our employees
is located in Europe. In addition, we have engaged and may continue to engage 66 independent contracted consultants and advisors to assist
us with our operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have
never experienced any employment related work stoppages, and we consider our relations with our employees to be good.
E.
Share Ownership
The
following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange
Act, of our Ordinary Shares as of the date of this annual report.
●
each of our directors and
    executive officers who beneficially own our Ordinary Shares; and
●
each person known to us
    to own beneficially more than 5.0% of our Ordinary Shares.
Beneficial ownership includes
voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws,
the persons named in the table have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned by
them. Percentage of beneficial ownership of each listed person is based on 1,719,522 Class A Ordinary Shares and 2,243,776 Class B Ordinary
Shares outstanding as of the date of this annual report.
Information
with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or more of our Ordinary Shares.
Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment
power with respect to securities. In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage
ownership of such person, Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable
or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing
the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable
community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned
by them. As of the date of the annual report, we have 3 shareholders of record holding beneficial ownership of 5% or more, none of which
are located in the United States.
129
Unless
otherwise indicated, the business address of each of the individuals is 17 Hanover Square, London, W1S 1BN, United Kingdom.
Name and Address of Beneficial Owner
Class A
Ordinary
Shares
Beneficially
Owned
Class B
Ordinary
Shares
Beneficially
Owned
Percentage
of Total
Class A and
Class B
Ordinary
Shares
(1)
Percentage
of Total
Voting
Power
(2)
Darren Lui
(3)
44,135
214,134
6.49
%
9.49
%
Clark Cheng
(4)
*
-
*
*
Martin Siu
-
-
-
-
Thomas Lee
*
-
*
*
Ian Huen
(5)
462,480
1,606,147
51.20
%
71.21
%
Charles Bathurst
*
-
*
*
Mirko Scherer
*
-
*
*
Justin Wu
*
-
*
*
Douglas Arner
*
-
*
*
All directors and executive officers as a group (9 persons)
625,920
1,820,281
59.27
%
80.73
%
5% Beneficial Owner
Jurchen Investment Corporation
(5)
424,362
1,606,147
50.54
%
71.21
%
Sui Fong Isabel Huen Ng
(6)
21,199
190,787
5.35
%
8.45
%
CGY Investments Limited
(7)
85,299
401,537
12.17
%
17.79
%
*
Less
than 1% of total outstanding Ordinary Shares on an as converted basis.
(1)
For each person and group
    included in this column, percentage ownership is calculated by dividing the number of Class A Ordinary Shares and Class B Ordinary
    Shares beneficially owned by such person or group, including shares that such person or group has the right to acquire within 60
    days after the date of this annual report, by the sum of Class A Ordinary Shares and Class B Ordinary Shares, and the number
    of Class A Ordinary Shares that such person or group has the right to acquire beneficial ownership within 60 days after the
    date of this annual report. Following the IPO, each Class B Ordinary Share can be converted at any time on a one-for-one basis into
    Class A Ordinary Shares at the discretion of the holder.
(2)
For each person and group
    included in this column, percentage of total voting power represents voting power based on both Class A Ordinary Shares and
    Class B Ordinary Shares beneficially owned by such person or group with respect to all of our outstanding Class A Ordinary
    Shares and Class B Ordinary Shares as one single class. Holders of Class A Ordinary Shares are entitled to one vote per
    share and holders of Class B Ordinary Shares are entitled to one hundred votes per share on all matters subject to a shareholders'
    vote.
(3)
Includes
    (i) 1,485 Class A Ordinary Shares and 13,365 Class B Ordinary Shares held by DSF Investment Holdings Limited, which is 29.5% held
    by Mr. Lui, and 70.5% held by Eternal Clarity Holdings Limited which is wholly-owned by Mr. Lui's mother, Ms. Emily Woo, and
    is located at Flat A2, 11
th
Floor, Wing Hang Insurance Building, 11 Wing Kut Street, Hong Kong, (ii) 24,094 Class A Ordinary
    Shares and 200,769 Class B Ordinary Shares held by CGY Investments Limited, which is 50% held by Seng Fun Yee (Mr. Lui's spouse),
    25% held by Mandy Lui (Mr. Lui's sister) and 25% held by Adrian Lui (Mr. Lui's brother), and (iii) options held by CGY
    Investments Limited to purchase 18,556 Class A Ordinary Shares. Mr. Lui only controls and/or has substantial influence on the disposition
    and voting rights of 29.5% of the Aptorum shares DSF owns; Mr. Lui controls and/or has substantial influence on the disposition and
    voting rights of the shares held by his spouse, but no such control over the shares held by his sister or brother regarding the CGY
    shares.
(4)
Pursuant
to his appointment letter, Dr. Cheng received 10% of Aptorum Medical Limited's ordinary shares as of the date of this annual report.
ACC Medical Limited, is a company wholly-owned by Dr. Cheng. Dr. Cheng maintains sole voting control over the shares held by ACC Medical
Limited, the principal office address of which is at Unit 1, 13/F, Block A, 19-25 Jervois Street, Hong Kong.
(5)
Includes
    370,308 Class A Ordinary Shares owned by Jurchen, warrants held by Jurchen to purchase 54,054 Class A Ordinary Shares, options granted
    to Mr. Huen to purchase 38,118 Class A Ordinary Shares, and 1,606,147 Class B Ordinary Shares owned by Jurchen. Jurchen Investment
    Corporation, is a company wholly-owned by Mr. Huen. Mr. Huen maintains sole voting control over the shares held by Jurchen, the principal
    office address of which is at 17
th
Floor, Guangdong Investment Tower, 148 Connaught Road Central, Hong Kong.
130
(6)
Sui Fong Isabel Huen Ng
    is the mother of Mr. Ian Huen. Mr. Ian Huen does not have control nor substantial influence on the disposition and voting rights
    of the shares held by his mother.
(7)
CGY Investments Limited
    is 50% held by Seng Fun Yee (Mr. Lui's spouse), 25% held by Mandy Lui (Mr. Lui's sister) and 25% held by Adrian Lui (Mr.
    Lui's brother). Mr. Lui controls and/or has substantial influence on the disposition and voting rights of the shares held by
    his spouse, but no such control over the shares held by his sister or brother. Includes (i) 48,187 Class A Ordinary Shares and 401,537
    Class B Ordinary Shares held by CGY Investments Limited, and (ii) options held by CGY Investments Limited to purchase 37,112 Class
    A Ordinary Shares.
F.
Disclosure of a registrant's action to recover erroneously awarded compensation.
None.
Item
7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major Shareholders
Please
refer to "Item 6. Directors, Senior Management and Employees—E. Share Ownership."
B.
Related Party Transactions
Lines
of Credit
On August 13, 2019 (the "Effective Date"), Aptorum Therapeutics
Limited ("ATL"), one of our wholly-owned subsidiaries, entered into two separate Promissory Notes and Line of Credit Agreements
(the "Agreements") with Aeneas Group Limited and Jurchen Investment Corporation ("Jurchen"). The Aeneas Group
Limited Agreement and Jurchen Agreement provide ATL with a line of credit up to twelve million dollars ($12,000,000) and three million
dollars ($3,000,000), respectively (collectively, the "Line of Credit"), representing the maximum aggregate amount of the
advances of funds from the Line of Credit that may be outstanding at any time under the Line of Credit (the "Principal Indebtedness").
ATL may draw down from the Line of Credit at any time through the day immediately preceding the third anniversary of the Effective Date
(the "Maturity Date"). As of the date of this annual report, the Jurchen Agreement is matured, and the maturity of Aeneas
Group Limited Agreement is extended for additional three years and will be matured on August 12, 2025. Interest is payable on the outstanding
Principal Indebtedness at the rate of eight percent (8%) per annum, payable semi-annually in arrears on February 12 and August 12 in each
year. ATL may pre-pay in whole or in part, the Principal Indebtedness of the Line of Credit, and all interest accrued at any time prior
to the Maturity Date, without penalty. Under the Agreements, in addition to certain standard covenants, we are also not permitted, without
the prior written consent of Aeneas Group and Jurchen to (i) liquidate, dissolve or wind-up our business and affairs; (ii) effect any
merger or consolidation transaction; (iii) sell, lease, transfer, license or otherwise dispose, in a single transaction or series of related
transactions, all or substantially all of our assets; or (iv) consent to any of the foregoing. The Agreements are subject to standard
events of default, which if not cured within the agreed upon cure period, permits Aeneas Group Limited or Jurchen, as applicable, to declare
the outstanding Principal Indebtedness immediately due and payable, to exercise any other remedy provided for in the Agreements or any
other right available to Aeneas Group Limited or Jurchen as provided at law or in equity. Jurchen and Aeanas Group Limited also maintain
the right to set-off during the term of the Agreements. As of the date of this annual report, the Company has drawn down $2.5 million
from the Line of Credit.
On
November 17, 2021, Aptorum Therapeutics Limited (the "Lender") entered into a loan agreement with Talem Medical Group Limited
("Talem" or the "Borrower"). According to the loan agreement, the Lender will grant a loan of up to AUD 4.7 million
for the Borrower for general working capital purposes of the Borrower and its subsidiaries. The loan is interest-bearing at a rate of
10% per annum and secured by the entire issued shares of Talem Medical Group (Australia) Pty Limited held by the Borrower. The loan is
initially matured 6 months from the date of the first drawdown date. The maturity date may be extended for 6 months to the first extended
maturity date, and further extended for another 6 months to the second extended maturity date, if certain conditions stated in loan agreement
are satisfied. We consider this loan to be a related party transaction as certain insiders, including Ian Huen, our Chief Executive Officer,
Executive Director and Director of the Lender; Dr. Clark Cheng, our Chief Medical Officer, Executive Director and Director of the Lender;
Darren Lui, our President, Executive Director and Director of the Lender; Professor Justin Wu, our Independent Non-Executive Director;
and Dr. Thomas Lee, our Head of Research and Development and Director of the Lender have direct and indirect minority interests in the
Borrower. As of the date of this annual report, there is no outstanding balance from the Borrower.
On January 13, 2022, the Group
entered a line of credit facility with Libra to provide up to a total $1 million in line of credit debt financing for its daily operation
The line of credit is originally matured on January 12, 2023, and is extended for additional 3 years. The interest on the outstanding
principal indebtedness is at the rate of 10% per annum. As of the date of this annual report, $0.4 million is outstanding from Libra Sciences
Limited.
131
Sales
and Purchases of Securities
Private
Placement Offering
Sale
of Class A Ordinary Shares
On May 26, 2021, the Company
entered into a private placement shares purchase agreement with Jurchen, issuing 138,793 Class A Ordinary Shares, par value $10 each,
at $28.82 per share, representing a 10% premium to the last closing price of the Company's Class A Ordinary Shares on the NASDAQ
stock exchange on that date. The Company received aggregate gross proceeds of $4,000,000 from the purchase of these shares.
Sales
of convertible notes
On
December 9, 2022, Aptorum Group Limited entered into a Securities Purchase Agreement (the "Agreement") with Aenco Technologies
Ltd ("Note holder"), a Cayman Islands company that is indirectly 34.56% effectively owned by our non-executive director and
major shareholder, Ian Huen. Since Mr. Huen is an affiliate of the Company, the Agreement and the transaction contemplated therein has
been approved by the audit committee of the board of directors of the Company, which only consists of independent directors.
Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $3,000,000 (the "Note"). The Note is
unsecured, convertible into the Company's restricted Class A Ordinary Shares at the Note holder option. The Notes will have a maturity
date of 12 months subject to the Note holder's extension, a bullet interest rate of 7%
per annum, and a conversion price of
$12.0 per Class A Ordinary share ("Conversion Price"). The Company shall have an obligation to repay the principal amount
and interest of the Note on the maturity date in cash or in unregistered Class A Ordinary Shares or a combination of such at the Company's
discretion. The shares used to meet a repayment would be valued at the Conversion Price. As of the date of this annual report, the convertible
note is fully converted into 250,000 Class A Ordinary Shares.
Disposal
of a subsidiary
On
May 27, 2021, Aptorum Therapeutics Limited, which is a wholly owned subsidiary of Aptorum Group Limited, entered a Share Sale Agreement
to sell all of the shares of SMPTH Limited, a previously wholly owned subsidiary of Aptorum Therapeutics Limited, to Aeneas Group Limited
at the consideration $1.
Consulting
Arrangements
CGY
Investment Limited
We
entered into a consulting agreement with CGY Investment Limited ("CGY") effective on January 10, 2020. Pursuant to this agreement,
CGY shall provide certain consultancy, advisory, and management services to the Group on potential investment projects related to health
care or R&D platform; CGY shall be initially paid a monthly service fee of HK$104,000 per month (approximately US$13,333 per month),
during the term of the agreement, which is remain in effect unless it is terminated. The monthly service fee is adjusted to HK$171,200
(approximately US$21,949) with effect from March 1, 2022. The agreement may be terminated by either party providing 1-months written
notice to the other party.
CGY
is 50% held by Seng Fun Yee (Mr. Lui's spouse), 25% held by Mandy Lui (Mr. Lui's sister) and 25% held by Adrian Lui (Mr.
Lui's brother). Mr. Lui, President and Executive Director of the Group, controls and/or has substantial influence on the disposition
and voting rights of the shares held by his spouse, but no such control over the shares held by his sister or brother. Hence, 50% of
the consulting service fee will be deemed as Mr. Lui's compensation.
ACC
Medical Limited
We
entered into a consulting agreement with ACC Medical Limited ("ACC") effective on December 1, 2020. Pursuant to this agreement,
ACC shall provide certain consultancy, advisory, and management services to the Group on clinic operations and other related projects
for clinics' business development; ACC shall be initially paid a monthly service fee of HK$101,542 per month (approximately US$13,018
per month), during the term of the agreement, which is to remain in effect unless it is terminated. The monthly service fee is adjusted
to HK$143,200 (approximately US$18,359 per month) effective from March 1, 2022. The agreement may be terminated by either party providing
1-months written notice to the other party. ACC is wholly owned by Dr. Clark Cheng, who is also the sole director of ACC, the Group's
Chief Medical Officer and one of its executive directors.
132
GloboAsia,
LLC
We
entered into a consulting agreement with GloboAsia effective as of August 18, 2017 (the "2017 GA Agreement"); GloboAsia is
not associated or affiliated with any FINRA members. However, the 2017 GA Agreement was terminated when Dr. Chan resigned from his position
as our Chief Scientific Officer in March 2019. Dr. Chan serves as the Director of International Affairs of GloboAsia.
Effective
as of April 1, 2019, GloboAsia, through Dr. Chan, shall serve as a member on our Scientific Advisory Board. To formalize such service,
we entered into that certain consulting agreement with GloboAsia dated March 13, 2019 (the "2019 GA Agreement"). Pursuant
to the 2019 GA Agreement, GloboAsia provides advisory and management services to us and as a member of the Scientific Advisory Board,
they provide advice to us regarding research and development, the scientific merit of licenses or products and other related scientific
issues. We agreed to pay GloboAsia an hourly rate of USD300 for work actually performed. The initial term of 2019 GA Agreement is until
December 31, 2020 and shall thereafter be automatically renewed for successive one-year terms, unless earlier terminated by either party
upon three months' notice prior to the end of the then applicable term; either party may also terminate the agreement upon 2 months
written notice and the Company may terminate the agreement if Dr. Chan is no longer with GloboAsia or if GloboAsia commits any act of
fraud or dishonesty.
Administrative
Management Services
Libra
Sciences Limited
On
January 1, 2022, the Group entered into an administrative management services agreement with Libra Sciences Limited. According to the
agreement, the Group will provide documentation and administrative services, include but are not limited to human resources and payroll
administration, general secretarial and administrative support, and accounting and financial reporting services. The Group is entitled
to receive a fixed amount of services fees of HKD 25,000 (approximately $3,205) per calendar month with the expiry date on December 31,
2023.
Employment
Agreements
We
entered into Appointment Letters with each of our executive officers. The terms of the Appointment Letters for each of our executive
officers are consistent with each other, except with regard to the individual's compensation, term of employment and duties and
responsibilities, the latter of which coincides with the standard functions normally associated with the given position. In addition
to setting forth the individual compensation and such, the appointment letters contain the following material terms:
We
may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, such
as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or
misconduct or a failure to perform agreed duties. We may also terminate an executive officer's employment without cause upon three-month
advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as expressly required
by applicable law of the jurisdiction where the executive officer is based. The executive officer may resign at any time with three-month
advance written notice.
Each
executive officer has agreed to hold, both during and after the termination or expiration of his or her Appointment Letter, in strict
confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to
applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or
prospective clients, or the confidential or proprietary information of any third-party received by us and for which we have confidential
obligations.
In
addition, each executive officer has agreed to be bound by non-solicitation and non-compete restrictions during the term of his or her
employment and typically for one year following the last date of employment. Specifically, each executive officer has agreed not to (i)
solicit or entice away from the Company, any person, firm, company or organization that is or shall have been at any time within 12 months
prior to termination of employee a customer, client, identified prospective customer or client of the Company or in the habit of dealing
with the Company; (ii) employ, solicit or entice away from the Company any person who is or shall have been on the date of or within
12 months prior to termination of employment an employee of the Company; or (iii) assume employment with or provide services to, or otherwise
engage in income generating activities with any of our competitors, or engage, whether as principal, partner, licensor or otherwise,
any of our competitors, without our express consent.
133
Some
of our Appointment Letters also provide for the executive officer to participate in our mandatory provident fund, which is similar to
a pension fund.
On
May 27, 2022, we appointed Mr. Huen as Non-Executive Director for a term of 3 years from June 1, 2022, after Mr. Huen stepping down as
Chief Executive Officer on that date. Under the appointment letter, we pay Mr. Huen approximately USD27,308 per month. The appointment
letter can be earlier terminated by either party with two-months' written notice.
On
June 30, 2022, we appointed Mr. Siu as our Head of Finance, effective on July 11, 2022, pursuant to an Operations Services & Secondment
Agreement between Aptus Management Limited and MG Consultancy Limited ("MG"), through which Mr. Siu provides his services.
MG charges an initial monthly fee of approximately USD7,600, which may be increased to approximately USD12,700 during the term of the
agreement. The agreement has a three-year term, which will automatically renew for additional one-year terms, unless earlier terminated
by either party with one-month written notice.
See
"Item 6. Directors, Senior Management and Employees — C. Board Practices — Employment Agreements".
C.
Interests of Experts and Counsel
Not
applicable.
Item
8. FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information
We
have appended consolidated financial statements filed as part of this annual report.
Legal
Proceedings
From
time to time, we are subject to legal proceedings, investigations and claims incidental to the conduct of our business. We are not currently
a party to any legal proceeding or investigation which, in the opinion of our management, is likely to have a material adverse effect
on our business, financial condition or results of operations.
Dividend
Policy
We
have never declared or paid cash dividends to our shareholders, and we do not intend to pay cash dividends in the foreseeable future.
We intend to reinvest any earnings in developing and expanding our business. Any future determination relating to our dividend policy
will be at the discretion of our Board of Directors and will depend on a number of factors, including future earnings, our financial
condition, operating results, contractual restrictions, capital requirements, business prospects, our strategic goals and plans to expand
our business, applicable law and other factors that our Board of Directors may deem relevant.
Under
Cayman Islands law, dividends may be declared and paid only out of funds legally available therefor, namely out of either profit or our
share premium account, and provided further that a dividend may not be paid if this would result in our Company being unable to pay its
debts as they fall due in the ordinary course of business.
B.
Significant Changes
Except
as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated
financial statements included in this annual report.
134
Item
9. THE OFFER AND LISTING
A.
Offering and Listing Details.
Our
Class A Ordinary Shares are currently listed on NASDAQ Global Market under the symbol "APM" and the Professional Compartment
of Euronext in Paris under the Euronext ticker symbol "APM."
B.
Plan of Distribution
Not
applicable.
C.
Markets
Our
Class A Ordinary Shares are currently listed on NASDAQ Global Market under the symbol "APM" and the Professional Compartment
of Euronext in Paris under the Euronext ticker symbol "APM."
D.
Selling Shareholders
Not
applicable.
E.
Dilution
Not
applicable.
F.
Expenses of the Issue
Not
applicable.
Item
10. ADDITIONAL INFORMATION
A.
Share Capital
Not
applicable.
B.
Amended and Restated Memorandum and Articles of Association
We
are a Cayman Islands exempted company with limited liability and our affairs are governed by our Third Amended and Restated Memorandum
and Articles of Association (the "Memorandum and Articles"), the Companies Law, the common law of the Cayman Islands, our
corporate governance documents and rules and regulations of the stock exchange on which are shares are traded. The Memorandum and Articles
of the Company is filed herein as Exhibit 1.2 to this annual report and is hereby incorporated by reference into this annual report.
You may refer to Exhibit 2.3 for a detailed disclosure of description of our securities registered under Section 12 of the Exchange Act
of 1934, as amended, of the Memorandum and Articles.
As
of the date hereof, the authorized share capital of the Company is $100,000,000.00, divided into 9,999,996,000,000 Class A Ordinary Shares
with a nominal or par value of $0.00001 each and 4,000,000 Class B Ordinary Shares with a nominal or par value of $0.00001 each. As of
the date hereof, 1,719,522 Class A Ordinary Shares and 2,243,776 Class B Ordinary Shares are issued and outstanding. All of our issued
and outstanding Class A Ordinary Shares and Class B Ordinary Shares are fully paid.
135
At the February 21, 2023 special extraordinary meeting of shareholders,
the shareholders approved by a special resolution an amendment and restatement of the Company's Second Amended and Restated Memorandum
and Articles of Association (the "M&A") in the form of the Third Amended and Restated Memorandum and Articles of Association,  to
reflect (i) the merger between the Company and Aptorum Group Cayman Limited, a newly established wholly owned subsidiary of the Company,
whereby the Company would be the surviving company (the "Merger") pursuant to a plan of merger, which also forces a change
in par value to Ordinary Shares of the Company from USD10 to USD0.00001 (the "Plan of Merger"); (ii) the voting rights of
the Class B Ordinary Shares be increased from 10 votes per share to 100 votes per share; (iii) a staggered board of directors consisting
of three (3) classes, such that only one (1) class is subject to re-election each year; (iv) to increase the number of Class A Ordinary
Shares authorized; (v) reducing the vote required for class consent from two-thirds (2/3) to a simple majority; and (vi) to decrease the
number of days for effective service by post to shareholders from 14 days to 3 days (collectively, the "Amendments of M&A")
and that the Third Amended and Restated Memorandum and Articles of Association be adopted as the Memorandum and Articles of Association
of the Company, to the exclusion of the existing M&A with effect from February 21, 2023, which is the date of the registration of
the Merger with the Registrar of Companies of the Cayman Islands.
C.
Material Contracts
We
have not entered into any material contracts other than in the ordinary course of business and other than those described in "Item
4. Information on the Company" or elsewhere in this annual report.
D.
Exchange Controls
There
are no governmental laws, decrees, regulations or other legislation in the Cayman Islands, the United Kingdom or Hong Kong that may affect
the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance
of dividends, interest, or other payments by us to non-resident holders of our ordinary shares, other than withholding tax requirements.
There is no limitation imposed by Cayman Islands law, the United Kingdom law, Hong Kong law or our articles of association on the right
of non-residents to hold or vote shares.
E.
Taxation
Cayman
Islands Tax Considerations
The
Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is
no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government
of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within, the jurisdiction
of the Cayman Islands. The Cayman Islands is not party to any double tax treaties which are applicable to any payments made by or to
our Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Payments
of dividends and capital in respect of our Class A Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding
will be required on the payment of a dividend or capital to any holder of our Class A Ordinary Shares, nor will gains derived from the
disposal of our Class A Ordinary Shares be subject to Cayman Islands income or corporation tax.
No
stamp duty is payable in respect of the issue of our Class A Ordinary Shares or on an instrument of transfer in respect of our Class
A Ordinary Shares except on instruments executed in, or brought within, the jurisdiction of the Cayman Islands.
136
Material
U.S. Federal Income Tax Considerations for U.S. Holders
The
following is a description of the material U.S. federal income tax consequences to U.S. Holders (as defined below) of purchasing, owning
and disposing of Class A Ordinary Shares. It is not a comprehensive description of all U.S. federal income tax considerations that may
be relevant to a particular person's decision to acquire Class A Ordinary Shares. This discussion applies only to a U.S. Holder
that holds a Class A Ordinary Share as a capital asset for U.S. federal income tax purposes (generally, property held for investment).
In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder's particular circumstances,
including state and local tax consequences, non-U.S. tax consequences, federal estate or gift tax consequences, alternative minimum tax
consequences, the potential application of the provisions of the Code known as the Medicare Contribution Tax, and tax consequences applicable
to U.S. Holders subject to special rules, such as:
●
banks and other financial
    institutions;
●
insurance companies;
●
dealers or traders in securities
    who use a mark-to-market method of tax accounting;
●
persons holding Class A
    Ordinary Shares as part of a hedging transaction, "straddle," wash sale, conversion transaction or integrated transaction
    or persons entering into a constructive sale with respect to the Class A Ordinary Shares;
●
persons whose "functional
    currency" for U.S. federal income tax purposes is not the U.S. dollar;
●
tax exempt entities, including
    "individual retirement accounts" and "Roth IRAs";
●
former citizens or long-term
    residents of the United States;
●
entities or arrangements
    classified as partnerships for U.S. federal income tax purposes;
●
regulated investment companies
    or real estate investment trusts;
●
persons who acquired our
    Class A Ordinary Shares pursuant to the exercise of an employee share option or otherwise as compensation;
●
persons that own or are
    deemed to own ten percent or more of our shares; and
●
persons holding Class A
    Ordinary Shares in connection with a trade or business conducted outside the United States.
If
an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds Class A Ordinary Shares, the
U.S. federal income tax treatment of such partnership and each partner thereof will generally depend on the status of the partner and
the activities of the partnership. Partnerships holding Class A Ordinary Shares and partners in such partnerships are encouraged to consult
their tax advisors as to the particular U.S. federal income tax consequences of purchasing, holding and disposing of Class A Ordinary
Shares.
The
discussion is based on the Code, the Treasury Regulations issued thereunder, and administrative and judicial interpretations thereof,
all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or to different interpretation.
Such change could materially and adversely affect the tax consequences described below.
137
For
purposes of this discussion, a "U.S. Holder" is a holder who, for U.S. federal income tax purposes, is a beneficial owner
of Class A Ordinary Shares and that is:
(1)
an individual citizen or
    resident of the United States;
(2)
a corporation, or other
    entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District
    of Columbia;
(3)
an estate, the income of
    which is subject to U.S. federal income taxation regardless of its source; or
(4)
a trust, (i) if a court
    within the United States is able to exercise primary supervision over its administration and one or more "U.S. persons"
    (within the meaning of the Code) have the authority to control all of its substantial decisions, or (ii) if a valid election is in
    effect for the trust to be treated as a U.S. person.
U.S.
Holders are encouraged to consult their tax advisors concerning the U.S. federal, state, local and foreign tax consequences of purchasing,
owning and disposing of Class A Ordinary Shares in their particular circumstances.
Taxation
of Distributions
Subject
to the discussion below under "Passive Foreign Investment Company Rules," a U.S. Holder will be required to include in gross
income as dividend income the gross amount of any distributions paid on Class A Ordinary Shares (including any amount of taxes withheld),
other than certain
pro rata
distributions of Class A Ordinary Shares, to the extent paid out of our current or accumulated
earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of our current and accumulated
earnings and profits would be treated as a non-taxable return of capital to the extent of the U.S. Holder's adjusted tax basis
in the Class A Ordinary Shares and thereafter as a gain from the sale of the Class A Ordinary Shares. However, because we do not calculate
our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders
as dividends.
In
case of a U.S. Holder that is a corporation, dividends paid on the Class A Ordinary Shares will be subject to regular corporate rates
and will not be eligible for the "dividends received" deduction generally allowed to corporate shareholders with respect
to dividends received from U.S. corporations.
Dividends
received by an individual, trust or estate will be subject to taxation at standard tax rates. A reduced income tax rate applies to dividends
paid by a "qualified foreign corporations" (if certain holding period requirements and other conditions are met). A non-U.S.
corporation generally will be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive
tax treaty with the United States which includes an exchange of information program or (ii) with respect to any dividend it pays on stock
which is readily tradable on an established securities market in the United States. US. Treasury Department guidance indicates that our
Class A Ordinary Shares, which is listed on the NASDAQ Global Market is readily tradable on an established securities market in the United
States. There can be no assurance, however, that our Class A Ordinary Shares will be considered readily tradable on an established securities
market in later years.
Non-corporate
U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the taxable year
in which such dividends are paid or in the preceding taxable year (See "Item 10. Additional Information – E. Taxation –
Material U.S. Federal Income Tax Considerations for U.S. Holders – Passive Foreign Investment Company Rules" below).
A
U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding
taxes imposed on dividends received on the Class A Ordinary Shares. A U.S. Holder who does not elect to claim a foreign tax credit for
foreign income tax withheld may instead claim a deduction for U.S. federal income tax purposes in respect of such withholding, but only
for a year in which such investor elects to do so for all creditable foreign income taxes. For purposes of calculating the foreign tax
credit limitation, dividends paid by us will, depending on the circumstances of the U.S. Holder, be either general or passive income.
While
we do not expect to pay dividends in the near future, in the event any dividends are paid and if a dividend is paid in non-U.S. currency,
it must be included in a U.S. Holder's income as a U.S. dollar amount based on the exchange rate in effect on the date such dividend
is actually or constructively received, regardless of whether the dividend is in fact converted into U.S. dollars. If the dividend is
converted to U.S. dollars on the date of receipt, a U.S. Holder generally will not recognize a foreign currency gain or loss. If the
non-U.S. currency is converted into U.S. dollars on a later date, however, the U.S. Holder must include in income any gain or loss resulting
from any exchange rate fluctuations. Such gain or loss will generally be ordinary income or loss and will be from sources within the
United States for foreign tax credit limitation purposes. U.S. Holders should consult their own tax advisors regarding the tax consequences
to them if we pay dividends in non-U.S. currency.
138
Sale
or Other Taxable Disposition of Ordinary Shares
Subject
to the discussion below under "Passive Foreign Investment Company Rules," gain or loss realized on the sale or other taxable
disposition of Class A Ordinary Shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held
the Class A Ordinary Shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder's
tax basis in the Class A Ordinary Shares disposed of and the amount realized on the disposition. Long-term capital gain of a non-corporate
U.S. Holder is generally taxed at preferential rates. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit
purposes. The deductibility of capital losses is subject to limitations. U.S. Holders are urged to consult their tax advisors regarding
the tax consequences if a foreign tax is imposed on the disposition of Class A Ordinary Shares, including the availability of the foreign
tax credit under an investor's own particular circumstances.
A
U.S. Holder that receives non-U.S. currency on the disposition of the Class A Ordinary Shares will realize an amount equal to the U.S.
dollar value of the foreign currency received on the date of disposition (or in the case of cash basis and electing accrual basis taxpayers,
the settlement date) whether or not converted into U.S. dollars at that time. Very generally, the U.S. Holder will recognize currency
gain or loss if the U.S. dollar value of the currency received on the settlement date differs from the amount realized with respect to
the Class A Ordinary Shares. Any currency gain or loss on the settlement date or on any subsequent disposition of the foreign currency
generally will be U.S.-source ordinary income or loss.
Passive
Foreign Investment Company Rules
Special
U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a PFIC for U.S. federal
income tax purposes. In general, a non-U.S. corporation will be classified as a PFIC for any taxable year in which, after applying certain
look-through rules, either:
●
at least 75% of its gross
    income for such taxable year is passive income (e.g., dividends, interest, capital gains and rents derived other than in the active
    conduct of a rental business); or
●
at least 50% of its gross
    assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income or are held for the
    production of passive income.
We
will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation
in which we own, directly or indirectly, 25% or more (by value) of the equity.
A
separate determination must be made after the close of each taxable year as to whether we are a PFIC for that year. As a result, our
PFIC status may change. In particular, the total value of our assets generally will be calculated using the market price of our Class
A Ordinary Shares, which may fluctuate considerably. Fluctuations in the market price of our Class A Ordinary Shares may result in our
being a PFIC for any taxable year.
Due
to the amount of restricted and unrestricted cash and investments that we had on hand during our year ending December 31, 2022, we believe
that we were classified as a PFIC for that tax year. Depending on the future composition and value of our assets, we may be classified
as a PFIC for future years.
If
we were to be classified as a PFIC, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder (i)
takes no action, (ii) makes an election to treat us as a "Qualified Electing Fund" (a "QEF election") or (iii)
if permitted, makes a "mark-to-market" election with respect to our Class A Ordinary Shares. A U.S. Holder of our Class A
Ordinary Shares will also be required under applicable Treasury Regulations to file an annual information return (Form 8621) containing
information regarding our company. Additional explanations of the PFIC rules are set forth below: this material is complex and may affect
different U.S. Holders differently. Accordingly, U.S. Holders should consult their own tax advisors about the consequences of our company
being classified as a PFIC and about what steps, if any, they might take to lessen the tax impact of our PFIC status on them.
139
A
U.S. Holder who does not make a timely QEF or mark-to-market election (a "Non-Electing Holder"), as discussed below, will
be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you realize from
a sale or other disposition (including a pledge) of Class A Ordinary Shares. Distributions you receive in a taxable year that are greater
than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period
for the Class A Ordinary Shares will be treated as an excess distribution. Under these special tax rules:
●
the excess distribution
    or gain will be allocated ratably over your holding period for the Class A Ordinary Shares;
●
the amount allocated to
    the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary
    income; and
●
the amount allocated to
    each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments
    of tax will be imposed on the resulting tax attributable to each such year.
It
should be noted that, until such time as we make a distribution, there are no tax consequences to Non-Electing Holders. However, if we
ever did make a distribution it would in all likelihood be an excess distribution (because we would not have previously made any distributions
to holders of Class A Ordinary Shares). At that point, and for all subsequent distributions, the rules described above would apply to
Non-Electing Holders. The tax liability for amounts allocated to years prior to the year of disposition or "excess distribution"
cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary
Shares cannot be treated as capital, even if you hold the Ordinary Shares as capital assets.
Certain
elections may be available that would result in alternative treatments. The adverse consequences of owning stock in a PFIC could be mitigated
if a U.S. Holder makes a valid QEF election (a U.S. Holder which we refer to as an "Electing Holder") which, among other
things, would require the Electing Holder to include currently in income its pro rata share of the PFIC's net capital gain and
ordinary earnings, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether
or not the Electing Holder actually received distributions from us. When an Electing Holder makes a QEF election, its adjusted tax basis
in our Class A Ordinary Shares is increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits
that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in our Class A Ordinary Shares and
will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or
other disposition of our Class A Ordinary Shares.
A
U.S. Holder can make a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with its U.S. federal income
tax return. This election must be made by the deadline (including extensions) for filing the U.S. Holder's federal tax return for
the year in question. U.S. Holders should discuss their election alternatives with their own tax advisors. Once an election is made,
the Electing Holder is subject to the QEF rules for as long as we are a PFIC.
It
should be noted that in order to make a QEF election a U.S. Holder needs information from us concerning our PFIC status and our financial
results for the year. We cannot assure our U.S. Holders that we will provide such information.
As
an alternative to making a QEF election, a U.S. Holder may make a "mark-to-market" election with respect to our Class A Ordinary
Shares provided our Class A Ordinary Shares are treated as "marketable stock." The Class A Ordinary Shares generally will
be treated as marketable stock if they are regularly traded on a "qualified exchange or other market" (within the meaning
of applicable Treasury Regulations) on at least 15 days during each calendar quarter (other than in de minimis amounts).
140
If
a U.S. Holder makes an effective mark-to-market election, for each taxable year that we are a PFIC, the U.S. Holder will include as ordinary
income the excess of the fair market value of its Class A Ordinary Shares at the end of the year over its adjusted tax basis in the Class
A Ordinary Shares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the
Class A Ordinary Shares over their fair market value at the end of the year, but only to the extent of the net amount previously included
in income as a result of the mark-to-market election. A U.S. Holder's adjusted tax basis in the Class A Ordinary Shares will be
increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules. In addition,
upon the sale or other disposition of your Class A Ordinary Shares in a year that we are PFIC, any gain will be treated as ordinary income
and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of
the mark-to-market election.
If
a U.S. Holder makes a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent
taxable years unless the Class A Ordinary Shares are no longer regularly traded on a qualified exchange or other market, or the IRS consents
to the revocation of the election. You are urged to consult your tax advisor about the availability of the mark-to-market election, and
whether making the election would be advisable in your particular circumstances.
Information
Reporting and Backup Withholding
Payments
of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally
are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other
exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and
certifies that it is not subject to backup withholding.
Backup
withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit
against the holder's U.S. federal income tax liability and may entitle it to a refund, provided that the required information is
timely furnished to the IRS.
Information
with Respect to Foreign Financial Assets
Certain
U.S. Holders may be required to report information relating to the Class A Ordinary Shares, subject to certain exceptions (including
an exception for Class A Ordinary Shares held in accounts maintained by certain U.S. financial institutions). U.S. Holders should consult
their tax advisors regarding their reporting obligations with respect to their purchase, ownership and disposition of the Class A Ordinary
Shares.
F.
Dividends and Paying Agents
Not
applicable.
G.
Statement by Experts
Not
applicable.
H.
Documents on Display
We
have previously filed the Registration Statement with the SEC.
We
are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required
to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after
the end of each fiscal year. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained
at prescribed rates at the public reference facilities maintained by the SEC at Judiciary Plaza, 100 F Street, N.E., Washington, D.C.
20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains a web site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding
registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules
of the Exchange Act prescribing, among other things, the furnishing and content of proxy statements to shareholders, and our executive
officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act.
We
also maintain a corporate website at www.aptorumgroup.com. Information contained on, or that can be accessed through, our website does
not constitute a part of this report.
I.
Subsidiary Information
For
a listing of our subsidiaries, see "Item 4. Information on the Company — A. History and Development of the Company."
J.
Annual Report to Security Holders.
Not
applicable.
141
Item
11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For
purposes of Item 11, reference to the "Group" means Aptorum Group Limited and all of its subsidiaries.
Foreign
Exchange Risk
Currency
risk is the risk that the value of financial assets or liabilities will fluctuate due to changes in foreign exchange rates.
Currency
risk sensitivity analysis
At
December 31, 2022 and 2021, the Group has no significant foreign currency risk because most of the transactions are denominated in Hong
Kong dollar or the United States dollar. Since the Hong Kong dollar is pegged to the United States dollar, the Group's exposure
to foreign currency risk in respect of the balances denominated in Hong Kong dollars is considered to be minimal.
Credit
Risk
Financial
assets which potentially subject the Group to concentrations of credit risk consist principally of bank deposits and balances.
The
Group takes on exposure to credit risk on cash and restricted cash balances majority held with HSBC for the purposes of payments of Group
expenses. The risk of default is considered minimal as the Group considers HSBC is well established with high credit rating.
Liquidity
Risk
Liquidity
risk is the risk that the Group will encounter difficulty in raising funds to meet commitments associated with financial assets and liabilities.
Liquidity risk may result from an inability to sell a financial asset quickly at an amount close to its fair value.
The
Group invested in private equities which are generally unquoted and not readily marketable before its restructuring to an operating company.
After the restructuring in 2017, the Group generally does not acquire new investments in unlisted securities that cannot be readily disposed
of to minimize the liquidity risk. Investment of the Group's assets in unquoted securities may restrict the ability of the Group
to dispose of its investment at a price and time it wishes to do so.
Interest
Rate Risk
Interest
rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments.
Interest
rate risk sensitivity analysis
The
Group's cash deposits and bank loan held with banks are exposed to interest rate risk. However, Management considers the risk on
cash deposits to be minimal as they are short-term with terms less than one month.
With
regard to interest rate sensitivity on our bank loans, we present the sensitivity analysis below based on the exposure to interest rates
for interest bearing bank loans with variable interest rates as of December 31, 2022. The analysis is prepared assuming that those balances
outstanding as of December 31, 2022 were outstanding for the whole financial year. A 1.0% increase or decrease which represents the management's
assessment of the reasonably possible change in interest rates is used. Assuming no change in the outstanding balance of our existing
interest bearing bank loans balances with floating interest rates as of December 31, 2022, a 1.0% increase or decrease in each applicable
interest rate would increase or decrease $30,000 to our interest expense for the year ended December 31, 2022. We have not used any derivative
financial instruments to manage our interest risk exposure.
Inflation
Risk
In
recent years, inflation has not had a material impact on our results of operations.
Item
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Items
12.D.3 and 12.D.4 of this Item 12 is not applicable, as the Company does not have any American Depositary Shares; all other applicable
information required by this Item 12 is included in Exhibit 2.3.
142
Part
II
Item
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
Item
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
See
"Item 10. Additional Information" for a description of the rights of securities holders, which remain unchanged.
Item
15. CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures
Under the supervision and
with the participation of our management, including our chief executive officer and our chief financial accounting officer, we carried
out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange
Act, as of December 31, 2022. Based on that evaluation, our chief executive officer and chief financial accounting officer concluded that
our disclosure controls and procedures, as of December 31, 2022, were not effective at the reasonable assurance level due to the material
weakness described below.
(b)
Management's Annual Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for
external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America 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 the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company
are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of the unauthorized acquisition, use or disposition of our company's assets that could have a material
effect on the consolidated financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As
required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the Securities and Exchange Commission,
our management including our Chief Executive Officer and Chief Financial Accounting Officer assessed the effectiveness of internal control
over financial reporting as of December 31, 2022 using the criteria set forth in the report "Internal Control—Integrated
Framework (2013)" published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
management concluded that our internal control over financial reporting was effective as of December 31, 2022.
In connection with the previous
audit of our financial statements for the year ended December 31, 2022, we and our independent registered public accounting firm identified
one material weakness in our internal control over financial reporting, as defined in the standards established by the Public Company
Accounting Oversight Board of the United States. The material weakness identified was the lack of dedicated resources to take responsibility
for the finance and accounting functions and the preparation of financial statements in compliance with generally accepted accounting
principles in the United States, or U.S. GAAP.
143
Since
2019, we took actions to remediate the abovementioned material weakness, and we believe we have remediated the material weakness by implementing
the following measures:
●
provide trainings to staff
    regarding to the preparation of financial statements in compliance with generally accepted accounting principles in the United States;
●
change to a new and well-established
    accounting system to enhance effectiveness and financial and system control;
●
establish clear roles and
    responsibilities for accounting and financial reporting staff to address finance and accounting issues; and
●
continue to monitor the
    improvement on internal control over financial reporting.
However, since we are still
in the process of replenishing and building up a qualified finance and accounting team with sufficient dedicated resources, our management
assessed that the deficiency related to the lack of dedicated resources to take responsibility for the finance and accounting functions
and the preparation of financial statements in compliance with generally accepted accounting principles in the United States, or U.S.
GAAP, still existed as of December 31, 2022.
We
cannot assure you that we will not identify additional material weaknesses or significant deficiencies in the future. See "Item
3. Key Information—D. Risk Factors— Risks Related to Our Industry, Business and Operation — If we fail to establish
and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with applicable
regulations could be impaired."
Notwithstanding there is a
material weakness identified as described above, we believe that our consolidated financial statements contained in this annual report
on Form 20-F fairly present our financial position, results of operations and cash flows for the years covered thereby in all material
respects.
(c)
Attestation Report of the Company's Registered Public Accounting Firm
We
did not include an attestation report of the company's registered public accounting firm due to rules of the SEC where domestic
and foreign registrants that are non-accelerated filers, which we are, and "emerging growth companies" which we also are,
are not required to provide the auditor attestation report.
(d)
Changes in Internal Control over Financial Reporting
There
were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form
20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item
16. [RESERVED]
Item
16A. AUDIT COMMITTEE FINANCIAL EXPERT
We
have one financial expert as of the date of this report. Our Board of Directors has determined that Mr. Charles Bathurst, Chair of our
audit committee, qualifies as an "audit committee financial expert" as defined in the SEC rules and satisfies the financial
sophistication requirements of The NASDAQ Global Market. Mr. Bathurst is "independent" as that term is defined in the rules
of the SEC and the applicable rules of the NASDAQ Global Market.
144
Item
16B. CODE OF ETHICS
The
Company's Code of Ethics became effective on the effective date of the Registration Statement. The Code of Ethics is incorporated
by reference to exhibit 14.1 of the Registration Statement.
Item
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The
following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered
by our principal external auditors, for the periods indicated.
For the years ended
December 31,
2022
2021
(In thousand)
Audit fees
$
258
$
258
Audit-related fees
42
37
Tax fees
-
-
All other fees
-
-
Total
$
300
$
295
"Audit
fees" represents the aggregate fees billed or to be billed for each of the fiscal years listed for professional services rendered
by our principal auditor for the audit of our annual financial statements.
"Audit-related fees"
are the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit and are not
reported under audit fees. These fees primarily include issuance of comfort letters.
"Tax
fees" include fees for professional services rendered by our principal auditor for tax compliance and tax advice on actual or contemplated
transactions.
"Other
fees" include fees for services rendered by our independent registered public accounting firm with respect to other matters not
reported under "Audit fees", "Audit-related fees" and "Tax fees".
The
policy of our audit committee is to pre-approve all audit and non-audit services provided by our principal auditor including audit services,
audit-related services, tax services and other services.
Item
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not
applicable.
Item
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not
applicable.
Item
16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not
applicable.
Item
16G. CORPORATE GOVERNANCE
See
"Item 6. Directors, Senior Management and Employees" for more information.
Item
16H. MINE SAFETY DISCLOSURE
Not
applicable.
Item
16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not
applicable.
145
Part
III
Item
17. FINANCIAL STATEMENTS
We
have elected to provide financial statements pursuant to Item 18.
Item
18. FINANCIAL STATEMENTS
The
consolidated financial statements of Aptorum Group Limited, and its subsidiaries are included at the end of this annual report.
Item
19. EXHIBITS
EXHIBIT
INDEX
Exhibit No.
Description
1.1
Third Amended and Restated Articles of Association, as amended**
2.1
Registrant's Specimen Certificate for Ordinary Shares*
*
2.2
Form of Underwriter's
    Warrant+++
2.3
Description of Securities registered under Section 12 of the Exchange Act of 1934, as amended**
2.4
Form of Warrant+
4.1
Form of Underwriting Agreement+++
4.2
Appointment Letter between
    the Company and Ian Huen (Founder, Chief Executive Officer & Executive Director), dated September 25, 2017*
4.3
Employment Letter between
    the Company and Sabrina Khan (Chief Financial Officer), dated September 1, 2017*
4.4
Addendum to Employment
    Letter between Company and Sabrina Khan (Chief Financial Officer) dated April 24, 2018*
4.5
Appointment Letter between
    the Company and Darren Lui (Chief Business Officer, President & Director), dated September 25, 2017*
4.6
Employment Letter between
    the Company and Clark Cheng (Chief Medical Officer & Director), dated August 31, 2017*
4.7
Addendum to Appointment
    Letter between the Company and Clark Cheng (Chief Medical Officer & Director), dated September 25, 2017*
4.8
Second Addendum to Appointment
    Letter between the Company and Clark Cheng (Chief Medical Officer & Director), dated October 30, 2017*
4.9
Third Addendum to Appointment
    Letter between the Company and Clark Cheng (Chief Medical Officer & Director), dated January 2, 2018*
4.10
Appointment letter between
    the Company and Keith Chan (former Chief scientific officer) (Terminated March 13, 2019)*
4.11
Appointment Letter between
    the Company and Charles Bathurst (Independent Non-Executive Director), dated September 24, 2017*
4.12
Appointment Letter between
    the Company and Mirko Scherer (Independent Non-Executive Director), dated September 24, 2017*
4.13
Employment Agreement between
    the Company and Justin Wu (Independent Non-Executive Director), dated September 18, 2017*
4.14
Employment Agreement between
    the Company and Douglas Arner (Independent Non-Executive Director), dated February 13, 2018*
4.15
2017 Share Option Plan,
    as amended
(15)
4.16
Service Agreement Between
    Covar Pharmaceuticals Incorporated and Videns Incorporation Limited*
4.17
Consulting Agreement between
    the Company and GloboAsia, LLC (includes provisions for the appointment of Keith Chan as member of the Scientific Advisory Board)
    dated March 13, 2019
(5)
4.18
Exclusive Patent License
    Agreement for ALS-4 dated October 18, 2017
(3)
4.19
First Amendment to Exclusive License Agreement for ALS-4 dated June 7, 2018*
4.20
Second Amendment to Exclusive
    License Agreement for ALS-4 dated July 10, 2019
(6)
4.21
Exclusive License Agreement
    for ALS-4 dated January 11, 2019
(4)
146
4.22
Employment Agreement with Dr. Lee dated March 13, 2019++
4.23
Master Collaboration Agreement
    by and between the Company, A*ccelerate Technologies Pte. Ltd, and AENEAS CAPITAL LIMITED dated April 24, 2019
(1)
4.24
Bond Repurchase Agreement
    dated April 24, 2019
(1)
4.25
Form of Line of Credit
    Agreement
(2)
4.26
Form of Promissory Note
(2)
4.27
Form of Securities Purchase Agreement+
4.28
Consulting agreement with
    CGY Investment Limited effective on January 10, 2020
(6)
4.29
Administrative Consultant
    Services Agreement with Aeneas Management Limited dated January 1, 2019
(6)
(Terminated April 30, 2020)
4.30
Secondment Agreement between
    the Company and Aenco Limited dated January 1, 2019
(6)
(Replaced April 1, 2020)
4.31
Secondment Agreement (2)
    between the Company and Aenco Limited dated April 1, 2020
(6)
(Terminated September 30, 2020)
4.32
Evaluation Agreement with
    Illumina Inc. (portions of the exhibit have been omitted because they (i) are not material and (ii) would likely cause competitive
    harm to the Registrant if publicly disclosed.)
(7)
4.33
Placement Agency Agreement,
    dated February 25, 2020 between the Company and Alliance Global Partners
(8)
4.34
Form of Securities Purchase
    Agreement
(8)
4.35
Form of Warrant
(8)
4.36
Form of Securities Purchase
    Agreement dates as of September 29, 2020, by and among the Company and the purchasers named therein
(9)
4.37
Form of Warrant
(9)
4.38
Form of Pre-Funded Warrant
(9)
4.39
Form of Placement Agent
    Warrant
(9)
4.40
Exclusive License Agreement
    with Accelerate Technologies Pte Ltd.'s dated September 25, 2020
(11, 12)
4.41
Sales Agreement, dated
    March 26, 2021 between the Company and H.C. Wainwright
(10)
4.42
Share Subscription and
    Shareholders Agreement dated as of September 25, 2020
(11,12)
4.43
Contract Research Agreement between Aptorum Therapeutics Limited and Aeneas Technology (Hong Kong) Limited
(12)
4.44
Loan Agreement between
    Aptorum Therapeutics Limited and Talem Medical Group Limited (portions of the exhibit have been omitted because they (i) are not
    material and (ii) would likely cause competitive harm to the Company if publicly disclosed.)
(11)(13)
4.45
Specific Security Deed
    between Aptorum Therapeutics Limited and Talem Medical Group Limited
(13)
4.46
Private Placement Shares
    Purchase Agreement with Jurchen Investment Corporation
(14)
4.47
Concerted Action Agreement
    between Aptorum Therapeutics Limited and Peace Range Limited dated December 30, 2021 regarding to Mios Pharmaceuticals Limited
(17)
4.48
Concerted Action Agreement
    between Aptorum Therapeutics Limited and Peace Range Limited dated December 30, 2021 regarding to Scipio Life Sciences Limited
(17)
4.49
Operations Services &
    Secondment Agreement between Aptus Management Limited and MG Consultancy Limited
(16)
4.50
Form of Securities Purchase
    Agreement
(18)
4.51
Appointment letter between the Company and Ian Huen (Non-Executive Director), dated May 27, 2022**
4.52
Non-binding Letter of Intent
(20)
8.1
List of Subsidiaries
**
12.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)**
12.2
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)**
13.1
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002***
15.1
Consent of Marcum Asia CPAs LLP**
99.1
Code of Business Ethics*
101.INS
Inline XBRL Instance Document**
101.SCH
Inline XBRL Taxonomy Extension Schema Document**
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
    Document**
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
    Document**
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document**
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
    Document**
104
Cover Page Interactive Data File (formatted as Inline
    XBRL and contained in Exhibit 101)**
***
Furnished with this annual
    report on Form 20-F
**
Filed with this annual
    report on Form 20-F
*
Incorporated by reference
    to our Registration Statement Filed on Form F-1 on September 5, 2018
+++
Incorporated by reference
    to our Registration Statement Filed on Form F-1 on November 15, 2018
++
Incorporated by reference
    to our Current Report on Form 6-K filed on April 1, 2019
+
Incorporated by reference
    to our Current Report on Form 6-K filed on February 26, 2020
147
(1)
Incorporated by reference to our Current Report on Form 6-K filed on April 24, 2019
(2)
Incorporated by reference
    to our Current Report on Form 6-K filed on August 14, 2019
(3)
Incorporated by reference
    to our Registration Statement Filed on Form F-1 on September 5, 2018; portions of the exhibit were previously omitted in reliance
    on the confidential treatment provisions available pursuant to revised paragraph 4(a) of Instructions as to Exhibits of Form 20-F.
(4)
Incorporated by reference
    to our annual report on Form 20-F filed on April 15, 2019; portions of the exhibit were previously omitted in reliance on the confidential
    treatment provisions available pursuant to revised paragraph 4(a) of Instructions as to Exhibits of Form 20-F.
(5)
Incorporated by reference
    to our annual report on Form 20-F filed on April 15, 2019
(6)
Incorporated by reference
    to our annual report on Form 20-F filed on April 29, 2020. Certain information from this exhibit has been excluded from this exhibit
    because it both (i) is not material and (ii) would likely cause competitive harm to the Registrant if publicly disclosed.
(7)
Incorporated by reference
    to our Current Report on Form 6-K filed on January 25, 2021; portions of the exhibit were omitted because they (i) are not material
    and (ii) would likely cause competitive harm to the Company if publicly disclosed.
(8)
Incorporated by reference
    to our Current Report on Form 6-K filed on February 26, 2020
(9)
Incorporated by reference
    to our Current Report on Form 6-K filed on October 2, 2020
(10)
Incorporated by reference
    to our Current Report on Form 6-K filed on March 26, 2021
(11)
Certain information from
    this exhibit has been excluded from this exhibit because it both (i) is not material and (ii) is the type that the registrant treats
    as private or confidential.
(12)
Incorporated by reference
    to our annual report on Form 20-F filed on April 19, 2021
(13)
Incorporated by reference
    to our Current Report on Form 6-K filed on November 17, 2021
(14)
Incorporated by reference
    to our Current Report on Form 6-K filed on May 26, 2021
(15)
Incorporated by reference
    to our Current Report on Form 6-K filed on November 17, 2021
(16)
Incorporated by reference
    to our Current Report on Form 6-K filed on July 11, 2022.
(17)
Incorporated by reference
    to our annual report on Form 20-F filed on April 29, 2022.
(18)
Incorporated by reference
    to our Current Report on Form 6-K filed on December 9, 2022.
(19)
Incorporated
by reference to our Annual Report on Form 20-F/A filed on January 17, 2023.
(20)
Incorporated
by reference to our Current Report on Form 6-K filed on March 27, 2023.
148
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.
Aptorum Group Limited
Date: April 28, 2023
By:
/s/
    Darren Lui
Darren Lui
Chief Executive Officer,
Chief Accounting Officer
Chairman of the Board of Directors
(Principal Executive & Financial Officer)
149
APTORUM GROUP LIMITED
Financial Statements
Table of Contents
Report of Independent Registered Public Accounting Firm (Marcum Asia CPAs LLP PCAOB ID:
5395
)
F-2
Consolidated Balance Sheets as of December 31, 2022 and 2021
F-3
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2022, 2021 and 2020
F-4
Consolidated Statements of Equity for the years ended December 31, 2022, 2021 and 2020
F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
F-6
Notes to Consolidated Financial Statements
F-7
F-
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Shareholders and Board of Directors of
Aptorum Group Limited
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Aptorum Group Limited (the "Company") as of December 31, 2022 and 2021, the related consolidated statements
of operations and comprehensive (loss) income, equity and cash flows for each of the three years in the period ended December 31, 2022,
and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
Marcum Asia CPAs LLP
Marcum Asia CPAs LLP
We have served as the Company's auditor since 2017
New York, NY
April 28, 2023
PCAOB ID. 5395
NEW YORK OFFICE • 7 Penn Plaza • Suite
830 • New York, New York • 10001
Phone 646.442.4845 • Fax 646.349.5200 •
www.marcumasia.com
F-
2
APTORUM GROUP LIMITED
CONSOLIDATED BALANCE SHEETS
December 31, 2022 and 2021
(Stated in U.S. Dollars)
December 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash
$
1,882,545
$
8,131,217
Restricted cash
3,130,335
130,270
Accounts receivable
174,426
78,722
Inventories
27,722
35,775
Marketable securities, at fair value
102,481
236,615
Amounts due from related parties
129,677
47,754
Due from brokers
652
76,380
Loan receivable from related parties
875,956
3,358,089
Other receivables and prepayments
744,008
593,478
Total current assets
7,067,802
12,688,300
Property, plant and equipment, net
2,825,059
3,731,116
Operating lease right-of-use assets
347,000
154,439
Long-term investments
9,744,958
4,156,907
Intangible assets, net
752,705
880,256
Long-term deposits
129,847
296,225
Total Assets
$
20,867,371
$
21,907,243
LIABILITIES AND EQUITY
LIABILITIES
Current liabilities:
Amounts due to related parties
$
12,693
$
11,389
Accounts payable and accrued expenses
6,166,807
4,172,565
Finance lease liabilities current
-
47,923
Operating lease liabilities, current
310,548
145,391
Bank loan
3,000,000
-
Convertible notes
3,013,234
-
Total current liabilities
12,503,282
4,377,268
Finance lease liabilities, non-current
-
Operating lease liabilities, non-current
30,784
23,853
Loan payables to related parties
500,000
-
Total Liabilities
$
13,034,066
$
4,401,121
Commitments and contingencies
-
-
EQUITY
Class A Ordinary Shares ($
10.00
par value;
6,000,000
shares authorized,
1,326,953
and
1,320,241
shares issued and outstanding as of December 31, 2022 and 2021, respectively
(1)
)
$
13,269,528
$
13,202,408
Class B Ordinary Shares ($
10.00
par value;
4,000,000
shares authorized,
2,243,776
shares issued and outstanding as of December 31, 2022 and 2021
(1)
)
22,437,754
22,437,754
Additional paid-in capital
45,308,080
43,506,717
Accumulated other comprehensive income (loss)
33,807
(
2,019
)
Accumulated deficit
(
65,337,075
)
(
55,537,515
)
Total equity attributable to the shareholders of Aptorum Group Limited
15,712,094
23,607,345
Non-controlling interests
(
7,878,789
)
(
6,101,223
)
Total equity
7,833,305
17,506,122
Total Liabilities and Equity
$
20,867,371
$
21,907,243
(1)
All per share amounts and shares outstanding for all periods have been retroactively restated to reflect APTORUM GROUP LIMITED's 1 for 10 reverse stock split, which was effective on January 23, 2023.
See accompanying notes to the consolidated financial
statements.
F-
3
APTORUM GROUP LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
(LOSS) INCOME
For Years Ended December 31, 2022, 2021 and
2020
(Stated in U.S. Dollars)
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Revenue
Healthcare services income
$
1,295,889
$
1,541,778
$
911,509
Operating expenses
Cost of healthcare services
(
1,215,824
)
(
1,459,924
)
(
1,015,023
)
Research and development expenses
(
9,219,595
)
(
10,869,642
)
(
11,586,923
)
General and administrative fees
(
5,220,405
)
(
5,409,302
)
(
4,853,488
)
Legal and professional fees
(
2,888,140
)
(
2,617,834
)
(
2,854,225
)
Other operating expenses
(
261,038
)
(
392,511
)
(
877,391
)
Total operating expenses
(
18,805,002
)
(
20,749,213
)
(
21,187,050
)
Other income (loss), net
(Loss) gain on investments in marketable securities, net
(
134,134
)
(
8,031,595
)
25,241,556
Gain on long-term investments
5,588,051
-
-
Loss on investments in derivatives, net
-
(
4,289
)
(
199,031
)
Gain on use of digital currencies
-
4,918
-
Gain on derecognition of non-financial assets
-
75,000
-
Interest income (expense), net
146,588
(
93,601
)
(
243,628
)
Rental income
-
-
30,894
Loss on disposal of subsidiaries
-
(
3,638
)
-
Sundry income
383,506
146,347
365,917
Total other income (loss), net
5,984,011
(
7,906,858
)
25,195,708
Net (loss) income
(
11,525,102
)
(
27,114,293
)
4,920,167
Net loss attributable to non-controlling interests
1,725,542
2,065,904
2,146,687
Deemed dividend related to warrants down round provision
-
-
(
755,514
)
Net (loss) income attributable to Aptorum Group Limited
$
(
9,799,560
)
$
(
25,048,389
)
$
6,311,340
Net (loss) income per share attributable to Aptorum Group Limited
- Basic
(1)
$
(
2.75
)
$
(
7.15
)
$
2.03
- Diluted
(1)
$
(
2.75
)
$
(
7.15
)
$
2.00
Weighted-average shares outstanding
- Basic
(1)
3,569,484
3,503,396
3,113,588
- Diluted
(1)
3,569,484
3,503,396
3,153,447
Net (loss) income
$
(
11,525,102
)
$
(
27,114,293
)
$
4,920,167
Other comprehensive income (loss)
Exchange differences on translation of foreign operations
35,826
(
55,315
)
58,848
Other comprehensive income (loss)
35,826
(
55,315
)
58,848
Comprehensive (loss) income
(
11,489,276
)
(
27,169,608
)
4,979,015
Comprehensive loss attributable to non-controlling interests
1,725,542
2,065,904
2,146,687
Deemed dividend related to warrants down round provision
-
-
(
755,514
)
Comprehensive (loss) income attributable to the shareholders of Aptorum Group Limited
(
9,763,734
)
(
25,103,704
)
6,370,188
(1)
All per share amounts and shares outstanding for all periods have been retroactively restated to reflect APTORUM GROUP LIMITED's 1 for 10 reverse stock split, which was effective on January 23, 2023.
See accompanying notes to the consolidated financial
statements.
F-
4
APTORUM GROUP LIMITED
CONSOLIDATED STATEMENTS OF EQUITY
For Years Ended December 31, 2022, 2021 and
2020
(Stated in U.S. Dollars)
Class A Ordinary Shares
Class B Ordinary Shares
Additional
Paid-in
Capital
Accumulated
deficit
Accumulated
other
comprehensive
(loss) income
Non-
controlling interests
Total
Shares
(1)
Amount
Shares
(1)
Amount
Amount
Amount
Amount
Amount
Amount
Balance, January 1, 2020
659,736
$
6,597,362
2,243,776
$
22,437,754
$
24,887,624
$
(
37,555,980
)
$
(
5,552
)
$
(
1,509,456
)
$
14,851,752
Issuance of Class A Ordinary Shares and warrants, net of issuance cost
412,058
4,120,581
-
-
12,661,754
-
-
-
16,782,335
Issuance of shares to non-controlling interest
-
-
-
-
25,715
-
-
(
25,715
)
-
Warrant Exchange
54,054
540,540
-
-
(
540,540
)
-
-
-
-
Share-based compensation
-
-
-
-
1,478,565
-
-
-
1,478,565
Exercise of warrants
31,351
313,513
-
-
(
313,513
)
-
-
-
-
Exercise of options
1,233
12,328
-
-
48,298
-
-
-
60,626
Exchange difference on translation of foreign operation
-
-
-
-
-
-
58,848
-
58,848
Net income (loss)
-
-
-
-
-
7,066,854
-
(
2,146,687
)
4,920,167
Balance, December 31, 2020
1,158,432
$
11,584,324
2,243,776
$
22,437,754
$
38,247,903
$
(
30,489,126
)
$
53,296
$
(
3,681,858
)
$
38,152,293
Issuance of Class A Ordinary Shares
138,793
1,387,925
-
-
2,612,075
-
-
-
4,000,000
Issuance of shares to non-controlling interest
-
-
-
-
66,783
-
-
(
61,423
)
5,360
Disposal of subsidiaries under common control transaction
-
-
-
-
303,419
-
(
5,386
)
(
300,000
)
(
1,967
)
Disposal of subsidiaries
-
-
-
-
-
-
-
7,962
7,962
Share-based compensation
-
-
-
-
1,682,460
-
-
-
1,682,460
Exercise of warrants
4,000
40,000
-
-
90,012
-
-
-
130,012
Exercise of options
19,016
190,159
-
-
504,065
-
-
-
694,224
Exchange difference on translation of foreign operation
-
-
-
-
-
-
(
49,929
)
-
(
49,929
)
Net loss
-
-
-
-
-
(
25,048,389
)
-
(
2,065,904
)
(
27,114,293
)
Balance, December 31, 2021
1,320,241
$
13,202,408
2,243,776
$
22,437,754
$
43,506,717
$
(
55,537,515
)
$
(
2,019
)
$
(
6,101,223
)
$
17,506,122
Issuance of shares to non-controlling interest
-
-
-
-
52,024
-
-
(
52,024
)
-
Share-based compensation
-
-
-
-
1,646,999
-
-
-
1,646,999
Exercise of options
6,712
67,120
-
-
102,340
-
-
-
169,460
Exchange difference on translation of foreign operation
-
-
-
-
-
-
35,826
-
35,826
Net loss
-
-
-
-
-
(
9,799,560
)
-
(
1,725,542
)
(
11,525,102
)
Balance, December 31, 2022
1,326,953
$
13,269,528
2,243,776
$
22,437,754
$
45,308,080
$
(
65,337,075
)
$
33,807
$
(
7,878,789
)
$
7,833,305
(1)
All per share amounts and shares outstanding for all periods have been retroactively restated to reflect APTORUM GROUP LIMITED's 1 for 10 reverse stock split, which was effective on January 23, 2023.
See accompanying notes to the consolidated financial
statements.
F-
5
APTORUM GROUP LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Years Ended December 31, 2022, 2021 and
2020
(Stated in U.S. Dollars)
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Cash flows from operating activities
Net (loss) income
$
(
11,525,102
)
$
(
27,114,293
)
$
4,920,167
Adjustments to reconcile net (loss) income to net cash used in operating activities
Amortization and depreciation
1,207,510
1,192,578
1,334,661
Share-based compensation
1,646,999
1,682,460
1,478,565
Loss (gain) on investments in marketable securities, net
134,134
8,031,595
(
25,241,556
)
Gain on non-marketable investments
(
5,588,051
)
-
-
Loss on investments in derivatives, net
-
4,289
199,031
Gain on derecognition of non-financial assets
-
(
75,000
)
-
Loss on disposal of an intangible asset
205,189
-
-
Loss on disposal of subsidiaries
-
3,638
-
Gain on use of digital currencies
-
(
4,918
)
-
Settlement of service fee by tokens and digital currencies
-
90,457
24,000
Operating lease cost
349,031
425,280
483,398
Loss on disposal of property, plant and equipment
-
392
50,197
Impairment loss of property, plant and equipment
-
-
330,445
Impairment loss of intangible assets
-
-
200,000
Interest income
(
235,560
)
(
41,246
)
(
825
)
Interest expense and accretion of convertible debts
87,537
130,397
237,163
Accretion of finance lease obligation
1,435
4,450
7,290
Changes in operating assets and liabilities
Accounts receivable
(
95,704
)
(
16,501
)
(
21,678
)
Inventories
8,053
3,358
(
4,948
)
Other receivables and prepayments
(
105,584
)
695,308
(
358,365
)
Long-term deposits
19,328
-
20
Due from brokers
75,728
83,957
156,668
Amounts due from related parties
(
46,349
)
112,635
50,962
Amounts due to related parties
(
6,805
)
(
264,934
)
(
120,560
)
Accounts payable and accrued expenses
1,918,751
855,272
800,960
Operating lease liabilities
(
369,505
)
(
450,807
)
(
457,508
)
Net cash used in operating activities
(
12,318,965
)
(
14,651,633
)
(
15,931,913
)
Cash flows from investing activities
Purchases of intangible assets
-
(
6,026
)
-
Purchases of property, plant and equipment
(
186,916
)
(
131,750
)
(
161,314
)
Proceeds from disposal of property, plant and equipment
-
-
1,051,282
Disposal of subsidiaries, net of cash disposed
-
(
113,830
)
-
Proceeds from sales of investment securities
-
20,116,734
952,196
Loan to a related party
(
330,341
)
(
3,358,089
)
-
Repayment of loan from a related party
2,962,153
-
-
Net cash provided by investing activities
2,444,896
16,507,039
1,842,164
Cash flows from financing activities
Loan from related parties
500,000
3,500,000
1,000,000
Repayment of loan due to related parties
-
(
5,489,665
)
(
5,306,558
)
Proceeds from issuance of subsidiaries shares
5,360
-
-
Proceeds from issuance of Class A Ordinary Shares and warrants
-
4,000,000
17,497,426
Payments of offering costs
-
-
(
715,091
)
Exercise of share options
169,460
694,224
-
Exercise of warrants
-
130,012
-
Loan from a bank
3,000,000
-
-
Proceeds from issuance of convertible notes
3,000,000
-
-
Payment of finance lease obligations
(
49,358
)
(
53,846
)
(
53,845
)
Net cash provided by financing activities
6,625,462
2,780,725
12,421,932
Net (decrease) increase in cash and restricted cash
(
3,248,607
)
4,636,131
(
1,667,817
)
Cash and restricted cash – Beginning of year
8,261,487
3,625,356
5,293,173
Cash and restricted cash – End of year
$
5,012,880
$
8,261,487
$
3,625,356
Supplemental disclosures of cash flow information
Interest paid
$
64,744
$
273,155
$
131,554
Income taxes paid
$
-
$
-
$
-
Proceeds in broker accounts
$
-
$
20,116,734
$
952,196
Non-cash operating, investing and financing activities
Right-of-use assets obtained in exchange for new operating lease liabilities
$
549,596
$
-
$
1,107,206
Settlement of service fee by tokens and digital currencies
$
-
$
90,457
$
24,000
Deemed dividend related to warrants down round provision
$
-
$
-
$
755,514
Reconciliation of cash and restricted cash
Cash
$
1,882,545
$
8,131,217
$
3,495,231
Restricted cash
3,130,335
130,270
130,125
Total cash and restricted cash shown in the consolidated statements of cash flows
$
5,012,880
$
8,261,487
$
3,625,356
See accompanying notes to the consolidated financial
statements.
F-
6
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
1. ORGANIZATION
The consolidated financial statements include
the financial statements of Aptorum Group Limited (the "Company") and its subsidiaries. The Company and its subsidiaries
are hereinafter collectively referred to as the "Group".
The Company, formerly known as APTUS Holdings
Limited and STRIKER ASIA OPPORTUNITIES FUND CORPORATION, is a company incorporated on September 13, 2010 under the laws of the Cayman
Islands with limited liability.
The Company researches and develops life science
and biopharmaceutical products within its wholly-owned subsidiary, Aptorum Therapeutics Limited, formerly known as APTUS Therapeutics
Limited ("Aptorum Therapeutics") and its indirect subsidiary companies (collectively, "Aptorum Therapeutics Group").
Below summarizes the list of the major subsidiaries consolidated as
of December 31, 2022:
Name
Incorporation
date
Ownership
Place
    of
incorporation
Principle
    activities
Aptorum Therapeutics Limited ("ATL")
June 30, 2016
100
%
Cayman Islands
Research and development of life science and biopharmaceutical products
APTUS MANAGEMENT LIMITED
May 16, 2017
100
%
Hong Kong
Provision of management services to its holding company and fellow subsidiaries
Aptorum Medical Limited
August 28, 2017
91
%
Cayman Islands
Provision of medical clinic services
Paths Innovations Limited (formerly known as Aptorum
    Innovations Holding Limited)
April 15, 2019
100
%
Cayman Islands
Investment holding company
Paths Diagnostics Pte. Limited (formerly known as Aptorum
    Innovations Holding Pte. Limited)
June 5, 2019
75
%
Singapore
Research and development of life science and biopharmaceutical products
Acticule Life Sciences Limited
June 30, 2017
80
%
Cayman Islands
Research and development of life science and biopharmaceutical products
Claves Life Sciences Limited
August 2, 2017
100
%
Cayman Islands
Research and development of life science and biopharmaceutical products
Nativus Life Sciences Limited
July 7, 2017
100
%
Cayman Islands
Research and development of life science and biopharmaceutical products
Videns Incorporation Limited
March 2, 2017
100
%
Cayman Islands
Research and development of life science and biopharmaceutical products
Mios Pharmaceuticals Limited
March 6, 2018
97.93
%
Cayman Islands
Research and development of life science and biopharmaceutical products
mTOR (Hong Kong) Limited
November 4, 2016
90
%
Hong Kong
Research and development of life science and biopharmaceutical products
Scipio Life Sciences Limited
July 19, 2017
97.93
%
Cayman Islands
Research and development of life science and biopharmaceutical products
Signate Life Sciences Limited
August 28, 2017
100
%
Cayman Islands
Research and development of life science and biopharmaceutical products
F-
7
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
2. LIQUIDITY
The Group reported a net loss of $
11,525,102
and net operating cash outflow of $
12,318,965
for the year ended December 31, 2022. In addition, the Group had an accumulated deficit
of $
65,337,075
as of December 31, 2022. The Group's operating results for future periods are subject to numerous uncertainties
and it is uncertain if the Group will be able to reduce or eliminate its net losses for the foreseeable future. If management is not
able to generate significant revenues from its product candidates currently in development, the Group may not be able to achieve profitability.
The Group's principal sources of liquidity
have been cash and line of credit facility from related parties and banks. As of the date of issuance of the consolidated financial statements,
the Group has approximately $
1.4
million of restricted and unrestricted cash (excluded $
3
million time deposits pledged to a loan), and
approximately $
9.5
million of undrawn line of credit facilities from a related party. In addition, the Group maintains its operating costs
at a level through strict cost control and budget until the completion of the reverse takeover transaction.
The Group believes that available cash, together
with the efforts from aforementioned management plan and actions, should enable the Group to meet current anticipated cash needs for
at least the next 12 months after the date that the consolidated financial statements are issued and the Group has prepared the consolidated
financial statements on a going concern basis. We may, however, need additional capital in the future to fund our continued operations.
If we determine that our cash requirements exceed the amount of cash and cash equivalents we have at the time, we may seek to issue equity
or debt securities or obtain credit facilities. The issuance and sale of additional equity or convertible debts would result in further
dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating
covenants that might restrict our operations. We cannot assure you the financing will be available in amounts or on terms acceptable
to us, if at all.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of presentation and consolidation
The consolidated financial statements of the
Group are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States
of America ("U.S. GAAP") and include the accounts of the Company, its direct and indirect wholly and majority owned subsidiaries.
In accordance with the provisions of Accounting Standards Codification ("ASC") 810, Consolidation, we consolidate any variable
interest entity ("VIE") of which we are the primary beneficiary. The typical condition for a controlling financial interest
ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities,
such as VIEs, through arrangements that do not involve controlling voting interests. ASC 810 requires a variable interest holder to consolidate
a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance
and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from
the VIE that could potentially be significant to the VIE. We do not consolidate a VIE in which we have a majority ownership interest
when we are not considered the primary beneficiary. We have determined that we are not one of the primary beneficiary of the VIE (see
Note 14, Variable Interest Entity). We evaluate our relationships with the VIE on an ongoing basis to determine whether we become the
primary beneficiary. All material intercompany balances and transactions have been eliminated in preparation of the consolidated financial
statements.
F-
8
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Non-controlling interests
Non-controlling interests are recognized to reflect
the portion of the equity of majority-owned subsidiaries which are not attributable, directly or indirectly, to the controlling shareholder.
Non-controlling interests are classified as a separate line item in the equity section of the Group's consolidated balance sheets and
have been separately disclosed in the Group's consolidated statements of operations and comprehensive loss to distinguish the interests
from that of the Group.
Use of estimates
The preparation of the consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as income
and expenses during the reporting period. Significant accounting estimates reflected in the Group's consolidated financial statements
include valuation of equity securities, fair value of investments in securities, convertible debts, finance lease, warrants and share
options, the useful lives of intangible assets and property, plant and equipment, impairment of long-lived assets, valuation allowance
for deferred tax assets, and collectability of receivables. Actual results could differ from those estimates.
Foreign currency translation and transaction
USD is the reporting currency. The functional
currency of subsidiaries in the Cayman Islands, Seychelles, Samoa and the United States are USD, the functional currency of subsidiaries
in Hong Kong is Hong Kong Dollars ("HKD"), the functional currency of a subsidiary in Singapore is Singapore Dollars ("SGD"),
the functional currency of a subsidiary in the United Kingdom is Great British Pound ("GBP"), the functional currency of
subsidiaries in Canada is Canadian Dollars ("CAD"), and the functional currency of subsidiaries in Ireland is Euro ("EUR").
An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the
currency of the environment in which it primarily generates and expends cash. The management considered various indicators, such as cash
flows, market expenses, financing and inter-company transactions and arrangements in determining the Group's functional currency.
In the consolidated financial statements, the
financial information of the Company and its subsidiaries, which use HKD, SGD, GBP, CAD and EUR as their functional currency, has been
translated into USD. Assets and liabilities are translated from each subsidiary's functional currency at the exchange rates on
the balance sheet dates, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated
using the average exchange rates for the year. Translation adjustments are reported as cumulative translation adjustments and are shown
as a separate component of other comprehensive income or loss in the consolidated statements of operations and comprehensive income or
loss.
Cash
Cash consists of cash on hand and bank deposits,
which is unrestricted as to withdrawal and use.
Restricted cash
Restricted cash represented time deposits pledged
for banking facilities.
F-
9
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Inventories
Inventories are stated at lower of cost and net
realizable value. Cost is determined using the weighted average method.
Where there is evidence that the utility of inventories,
in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes
in price levels, or other causes, the inventories are written down to net realizable value.
Accounts receivable
Accounts receivable are stated at the original
amount less an allowance for doubtful receivables, if any, based on a review of all outstanding amounts at period end. An allowance is
estimated in accordance with ASC Topic 326,
Credit Losses
and records the allowance for credit losses as an offset to accounts
receivable, and the expected credit losses charged to the allowance is included in other operating expenses in the consolidated statements
of operations. In determining expected credit losses, the Group consider the historical level of credit losses, current economic trends,
and reasonable and supportable forecasts that affect the collectability of the future cash flows. As of December 31, 2022 and 2021, no
allowance for doubtful receivables were made.
Marketable securities
Marketable securities are publicly traded stocks
measured at fair value and classified within Level 1 and 2 in the fair value hierarchy because the Group either uses quoted prices for
identical assets in active markets, inputs that are based upon quoted prices for similar instruments in active markets, or quoted prices
for identical assets in markets with insufficient volume or infrequent transaction (less active markets).
Long-term investments
The Group's long-term investments consist
of equity method investment in common stocks and non-marketable investments in non-redeemable preferred shares of privately-held companies
that are not required to be consolidated under the variable interest or voting models. Long-term investments are classified as non-current
assets on the consolidated balance sheets as those investments do not have stated contractual maturity dates.
Non marketable investments
The non-marketable equity securities not accounted
for under the equity method are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in
orderly transactions for identical or similar investments of the same issuer. Adjustments are determined primarily based on a market approach
as of the transaction date.
Equity method investment – Fair value option
The Group elects the fair value option for an
investment that would otherwise be accounted for using the equity method of accounting. Such election is irrevocable and is applied on
an investment by investment basis at initial recognition. The fair value of such investments is based on quoted prices in an active market,
if any, or recent orderly transactions for identical or similar investment of the same issuer. Changes in the fair value of these equity
method investments are recognized in other income (loss), net in the consolidated statement of operations.
F-
10
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Fair value measurement
Fair value is defined as the price that would
be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the
Group considers the principal or most advantageous market in which it would transact its business, and it considers assumptions that market
participants would use when pricing the asset or liability.
As a basis for considering such assumptions, a
three-tier fair value hierarchy prioritizes the inputs utilized in measuring fair value as follows:
●
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
●
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
●
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The hierarchy requires the Group to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization
within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Group has
estimated the fair value amounts of its financial instruments using the available market information and valuation methodologies considered
to be appropriate and has determined that the carrying value of the Group's cash, restricted cash, accounts receivable, due from
brokers, other receivables and prepayments, amounts due from/to related parties, accounts payable and accrued expenses, loan receivables
from related parties, loan payables, and loan payables to a related party as of December 31, 2022 and 2021 approximate fair value due
to the short-term nature of these assets and liabilities.
Property, plant and equipment
Property, plant and equipment is stated at cost
less accumulated depreciation and impairment losses. Cost represents the purchase price of the asset and other costs incurred to bring
the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major
additions to physical properties are capitalized.
Assets under construction are stated at cost less
impairment losses. Cost comprises of cost of laboratory equipment delivered but not ready to be used, together with interest expense capitalized
during the period of construction or installation and testing. Capitalization of these costs ceases and the asset concerned is transferred
to the appropriate fixed assets category when substantially all the activities necessary to prepare the asset for its intended use are
completed.
Depreciation of property, plant and equipment
is provided using the straight-line method over their estimated useful lives:
Computer equipment
3
years
Furniture, fixture, and office and medical equipment
5
years
Leasehold improvements
Shorter of the remaining lease terms or 5 years
Laboratory equipment
5
years
Motor vehicle
5
years
Upon sale or disposal, the applicable amounts
of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or
credited to income.
F-
11
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Intangible assets
Indefinite-lived intangible assets are tested
for impairment at least annually and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair values are less than
their carrying values.
Finite-lived intangible assets are carried at
cost less accumulated amortization and impairment if any. The finite intangible assets are amortized over their estimated useful life,
which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Group. These
intangible assets are tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may
be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts.
The Group may rely on a qualitative assessment when performing its intangible asset impairment test. Otherwise, the impairment evaluation
is performed at the lowest level of identifiable cash flows independent of other assets.
The Group's intangible assets mainly consist
of computer software, exclusive rights in prepaid patented and unpatented licenses. The prepaid patented licenses are for clinical purpose
or further development into other products. Prepaid unpatented license is for further development, once the associated research and development
efforts are completed, the prepaid unpatented license will be reclassified as a finite-lived asset and is amortized over its useful life.
The estimated useful life of the exclusive rights in using patents is generally the remaining patent life from the acquisition date to
expiration date under the law, which is
17
to
20
years, the Group will reassess the remaining patent life on annual basis, and the Group
will assess the intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may no longer be recoverable.
Impairment of long-lived assets
The Group reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events
occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash
flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow
is less than the carrying amount of the assets, the Group would recognize an impairment loss, which is the excess of carrying amount over
the fair value of the assets, using the expected future discounted cash flows.
Convertible notes
The Group evaluates and account for conversion
options embedded in convertible notes in accordance with ASC 815 "Derivatives and Hedging Activities".
Applicable 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 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 Group accounts for convertible notes (when
it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Group
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 Class A Ordinary Shares 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.
F-
12
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Operating leases
lAt the inception of a contract, the Group determines
if the arrangement is, or contains, a lease. Operating lease liabilities are recognized at lease commencement based on the present value
of lease payments over the lease term. Operating lease right-of-use assets are initially measured at cost, which comprises the initial
amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs
incurred and less any lease incentives received. As the rate implicit in the lease cannot be readily determined, the Group uses incremental
borrowing rate at the lease commencement date in determining the imputed interest and present value of lease payments. The incremental
borrowing rate is determined based on the rate of interest that the Group would have to pay to borrow an amount equal to the lease payments
on a collateralized basis over a similar term in a similar economic environment. The lease term for all of the Group's leases includes
the non-cancellable period of the lease plus any additional periods covered by either a Group's option to extend (or not to terminate)
the lease that the Group is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
For operating leases, the Group recognizes a single lease cost on a straight-line basis over the remaining lease term.
The Group has elected not to recognize right-of-use
assets or lease liabilities for leases with an initial term of 12 months or less and the Group recognizes lease expense for these leases
on a straight-line basis over the lease terms.
Finance lease
Leases that transfer substantially all the rewards
and risks of ownership of assets to the Group, other than legal title, are accounted for as finance leases. At the inception of a finance
lease, the cost of the leased asset is capitalized at the present value of the minimum lease payments and recorded together with the obligation,
excluding the interest element, to reflect the purchase and financing. Assets held under capitalized finance leases are included in property,
plant and equipment, and depreciated over the shorter of the lease terms and the estimated useful lives of the assets. The interest expenses
of such leases are charged to the consolidated statements of operations to provide a constant periodic rate of charge over the lease terms.
Warrants
In connection of the issuance of Class A Ordinary
Shares, the Company may issue warrants to purchase Class A Ordinary Shares. Warrants classified as equity are initially recorded at fair
value and subsequent changes in fair value are not recognized.
Revenue recognition
Revenues are derived from healthcare services
rendered to patients for healthcare consultation and medical treatment. Revenue is reported at the amount that reflects the consideration
to which the Group expects to be entitled in exchange for providing healthcare services.
The Group recognizes revenue as its performance
obligations are completed. Healthcare services are treated as a single performance obligation satisfied at a point in time because the
performance obligations are generally satisfied over a period of less than one day.
The Group determines the transaction price based
on established billing rates.  The Group considers the patient's ability and intent to pay the amount of consideration upon admission.  Subsequent
changes resulting from a patient's ability to pay are recorded as bad debt expense, which is included as a component of other operating
expenses in the consolidated statements of operations. During the years ended December 31, 2022, 2021, and 2020, the
bad debt expenses were $
71
,
nil
and
nil
, respectively.
Cost of healthcare services
Cost of healthcare services rendered represents
cost in relation to the medical services provided including the compensation of the physicians and cost of pharmaceutical supplies and
medicine.
Research and development expenses
Research and development costs are expensed as
incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including
amortization of the patent license, depreciation of laboratory equipment, costs of engaging external consultants, advisors and contracted
research organization to conduct preclinical development activities and trials, payroll expenses to research and development staff, and
sponsored research expenses to universities and research institutions.
F-
13
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Share-based compensation
The Group uses the fair value method of accounting
for the share options granted to directors, employees, external consultants and advisors to measure the cost services received in exchange
for the share based awards. The fair value of share option awards with only service condition is estimated on the grant or offering date
using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate,
expected term and expected volatility. These inputs are subjective and generally require significant judgment. The resulting cost is recognized
over the period during which a director, employee, external consultant or advisor is required to provide service in exchange for the awards,
usually the vesting period, which is generally from
9.5
months to
21.5
months. Share-based compensation expense is recognized on a graded
vesting basis, net of actual forfeitures in the period.
Share-based compensation expense is recorded in
cost of healthcare services, research and development expenses, general and administrative fees and legal and professional fees in the
consolidated statements of operations.
Gain or loss on derecognition of non-financial
asset
The Group determines if a contract exists, identifies
the distinct non-financial assets, and determines when control transfers and, therefore, when to derecognize the asset. Additionally,
the Group applies the measurement principles of revenue from contracts with customers within U.S. GAAP to determine the amount of consideration
to include in the calculation of the gain or loss for the non-financial asset. Any gains or losses have been included within other income
(loss), net.
Income taxes
The Group accounts for income taxes under the
asset and liability method. Under this method, deferred income taxes are determined based on differences between the financial carrying
amounts of existing assets and liabilities and their tax bases. Income taxes are provided for in accordance with the laws of the relevant
taxing authorities.
A valuation allowance is provided for deferred
tax assets if it is more likely than not that these items will either expire before the Group is able to realize their benefits, or that
future deductibility is uncertain. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
Uncertain tax positions
The Group accounts for uncertainty in income taxes
using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition
by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit,
including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest
amount that is more than
50
% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized
and recorded as necessary in the provision for income taxes. The Group recognizes interest on non-payment of income taxes and penalties
associated with tax positions when a tax position does not meet more likely than not thresholds be sustained under examination. The tax
returns of the Group's Hong Kong subsidiaries are subject to examination by the relevant tax authorities. According to the Hong
Kong Inland Revenue Department, the statute of limitation is six years if any company chargeable with tax has not been assessed or has
been assessed at less than the proper amount, the statute of limitation is extended to ten years if the underpayment of taxes is due to
fraud or willful evasion. According to United Kingdom, Singapore, the United States, Canada and Ireland tax rule, trading losses are available
to be carried forward indefinitely. The Group did not have any material interest or penalties associated with tax positions for the years
ended December 31, 2022, 2021 and 2020, and did not have any significant unrecognized uncertain tax positions as of December 31, 2022
and 2021. The Group does not believe that its assessment regarding unrecognized tax benefits will materially change over the next twelve
months.
Comprehensive income or loss
U.S. GAAP generally requires that recognized revenue,
expenses, gains and losses be included in net income or loss. Although certain changes in assets and liabilities are reported as separate
components of the equity section of the consolidated balance sheets, such items, along with net income or loss, are components of comprehensive
income or loss. The components of other comprehensive income or loss consist of exchange differences on translation of foreign operations.
Net income or loss per share
Basic net income or loss per share is computed
by dividing net income or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during
the period. Diluted net income or loss per share reflects the potential dilution that could occur if securities or other contracts to
issue ordinary shares were exercised or converted into ordinary shares. Potential dilutive securities are excluded from the calculation
of diluted loss per share in loss periods as their effect would be anti-dilutive.
F-
14
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Risks and uncertainties
The Group is subject to a number of risks associated
with companies at a similar stage, including dependence on key individuals, competition from similar services and larger companies, volatility
of the industry, ability to obtain regulatory clearance, ability to obtain adequate financing to support growth, the ability to attract
and retain additional qualified personnel to manage the anticipated growth of the Group and general economic conditions.
The Group is currently evaluating the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Group's
financial position and results of its operations, the specific impact is not readily determinable as of the date of the issuance of these
financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
Recently adopted accounting pronouncements
In December 2019, the FASB issued ASU 2019-12,
Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which simplifies the
accounting for income taxes. The Group adopted this standard effective January 1, 2022. The adoption did not have a material effect on
the Group's consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt
- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). ASU 2020-06 simplifies
the accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature models used to separately
account for embedded conversion features as a component of equity. Instead, the entity will account for the convertible debt securities
as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives. Additionally, the guidance
requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include
the effect of potential share settlement for instruments that may be settled in cash or shares. The Group adopted this standard effective
January 1, 2022. The adoption did not have any impact on the Group's consolidated financial statements.
In May 2021, the FASB issued ASU No. 2021-04,
Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The ASU addresses
the previous lack of specific guidance in the accounting standards codification related to modifications or exchanges of freestanding
equity-classified written call options (such as warrants) by specifying the accounting for various modification scenarios. The Group adopted
this standard effective January 1, 2022. The adoption does not have a material effect on the Group's consolidated financial statements.
In November 2021, the FASB issued ASU 2021-10,
Government Assistance (Topic 832). This ASU requires business entities to disclose information about government assistance they receive
if the transactions were accounted for by analogy to either a grant or a contribution accounting model. The disclosure requirements include
the nature of the transaction and the related accounting policy used, the line items on the balance sheets and statements of operations
that are affected and the amounts applicable to each financial statement line item and the significant terms and conditions of the transactions.
The Group adopted this standard effective January 1, 2022. The adoption does not have a material effect on the Group's consolidated
financial statements.
Recently issued accounting standards which have not yet been adopted
The Group is an "emerging growth company"
as defined in the Jumpstart Our Business Startups Act of 2010 (the "JOBS Act"). Under the JOBS Act, the emerging growth companies
("EGCs") can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such
time as those standards apply to private companies.
The Group does not believe other recently issued
but not yet effective accounting standards, if currently adopted, would have a material impact on the consolidated balance sheets, consolidated
statements of operations and cash flows.
4. REVENUE
For the years ended December 31, 2022, 2021 and
2020, all revenue came from provision of healthcare services in Hong Kong.
F-
15
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
5. INVESTMENT AND FAIR VALUE MEASUREMENT
Assets Measured at Fair Value on a Recurring Basis
The following table provides the assets and liabilities
carried at fair value measured on a recurring basis as of December 31, 2022 and 2021:
December 31, 2022
Level 1
Level 2
Level 3
Total
Current Assets
Marketable securities
Common stocks
$
10,202
$
92,279
$
-
$
102,481
Non current Assets
Long-term investments
Common stocks
-
-
77,200
77,200
Total assets at fair value
$
10,202
$
92,279
$
77,200
$
179,681
December 31, 2021
Level 1
Level 2
Level 3
Total
Current Assets
Marketable securities
Common stocks
$
23,527
$
213,088
$
-
$
236,615
Non current Assets
Long-term investments
Common stocks
$
-
$
-
$
77,200
$
77,200
Total assets at fair value
$
23,527
$
213,088
$
77,200
$
313,815
The following is a reconciliation of Level 3 assets
measured and recorded at fair value on a recurring basis during the years ended December 31, 2022 and 2021:
Warrants
Common Stock
Balance at January 1, 2022
$
-
$
77,200
Change in unrealized (depreciation) appreciation, net
-
-
Balance at December 31, 2022
$
-
$
77,200
Net change in unrealized appreciation relating to investments still held at December 31, 2022
-
-
Balance at January 1, 2021
$
4,289
$
-
Change in unrealized (depreciation) appreciation, net
(
4,289
)
-
Additions
-
77,200
Balance at December 31, 2021
$
-
$
77,200
Net change in unrealized appreciation relating to investments still held at December 31, 2021
-
-
The following table presents the quantitative
information about the Group's Level 3 fair value measurements of investment as of December 31, 2022 and 2021, which utilized significant
unobservable internally-developed inputs:
December 31, 2022
Valuation technique
Unobservable input
Range
(weighted average)
Common stocks
Recent transactions
Recent transaction price
$0.0001 - $0.01
December 31, 2021
Valuation technique
Unobservable input
Range
(weighted average)
Common stocks
Recent transactions
Recent transaction price
$0.0001 - $0.01
F-
16
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Non-marketable investments
The Group's
non-marketable investments are investments in privately held companies without readily determinable fair values. The carrying value of
the non-marketable investments are adjusted based on price changes from observable transactions of identical or similar securities of
the same issuer (referred to as the measurement alternative) or for impairment
if
the carrying amount
of the non-marketable investments may not be fully recoverable. Any changes in carrying value are recorded within other income (loss),
net in the consolidated statements of operations.
The following is a summary of annual upward or
downwards adjustments and impairment recorded in other income (loss), net, and included as adjustments to the carrying value of non-marketable
investments held as of December 31, 2022, 2021 and 2020 based on the observable price in an orderly transaction for the same or similar
security of the same issuers:
Year ended
December 31,
2022
Year ended
December 31,
2021
Year ended
December 31,
2020
Upward adjustments
$
6,108,872
$
-
$
-
Downward adjustments and impairment
(
520,821
)
-
-
Total unrealized gain for non-marketable investments
$
5,588,051
$
-
$
-
The Group did not sell any non-marketable investments
and recorded any realized gains or losses for the non-marketable investments measured at fair value on a non-recurring basis during the
years ended December 31, 2022, 2021 and 2020.
The following table summarizes the total carrying
value of the non-marketable investments held as of December 31, 2022 and 2021 including cumulative unrealized upward and downward
adjustments and impairment made to the initial cost basis of the investments:
December 31,
2022
December 31,
2021
Initial cost basis
$
4,079,707
$
4,079,707
Upward adjustments
6,108,872
-
Downward adjustments and impairment
(
520,821
)
-
Total carrying value at the end of the year
$
9,667,758
$
4,079,707
There was no transferred of non-marketable investments
into marketable securities for the year ended December 31, 2022 and 2021.
Equity method investment, fair value option
In December 2021, one of the Group's subsidiaries,
Libra Sciences Limited ("Libra", formerly known as Aptorum Pharmaceutical Development Limited), issued Class A and Class B
ordinary shares to various parties in exchange of licenses or cash.
Each Class A share of Libra is entitled to 1 vote while each Class
B share of Libra is entitled to 10 votes.
Upon the share issuance, the Group was holding
97.27
% economic interest and
31.51
% voting power
in Libra. The Group lost the controlling interest in Libra because it was transferred to a third party, and therefore deconsolidated Libra.
However, the Group still owns
97.27
% economic interest and
31.51
% voting power, which is deemed as having significant influence over Libra.
As a result, the Group's investment in Libra is subject to the equity method of accounting. The Group assessed that the fair value
option can better reflect the true value of Libra. Pursuant to ASC 825 – Financial Instruments ("ASC 825"), the Group
elected to apply the fair value option for its investments in Libra and will remeasure its investments in Libra at fair value every reporting
period. For the year ended December 31, 2022 and 2021, there was no change in fair value of equity method investment, at fair value.
F-
17
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
6. OTHER RECEIVABLES AND PREPAYMENTS
Other receivables and prepayments as of December 31, 2022 and 2021
consisted of:
December 31,
2022
December 31,
2021
Prepaid research and development expenses
$
305,178
$
314,165
Prepaid insurance
47,833
92,035
Prepaid service fee
148,346
90,857
Rental deposits
16,296
12,011
Prepaid rental expenses
-
13,205
Other receivables
204,752
47,697
Others
21,603
23,508
$
744,008
$
593,478
7.
Digital Currencies
The following table presents additional information about digital currencies:
December 31,
2022
December 31,
2021
Beginning balance
$
-
$
1,539
Utilization of digital currencies to settle service fee
-
(
6,457
Gain on use of digital currencies
-
4,918
Ending balance
$
-
$
-
8. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment as of December 31, 2022 and 2021 consisted
of:
December 31,
2022
December 31,
2021
Computer equipment
$
84,636
$
85,495
Furniture, fixture, and office and medical equipment
298,738
264,123
Leasehold improvements
543,975
542,514
Laboratory equipment
6,229,072
4,179,064
Motor vehicle
239,093
239,093
Assets in construction
-
1,899,169
7,395,514
7,209,458
Less: accumulated depreciation
4,570,455
3,478,342
Property, plant and equipment, net
$
2,825,059
$
3,731,116
Depreciation expenses for property, plant and
equipment amounted to $
1,092,957
, $
1,086,564
and $
1,128,867
for the years ended December 31, 2022, 2021 and 2020, respectively.
For the year ended December 31, 2020, the Group
recorded $
330,445
of impairment loss of buildings in other operating expenses due to the management assessed that its carrying amount
may not be recoverable. On July 20, 2020, the Group signed a sales and purchase agreement to sell its property in Fo Tan, Hong Kong, at
approximately $
1.1
million to a third party buyer. The property was assigned to the buyer on September 1, 2020. For the year ended December
31, 2022 and 2021, no impairment loss was recorded.
For the year ended December 31, 2021, the Group
recorded $
392
of loss on disposal of office equipment in other operating expenses. For the year ended December 31, 2020, the Group disposed
certain leasehold improvement and furniture, fixture, and office equipment as a result of the relocation of office, incurred a disposal
loss of $
50,197
in other operating expenses. For the year ended December 31, 2022, no gain or loss from disposal was recorded.
F-
18
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
9. INTANGIBLE ASSETS, NET
December 31,
2022
December 31,
2021
Gross carrying amount
Prepaid patented licenses
$
1,038,205
$
1,338,205
Computer software
223,858
31,667
1,262,063
1,369,872
Less: accumulated amortization
Prepaid patented licenses
474,131
462,803
Computer software
35,227
26,813
509,358
489,616
Intangible assets, net
Prepaid patented licenses
564,074
875,402
Computer software
188,631
4,854
Intangible assets, net
$
752,705
$
880,256
As of December 31, 2022 and 2021, the Group has
capitalized eight and seven of the exclusive licenses respectively, which includes seven patented technologies in relation to the Group's
therapeutics segment respectively. Pursuant to the license agreements, the Group paid upfront payments and became the exclusive licensee
to prosecute certain patents developed or licensed under the applicable agreements.
Prepaid patented licenses and computer software
are finite-lived intangible assets which are amortized over their estimated useful life. Amortization expenses for finite-lived intangible
assets amounted to $
114,553
, $
106,014
and $
145,961
for the years ended December 31, 2022, 2021 and 2020, respectively.
A license agreement was terminated on December
15, 2022. As a result, a loss on disposal of $
205,189
related to a patented license was recognized in research and development expenses
during the year ended December 31, 2022. For the year ended December 31, 2020, an impairment loss of $
200,000
was recognized in research
and development expenses as the Group considered that the carrying amount of an intangible asset related to an unpatented license may
not be recoverable. This license agreement was terminated on February 19, 2021. For the year ended December 31, 2021, no impairment loss
was recorded.
The Group wrote off the cost and the related amortization
of $
nil
, $
1,344
and $
70,477
after the expiration of the computer software for the years ended December 31, 2022, 2021 and 2020, respectively.
The Group expects amortization expense related
to its finite-lived intangible assets for the next
five years
and thereafter to be as follows as of December 31, 2022:
For the years ending December 31,
Amount
2023
$
146,584
2024
138,956
2025
119,713
2026
119,713
2027
106,795
Thereafter
326,133
Total
$
957,894
F-
19
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
10. LONG-TERM DEPOSITS
Long-term deposits as of December 31, 2022 and 2021 consisted of:
December 31,
2022
December 31,
2021
Rental deposits
$
127,303
$
149,175
Prepayments for equipment
2,544
147,050
$
129,847
$
296,225
11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses as of December 31, 2022 and 2021
consisted of:
December 31,
2022
December 31,
2021
Deferred bonus and salaries payable
$
5,084,969
$
3,173,739
Research and development expenses payable
563,913
519,012
Professional fees payable
226,407
166,190
Cost of healthcare services payable
138,316
142,968
Insurance expenses payable
33,367
35,010
Others
119,835
135,646
$
6,166,807
$
4,172,565
12. INCOME TAXES
The Company and its subsidiaries file tax returns separately.
Income taxes
Cayman Islands: under the current laws of the
Cayman Islands, the Company and its subsidiaries in the Cayman Islands are not subject to taxes on their income and capital gains.
Hong Kong: in accordance with the relevant tax
laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax
rate on taxable income. In March 2018, the Hong Kong Government introduced a two-tiered profit tax rate regime by enacting the Inland
Revenue (Amendment) (No.3) Ordinance 2018 (the "Ordinance").
Under the two-tiered profits tax rate regime, the first $2 million
of assessable profits of qualifying corporations is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective
from the year of assessment 2018-2019. According to the policy, if no election has been made, the whole of the taxpaying entity's
assessable profits will be chargeable to Profits Tax at the rate of 16.5% or 15%, as applicable. Because the preferential tax treatment
is not elected by the Group, all the subsidiaries registered in Hong Kong are subject to income tax at a rate of 16.5%.
The subsidiaries
registered in Hong Kong did not have assessable profits that were derived Hong Kong during the years ended December 31, 2022, 2021 and
2020. Therefore, no Hong Kong profit tax has been provided for in the periods presented. Our returns for 2016 and subsequent tax years
remain subject to examination by Hong Kong Inland Revenue Department.
F-
20
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
United Kingdom: in accordance with the relevant
tax laws and regulations of United Kingdom, a company registered in the United Kingdom is subject to income taxes within United Kingdom
at the applicable tax rate on taxable income. All the United Kingdom subsidiaries that are not entitled to any tax holiday were subject
to income tax at a rate of
19
%. The subsidiary in United Kingdom did not have assessable profits that were derived from United Kingdom
during the years ended December 31, 2022, 2021 and 2020. Therefore, no United Kingdom profit tax has been provided for in the periods
presented. Our returns for 2018 and subsequent tax years remain subject to examination by the UK tax authority.
Singapore: in accordance with the relevant tax
laws and regulations of Singapore, a company registered in the Singapore is subject to income taxes within Singapore at the applicable
tax rate on taxable income. All the Singapore subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate
of
17
%. The subsidiary in Singapore did not have assessable profits that were derived from Singapore during the years ended December 31,
2022, 2021 and 2020. Therefore, no Singapore profit tax has been provided for in the periods presented. Our returns for 2018 and subsequent
tax years remain subject to examination by the Singapore tax authority.
United States (Nevada): in accordance with the
relevant tax laws and regulations of the United States, a company registered in the United States is subject to income taxes within the
United States at the applicable tax rate on taxable income. All the United States subsidiaries in Nevada that are not entitled to any
tax holiday were subject to income tax at a rate of
21
%. The subsidiary in the United States did not have assessable profits that were
derived from the United States during the years ended December 31, 2022, 2021 and 2020. Therefore, no United States profit tax has been
provided for in the periods presented. Our returns for 2019 and subsequent tax years remain subject to examination by Internal Revenue
Service.
Canada: in accordance with the relevant tax laws
and regulations of Canada, a company registered in Canada is subject to income taxes within Canada at the applicable tax rate on taxable
income. All the Canada subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of
15
%. The subsidiary
in Canada did not have assessable profits that were derived from Canada during the years ended December 31, 2022, 2021 and 2020. Therefore,
no Canada profit tax has been provided for in the periods presented. Our returns for 2018 and subsequent tax years remain subject to examination
by the Canada tax authority.
Ireland: in accordance with the relevant tax laws
and regulations of Ireland, a company registered in Ireland is subject to income taxes within Ireland at the applicable tax rate on taxable
income. All the Ireland subsidiaries that are not entitled to any tax holiday were subject to income tax at a rate of
12.5
%. The subsidiary
in Ireland did not have assessable profits that were derived from Ireland during the years ended December 31, 2022, 2021 and 2020. Therefore,
no Ireland profit tax has been provided for in the periods presented. Our returns for 2018 and subsequent tax years remain subject to
examination by the Ireland tax authority.
The components of the provision for income taxes expenses are:
Year ended
December 31,
2022
Year ended
December 31,
2021
Year ended
December 31,
2020
Current
$
-
$
-
$
-
Deferred
-
-
-
Total income taxes expense
$
-
$
-
-
The reconciliation of income taxes expenses computed
at the Hong Kong statutory tax rate applicable to income tax expense is as follows:
Year ended
December 31,
2022
Year ended
December 31,
2021
Year ended
December 31,
2020
Net income (loss) before tax
$
(
11,525,102
)
$
(
27,114,293
)
$
4,920,167
Provision for income taxes at Hong Kong statutory income tax rate (
16.5
%)
(
1,901,642
)
(
4,473,859
)
811,828
Impact of different tax rates in other jurisdictions
(
263,787
)
(
214,135
)
(
18,869
)
Non-taxable income
(
907,495
)
(
716,628
)
(
4,281,521
)
Non-deductible expenses
-
1,992,463
79,200
Change in valuation allowance
3,072,924
3,412,159
3,409,362
Effective income tax expense
$
-
$
-
$
-
F-
21
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Deferred tax asset, net
Deferred tax assets and deferred tax liabilities
reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purpose
and the tax bases used for income tax purpose. The following represents the tax effect of each major type of temporary difference.
December 31,
2022
December 31,
2021
Deferred tax asset:
Tax loss carry forward
$
14,865,121
$
12,189,424
Share-based payment expenses
948,893
698,564
15,814,014
12,887,988
Deferred tax liability:
Depreciation and amortization
(
108,926
)
(
255,824
)
Net deferred tax assets before valuation allowance
15,705,088
12,632,164
Valuation allowance
(
15,705,088
)
(
12,632,164
)
Deferred tax asset, net
$
-
$
-
As of December 31, 2022 and 2021, the Group had
net operating loss carry-forwards of $
90,060,983
and $
73,785,041
, respectively, including its Hong Kong, Singapore, the United States,
the United Kingdom, Canada and Ireland operations, which are available to reduce future taxable income and have an unlimited carryover
period. For the year ended December 31, 2021, there was no tax loss carried forward expired, while tax loss brought forward of $
1,805,527
was cancelled due to the disposal of various subsidiaries.
Valuation allowance was provided against deferred
tax assets in entities where it was determined, it was more likely than not that the benefits of the deferred tax assets will not be realized.
The Group had deferred tax assets which consisted of tax loss carry forward, which can be carried forward to offset future taxable income.
The Group maintains a full valuation allowance on its net deferred tax assets. The management determines it is more likely than not that
all of its deferred tax assets will not be utilized.
Changes in valuation allowance are as follows:
Year ended
December 31,
2022
Year ended
December 31,
2021
Year ended
December 31,
2020
Balance as of January 1
$
12,632,164
$
9,561,560
$
6,152,198
Additions
3,072,924
3,412,159
3,409,362
Disposal
-
(
341,555
)
-
Balance as of December 31
$
15,705,088
$
12,632,164
$
9,561,560
13. RELATED PARTY BALANCES AND TRANSACTIONS
The following is a list of a director and related parties to which
the Group has transactions with:
(a)
Ian Huen, a Non-executive Director of the Group since June 1, 2022. Before June 1, 2022, he was the Chief Executive Officer and Executive Director of the Group;
(b)
Darren Lui, the Chief Executive Officer and Executive Director since June 1, 2022. Before June 1, 2022, he was the President and Executive Director of the Group;
(c)
Clark Cheng, an Executive Director of the Group;
(d)
Sabrina Khan, the Chief Financial Officer of the Group. On July 11, 2022, she resigned from her position as Chief Financial Officer.
(e)
Aeneas Group Limited, an entity controlled by Ian Huen;
F-
22
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
(f)
Aenco Limited, an entity controlled by Ian Huen;
(g)
Aeneas Technology (Hong Kong) Limited, an entity controlled by Ian Huen;
(h)
Aeneas Management Limited, an entity controlled by Ian Huen;
(i)
Talem Medical Group Limited, an entity which Clark Cheng is a director;
(j)
Jurchen Investment Corporation, the holding company and an entity controlled by Ian Huen;
(k)
CGY Investment Limited, an entity jointly controlled by Darren Lui;
(l)
ACC Medical Limited, an entity controlled by Clark Cheng;
(m)
Libra Sciences Limited, an entity which was originally a wholly owned subsidiary of ATL. Since December 30, 2021, Libra has been turned into a related party to the Group due to the voting power owned by ATL is decreased to below
50
% but more than
20
%. (Note 14)
(n)
Libra Therapeutics Limited, a wholly owned subsidiary of Libra Sciences Limited; and
(o)
Aenco Technologies Ltd, an entity being
34.56
% effectively owned by Ian Huen.
Amounts due from related parties
Amounts due from related parties consisted of the following as of December
31, 2022 and 2021:
December 31,
2022
December 31,
2021
Current
Libra Sciences Limited (Note b)
$
378,036
$
4,193
Libra Therapeutics Limited
17,459
-
Jurchen Investment Corporation
-
2,000
CGY Investment Limited
-
2,000
Talem Medical Group Limited (Note b)
610,138
3,397,650
Total
$
1,005,633
$
3,405,843
Amounts due to related parties
Amounts due to related parties consisted of the following as of December
31, 2022 and 2021:
December 31,
2022
December 31,
2021
Current
Aenco Technologies Ltd
$
3,013,234
$
-
Aeneas Group Limited
8,110
-
Ian Huen
-
1,397
Darren Lui
-
3,449
Clark Cheng
4,583
5,699
Sabrina Khan
-
844
Total
$
3,025,927
$
11,389
Non-current
Aeneas Group Limited (Note a)
$
500,000
$
-
Jurchen Investment Corporation (Note a)
-
-
$
500,000
$
-
F-
23
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Related party transactions
Related party transactions consisted of the following
for the years ended December 31, 2022, 2021 and 2020:
Year ended
December 31,
2022
Year ended
December 31,
2021
Year ended
December 31,
2020
Loan from related parties (Note a)
- Aeneas Group Limited
$
500,000
$
1,000,000
$
500,000
- Jurchen Investment Corporation
$
-
$
2,500,000
$
500,000
Interest expenses (Note a and c)
- Aeneas Group Limited
$
8,110
$
64,753
$
155,633
- Jurchen Investment Corporation
$
-
$
65,644
$
81,530
- Aenco Technologies Ltd
$
13,234
$
-
$
-
Loan repayment and interest paid to related parties (Note a)
- Aeneas Group Limited
$
-
$
2,673,389
$
2,356,080
- Jurchen Investment Corporation
$
-
$
3,085,097
$
3,082,131
Loan to related parties (Note b)
- Talem Medical Group Limited
$
-
$
3,358,089
$
-
- Libra Sciences Limited
$
330,341
$
-
$
-
Interest income (Note b)
- Talem Medical Group Limited
$
164,600
$
39,561
$
-
- Libra Sciences Limited
$
14,232
$
-
$
-
Loan repayment and interest received from a related party (Note b)
- Talem Medical Group Limited
$
2,962,153
$
-
$
-
Issuance of convertible notes to a related party (Note c)
- Aenco Technologies Ltd
$
3,000,000
$
-
$
-
Consultant, secondment, management and administrative services fees (Note d)
- CGY Investments Limited
$
268,102
$
173,333
$
169,462
- ACC Medical Limited
$
209,626
$
157,511
$
13,018
- Aenco Limited
$
-
$
-
$
746,153
- Aeneas Technology (Hong Kong) Limited
$
-
$
-
$
617,794
- Aeneas Management Limited
$
-
$
-
$
231,795
Rental expense (Note e)
- Jurchen Investment Corporation
$
-
$
-
$
96,300
Administrative management services (Note g)
- Libra Sciences Limited
$
38,462
$
-
$
-
Healthcare services income
- Aeneas Management Limited
$
1,282
$
7,564
$
321
F-
24
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Note a: On August 13, 2019, Aptorum Therapeutics
Limited ("ATL"), a wholly owned subsidiary of the Company, entered into financing arrangements with Aeneas Group Limited,
a related party, and Jurchen Investment Corporation, the ultimate parent of the Group, allowing ATL to access up to a total $
15
million
in line of credit debt financing. Both line of credits have originally matured on August 12, 2022. ATL and Aeneas Group Limited has mutually
agreed to extend the line of credit arrangement further
3
years to August 12, 2025. The interest on the outstanding principal indebtedness
is at the rate of 8% per annum. ATL may early repay, in whole or in part, the principal indebtedness and all interest accrued at any time
prior to the maturity date without the prior written consent of the lender and without payment of any premium or penalty. As of the date
of the issuance of this consolidated financial statements, the undrawn line of credit facility is $
9.5
million.
Note b: On November 17, 2021, Aptorum Therapeutics
Limited (the "Lender") entered into a loan agreement with Talem Medical Group Limited (the "Borrower"). According
to the loan agreement, the Lender granted a loan of up to AUD4,
700,000
for the Borrower for general working capital purposes of the Borrower
and its subsidiaries. The loan is interest-bearing at a rate of
10
% per annum and secured by the entire issued shares of Talem Medical
Group (Australia) Pty Limited held by the Borrower. The loan is initially matured 6 months from the date of the first drawdown. The maturity
date is extended for 6 months to the first extended maturity date, and may further extendable for another 6 months to the second extended
maturity date, if certain conditions stated in loan agreement are satisfied. As of the date of the issuance of this consolidated financial
statements, there is no outstanding balance from the Borrower.
On January 13, 2022, the Company entered a line
of credit facility with Libra Sciences Limited to provide up to a total $
1
million line of credit for its daily operation. The line of
credit is originally matured on
January 12, 2023
, and is extended for additional
3
years. The interest on the outstanding principal indebtedness
is at the rate of
10
% per annum. As of the date of the issuance of this consolidated financial statements, $
0.4
million is outstanding
from Libra Sciences Limited.
Note c: On December 9, 2022, the Company entered
into a Securities Purchase Agreement (the "Agreement") with Aenco Technologies Ltd ("Note holder"), a Cayman Islands
company that is indirectly
34.56
% effectively owned by our non-executive director and major shareholder, Ian Huen. Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $
3,000,000
(the "Note"). The Note is
unsecured, convertible into the Company's restricted Class A Ordinary Shares, par value $
10.00
per share (the "Ordinary Shares")
at the Note holder or the Company option. The Notes will have a maturity date of
12
months subject to the Note holder's extension,
a bullet interest rate of
7
% per annum, and a conversion price of $
12.0
per Class A Ordinary Share.
Note d: Aenco Limited provided certain information
technology services to the Group. For the year ended December 31, 2019, Aenco Limited was entitled to receive a fixed amount of services
fees of HKD
540,000
(approximately $
69,231
) per calendar month with the expiry date on December 31, 2019. The agreement was originally
renewed under the same terms with the expiry date on December 31, 2020. The agreement was replaced by another agreement on April 1, 2020.
Pursuant to the replaced agreement, Aenco Limited is entitled to receive a fixed amount of services fee of HKD
700,000
(approximately
$
89,744
) per calendar month. On September 30, 2020, the replaced agreement was terminated as mutually agreed.
Aeneas Technology (Hong Kong) Limited provided
research to the Group to assist the Group in computerized drug screening process of Smart-ACT
®
platform. Aeneas Technology
(Hong Kong) Limited is entitled to receive a fixed amount of research fees of HKD
963,760
(approximately $
123,559
) per calendar month
with the expiry date on October 30, 2021. On September 30, 2020, the agreement was terminated as mutually agreed.
F-
25
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Aeneas Management Limited provided certain documentation
and administrative services to the Group. For the year ended December 31, 2019, Aeneas Management Limited was entitled to receive a fixed
amount of services fees of HKD
452,000
(approximately $
57,949
) per calendar month with the expiry date on December 31, 2019. The agreement
was originally renewed under the same terms with the expiry date on December 31, 2020. On April 30, 2020, the agreement was terminated
as mutually agreed.
CGY Investment Limited provided certain consultancy,
advisory and management services to the Group on potential investment projects related to healthcare or R&D platforms. CGY Investment
Limited is initially entitled to receive HK $
104,000
(approximately $
13,333
) per calendar month plus reimbursement; such the monthly service
fee is adjusted to HK$
171,200
(approximately US$
21,949
) with effect from March 1, 2022. The agreement will be remained in effect until
1 month's notice in writing is given by either party.
ACC Medical Limited provided certain consultancy,
advisory, and management services to the Group on clinic operations and other related projects for clinics' business development.
ACC Medical Limited is initially entitled to receive HK $
101,542
(approximately $
13,018
) per calendar month plus reimbursement; such monthly
service fee is adjusted to HK$
143,200
(approximately US$
18,359
per month) effective from March 1, 2022. The agreement will be remained
in effect until 1 month's notice in writing is given by either party.
Note e: Jurchen Investment Corporation entered
into a sub-tenancy agreement with a subsidiary of the Group for the rental arrangement of an office in Hong Kong. For the period February
1, 2018 through January 31, 2021, Jurchen Investment Corporation was entitled to receive a fixed amount of rental fee of HK $
130,000
(approximately
USD
16,667
) per calendar month. In May 2020, Jurchen Investment Corporation and the Group mutually agreed to early terminate the rental
agreement and returned the office on May 31, 2020.
Note f: On January 2, 2020, Aptorum Medical Limited
issued
115
shares to Clark Cheng in according to the appointment agreement, decreasing the equity interest of the Company from
94
% to
93
%. On January 2, 2021, Aptorum Medical Limited further issued
117
shares to Clark Cheng in according to the appointment agreement, decreasing
the equity interest of the Company from
93
% to
92
%. On February 25, 2022, Aptorum Medical Limited further issued
119
shares to Clark Cheng
in according to the appointment agreement, decreasing the equity interest of the Company from
92
% to
91
%. On February 1, 2023, Aptorum
Medical Limited further issued
122
shares to Clark Cheng in according to the appointment agreement, decreasing the equity interest of
the Company from
91
% to
90
%.
Note g: On January 1, 2022, the Group entered
into an administrative management services agreement with Libra Sciences Limited. According to the agreement, the Group will provide documentation
and administrative services, include but are not limited to human resources and payroll administration, general secretarial and administrative
support, and accounting and financial reporting services. The Group is entitled to receive a fixed amount of services fees of HKD
25,000
(approximately $
3,205
) per calendar month with the expiry date on December 31, 2023.
Note h: On May 27, 2021, Aptorum Therapeutics
Limited, which is a wholly owned subsidiary of Aptorum Group Limited, entered a Share Sale Agreement to sell all of the shares of SMPTH
Limited to Aeneas Group Limited at the consideration $
1
. The sale of SMPTH Limited was a common control transaction and resulted in $
303,419
increase in additional paid-in capital in the consolidated statement of changes in equity.
F-
26
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
14. VARIABLE INTEREST ENTITY
The Company consolidates VIEs in which the Group
has a variable interest and is determined to be the primary beneficiary. This determination is based on whether the Group has a variable
interest (or combination of variable interests) that provides the Company with (a) the power to direct the activities that most significantly
impact the VIE's economic performance and (b) the obligation to absorb losses or right to receive benefits that could be potentially
significant to the VIE. The Group continually reassesses whether it is the primary beneficiary of a VIE throughout the entire period the
Group is involved with the VIE.
On December 30, 2021, three of the Group's
subsidiaries, Libra Sciences Limited ("Libra", formerly known as Aptorum Pharmaceutical Development Limited),  
Mios Pharmaceuticals Limited ("Mios") and Scipio Life Sciences Limited ("Scipio"), issued Class A and Class B
ordinary shares to various parties; for each such entity,
each Class A ordinary share is entitled to 1 vote and 1 share of economic benefit
of the respective company, while each Class B ordinary share is entitled to 10 votes
and
0.001
share of economic benefit of the respective
company. Following such share issuances, the Group lost its majority voting rights in each of these three companies and only holds
48.33
%,
48.39
% and
48.36
% economic interest in Libra, Mios and Scipio, respectively. However, the Group still holds a majority of each of these
three company's outstanding Class A ordinary shares and therefore will absorb/receive portions of these subsidiaries' expected
losses or residual returns. In addition, none of these three companies have sufficient equity to sustain its own activities, and they
have two classes of ordinary shares which have different rights, benefits and obligations. We determined that all these three companies
are variable interest entities ("VIE"). On December 31, 2021, Libra, Mios and Scipio further issued Class A ordinary shares
to the Group in exchange of certain projects licenses. Upon these share issuances, the Group was holding
97.27
% economic interest and
31.51
% voting power in Libra,
97.93
% economic interest and
36.17
% voting power in Mios, and
97.93
% economic interest and
35.06
% voting
power in Scipio, respectively.
We have considered each of these entity's
Memorandum and Article of Association and their respective board of directors (the sole director of each of Mios and Scipio is an executive
director of the Group), and determined that we have the power to manage and make decisions that affect Mios and Scipio's research
and development activities, which activities most significantly impact Mios and Scipio's economic performance. However, we do not
have such power over Libra's research and development activities, which activities most significantly impact Libra's economic
performance. Accordingly, we determined that we are the primary beneficiary of Mios and Scipio, but not the primary beneficiary of Libra.
The following tables summarize the aggregate carrying
value of VIEs' assets and liabilities in the consolidated balance sheets that are consolidated
Assets
Liabilities
Net Assets/ (Liabilities)
December 31, 2022
Total
$
61,630
$
86,306
$
(
22,676
)
December 31, 2021
Total
$
5,361
$
2,266
$
3,095
The following tables summarize the aggregate carrying
value of assets and liabilities in the Group's consolidated balance sheets that relate to the VIE in which the Group holds a variable
interest but is not the primary beneficiary.
Assets
Liabilities
Net Assets
Maximum
Exposure to
Losses
December 31, 2022
Total
$
472,695
$
-
$
472,695
$
472,695
December 31, 2021
Total
$
4,195
$
-
$
4,195
$
4,195
F-
27
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
The Group's maximum exposure to loss from
its involvement with unconsolidated VIE represents the estimated loss that would be incurred if the VIE is liquidated, so that the fair
value of the equity investment in VIE is
zero
and the amounts due from the VIE have to be fully impaired.
On January 1, 2022, the Group entered into an
administrative management services agreement with Libra. According to the agreement, the Group will provide documentation and administrative
services, including but are not limited to human resources and payroll administration, general secretarial and administrative support,
and accounting and financial reporting services. The Group is entitled to receive a fixed amount of services fees of HKD
25,000
(approximately
$
3,205
) per calendar month with the expiry date on December 31, 2023.
On January 13, 2022, the Group entered a line
of credit facility with Libra Sciences Limited to provide up to a total $1 million line of credit for its daily operation. The line of
credit is originally matured on January 12, 2023, and is extended for additional 3 years.
The interest on the outstanding principal indebtedness
is at the rate of
10
% per annum.
15. LEASE
As of December 31, 2022, the Group has three non-short-term
operating leases for office, laboratories and clinic with remaining terms expiring from 2023 through 2024 and a weighted average remaining
lease term of
1.1
years. Weighted average discount rates used in the calculation of the operating lease liability is
8
%. The discount
rates reflect the estimated incremental borrowing rate, which includes an assessment of the credit rating to determine the rate that the
Group would have to pay to borrow, on a collateralized basis for a similar term, an amount equal to the lease payments in a similar economic
environment.
For the year
ended
December 31,
2022
For the year
ended
December 31,
2021
Lease cost
Finance lease cost:
Depreciation
$
47,818
$
47,819
Interest on lease liabilities
1,435
4,450
Operating lease cost
349,031
425,280
Short-term lease cost
85,598
86,125
Variable lease cost
-
-
Sublease income
-
-
Total lease cost
$
483,882
$
563,674
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$
369,505
$
450,807
Financing cash flows from finance leases
49,358
53,846
Right-of-use assets obtained in exchange for new operating lease liabilities
549,596
-
Weighted-average remaining lease term – finance leases
-
0.9
years
Weighted-average remaining lease term – operating leases
1.1
years
1.0
years
Weighted-average discount rate – finance leases
2.5
%
2.5
%
Weighted-average discount rate – operating leases
8.0
%
8.0
%
The maturity analysis of operating leases liabilities
as of December 31, 2022 is as follows:
December 31,
2022
Remaining periods ending December 31,
2023
$
298,409
2024
58,434
Total future undiscounted cash flow
356,843
Less: Discount on operating lease liabilities
(
15,511
)
Present value of operating lease liabilities
341,332
Less: Current portion of operating lease liabilities
(
310,548
)
Non-current portion of operating lease liabilities
$
30,784
F-
28
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
16. CONVERTIBLE NOTE
On December 9, 2022, the Group entered into a
Securities Purchase Agreement (the "Agreement") with Aenco Technologies Ltd ("Note holder"). Pursuant to the Agreement,
the Note holder is purchasing a convertible note in the original principal amount of $
3,000,000
(the "Note"). The Note is
unsecured, convertible into the Company's restricted Class A Ordinary Shares at the Note holder option. The Notes will have a maturity
date of 12 months subject to the Note holder's extension, a bullet interest rate of
7
% per annum, and a conversion price of $
12.0
per Class A Ordinary share. The Company shall have an obligation to repay the principal amount and interest of the Note on the maturity
date in cash or in unregistered Class A Ordinary Shares or a combination of such at the Company's discretion. As of the date of
the issuance of this consolidated financial statements, the convertible note is fully converted into
250,000
Class A Ordinary Shares.
17. ORDINARY SHARES
On February 28, 2020, the Group entered into securities
purchase agreement (the "Purchase Agreement") with certain non-affiliated institutional investors and Jurchen Investment Corporation,
the ultimate parent of the Group, pursuant to which the Company agreed to sell a total of
135,135
Class A Ordinary Shares and warrants
to purchase
135,135
of the Class A Ordinary Shares, for gross proceeds of approximately $
10
million. At the completion of the offering,
approximately $
1.0
million offering costs was charged to additional paid-in capital. Each warrant entitled their holders to purchase
1
Class A Ordinary Shares and is exercisable immediately as of the date of issuance at an exercise price of $
74.0
per Class A Ordinary Share
and expire
seven years
from the date of issuance. Additionally, the Group issued
4,324
warrants to placement agent on terms substantially
the same as the warrants issued to investors, except that the exercise price of the warrants issued to the placement agent is $
88.8
.
On August 27, 2020, the Group entered into warrant
exchange agreements (the "Purchaser Exchange Agreements") with two non-affiliated purchasers to exchange their warrant of
the Company by Class A Ordinary Shares of the Company (the "Purchaser Warrant Exchange"). Pursuant to the Purchaser Exchange
Agreements, the Company and the Non-affiliated Purchasers have agreed that in consideration for exchanging in full all of the warrants
held by the Non-affiliated Purchasers, the Company will exchange one (1) Class A Ordinary Share for each one (1) Purchaser Exchange Warrant.
Total
54,054
Class A Ordinary Shares are issued to two non-affiliated purchasers in exchange for
54,054
warrants. For other warrant holders
did not participate in the Purchaser Warrant Exchange, the exercise prices of their respective warrants will be reduced to a nominal amount
pursuant to the anti-dilution provisions in such warrants (a "Down Round"). As a result of this Down Round being triggered,
the Group recorded a deemed dividend of $
755,514
as a decrease to net income attributable to Aptorum Group Limited in computing basic
net income per share on the consolidated statements of operations.
On October 2, 2020, the Group completed a public
offering, issuing
276,923
Class A Ordinary Shares and warrants to purchase an aggregate of
276,923
Class A Ordinary Shares, for gross
proceeds of approximately $
9
million. At the completion of the offering, approximately $
1.2
million offering costs was charged to additional
paid-in capital. The warrants have an exercise price of $
32.5
per Class A Ordinary Share, are exercisable upon issuance and will expire
five years
from the date of issuance. Additionally, the Group issued
14,754
warrants to placement agent on terms substantially the same
as the warrants issued to investors, except that the exercise price of the warrants issued to the placement agent is $
40.625
.
Following
the public offering completed on October 2, 2020, the placement agent of the offering on February 28, 2020 was further received 6,541
warrants as a tail fee, with an exercise price of $39.0 and expire seven years from the date of issuance.
F-
29
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
On March 26, 2021, the Company entered into an
at-the-market offering agreement (the "Sales Agreement"), with H.C. Wainwright & Co., LLC, acting as our sales agent
(the "Sales Agent"), relating to the sale of our Class A Ordinary Shares, offered pursuant to the prospectus supplement and
the accompanying prospectus to the registration statement on Form F-3 (File No. 333-268873) (such offering, the "ATM Offering",
or "At The Market Offering"). In accordance with the terms of the Sales Agreement, we may offer and sell shares of our Class
A Ordinary Shares having an aggregate offering price of up to $
15,000,000
from time to time through the Sales Agent under such prospectus
supplement and the accompanying prospectus. As of the date of issuance of the consolidated financial statements, we have issued
7,875
Class A Ordinary Shares pursuant to the ATM Offering.
On May 26, 2021, the Company entered into a private
placement shares purchase agreement with Jurchen Investment Corporation, issuing
138,793
Class A Ordinary Shares at $
28.82
per share,
representing a
10
% premium to the last closing price of the Company's Class A Ordinary Shares on the NASDAQ stock exchange on that
date. The Company received aggregate gross proceeds of $
4,000,000
from the purchase of these shares.
All the above issued warrants are classified as
equity in accordance with ASC 815, Derivatives and Hedging. This ASC provides a scope exception from classifying and measuring as a financial
liability a contract that would otherwise meet the definition of a derivative if the contract is both (i) indexed to the entity's
own stock and (ii) meets the equity classifications conditions. The Group concluded all above issued warrants should be equity-classified
since they contain no provisions which would require the Group to account for the warrants as a derivative liability and therefore were
initially measured at fair value in permanent equity with subsequent changes in fair value not measured.
For the year ended December 31, 2022, the Group
issued
6,712
Class A Ordinary Shares to share option holders as a result of exercise of share options. For the year ended December 31,
2021, the Group issued
4,000
and
19,016
Class A Ordinary Shares to warrant holders and share option holders respectively as a result of
exercise of warrants or options. For the year ended December 31, 2020, the Group issued
31,351
and
1,233
Class A Ordinary Shares to warrant
holders and share option holders respectively as a result of exercise of warrants or options.
Holders of Class A Ordinary Shares and Class B
Ordinary Shares have the same rights except for the following: (i) each Class A Ordinary Share is entitled to one vote while each Class
B Ordinary Share is entitled to ten votes; and (ii) each Class B Ordinary Share is convertible into one Class A Ordinary Share at any
time while Class A Ordinary Shares are not convertible under any circumstances.
F-
30
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
18. SHARE BASED COMPENSATION
Share option plan
On October 13, 2017, the Group adopted the 2017
Share Option Plan (the "Option Plan") and on November 5, 2021, the Group amended the Option Plan. A total of
550,000
Class
A Ordinary Shares (subject to subsequent adjustments described more fully below) may be issued pursuant to awards under the Option Plan.
Subsequent adjustments include that on each January 1, starting with January 1, 2020, an additional number of shares equal to the lesser
of (i)
2
% of the outstanding number of Class A Ordinary Shares (on a fully diluted basis) on the immediate preceding December 31, and
(ii) such lower number of Class A Ordinary Shares as may be determined by the board of directors, subject in all cases to adjustments
as provided in Section 10 of the Option Plan. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions
as determined by the board of directors.
53,694
options were granted on March 16, 2020 to directors, employees,
external consultants and advisors of the Group. One-half of each option grant vests on January 1, 2021 and expires on
December 31, 2031
and the other half vests on January 1, 2022 and expires on
December 31, 2032
. The exercise price is $
29.9
per share, which was based on
the average closing price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant
date.
14,896
options were granted on June 1, 2020 to directors and employees
of the Group. Nearly one-half of each option grant vests on December 1, 2020 and expires on
November 30, 2030
and the remaining vests
on January 1, 2021 and expires on
December 31, 2031
. The exercise price is US$
31.1
per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.
2,748
options were granted on August 10, 2020 to Dr. Weiss, which vest
on August 10, 2021 and expire on
August 9, 2031
. The exercise price is $
36.4
per share, which was based on the average closing price of
the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.
75,235
options were granted on March 11, 2021 to directors, employees,
external consultants and advisors of the Group with an exercise price of $
27.6
per share, which was based on the average closing price
of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant date.
36,796
options
vest on January 1, 2022 and expire on
December 31, 2032
;
36,808
options vest on January 1, 2023 and expire on
December 31, 2033
;
906
options
vest on June 8, 2021 and expire on
June 7, 2032
; and
725
options vest on July 14, 2021 and expire on
July 13, 2032
.
153,146
options were granted on March 8, 2022
to directors, employees, external consultants and advisors of the Group with an exercise price of $
13.4
per share, which was based on
the average closing price of the shares traded on the NASDAQ stock exchange for the five trading days immediately preceding the grant
date.
74,881
options vest on January 1, 2023 and expire on
December 31, 2033
;
74,906
options vest on January 1, 2024 and expire
on
December 31, 2034
;
1,866
options vest on June 8, 2022 and expire on
June 7, 2033
; and
1,493
options vest on July 14, 2022 and expire
on
July 13, 2033
.
226,153
options were granted on March 31, 2023
to directors and employees of the Group with an exercise price of $
2.68
per share, which was based on the last closing price of the shares
traded on the NASDAQ stock exchange on the grant date. Besides,
136,200
shares awards were granted on March 31, 2023 to directors, employees
and external consultants. All options vests on October 1, 2023 and expires on
September 30, 2033
.
A summary of the option activity as of December
31, 2022, 2021 and 2020 and changes during the period is presented below:
Number of
share options
Weighted
average
exercise
price
$
Remaining
contractual
term in
years
Aggregate
Intrinsic
value
Outstanding, January 1, 2022
127,404
31.91
11.01
Granted
153,146
13.40
12.30
Exercised
(
6,721
)
25.25
-
Forfeited
(
1,268
)
28.11
Cancelled
(
435
)
116.71
Outstanding, December 31, 2022
272,126
21.54
10.83
-
Exercisable, December 31, 2022
89,300
32.71
9.64
-
F-
31
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
Number of
share options
Weighted
average
exercise
price
$
Remaining
contractual
term in
years
Aggregate
Intrinsic
value
Outstanding, January 1, 2021
71,756
37.63
11.22
Granted
75,235
27.60
12.29
Exercised
(
19,037
)
36.52
-
Forfeited
(
550
)
29.00
Outstanding, December 31, 2021
127,404
31.91
11.01
-
Exercisable, December 31, 2021
31,456
42.62
9.63
-
Number of
share options
Weighted
average
exercise
price
$
Remaining
contractual
term in
years
Aggregate
Intrinsic
value
Outstanding, January 1, 2020
21,853
129.10
11.51
Granted
71,338
30.40
11.99
Exercised
(
1,235
)
49.27
-
Forfeited
(
4,594
)
46.70
Cancelled
(
15,606
)
129.10
Outstanding, December 31, 2020
71,756
37.63
11.22
-
Exercisable, December 31, 2020
8,467
61.24
9.95
-
The weighted-average grant date fair value of share option grants during
the years ended December 31, 2022, 2021 and 2020 was $
10.02
, $
25.72
and $
17.56
, respectively. The maximum contractual term for share option
was
12.8
years.
The fair value of each stock option award is estimated
on the date of grant using the Black-Scholes option pricing model under the following assumptions.
Granted in
2022
Granted in
2021
Granted in
2020
Expected volatility
89.55
%
97.70
%
88.44
%-
96.55
%
Risk-free interest rate
1.86
%
1.64
%
0.59
%-
0.69
%
Expected term from grant date (in years)
5.63
-
6.41
5.62
-
6.41
5.25
-
7.29
Dividend rate
-
-
-
Dilution factor
1
1
0.9909
-
1
Fair value
$
9.74
- $
10.16
$
25.11
- $
26.01
$
15.50
- $
26.60
In connection with the grant of share options
to employees and non-employees, the Group recorded share-based compensation charges of $
1,123,122
and $
523,877
, respectively, for the
year ended December 31, 2022, $
1,203,000
and $
479,460
, respectively, for the year ended December 31, 2021, and $
1,191,957
and $
286,608
,
respectively, for the year ended December 31, 2020.
As of December 31, 2022, there were $
376,512
total
unrecognized share-based compensation cost related to unvested options which is expected to be recognized over 1 years. Total unrecognized
compensation cost may be adjusted for future changes in actual forfeitures.
F-
32
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
19. NON-CONTROLLING INTEREST
On September 25, 2020, Paths Innovation Limited, a wholly-owned subsidiary
of the Group, signed a share subscription and shareholders agreement with certain new individuals and institutions to subscribe ordinary
shares of Paths Diagnostics Pte. Limited, a wholly-owned subsidiary of Paths Innovation Limited before the share subscription agreement.
As a result, Paths Innovation Limited's equity interest in Paths Diagnostics Pte. Limited was decreased from
100
% to
75
%. A deficit
of $
3,090
was reclassified from additional paid-in capital to non-controlling interests within the Group's consolidated financial
statements.
On December 30, 2021, two of the Group's
subsidiaries, Mios Pharmaceuticals Limited ("Mios") and Scipio Life Sciences Limited ("Scipio"), issued Class
A and Class B ordinary shares to various parties; for each such entity, each Class A ordinary share is entitled to 1 vote and 1 share
of economic interest of the respective company, while each Class B ordinary share is entitled to 10 votes and
0.001
share of economic
interest of the respective company. On December 31, 2021, Mios and Scipio further issued Class A ordinary shares to the Group in exchange
of certain projects licenses. Upon these share issuances, the Group was holding
97.93
% economic interest and
36.17
% voting power in Mios,
and
97.93
% economic interest and
35.06
% voting power in Scipio, respectively.   Since the sole director of Mios and Scipio is
an executive director of the Group, the Group can effectively participate in all significant financial and operating decisions in these
two companies through the power granted to the sole director in Mios and Scipio's Articles of Association. The Group is deemed to
have control over Mios and Scipio and hence these two companies are still within the Group. As a result, a total deficit of $
27,293
was
reclassified from additional paid-in capital to non-controlling interests within the Group's consolidated financial statements.
As of December 31, 2022, non-controlling interest related to
25
% equity
interest in Paths Diagnostics Pte. Limited,
10
% equity interest in mTOR (Hong Kong) Limited,
9
% equity interest in Aptorum Medical Limited,
2.07
% equity interest in Mios Pharmaceuticals Limited,
2.07
% equity interest in Scipio Life Sciences Limited and
20
% equity interest in
Acticule Life Sciences Limited in the consolidated balance sheets was deficit of $
7,878,789
in total. As of December 31, 2021, non-controlling
interest related to
25
% equity interest in Paths Diagnostics Pte. Limited,
10
% equity interest in mTOR (Hong Kong) Limited,
8
% equity
interest in Aptorum Medical Limited,
2.07
% equity interest in Mios Pharmaceuticals Limited,
2.07
% equity interest in Scipio Life Sciences
Limited and
20
% equity interest in Acticule Life Sciences Limited in the consolidated balance sheets was deficit of $
6,101,223
in total.
For the years ended December 31, 2022, 2021 and
2020, non-controlling interest in the consolidated statements of operations were loss of $
1,725,542
, $
2,065,904
and $
2,146,687
, respectively.
20. NET (LOSS) INCOME PER SHARE
The following table sets forth the computation of basic and diluted
(loss) income per share:
Year ended
December 31,
2022
Year ended
December 31,
2021
Year ended
December 31,
2020
Numerator:
Net (loss) income attributable to Aptorum Group Limited
$
(
9,799,560
)
$
(
25,048,389
)
$
6,311,340
Denominator:
Weighted average shares outstanding
– Basic
3,569,484
3,503,396
3,113,588
– Diluted
3,569,484
3,503,396
3,153,447
Net (loss) income per share attributable to Aptorum Group Limited
– Basic
$
(
2.75
)
$
(
7.15
)
$
2.03
– Diluted
$
(
2.75
)
$
(
7.15
)
$
2.00
Basic net (loss) income per share is computed
by dividing net (loss) income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during
the period. Diluted net (loss) income per share reflects the potential dilution that could occur if securities or other contracts to issue
ordinary shares were exercised or converted into ordinary shares. Potential dilutive securities are excluded from the calculation of diluted
loss per share in loss periods as their effect would be anti-dilutive.
F-
33
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
21. COMMITMENTS AND CONTINGENCIES
Contingent Payment Obligations
The Group has entered into agreements with independent
third parties for purchasing office and laboratory equipment. As of December 31, 2022, the Group had non-cancellable purchase commitments
of $
50,075
.
The Group has additional contingency payment obligations
under each of the license agreements, such as milestone payments, royalties, research and development funding, if certain condition or
milestone is met.
Milestone payments are to be made upon achievements
of certain conditions, such as Investigational New Drugs ("IND") filing or U.S. Food and Drug Administration ("FDA")
approval, first commercial sale of the licensed products, or other achievements. The aggregate amount of the milestone payments that the
Group are required to pay up to different achievements of conditions and milestones for all the license agreements signed as of December
31, 2022 are below:
Amount
Drug molecules: up to the conditions and milestones of
Preclinical to IND filing
$
222,564
From entering phase 1 to before first commercial sale
20,336,410
First commercial sale
14,282,051
Net sales amount more than certain threshold in a year
65,769,231
Subtotal
$
100,610,256
Diagnostics technology: up to the conditions and milestones of
Before FDA approval
$
205,554
$
100,815,810
For the years ended December 31, 2022, 2021 and
2020, the Group incurred $
nil
, $
nil
and $
129,203
milestone payments, respectively. For the years ended December 31, 2022, 2021 and 2020,
the Group did not incur any royalties or research and development funding, respectively.
F-
34
APTORUM GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Stated in U.S. Dollars)
22. SEGMENT REPORTING
The Group's chief operating decision maker,
the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and accessing performance
of the Group as a whole and hence, the Group has only
one
reportable segment. The Group does not distinguish between markets or segments
for the purpose of internal reporting. The Group's long-lived assets are substantially located in Hong Kong and majority of the
Group's expense is derived from within Hong Kong. Therefore, no geographical segments are presented.
23. SUBSEQUENT EVENTS
The Group has evaluated subsequent events through
the date of issuance of the consolidated financial statements. Except for the events disclosed elsewhere in the consolidate financial
statements and the following events with material financial impact on the Group's consolidated financial statements, no other subsequent
event is identified that would have required adjustment or disclosure in the consolidated financial statements.
On January 23, 2023, the Company effectuated a
10 for 1 share consolidation of its authorized share capital, such that every 10 Class A Ordinary Shares, par value of US$
1.00
per share,
in the authorized share capital of the Company (including issued and unissued share capital) be consolidated into 1 Class A Ordinary Share,
par value of US$
10.00
per share, and that every 10 Class B Ordinary Shares, par value of US$
1.00
per share in the authorized share capital
of the Company (including issued and unissued share capital) be consolidated into 1 Class B Ordinary Share, par value of US$
10.00
per
share (the "Reverse Split").
On February 21, 2023, the Company's Special
Extraordinary Meeting approved amendments of certain Memorandum and Articles of Association, including the par value being adjusted from
US$
10
per share to US$
0.00001
per share. The difference of the par values is credited to additional paid-in capital.
On March 27, 2023, the Company entered into a
non-binding Letter of Intent and Term Sheet to acquire ("Transaction")
100
% of URF Holding Group Limited and its underlying
businesses. Currently, it is contemplated that the Transaction will occur via a reverse takeover of the Company. As of the date of the
issuance of this consolidated financial statements, the definitive agreement has not been signed yet.
F-35