NOTE 8 — COMMITMENTS AND CONTINGENCIES

Operating lease

The Company leases office space in San Diego, California under an operating lease that was entered into on December 12, 2025 and commenced on January 1, 2026, with a three-year term expiring December 31, 2028. As of June 30, 2026, the remaining lease term was approximately 30 months and the weighted-average discount rate used to measure the lease liability was 5.0%. The lease does not contain residual value guarantees or material restrictive covenants, and the Company has no leases that have not yet commenced. As of December 31, 2025, the operating lease right-of-use asset was $187,395 and the operating lease liability was $169,032, the remaining lease term was approximately 36 months and the weighted-average discount rate used to measure the lease liability was 5.0%. This is the Company’s only lease recognized under ASC 842. The Company’s principal executive offices at 100 Matawan Rd, Suite 325, Matawan, New Jersey and its Digital Asset Treasury operations at 60 Paya Lebar Road, Singapore are occupied under arrangements with terms of twelve months or less, for which the Company has elected the short-term lease exception and recognizes the payments as expense as incurred.

Future minimum lease payments under the operating lease as of June 30, 2026 were as follows:

Operating lease cost was $17,740 and $35,478 for the three and six months ended June 30, 2026, respectively, comprising amortization of the right-of-use asset of $15,616 and $31,233 and accretion of the lease liability of $2,124 and $4,245. Variable lease cost, consisting of utilities and other occupancy charges billed by the landlord, was $3,765 and $7,525 for the same periods. Total occupancy cost of $21,505 and $43,003 is included in general and administrative expenses. The right-of-use asset of $187,395 recognized at commencement exceeded the lease liability of $169,032 by $18,363 of prepaid rent and initial direct costs, which is why total lease cost over the 36-month term exceeds the remaining undiscounted payments of $172,285 plus the $11,882 paid during the period. Cash paid for amounts included in the measurement of operating lease liabilities was $11,882 for the six months ended June 30, 2026; the lease provided for a rent abatement through April 2026. The lease was entered into on December 12, 2025 and commenced on January 1, 2026; accordingly, there was no operating lease cost and no cash paid for amounts included in the measurement of operating lease liabilities during the three and six months ended June 30, 2025.

Settlement Agreement

As described in Note 1, on April 24, 2026 the Company, MindWave and Lokahi entered into a Confidential Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Inscobee Inc. and Apimeds Inc. (Korea), together with a related side letter. Under the Settlement Agreement, Lokahi retained the Apitox program, including the related intellectual property, regulatory materials, development data and manufacturing information and a contract research organization credit facility with an estimated value of approximately $2.2 million. In exchange, Lokahi was required to transfer $4,000,000 to the Company or its designee (the “Working Capital Contribution”) within five business days of the effective date and to forgive advances previously made to the Company’s subsidiaries.

In connection with the Settlement Agreement, the Company incorporated Nexus Global Partners Inc. (“Nexus”) during the three months ended June 30, 2026 as a wholly owned subsidiary designated to receive and disburse the Working Capital Contribution. Nexus conducts no operations other than the receipt and disbursement of those funds, and its balances and activity are eliminated in consolidation.

Of the $4,000,000 Working Capital Contribution, $3,750,000 had been performed under the Settlement Agreement as of June 30, 2026 (the amounts are intercompany and are eliminated in consolidation, so no consolidated obligation was settled), comprising $3,000,000 funded into an escrow account maintained in an attorney trust account and $750,000 satisfied through Lokahi’s forgiveness of an advance of approximately $750,000 previously made by Lokahi to MindWave on or about February 2, 2026; the remaining $250,000 had not been funded as of June 30, 2026. Because Lokahi remained a wholly owned subsidiary as of June 30, 2026, the Working Capital Contribution and the related forgiveness are intercompany transactions and are eliminated in consolidation. As of June 30, 2026, all amounts were disbursed from the escrow account.

The Company’s obligation to distribute 51% of the equity of Lokahi and to effect a spin-off of the BioBusiness had not been satisfied as of June 30, 2026. The Settlement Agreement provides Nexus with 10% of the net proceeds of certain future financings, with the remaining 90% retained by MindWave, and a spin-off of Nexus is contemplated within approximately twelve months. No amounts were payable under the net-proceeds provision as of June 30, 2026.

NYSE American continued listing

On April 17, 2026, the Company received notice from NYSE American that it was not in compliance with Section 1007 of the NYSE American Company Guide as a result of its failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2025. The Company was granted an initial cure period of six months, expiring October 15, 2026, which the exchange may extend by up to an additional six months, and its common stock trades under the symbol “APUS.LF” pending regained compliance. Trading in the Company’s common stock was halted on April 2, 2026 and, as disclosed in the Company’s Current Report on Form 8-K filed April 22, 2026, remained halted as of that date. Trading had resumed before June 30, 2026, and the common stock has traded on a split-adjusted basis under the symbol “APUS.LF” since July 24, 2026. The Company filed its Annual Report on Form 10-K for the year ended December 31, 2025 on May 4, 2026 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 on May 26, 2026, in each case after the applicable due date. Under Section 1007, the Company will regain compliance only when it is current in all of its required periodic filings with the SEC. There can be no assurance that the Company will regain compliance within the cure period.

Legal proceedings and other contingencies

From time to time the Company may become involved in legal proceedings arising in the ordinary course of business. Other than as described above, management is not aware of any pending or threatened legal proceedings that would be expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.