NOTE 1 — DESCRIPTION OF BUSINESS

Apimeds Pharmaceuticals US, Inc. (“APUS” or the “Company”) is a development-stage biopharmaceutical company incorporated in Delaware as a C-Corporation. The Company focuses on developing the pharmaceutical business, a purified honeybee venom-based drug for treating acute pain and inflammation from knee osteoarthritis (the “BioBusiness”). On December 1, 2025, the Company completed a merger with MindWave Innovations Inc. (“MindWave”), making MindWave a wholly owned subsidiary. Through this merger, the Company acquired digital assets including Bitcoin (“BTC”), Tether (“USDT”), and MindWaveDAO NILA tokens (“NILA Tokens”), along with operations related to digital asset activities.

MindWave and its subsidiaries hold and transact in digital assets and constitute the Company’s Digital Asset segment. The acquisition was accounted for as an asset acquisition under ASC 805-50 because substantially all of the fair value of the gross assets acquired was concentrated in a group of similar identifiable assets and the acquired set did not constitute a business. The Company was the accounting acquirer. Consideration consisted of 747,702 shares of Series A Convertible Preferred Stock (as adjusted for the reverse stock split) with a fair value of $145,335,708, which was allocated to the identifiable assets acquired and liabilities assumed, principally digital assets, on a relative fair value basis; no goodwill was recognized. Accordingly, the comparative periods presented for 2025 reflect the operations of the BioBusiness only.

The Company operates its biopharmaceutical business through Lokahi Therapeutics Inc. (“Lokahi”), a wholly owned subsidiary. As of June 30, 2026, the corporate structure includes:

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. Among other things, the Settlement Agreement provides for the distribution of 51% of the outstanding equity of Lokahi as directed by the Company’s former Chief Executive Officer, with the Company retaining the remaining 49%, and for the separation of the BioBusiness, consistent with the Company’s Current Report on Form 8-K filed May 4, 2026. As of June 30, 2026, the distribution of the Lokahi equity had not been effected and Lokahi remained a wholly owned subsidiary of the Company; accordingly, no noncontrolling interest has been recognized in these condensed consolidated financial statements. See Note 8 for the terms of the Settlement Agreement. The Company assessed the contemplated distribution against the held-for-sale criteria in ASC 205-20-45-1E. As of June 30, 2026 the Company had not obtained the approvals required to complete the distribution, the conditions precedent in the Settlement Agreement had not been satisfied, therefore Lokahi was not available for immediate sale, and Lokahi was not actively marketed on the terms then in effect; accordingly the criteria were not met and the BioBusiness has not been classified as held for sale. The Company also concluded that the criteria in ASC 205-20-45-1G for reporting the BioBusiness as a discontinued operation were not met as of June 30, 2026 because there had been no disposal and no classification as held for sale. Because the distribution of a 51% interest would leave the Company with a retained noncontrolling interest, completion would result in deconsolidation and recognition of a noncontrolling interest rather than presentation as a discontinued operation, unless the separation is expanded to a disposal of the entire BioBusiness. The Company will reassess these conclusions at each reporting date.

The Company has not yet generated revenue from biopharmaceutical operations and faces risks common to development-stage biotechnology companies. Success depends on obtaining regulatory approvals for product candidates and continuing the Company’s Digital Asset segment. MindWave operates as a blockchain and digital asset technology business and has been has been generating realized gains, trading gains, and digital asset yield income. In addition to holding, sale and conversion of digital assets, MindWave is developing commercial blockchain and technology applications, including initiatives intended to establish recurring revenue opportunities and expand its U.S. commercial presence.

The Company’s digital asset activities are limited to the holding, sale and conversion of tokens acquired in the MindWave transaction; the Company is not a broker-dealer, exchange or investment company, has not committed to a plan to sell any specific holding, and has not classified any digital asset as held for sale. Consistent with the presentation in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, digital assets are therefore classified as non-current under ASC 210-10-45-1. Sales made to fund operating requirements, including those contemplated by management’s plans described in the going-concern discussion above, are effected from time to time out of that non-current position and do not, individually or in the aggregate, represent a plan to dispose of the holdings.