Business Context and Reporting Period
Company: Apimeds Pharmaceuticals US, Inc. (APUS)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Reporting Status: Smaller Reporting Company; Emerging Growth Company
APUS is a dual-segment operating company following a transformative fiscal year 2025. The company operates a biopharmaceutical segment (Lokahi Therapeutics) focused on the clinical development of Apitox, a bee venom-based therapy for knee osteoarthritis and multiple sclerosis. On December 1, 2025, APUS completed a merger with MindWave Innovations Inc., adding a digital asset operations segment. This transaction was accounted for as an asset acquisition, adding approximately $145.3 million in net identifiable assets, primarily digital assets (Bitcoin, USDT, and NILA tokens).
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(6.0) million | $(1.4) million |
| Operating Expenses | $11.9 million | $1.3 million |
| Other Income (Expense) | $5.9 million | $(0.1) million |
| Cash & Cash Equivalents | $1.6 million | $3,455 |
| Restricted Cash | $8.0 million | $0 |
| Digital Assets (Fair Value) | $149.9 million | $0 |
| Total Assets | $164.2 million | $13,057 |
| Working Capital (excl. Digital Assets) | $3.2 million | Not Applicable |
Debt & Liquidity: As of December 31, 2025, the company held a senior secured convertible note with a principal of $10.9 million (gross proceeds $10.0 million). Of these proceeds, $8.0 million is held in a restricted Deposit Account Control Agreement (DACA) and is not available for general operations. The company also has related party notes totaling approximately $500,100 in principal.
Material Changes vs. Prior Period
- Merger & Asset Acquisition: The acquisition of MindWave Innovations Inc. fundamentally altered the balance sheet, introducing $149.9 million in digital assets (BTC, USDT, NILA) compared to zero in 2024.
- Operating Expenses: Total operating expenses surged to $11.9 million from $1.3 million in 2024. This increase was driven by the IPO, merger-related fees, increased headcount, and the commencement of clinical development for Apitox ($1.6 million in R&D).
- Other Income: The company reported $5.9 million in other income in 2025, primarily due to a $4.2 million realized gain on the sale of NILA tokens and a $1.8 million unrealized gain on digital assets. This contrasts with a minor expense in 2024.
- Capital Structure: The company completed an IPO in May 2025 raising $11.6 million and issued 7.5 million shares of Series A Convertible Preferred Stock as merger consideration.
Guidance, Outlook, Risks, and Contingencies
Outlook and Guidance
Management does not provide specific numerical guidance but outlines a plan to fund operations through:
- Execution of remaining tranches under a $129 million convertible note facility (only $10.9 million drawn as of year-end).
- Continued sales of NILA tokens for USDT proceeds.
- Potential additional equity or debt financing.
The company expects to incur significant manufacturing costs for Apitox starting in Q1 2026.
Risks and Contingencies
- Going Concern: The filing includes a "Going Concern" warning. The company has an accumulated deficit of $10.4 million and negative cash flows from operations. Management states there is substantial doubt about the ability to continue as a going concern without additional financing.
- Internal Controls: Management identified a material weakness in internal control over financial reporting due to a lack of segregation of duties, resulting in ineffective disclosure controls as of December 31, 2025.
- Digital Asset Volatility: A significant portion of assets ($149.9 million) is held in volatile digital assets. Changes in fair value are recognized in earnings, creating earnings volatility.
- Regulatory & Clinical Risk: Apitox is not FDA approved. The company is pursuing a Phase III trial for knee OA. Failure to meet FDA standards or complete trials would halt the primary revenue-generating strategy.
- Recent Legal Settlements: Subsequent to year-end (April 2026), the company entered into a Settlement Agreement resolving disputes related to the Merger and a Forbearance Agreement with a note holder regarding existing events of default.
Investor Verification Checklist
- Restricted Cash Availability: Verify the conditions for releasing the $8.0 million in restricted cash held in the DACA account, as this is critical for near-term liquidity.
- Digital Asset Valuation: Confirm the fair value methodology for NILA tokens (Level 2) and the liquidity of these assets given modest trading volumes.
- Debt Covenants & Defaults: Review the terms of the Forbearance Agreement entered in April 2026 regarding the $11 million convertible note and the specific "Existing Defaults" being addressed.
- Internal Control Remediation: Assess the timeline and effectiveness of management's plan to remediate the material weakness in internal controls (segregation of duties).
- Clinical Trial Progress: Monitor the status of the Phase III trial for Apitox and any FDA correspondence regarding the study design.
- Subsequent Financing: Verify if additional tranches of the $129 million note facility have been drawn or if new equity financing has been secured post-filing.