Apimeds Pharmaceuticals US, Inc. Commitments Disclosure
Note 14 COMMITMENTS AND CONTINGENCIES
License Agreement
On August 2, 2021, the Company entered into a business agreement with Apimeds Korea. Under the agreement, the Company received the right to continue any clinical trial and acquire the permits and approval necessary from the U.S. Food and Drug Administration. The Company will pay Apimeds Korea a royalty of 5% of the earnings before interest and taxes, delivered from the sale or license of Apitox less any credits and charges, however, the royalty terms shall not apply when shares of the Company are transferred or sold through merger, acquisition, or share transfer agreement to a third party. On October 12, 2021, the Company entered into an exclusive patent license agreement with Apimeds Korea, a shareholder of the Company. Under the agreement, the Company was granted the exclusive right and license under the licensed patents to make and sell the licensed products in the United States of America. The agreement commenced on the effective date and shall remain in force for each licensed product on a licensed product-by-licensed-product basis for rights and obligations concerning the licensed patent, until the expiration of the last to expire valid claim of a licensed patent. The total consideration exchanged for the exclusive license agreement was $1.
Legal Proceedings
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. As of December 31, 2025, the Company was not a party to any legal proceedings that management believes would have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
Future Commitments
During the year ended December 31, 2025, the Company entered into an agreement to accumulate a prepaid balance with its respective Clinical Research Organization, Prevail InfoWorks Inc, pertaining to future clinical trial execution. The total remaining obligation associated with this agreement is $1,065,405 as of December 31, 2025.
During the year ended December 31, 2025 the Company entered into an agreement with Piramal Pharma Solutions, Inc. to manufacture clinical trial material for its lead Biopharmaceutical asset, Apitox.
The Company holds customary employment agreements with its key executives. These employment agreements provide for compensation in the form of salary, employee benefits, stock compensation, discretionary bonuses. The contract in place for the President of Lokahi Therapeutics (“The BioBusiness”) includes a severance package equivalent to twenty four (24) months of salary and benefits, or $1,000,000. These employment agreements have been assigned to the BioBusiness, Lokahi Therapeutics.
Indemnification Agreements
The Company has entered into indemnification agreements with its directors and officers. Under these agreements, the Company may be required to indemnify its directors and officers against certain liabilities that may arise by reason of their status or service. The Company has not incurred material costs related to these indemnification provisions and has not accrued any liabilities related to such obligations as of December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | May 4, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.