APIMEDS PHARMACEUTICALS US, INC. (NYSE American: APUS) – Critical Update: Merger Developments, Debt Forbearance, Equity Actions, and Listing Status

Key Points Investors Should Know

• Execution of Settlement Agreement Resolving Control Dispute – The company has signed a comprehensive Settlement Agreement and Side Letter with key stakeholders, paving the way for a change in control, corporate restructuring, and facilitating crucial financing transactions.
• Forbearance Agreement with Major Noteholder – APIMEDS reached a conditional forbearance with Alto Opportunity Master Fund, SPC, the holder of its \$11 million senior convertible note, contingent on resolving SEC filing, NYSE compliance, and board composition milestones.
• NYSE Listing at Risk, Reverse Stock Split, and Change in Par Value – The company is at risk of delisting from NYSE American and is taking steps to regain compliance, including a proposed 1-for-10 reverse stock split and reduction of par value from \$0.01 to \$0.001 per share.
• Potential Change in Control and Strategic Spin-Off – Following the conversion of Series A Preferred Stock and convertible notes, a change in control will occur, prompting a new NYSE listing application. The company will also spin off a new subsidiary (“Newco”) focused on specified assets within 12 months.
• Comprehensive Board and Management Changes – The board and management will be reconstituted as part of the settlement, with shareholder proxy arrangements ensuring passage of critical proposals.

Detailed Analysis

1. Settlement Agreement and Control Realignment

APIMEDS Pharmaceuticals US, Inc. (APUS) entered into a multi-party Settlement Agreement and Side Letter with Inscobee Parties, Lokahi Therapeutics, and the Bio Business Representative. This agreement resolves a major dispute over control and governance and includes the following binding actions:

• Conversion of all Series A Convertible Preferred Stock and convertible notes into common stock, subject to NYSE approval.
• Approval and implementation of a 1-for-10 reverse stock split and reduction of par value, as well as amendments to the certificate of incorporation.
• Adoption of a new 2025 Equity Incentive Plan and increase in shares under the 2024 Equity Incentive Plan.
• Formation and subsequent spin-off of “Newco,” a new subsidiary, within 12–24 months, with strict limitations on its ability to incur debt or issue convertible securities without investor and CEO consent.
• Transfer of certain non-core assets, including a \$2.2 million CRO credit facility, to Lokahi (the “Prevail Credit Facility”).
• Obligation for full cooperation in all required regulatory and shareholder actions, including amendments to Schedule 13D filings and joint press releases to clarify governance and resolve the dispute in the public markets.

2. Forbearance Agreement with Major Noteholder – Key Risk Mitigation

On April 30, 2026, APIMEDS secured a Forbearance Agreement from its largest convertible noteholder, Alto Opportunity Master Fund, SPC. This agreement is crucial because:

• It temporarily waives existing defaults under the \$11 million note (including missed SEC filings and effectiveness of registration statements), but only if the company meets a series of strict deadlines:
  • Filing of the 2025 Annual Report (Form 10-K) by April 30, 2026.
  • Filing and SEC effectiveness of a registration statement by June 30, 2026.
  • Regaining full NYSE listing compliance, including effecting a reverse split and resuming trading by June 30, 2026.
  • Implementation of board reconstitution and other governance items by June 30, 2026.
• Failure to meet any condition may result in renewed default and potential enforcement by the noteholder.

3. NYSE Listing Status and Reverse Split – Shareholder Value at Stake

The company is in danger of delisting from NYSE American due to non-compliance. Key steps are underway to regain compliance and preserve shareholder value:

• A mandatory 1-for-10 reverse stock split and decrease in par value to \$0.001 per share, subject to NYSE approval.
• Change in control, triggered by the conversion of preferred stock and notes, requires a new NYSE listing application and regulatory approval before these transactions can be completed.
• Shareholders should note that the company does not intend to complete these actions (other than the reverse split) unless the NYSE listing application is approved – failure here could result in delisting and a collapse in share value.

4. Board and Governance Overhaul

The settlement ensures a comprehensive change in board composition and management, with:

• Appointment of directors as set forth in the Settlement Agreement.
• Shareholder proxy arrangements to ensure all key proposals (conversion, split, equity plan, etc.) are approved without interference.
• Obligation for Inscobee Parties to amend all Section 13D disclosures and cooperate with the company in clarifying the new governance structure via press releases.

5. Strategic Spin-Off (“Newco”) and Asset Transfers

A new subsidiary, “Newco,” will be formed, managed by the Co-CEO, and spun out within 12–24 months. Key terms include:

• Newco’s ability to raise equity (not convertible into APUS shares) but not to incur significant debt without written consent.
• Newco will house specific assets (such as the Apitox program and the Prevail CRO credit facility) and will be required to provide full transparency and access to its books for SEC reporting compliance.
• Obligations to pay \$750,000 each to Duane Morris LLP and Inscobee’s legal team upon receiving a working capital contribution.

6. Shareholder Voting and Proxy Arrangements

All major proposals are subject to irrevocable proxies, and the company has secured commitments from controlling shareholders to vote in favor of:

• Preferred Stock Conversion and Issuance
• Note Approval and Issuance
• Reverse Stock Split and Change in Par Value
• 2024 Plan Share Increase
• 2025 Equity Incentive Plan

The company has also taken steps to prevent any actions by shareholders that could impede or delay these corporate actions.

7. Critical Deadlines and Potential Risks

• The company’s ability to remain listed, restructure its capital, and avoid default on major debt is entirely dependent on meeting SEC and NYSE deadlines between April and June 2026.
• Failure to file the 2025 10-K by April 30, 2026, or to regain NYSE compliance by June 30, 2026, will result in significant adverse consequences, including acceleration of debt, possible delisting, and loss of investor confidence.
• Any qualified audit opinion for the 2025 10-K could trigger unwinding of the settlement and re-escalation of disputes.

Potential Price-Sensitive Information

• Risk of NYSE delisting if compliance deadlines are not met.
• Reverse stock split and change in par value, which will significantly affect the number of shares outstanding and could materially alter trading prices.
• Comprehensive change of control and governance, potentially signaling a new strategic direction or management philosophy.
• Spin-off of Newco and asset transfers, which may impact the company’s balance sheet and future prospects.
• Conditional forbearance from a major creditor, which, if lost, could trigger a debt crisis.

Conclusion

These corporate actions represent a fundamental restructuring of APIMEDS Pharmaceuticals’ capital structure, governance, and asset base. Investors should closely monitor the company’s ability to meet its regulatory deadlines, regain NYSE compliance, and execute on its strategic plans. Share price volatility is likely as these events unfold.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are urged to review all SEC filings and consult with their financial advisors regarding the risks and opportunities related to APIMEDS Pharmaceuticals US, Inc. The company’s ability to regain NYSE compliance, avoid debt default, and complete the proposed transactions is subject to significant uncertainty and risk.

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