Form 4: APLT CMO Disposes Shares in Merger, Options Cancelled

Applied Therapeutics' Chief Medical Officer, Evan Prescott Bailey, disposed of all common stock and had out-of-the-money stock options cancelled as part of the company's merger with Cycle Group Holdings Limited.

Summary

• Evan Prescott Bailey, Chief Medical Officer of Applied Therapeutics, Inc. (APLT), reported transactions related to the company's merger.
• On December 19, 2025, Bailey was granted 437,500 compensatory Restricted Stock Units (RSUs) under the 2019 Equity Incentive Plan.
• These RSUs were set to vest upon a Change in Control or June 19, 2026, whichever came first.
• An administrative error in prior Form 4s was corrected, adjusting total common stock holdings to 1,296,816 shares.
• The merger between Applied Therapeutics, Inc., Cycle Group Holdings Limited, and AT2B, INC. became effective on January 28, 2026.
• At the effective time of the merger, each outstanding share of common stock was converted into $0.088 cash plus one non-tradeable contingent value right.
• All outstanding RSUs, whether vested or unvested, were deemed vested and converted into the merger consideration.
• Bailey disposed of a total of 1,296,816 shares of common stock in exchange for the merger consideration.
• Stock options with an exercise price equal to or exceeding the $0.088 closing amount (Out-of-the-Money Options), including 24,414 options held by Bailey with a $1.05 exercise price, were fully vested but cancelled for no consideration at the effective time.
• Following these transactions, Bailey holds no beneficial ownership of common stock or derivative securities.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a negative event for equity holders, particularly given the very low cash consideration per share and the cancellation of executive stock options for no value, reflecting a distressed outcome for the company.

Positives

• Reporting person received merger consideration for all common stock and RSUs.
• All outstanding RSUs, whether vested or unvested, were deemed vested upon the merger.

Negatives

• Stock options with an exercise price of $1.05 were cancelled for no consideration as they were out-of-the-money relative to the $0.088 cash component of the merger consideration.

Risks

• NA

Future Outlook

NA

Management Comments

• NA

Industry Context

StockSavvy.ai notes that Form 4 filings related to mergers are common, indicating the finalization of executive compensation and equity holdings post-acquisition. The low cash consideration per share ($0.088) suggests a challenging valuation for Applied Therapeutics, potentially reflecting difficulties in the biotech sector or specific company performance issues prior to the merger. The cancellation of out-of-the-money options is a standard outcome in such transactions when the acquisition price is below the strike price.

Comparison to Industry Standards

• The merger consideration of $0.088 per share is significantly lower than typical acquisition prices seen in the biotech industry for companies with promising pipelines, such as the acquisition of MyoKardia by Bristol Myers Squibb for $13.1 billion ($225 per share) or Alexion Pharmaceuticals by AstraZeneca for $39 billion ($175 per share), indicating a distressed sale or a company with limited perceived value.
• The cancellation of out-of-the-money options is a standard practice in mergers where the acquisition price does not exceed the option's strike price, aligning with similar outcomes observed in other biotech acquisitions where executive options are underwater.

Legal Proceedings

• NA

Related Party Transactions

• NA

Stakeholder Impact

• Shareholders: Received $0.088 cash per share plus a non-tradeable contingent value right, indicating a very low return on investment.
• Employees (specifically option holders): Those with out-of-the-money options, like the Chief Medical Officer, had their options cancelled for no value.

Next Steps

• NA

Key Dates

Recommendation

The merger consideration of $0.088 per share, coupled with the cancellation of out-of-the-money executive stock options for no value, indicates a highly unfavorable outcome for existing shareholders. This transaction effectively liquidates the company's public equity at a distressed valuation, making a 'sell' recommendation appropriate for any remaining shares or for investors to avoid the stock.

Keywords

Applied Therapeutics, APLT, SEC Form 4, Insider Transaction, Merger, Restricted Stock Units, Stock Options, Executive Compensation, Cycle Group Holdings, AT2B INC, Beneficial Ownership