Form 4: Director's Holdings Shift Post-Applied Therapeutics Merger

A director of Applied Therapeutics, Inc. reported changes in beneficial ownership following the company's merger, converting shares and options into cash and contingent value rights.

Summary

• Reporting Person Stacy J. Kanter, a director of Applied Therapeutics, Inc. (APLT), reported changes in beneficial ownership.
• The changes are a result of the merger of Applied Therapeutics, Inc. with Cycle Group Holdings Limited and AT2B, INC., which became effective on January 28, 2026.
• Each outstanding share of Applied Therapeutics common stock was cancelled and converted into the right to receive $0.088 per share in cash and one non-tradeable contingent value right.
• Outstanding Restricted Stock Units (RSUs), whether vested or unvested, were fully vested and converted into the same merger consideration.
• Stock options with an exercise price equal to or exceeding the $0.088 closing amount (Out-of-the-Money Options) were fully vested and then cancelled for no consideration if unexercised.
• Kanter disposed of 22,500 shares of common stock and 42,500 shares of common stock on February 3, 2026, in exchange for the merger consideration.
• Kanter also disposed of a total of 263,690 stock options (20,460, 10,230, 16,500, 16,500 at $1.05 exercise price, and 200,000 at $0.395 exercise price) on February 3, 2026, which were cancelled for no consideration as they were out-of-the-money.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as negative due to the very low cash consideration per share and the cancellation of out-of-the-money options for no value, indicating a poor outcome for shareholders and option holders in the merger.

Positives

• The merger provided a cash payment of $0.088 per share to common stockholders.
• Shareholders also received a non-tradeable contingent value right, offering potential future value.
• All outstanding RSUs, whether vested or unvested, were fully vested as part of the merger terms.
• Out-of-the-money stock options were fully vested prior to cancellation, ensuring all potential value was realized before the merger's completion, even if ultimately cancelled for no consideration due to exercise price.

Negatives

• Stock options with an exercise price equal to or exceeding the $0.088 closing amount were cancelled for no consideration.
• The cash consideration of $0.088 per share is relatively low, indicating a potentially low valuation for the company's common stock at the time of the merger.
• The contingent value right is non-tradeable, limiting liquidity and immediate value realization for shareholders.

Risks

• Shareholders are subject to the terms and conditions of the non-tradeable contingent value right, the future value of which is uncertain.
• Holders of out-of-the-money stock options received no consideration for their options, representing a loss of potential future value.

Future Outlook

The filing primarily reports past transactions related to a completed merger and does not provide forward-looking statements or guidance regarding the combined entity's future operations or financial performance, beyond the existence of a non-tradeable contingent value right.

Management Comments

• Pursuant to the terms of that certain Agreement and Plan of Merger (the 'Merger Agreement') dated as of December, 11, 2025, among the Issuer, Cycle Group Holdings Limited and AT2B, INC. ('Purchaser'), Purchaser completed a tender offer for shares of Issuer and thereafter merged with and into the Issuer (the 'Merger'), effective as of January 28, 2026, with the Issuer surviving the Merger.
• At the effective time of the Merger (the 'Effective Time'), each outstanding share of Issuer common stock was cancelled and converted into the right to receive (i) $0.088 per share of common stock, net to the seller in cash, without interest (the 'Closing Amount') plus (ii) one non-tradeable contingent value right, in accordance with the terms and subject to the conditions of a contingent value rights agreement (the 'Merger Consideration').
• Pursuant to the Merger Agreement, at the Effective Time, each outstanding RSU (whether vested or unvested) was deemed to have vested and was cancelled and automatically converted into the right to receive the Merger Consideration.
• Pursuant to the Merger Agreement, at the Effective Time, each option to purchase shares of common stock (each a 'Stock Option') that has a per share exercise price that equals or exceeds the Closing Amount as of immediately prior to the Effective time (each such Stock Option, an 'Out-of-the-Money Option'), to the extent not vested, was fully vested as of prior to the Effective Time. Any Out-of-the-Money Options that remained outstanding and unexercised as of the Effective Time were cancelled for no consideration at the Effective Time.

Industry Context

StockSavvy.ai notes that mergers and acquisitions are common in the biotechnology and pharmaceutical sectors, often driven by strategic realignment, pipeline consolidation, or financial distress. The structure of this deal, including a low cash component and a non-tradeable contingent value right, suggests a complex valuation scenario, potentially reflecting challenges or specific strategic objectives for the acquiring entity, Cycle Group Holdings Limited.

Comparison to Industry Standards

• The cash consideration of $0.088 per share is significantly lower than typical per-share acquisition prices seen in the biotech industry, where valuations often reflect pipeline potential or market capitalization multiples. For instance, recent biotech acquisitions have often involved premiums over pre-announcement trading prices, unlike the low absolute value here.
• The inclusion of a non-tradeable contingent value right (CVR) is a common mechanism in biotech mergers, particularly when there is uncertainty regarding the future success of clinical assets or regulatory milestones. However, the non-tradeable nature limits immediate shareholder liquidity, contrasting with CVRs that may be listed or have more defined monetization paths.
• The cancellation of out-of-the-money options for no consideration is standard practice in mergers when the exercise price exceeds the acquisition price, aligning with similar transactions across various industries.

Stakeholder Impact

• Shareholders: Received $0.088 cash per share and one non-tradeable contingent value right, indicating a low valuation for their equity.
• Option Holders (including management): Out-of-the-money options were cancelled for no consideration, resulting in a loss of potential value.
• Employees (if holding RSUs): RSUs were fully vested and converted into the merger consideration, providing some liquidity.

Next Steps

• Shareholders will need to monitor the performance and terms associated with the non-tradeable contingent value rights for any potential future value realization.

Key Dates

Recommendation

The merger's terms, specifically the low cash consideration of $0.088 per share and the cancellation of out-of-the-money options for no value, indicate a significantly unfavorable outcome for existing shareholders. The non-tradeable contingent value right offers uncertain future value and lacks liquidity. For any remaining shareholders, the recommendation would be to sell any remaining positions or consider the implications of the CVR, as the primary equity value has been realized at a very low price.

Keywords

Applied Therapeutics, APLT, Merger, Form 4, Beneficial Ownership, Director, Stock Options, RSUs, Contingent Value Right, Corporate Action