Shares of Apimeds Pharma (APUS) rallied by more than 20% on Tuesday before trading was placed into a volatility halt, after the company announced a settlement with Inscobee Inc. and Apimeds Inc. that resolves outstanding disputes tied to its December 1, 2025 merger with MindWave Innovations Inc.
The settlement clears the way for completion of the merger transactions and for the company to proceed with its previously disclosed $100 million private investment in public equity, or PIPE, financing. The company said APUS common stock is expected to resume trading on the NYSE American on Tuesday, subject to approval by the NYSE American exchange.
Under the terms of the agreement, the Inscobee parties confirmed that the Stockholder Support and Lock-Up Agreement and attendant voting agreements remain valid and binding. The settlement further voids prior written stockholder consents that sought removal of the company’s directors. Leadership continuity is preserved: Dr. Vin Menon will continue to serve as Co-Chief Executive Officer alongside Co-Chief Executive Officer Sungjoon Chae.
The Inscobee parties also granted an irrevocable proxy to vote in favor of the proposals set forth in the company’s Information Statement on Schedule 14C dated February 27, 2026. Those proposals include conversion of Series A Convertible Preferred Stock and outstanding convertible notes, and a 1-for-10 reverse stock split, each of which were detailed in that filing.
A key commercial element of the settlement is the establishment of Lōkahi Therapeutics Inc. as an independent biopharmaceutical company focused on the Apitox program. Lōkahi will receive rights to the Apitox program, including associated intellectual property, regulatory materials, development data, and manufacturing information. As part of the transaction, Lōkahi will deliver $4 million to APUS within five business days following the settlement effective date.
In addition, APUS will assign to Lōkahi a $2.2 million Prevail CRO credit facility intended to support continued development of the Apitox program. Following receipt of the payment, APUS will distribute 51% of Lōkahi common stock as directed by Erik Emerson, the company’s former Chief Executive Officer; APUS will retain the remaining 49%.
The settlement also calls for the creation of a new wholly owned subsidiary within seven business days of the agreement. Ten percent of net proceeds from APUS’ financing arrangement will be allocated to this new subsidiary, with the remaining 90% allocated to MindWave. The company said the subsidiary is expected to be spun off within twelve months.
The agreement therefore addresses governance issues, converts certain securities and sets in motion both a financing and a corporate separation related to the Apitox program. The settlement includes precise cash and equity mechanics as well as voting commitments intended to enable the previously announced merger and financing to move forward.
Key points
- Settlement with Inscobee and Apimeds Inc. resolves disputes from the Dec. 1, 2025 merger with MindWave and preserves voting and lock-up agreements.
- The agreement enables completion of the merger and the previously disclosed $100 million PIPE financing; APUS trading is expected to resume pending NYSE American approval.
- The deal creates Lōkahi Therapeutics to own and develop the Apitox program, involves a $4 million payment to APUS, assignment of a $2.2 million Prevail CRO credit facility, and a planned equity distribution and subsidiary spin-off.
Sectors impacted - Biopharmaceuticals, capital markets, and corporate governance.
Risks and uncertainties
- Resumption of APUS common stock trading is subject to approval by the NYSE American exchange.
- Planned payments and assignments - including the $4 million delivery from Lōkahi and the $2.2 million Prevail CRO credit facility assignment - are conditions of the settlement.
- The new subsidiary is expected to be spun off within twelve months, but the timeline and completion of the spin-off are contingent on future actions described in the settlement.