Apimeds Pharmaceuticals US, Inc. (NYSE American: APUS) has just 563,192 shares in its tradeable public float — the portion of stock available for open-market trading — while 747,702 shares of Series A Convertible Preferred stock sit one corporate gate away from converting into 14,954,040 common shares. That preferred block is 26.6 times the entire float.
Shareholders already approved the conversion by written consent in December 2025. The sole remaining condition is NYSE American approval of a new listing application, a step the company has a direct financial incentive to pursue: $8 million in restricted cash held in a deposit-account control agreement — meaning the lender controls the account — unlocks only when the preferred converts. If and when it does, existing common holders would go from owning 100% of the common equity to roughly 9.1% in a single event.
The Defaulted Convertible
Running in parallel is a $10.9 million senior secured convertible note held by Alto Opportunity Master Fund, a Cayman Islands segregated-portfolio vehicle. The note carries a conversion price subject to reset and anti-dilution adjustments with a floor tied to future market price — a floating-price structure the company itself states produces a share count that is "not determinable." The holder declared a default, and a forbearance agreement expired June 30, 2026 without extension. Default interest accrues at 18%.
At a market capitalization of roughly $5.86 million, the note's redemption amount alone is 1.86 times the company's total equity value. Any conversion at a discount into a 563,192-share float creates a self-reinforcing loop: more shares issued drives the price lower, which resets the conversion price lower, which produces still more shares. This is the accounting signature of what practitioners call a toxic convert — the embedded conversion feature failed equity classification under ASC 815-40 and is carried as a Level 3 derivative liability valued by Monte Carlo simulation.
Beyond the drawn note, $110 million of unused capacity remains under the same facility. The company cannot draw on it unilaterally; the holder alone decides whether to deploy additional tranches.
Near-Term Float Pressure
Two smaller overhangs are closer to arriving. Approximately 251,520 restricted shares issued to financial advisor E.F. Hutton & Co. in May 2026 will season under Rule 144 — the SEC rule that lets restricted stock become freely tradeable after a six-month holding period — around November 11, 2026. That block equals 44.7% of the current float. An additional 204,284 shares are contractually committed to E.F. Hutton but not yet issued; no shareholder vote or market condition is required to release them, adding a potential 36% to the float.
The company has also completed two reverse splits in 18 months — 1-for-2.6 in February 2025 and 1-for-10 in July 2026 — while simultaneously cutting par value from $0.01 to $0.001. That par-value reduction removes balance-sheet friction from issuing large quantities of new shares into 100 million authorized but largely unissued shares.
What the Score Reflects
ShareStructure assigns APUS an elevated dilution risk score of 7 out of 10. The score is driven almost entirely by the convertible and preferred components; the warrant book (111,691 shares at strike prices of $17.80, $40, and $50) and options (131,037 shares at a weighted-average exercise price of $28.20) sit 4.6 to 12.9 times above the current market with no reset provisions — making them functionally inert. The score is suppressed from higher territory only because the preferred conversion faces a genuine exchange-approval gate.
Pending overhang instruments total roughly 15.4 million potential shares — 2,735% of the current float. The company reported $278,371 in unrestricted cash against $16.4 million of total debt, all classified as current, and zero revenue for the trailing twelve months. Five million dollars of short-term bridge notes matured on July 1, 2026 and remain unpaid — the typical precursor to an equity-settled workout that would land directly in the float.