What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-14 · 179 added, 130 removed, 461 unchanged (40% of the section changed)

16 unchanged sentences

Total current liabilities

Convertible notes at fair value, including related party amount of $ 13,320 and $ 11,689 , at March 31, 2025 and December 31, 2024, respectively

Convertible notes at fair value, including related party amount of $ 15,174 and $ 11,689 , at June 30, 2025 and December 31, 2024, respectively

Operating lease liability

5 unchanged sentences

Class A common stock, $ 0.0001 par value;

1,040,000,000 and 500,000,000 shares authorized at March 31, 2025 and December 31, 2024, and 10,538,615 and 555,511 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

1,040,000,000 and 500,000,000 shares authorized at June 30, 2025 and December 31, 2024, and 11,537,870 and 555,511 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

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AEON BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(in thousands, except share and per share data) (Unaudited)

Three Months Ended

Six Months Ended

Operating expenses:

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Total operating costs and expenses

Loss from operations

Other income (loss):

(Loss) income from operations

Other (loss) income:

Change in fair value of convertible notes

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Other income, net

Total other income (loss), net

Income (loss) before taxes

Net income (loss)

Basic and diluted net income (loss) per share

Weighted average shares of common stock outstanding used to compute basic and diluted net income (loss) per share

Total other (loss) income, net

(Loss) income before taxes

Net (loss) income

Basic net (loss) income per share

Diluted net (loss) income per share

Weighted average shares of common stock outstanding used to compute basic net (loss) income per share

Weighted average shares of common stock outstanding used to compute diluted net (loss) income per share

See accompanying notes to the condensed consolidated financial statements

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Issuance of shares and reclassification of liability related to cashless warrant exercises

Issuance of shares related to at-the-market offering, net

Stock-based compensation expense

Balance as of March 31, 2025

Balance as of June 30, 2025

Balance as of January 1, 2024

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Stock-based compensation expense

Balance as of March 31, 2024

Balance as of June 30, 2024

Stockholders'

Balance as of April 1, 2025

Issuance of shares and reclassification of liability related to cashless warrant exercises

Issuance of shares related to at-the-market offering, net

Stock-based compensation expense

Balance as of June 30, 2025

Balance as of April 1, 2024

Issuance of shares related to cashless warrant exercises

Stock-based compensation expense

Balance as of June 30, 2024

See accompanying notes to the condensed consolidated financial statements

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(in thousands, except per share data) (Unaudited)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Stock-based compensation expense

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Proceeds from issuance of convertible notes

Proceeds from issuance of at-the-market shares, net

Proceeds from issuance of public offering shares, net

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AEON Biopharma, Inc.

(“AEON” or the “Company”) is a biopharmaceutical company focused on developing its proprietary botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection (“ABP-450”), for debilitating medical conditions.

The Company is headquartered in Irvine, California.

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Also on the Closing Date, the Company changed its name from “Priveterra Acquisition Corp.” to “AEON Biopharma, Inc.” and is referred to herein as “AEON,” or the “Company.”

The Company’s common stock is trading on NYSE American under the symbol “AEON.”

The Company’s Class A common stock is trading on NYSE American under the symbol “AEON.”

Reverse Stock Split

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The Company has experienced recurring losses from operations and has a net capital deficiency and negative cash flows from operations since its inception.

As of March 31, 2025, the Company reported cash and cash equivalents of $ 10.4 million and an accumulated deficit of $ 422.5 million.

As of June 30, 2025, the Company reported cash and cash equivalents of $ 8.4 million and an accumulated deficit of $ 429.1 million.

The Company expects to incur losses and use cash in its operations for the foreseeable future.

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The Company held an initial meeting with the Food and Drug Administration (the “FDA”) in the third quarter of 2024 during which it aligned with the FDA on next steps to develop a Botox biosimilar.

The Company commenced analytical studies in the fourth quarter of 2024 to prepare for a potential Biosimilar Biological Product Development (“BPD”) Type 2a meeting with the FDA to review the results from the studies in the second half of 2025.

On August 14, 2024, the Company entered into an “at-the-market” sales agreement with Leerink Partners LLC (“Leerink Partners”) relating to an at-the-market offering program (the “ATM”), pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of common stock, registered pursuant to a shelf registration statement on Form S-3 that the Securities and Exchange Commission (the “SEC”) declared effective on August 21, 2024, having aggregate gross proceeds of up to $ 50.0 million through Leerink Partners as sales agent.

The Company commenced analytical studies in the fourth quarter of 2024 to prepare for an expected Biosimilar Biological Product Development (“BPD”) Type 2a meeting with the FDA to review the

results from the studies in the fourth quarter of 2025.

We anticipate results from our analytical studies, including comparative primary structure analysis and select functional analyses, to be completed in the third quarter of 2025.

333-281562) (as amended and supplemented, the “Registration Statement”) that the Securities and Exchange Commission (the “SEC”) declared effective on August 21, 2024, having aggregate gross proceeds of up to $ 50.0 million through Leerink Partners as sales agent.

Any sales by us pursuant to the Registration Statement, including any sales pursuant to the ATM, will be subject to any limits imposed under applicable law, including General Instructions I.B.1 and I.B.6 of Form S-3.

Under the ATM, Leerink Partners is entitled to commission at a rate equal to 3.0 % of the gross proceeds from sales of shares of common stock under the ATM.

As of March 31, 2025, the Company issued 2,241 shares under the ATM for net proceeds of approximately $ 0.2 million and approximately $ 49.8 million of common stock remains available to be sold under the ATM.

For the three months ended June 30, 2025, there were 112,503 shares issued under the ATM for net proceeds of approximately $ 84,000 .

As of June 30, 2025, the cumulative shares issued under the ATM were 273,094 shares net proceeds of approximately $ 0.2 million and approximately $ 49.8 million of common stock remains available to be sold under the ATM.

The Company may cancel its at-the-market program at any time upon prior notice, pursuant to its terms.

The commencement of studies, preparation for the potential BPD meeting and any further development of ABP-450 would require additional funding in the form of equity financings or debt.

The commencement of additional studies, preparation for an expected BPD meeting and any further development of ABP-450 would require additional funding in the form of equity financings or debt.

There can be no assurance that such efforts will be successful or that, in the event that they are successful, the terms and conditions of such financing will be commercially acceptable.

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Unaudited Interim Financial Information

The accompanying interim condensed consolidated balance sheets as of March 31, 2025, the condensed consolidated statements of operations and comprehensive income (loss), stockholders’ deficit and cash flows for the three months ended March 31, 2025 and March 31, 2024 and the related note disclosures are unaudited.

The accompanying interim condensed consolidated balance sheets as of June 30, 2025, the condensed consolidated statements of operations and comprehensive (loss) income, stockholders’ deficit and cash flows for the three and six months ended June 30, 2025 and June 30, 2024 and the related note disclosures are unaudited.

The balance sheet information as of December 31, 2024 is derived from the audited financial statements.

These unaudited interim financial statements have been prepared in accordance with U.S.

GAAP and, in management’s opinion, on a basis consistent with the audited financial statements and reflect all adjustments which only include normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2025 and its results of operations and comprehensive income (loss) and cash flows for the three months ended March 31, 2025 and March 31, 2024.

The results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or any other interim period.

GAAP and, in management’s opinion, on a basis consistent with the audited financial statements and reflect all adjustments which only include normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2025 and its results of operations and comprehensive (loss) income for the three and six months ended June 30, 2025 and June 30, 2024 and

cash flows for the six months ended June 30, 2025 and 2024.

The results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or any other interim period.

Use of Estimates

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Asset information, including monitoring of its cash and cash equivalents, provided to the CODM is consistent with those reported on the condensed consolidated balance sheets.

The key measure of the Company’s single segment profit and loss that the CODM uses to allocate resources and assess performance is the Company’s operating income (loss) as reported on the condensed consolidated statement of operations and comprehensive income (loss).

The table below shows a reconciliation of the Company’s net income (loss), including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S.

GAAP to the Company’s total consolidated net income (loss) as reported in the condensed consolidated statement of operations:

The key measure of the Company’s single segment profit and loss that the CODM uses to allocate resources and assess performance is the Company’s operating (loss) income as reported on the condensed consolidated statement of operations and comprehensive (loss) income.

The table below shows a reconciliation of the Company’s net (loss) income, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S.

GAAP to the Company’s total consolidated net (loss) income as reported in the condensed consolidated statement of operations:

Three Months Ended

Six Months Ended

Segment operating expenses:

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Total operating costs and expenses

Loss from operations

(Loss) income from operations

Other segment items:

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Total other segment items, net

Income (loss) before taxes

Segment net income (loss)

(Loss) income before taxes

Segment net (loss) income

Risk and Uncertainties

approval of its current and any future product candidates, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients and significant competition.

The Company is subject to risks common to early-stage companies in the pharmaceutical industry including, but not limited to, dependency on the clinical and commercial success of its current and any future product candidates, ability to obtain regulatory approval of its current and any future product candidates, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients and significant competition.

The Company relies on Daewoong Pharmaceutical Co., Ltd.

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Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the related lease term.

Property and equipment, net, as of March 31, 2025 (unaudited) and December 31, 2024 are as follows (in thousands):

Property and equipment, net, as of June 30, 2025 and December 31, 2024 are as follows (in thousands):

Furniture and fixtures

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The Company elected to account for its convertible notes at fair value at inception and at each subsequent reporting date.

Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the condensed consolidated statements of operations or as a component of other comprehensive income (loss) for changes related to instrument-specific credit risk.

Subsequent changes in fair value are recorded as a component of non-operating (loss) income in the condensed consolidated statements of operations or as a component of other comprehensive (loss) income for changes related to instrument-specific credit risk.

As a result of electing the fair value option, direct costs and fees related to the convertible notes are expensed as incurred.

Contingent Consideration

The Company accounts for its contingent consideration as either equity-classified or liability-classified instruments based on an assessment of the Contingent Consideration Shares specific terms (as further defined in Note 5 Fair Value Measurements ) and applicable authoritative guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

480, Distinguishing Liabilities from Equity (“ASC 480”) and Derivatives and Hedging (“ASC 815”).

Based on the appropriate guidance, the Company determined that the Contingent Consideration would be classified as a liability on the condensed consolidated balance sheets and remeasured at each reporting period with changes to fair value recorded to the condensed consolidated statements of operations and comprehensive income (loss).

Forward Purchase Agreements

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For more information, see Note 5 Fair Value Measurement .

Subsequent changes in the bifurcated derivatives were recorded in the condensed consolidated statements of operations and comprehensive income (loss).

The forward purchase agreements were terminated in March 2024, and the loss related to the termination was recorded to the condensed consolidated statement of operations and comprehensive income (loss).

Subsequent changes in the bifurcated derivatives were recorded in the condensed consolidated statements of operations and comprehensive (loss) income.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815.

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For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter until settlement.

Changes in the estimated fair value of the warrants are recognized in the condensed consolidated statements of operations and comprehensive income (loss).

Changes in the estimated fair value of the warrants are recognized in the condensed consolidated statements of operations and comprehensive (loss) income.

Fair Value of Financial Instruments

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Research and development costs are expensed as incurred.

Research and development expenses consist primarily of costs associated with clinical studies including clinical trial design, clinical site reimbursement, data management, travel expenses and the cost of products used for clinical trials and internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs.

Research and development expenses consist primarily of costs associated with the Company’s biosimilar analyses and clinical studies including clinical trial design, clinical site reimbursement, data management, travel expenses and the cost of products used for biosimilar studies and clinical trials, consulting and internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs.

Additionally, research and development expenses include employee compensation, including stock-based compensation, supplies, consulting, prototyping, testing, materials, travel expenses and an allocation of facility overhead expenses.

Costs incurred in obtaining technology licenses are charged to acquired in-process research and development (“IPR&D”) if the technology licensed has not reached technological feasibility and has no alternative future use.

The Company accrues the expenses for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements.

The Company accrues the expenses for its biosimilar and clinical trial activities performed by third parties, including clinical research organizations and other service providers, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements.

The Company determines these estimates through discussion with internal personnel and outside service providers as to progress or stage of completion of trials or services pursuant to contracts with clinical research organizations and other service providers and the agreed-upon fee to be paid for such services.

Payments made to outside service providers in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered .

There have been no material adjustments to the Company’s estimates for clinical trial expenses through March 31, 2025.

There have been no material adjustments to the Company’s estimates for biosimilar and clinical trial expenses through June 30, 2025.

Stock-Based Compensation

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The fair value of equity awards that are expected to vest is amortized on a straight-line basis over the requisite service period.

Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the condensed consolidated balance sheets and in selling, general and administrative or research and development expenses in the condensed consolidated statements of operations and comprehensive income (loss).

All stock-based compensation costs are recorded in the condensed consolidated statements of operations and comprehensive income (loss) based upon the underlying employee’s role within the Company.

Net income (loss) Per Share

All stock-based compensation costs are recorded in the condensed consolidated statements of operations and comprehensive (loss) income based upon the underlying employee’s role within the Company.

Net (loss) income Per Share

The Company only has one class of shares.

Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the period, without consideration for potentially dilutive shares of common stock.

Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average shares of common stock and potentially dilutive securities outstanding during the period using the treasury stock and if-converted methods, unless their inclusion would have been anti-dilutive.

Basic net (loss) income per share is computed by dividing the net (loss) income by the weighted average number of shares of common stock outstanding during the period, without consideration for potentially dilutive shares of common stock.

Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted-average shares of common stock and potentially dilutive securities outstanding during the period using the treasury stock and if-converted methods, unless their inclusion would have been anti-dilutive.

For purposes of the diluted net loss per share calculation, warrants, convertible notes and common stock options were considered as potentially dilutive securities.

For the three months ended March 31, 2025, there were no dilutive shares.

For the three months ended March 31, 2024, since the Company was in a loss position, basic net loss per share is the same as diluted net loss per share as the inclusion of all potentially dilutive shares of common stock was anti-dilutive.

Basic and diluted net income (loss) per share for three months ended March 31, 2025 and March 31, 2024 were calculated as follows (in thousands, except share and per share amounts) (unaudited):

Three months ended March 31, 2025

For the six months ended June 30, 2025 we had dilutive securities, while six months ended June 30, 2024, there were no dilutive securities.

Additionally, for the three months ended June 30, 2025, since the Company was in a loss position, basic net loss per share is the same as diluted net loss per share as the inclusion of all potentially dilutive shares of common stock was anti-dilutive.

Basic and diluted net (loss) income per share for three and six months ended June 30, 2025 and 2024 were calculated as follows (in thousands, except share and per share amounts):

Three months ended June 30, 2025

Weighted average shares of common stock outstanding, basic and diluted

Net loss per share, basic and diluted

Six months ended June 30, 2025

Weighted average shares of common stock outstanding, basic

Net loss per share, basic

Weighted average shares of common stock outstanding, diluted

Net income per share, diluted

Three months ended June 30, 2024

Weighted average shares of common stock outstanding, basic and diluted

Net income per share, basic and diluted

Three months ended March 31, 2024

Six months ended June 30, 2024

Weighted average shares of common stock outstanding, basic and diluted

Net loss per share, basic and diluted

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an anti-dilutive impact (unaudited):

Net income per share, basic and diluted

The following unweighted potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an anti-dilutive impact:

Three Months Ended

Six Months Ended

Contingent consideration

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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures .

This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income

This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted.

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For more information on fair value of convertible notes, see Note 5 Fair Value Measurements .

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 1.6 million and $ 0.1 million, respectively, of expense related to the increase in the fair value of the 2024 Daewoong Convertible Notes.

As of March 31, 2025 and December 31, 2024, the principal amount outstanding under the 2024 Daewoong Convertible Note was $ 15.0 million, with an estimated fair value inclusive of accrued interest of $ 13.3 million and $ 11.7 million, respectively.

During the three and six months ended June 30, 2025, the Company recognized $ 1.9 million and $ 3.5 million, respectively, of expense related to the increase in the fair value of the 2024 Daewoong Convertible Notes.

During the three and six months ended June 30, 2024, the Company recognized $ 1.8 million and $ 1.7 million, respectively, of income related to the decrease in the fair value of the 2024 Daewoong Convertible Notes.

As of June 30, 2025 and December 31, 2024, the principal amount outstanding under the 2024 Daewoong Convertible Note was $ 15.0 million, with an estimated fair value inclusive of accrued interest of $ 15.2 million and $ 11.7 million, respectively.

Public Offering

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The Offering was made pursuant to that certain Registration Statement on Form S-3, as amended (File No.

333-281562), which was originally filed on August 15, 2024, and declared effective by the Securities and Exchange Commission on August 21, 2024, including

the Prospectus contained therein and a prospectus supplement dated January 6, 2025, filed with the Securities and Exchange Commission on January 7, 2025.

333-281562), which was originally filed on August 15, 2024, and declared effective by the Securities and Exchange Commission on August 21, 2024, including the Prospectus contained therein and a prospectus supplement dated January 6, 2025, filed with the Securities and Exchange Commission on January 7, 2025.

The closing of the Offering occurred on January 7, 2025.

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The stock price on the Reset Date was below the floor price following the Stockholder Approval Date, and as such, the exercise price was reset to $ 8.06 .

During the three months ended March 31, 2025, certain holders of the Series B Warrants exercised 3,142,511 Series B Warrants in accordance with the alternative cashless exercise provision in the Series B Warrants, resulting in the issuance of 9,427,533 shares of Common Stock of the Company.

The fair value of the warrants exercised on the respective exercise dates for the three months ended March 31, 2025 was $ 6.4 million.

There were no Series A Warrants exercised during the three months ended March 31, 2025.

As of March 31, 2025, there were 3,565,245 and 422,734 units of Series A and Series B warrants outstanding, respectively.

During the three and six months ended June 30, 2025, certain holders of the Series B Warrants exercised 295,584 and 3,438,095 Series B Warrants, respectively, in accordance with the alternative cashless exercise provision in the Series B Warrants, resulting in the issuance of 886,752 and 10,314,285 shares of Common Stock of the Company, respectively.

The fair value of the warrants exercised on the respective exercise dates for the three and six months ended June 30, 2025 was $ 0.4 million and $ 6.9 million.

There were no Series A Warrants exercised during the three and six months ended June 30, 2025.

As of June 30, 2025, there were 3,565,245 and 127,150 units of Series A and Series B warrants outstanding, respectively.

On the date of issuance, the Company recognized a loss on issuance of Warrants of $ 75.6 million, which reflects the fair value of the warrants in excess of the proceeds received.

For the three months ended March 31, 2025, the Company recognized $ 19.4 million and $ 7.9 million of income related to the change in fair value of the remaining outstanding Series A and Series Warrants, respectively.

For the three and six months ended June 30, 2025, the Company recognized $ 0.1 million and $ 58.3 million, respectively, of income related to the change in fair value of the exercised Series B Warrants.

For the three and six months ended June 30, 2025, the Company recognized $( 0.5 ) million and $ 18.8 million of (expense) income related to the change in fair value of the remaining outstanding Series A, respectively, and $( 0.1 ) million and $ 7.9 million of (expense) income related to the change in fair value of the remaining outstanding Series B Series Warrants, respectively.

Refer to Note 5 Fair Value Measurements for additional information.

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The significant unobservable input assumptions that can significantly change the fair value included (i) the weighted average cost of capital, (ii) the timing of payments, (iii) the discount for lack of marketability, and (iv) the probability of certain corporate scenarios.

During the three months ended March 31, 2025 and March 31, 2024, the Company utilized discount rates ranging from 15 % to 60 %, reflecting changes in the Company’s risk profile, time-to-maturity probability, and key terms when modified to the convertible notes.

During the three months ended June 30, 2025 and June 30, 2024, the Company utilized discount rates ranging from 15 % to 60 %, reflecting changes in the Company’s risk profile, time-to-maturity probability, and key terms when modified to the convertible notes.

Termination of Forward Purchase Agreements

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Polar did not pay any cash to the Company for the Polar Retained Shares and retained all portions of the Prepayment Amount associated with the Polar Retained Shares.

As a result of the ACM Termination Agreement and Polar Termination Agreement, the Company recorded a charge to the condensed consolidated statement of operations of $ 20.3 million during the three months ended March 31, 2024 to reverse the related subscription receivable and derivative liability on the accompanying condensed consolidated balance sheet.

As a result of the ACM Termination Agreement and Polar Termination Agreement, the Company recorded a charge to the condensed consolidated statement of operations of $ 20.3 million during the first quarter of 2024 to reverse the related subscription receivable and derivative liability on the accompanying condensed consolidated balance sheet.

Additionally, in the first quarter of 2024, the Company had recorded potential liquidated damages of $ 3.0 million related to ACM and Polar;

however, since ACM and Polar each elected to remove its respective shares from the registration statement, the Company released the liability from the condensed consolidated balance sheet during the second quarter of 2024.

In connection with the negotiation of the Forward Purchase Agreements (and FPA Termination Agreements) and related subscription agreements, J.V.B.

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Following the Closing, in addition to the consideration received at the Closing and as part of the overall consideration paid in connection with the Merger, certain holders of common stock in Old AEON (the “Participating AEON Stockholders”) will be issued a portion of up to 222,653 additional shares of common stock, as follows:

● 13,996 shares of common stock, in the aggregate, if, on or before June 30, 2025 (as it may be extended, the “Migraine Phase 3 Outside Date”), the Company shall have commenced a Phase 3 clinical study for the treatment of chronic migraine or episodic migraine, which Phase 3 clinical study will have been deemed to commence upon the first subject having received a dose of any product candidate that is being researched, tested, developed or manufactured by or on behalf of the Company or any of its subsidiaries (any such product candidate, a “Company Product”) in connection with such Phase 3 clinical study (such 13,996 shares of common stock, the “Migraine Phase 3 Contingent Consideration Shares”);

Product”) in connection with such Phase 3 clinical study (such 13,996 shares of common stock, the “Migraine Phase 3 Contingent Consideration Shares”);

● 55,659 shares of common stock, in the aggregate, if, on or before November 30, 2026 (as it may be extended, the “CD BLA Outside Date”), the Company shall have received from the FDA acceptance for review of the BLA submitted by the Company for the treatment of cervical dystonia (such 55,659 shares of common stock, the “CD BLA Contingent Consideration Shares”);

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provided that in the event the satisfaction of the conditions for the issuance of the Episodic Migraine Contingent Consideration Shares occurs prior to the satisfaction of the conditions for the issuance of the Chronic Migraine Contingent Consideration Shares, then the number of Episodic Migraine Contingent Consideration Shares shall be increased to 152,998 shares of common stock;

FDA acceptance for review of the BLA submitted by AEON for the treatment of chronic migraine (such 97,339 shares of common stock, the “Chronic Migraine Contingent Consideration Shares”);

● 97,339 shares of common stock, in the aggregate, if, on or before June 30, 2028 (as it may be extended, the “Chronic Migraine Outside Date”, and together with the Migraine Phase 3 Outside Date, the CD BLA Outside Date and the Episodic Migraine Outside Date, the “Outside Dates”), the Company shall have received from the FDA acceptance for review of the BLA submitted by AEON for the treatment of chronic migraine (such 97,339 shares of common stock, the “Chronic Migraine Contingent Consideration Shares”);

provided that in the event that the number of Episodic Migraine Contingent Consideration Shares is increased to 152,998 , then the number of Chronic Migraine Contingent Consideration Shares shall be decreased to zero and no Contingent Consideration Shares will be issued in connection with the satisfaction of the conditions to the issuance of the Chronic Migraine Contingent Consideration Shares.

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market (a “Qualifying License”) prior to the satisfaction of (x) the conditions for the issuance of the Episodic Migraine Contingent Consideration Shares and (y) the conditions for the issuance of the Chronic Migraine Contingent Consideration Shares, then upon the entry of AEON into such Qualifying License, 27,992 shares of common stock shall become due and payable to Participating Stockholders and the number of Episodic Migraine Contingent Consideration Shares and (A) the number of Episodic Migraine Contingent Consideration Shares shall be reduced by 13,996 or by 27,992 and (B) the number of Chronic Migraine Contingent Consideration Shares shall be reduced by 13,996 , but not below zero .

The Company classifies the Contingent Consideration as a liability on the condensed consolidated balance sheets and remeasures at each reporting period with changes to fair value recorded to the condensed consolidated statements of operations and comprehensive income (loss).

The Company utilized the Probability-Weighted Expected Return Method (PWERM) model to value the contingent consideration based on earnout milestones, probability of forfeiture and success scenarios.

For the three months ended March 31, 2025 and March 31, 2024, the Company recognized a gain of $ 3.5 million and a loss of $ 63.8 million, respectively, related to the change in fair value of contingent consideration on the condensed consolidated statements of operations and comprehensive income (loss), and relates to the change in probabilities of achieving certain scenarios prior to and following the clinical results released in the second quarter of 2024 and changes in the Company’s stock price during the period.

As of March 31, 2025 and December 31, 2024, the contingent consideration liability was $ 0.1 million and $ 3.5 million, respectively.

For the three and six months ended June 30, 2025 and June 30, 2024, the Company recognized de minimus, $ 3.5 million, $ 161.2 million and $ 97.5 million of (loss) income, respectively, related to the change in fair value of contingent consideration on the condensed consolidated statements of operations and comprehensive (loss) income, and relates to the change in probabilities of achieving certain scenarios prior to and following the clinical results released in the second quarter of 2024 and changes in the Company’s stock price during the period.

As of June 30, 2025 and December 31, 2024, the contingent consideration liability was $ 0.1 million and $ 3.5 million, respectively.

Public and Private Placement Warrants related to the Closing

Upon the Closing, 201,112 warrants, consisting of 127,788 public warrants sold in Priveterra’s initial public offering and 73,334 warrants issued in a concurrent private placement, were outstanding.

The terms of the warrants are governed by a Warrant Agreement dated February 8, 2021 between the Company (then known as Priveterra Acquisition Corp.) and Continental Stock Transfer & Trust Company (the “Warrant Agreement”).

The terms of the warrants are governed by a Warrant Agreement

dated February 8, 2021 between the Company (then known as Priveterra Acquisition Corp.) and Continental Stock Transfer & Trust Company (the “Warrant Agreement”).

Public warrants related to the Closing

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Warrant exercises for Warrants related to the Closing

There were no warrants related to the Closing exercised during the three months ended March 31, 2025.

During the three months ended March 31, 2024, there were 86,164 warrants exercised on a cashless basis for 13,374 shares of common stock, with an impact to additional paid in capital of $ 10.4 million.

A summary of activity for the Company’s issued and outstanding public and private warrants related to the Closing for the three months ended March 31, 2025 and March 31, 2024 is as follows (unaudited):

There were no warrants related to the Closing exercised during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024, there were 56,664 and 142,828 warrants exercised on a cashless basis for 13,936 and 27,310 shares of common stock, with an impact to additional paid in capital of $ 15.0 million.

A summary of activity for the Company’s issued and outstanding public and private warrants related to the Closing for the six months ended June 30, 2025 and 2024 is as follows:

Issued and Outstanding, January 1, 2025

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Number of warrants cancelled

Issued and Outstanding, March 31, 2025

Issued and Outstanding, June 30, 2025

Issued and Outstanding, January 1, 2024

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Number of warrants cancelled

Issued and Outstanding, March 31, 2024

Issued and Outstanding, June 30, 2024

The private warrants are accounted for as a liability with changes in the fair value recorded to the condensed consolidated statement of operations.

The Company utilized the Black-Scholes option pricing model (Level 3), which requires the input of subjective assumptions, including the Company’s stock price, expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected remaining life.

The fair value of the warrants at March 31, 2025 and December 31, 2024 were

de minimus and $ 1.2 million, respectively.

For the three months ended March 31, 2025 and March 31, 2024, the Company recorded $ 1.2 million and $( 20.9 ) million, respectively, related to the income (expense) from the change in fair value of warrants.

The fair value of the warrants at June 30, 2025 and December 31, 2024 were de minimus and $ 1.2 million, respectively.

For the three and six months ended June 30, 2025 and 2024, the Company recorded de minimus, $ 1.2 million, $ 5.9 million, and $( 15.0 ) million, respectively, related to the income (expense) from the change in fair value of warrants related to the Closing.

Series A and Series B Warrants

The measurement of fair value of the Series A and Series B warrants were determined utilizing a Monte-Carlo simulation considering all relevant assumptions at the date of issuance of January 7, 2025 and at March 31, 2025.

The fair value on grant date will be recorded as a liability on the condensed consolidated balance sheets and changes in fair value will be recognized at each reporting period on the condensed consolidated statement of operations.

The table below summarizes the significant assumptions (unaudited):

The fair value on grant date was recorded as a liability on the condensed consolidated balance sheets and changes in fair value will be recognized at each reporting period on the condensed consolidated statement of operations.

The table below summarizes the significant assumptions:

Exercise Price

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As the fair value of the warrants issued were greater than the proceeds received, the Company recognized a loss on issuance of common shares and the warrants of $ 75.6 million.

For the three months ended March 31, 2025, there were $ 6.4 million of Series B Warrants cashlessly exercised for 9,427,533 shares of common stock, representing 3,142,511 Series B warrants.

A summary of activity for the Company’s issued and outstanding Series A and Series B warrants for the three months ended March 31, 2025 is as follows (unaudited):

A summary of activity for the Company’s issued and outstanding Series A and Series B warrants for the six months ended June 30, 2025 is as follows:

Issued and Outstanding, January 1, 2025

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( 3,438,095 )

Issued and Outstanding, March 31, 2025

Issued and Outstanding, June 30, 2025

Summary of Recurring Fair Value Measurements

The following details the Company’s recurring measurements for assets and liabilities at fair value (in thousands, unaudited):

The following details the Company’s recurring measurements for assets and liabilities at fair value (in thousands):

Convertible Notes

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Termination of forward purchase agreements

Balance, March 31, 2025

Balance, June 30, 2025

Balance, January 1, 2024

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Termination of forward purchase agreements

Balance, March 31, 2024

Balance, June 30, 2024

Commitments and Contingencies

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Lease expense is recognized on a straight-line basis over the lease term.

The following table summarizes supplemental balance sheet information related to the operating lease as of March 31, 2025 (in thousands, unaudited):

The following table summarizes supplemental balance sheet information related to the operating lease as of June 30, 2025 (in thousands):

Minimum lease payments by fiscal year

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Discount rate

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases for the three months ended March 31, 2025 and March 31, 2024 (in thousands) (unaudited).

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases for three and six months ended June 30, 2025 and 2024 (in thousands).

Three Months Ended

Six Months Ended

Cost of operating leases

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The Daewoong Agreement will terminate upon written notice by either the Company or Daewoong upon a continuing default that remains uncured within 90 days (or 30 days for a payment default) by the other party, or without notice upon the bankruptcy or insolvency of the Company.

The Company has recorded $ 0.2 million as a liability in accrued expenses on the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 for ABP-450 supplies.

The Company has recorded $ 0.2 million as a liability in accrued expenses on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024 for ABP-450 supplies.

Legal Proceedings

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In April 2024, the Company successfully obtained a dismissal of Odeon’s non-breach of contract claims, including the tort claims, breach of covenant claim and associated punitive damages claim.

Odeon’s breach of contract claim is proceeding, with each party filing a summary judgment motion in March 2025, which the court is expected to decide upon in the coming months.

Odeon’s breach of contract claim is proceeding to trial, with neither party prevailing on their respective summary judgment motions that were filed in March 2025.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications.

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The holders of common stock are entitled to receive dividends whenever funds are legally available, when and if declared by the Company’s Board of Directors.

As of March 31, 2025, there have been no cash dividend declared to date.

As of June 30, 2025, there have been no cash dividend declared to date.

Each share of common stock is entitled to one vote.

Common Stock Reserved

The table below summarizes the Company’s reserved common stock for further issuance as of March 31, 2025 and December 31, 2024:

The table below summarizes the Company’s reserved common stock for further issuance as of June 30, 2025 and December 31, 2024:

Stock options issued and outstanding

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There were 6,780 shares initially reserved for issuance under the 2023 ESPP, which shall automatically increase on January 1 of each calendar year beginning and including January 1, 2024 and ending on and including January 1, 2033, by an amount equal to the lesser of (i) 1.0 % of the total number of shares of common stock issued and outstanding on January 1 of the year in which such increase is to occur, or (ii) such smaller number of shares of common stock as may be established by the Board of Directors.

As of March 31, 2025, there were 19,419 shares available for issuance.

As of June 30, 2025, there were 19,419 shares available for issuance.

There have been no shares issued under the 2023 ESPP.

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2019 Incentive Award Plan

The following table summarizes stock option activity under 2019 Award Plan (unaudited):

The following table summarizes stock option activity under 2019 Award Plan:

Outstanding, January 1, 2025

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Options forfeited

Outstanding, March 31, 2025

Exercisable, March 31, 2025

As of March 31, 2025 and December 31, 2024, the weighted average remaining contractual life of options outstanding and options exercisable was 5.8 years and 6.0 years, respectively.

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 0.6 million and $ 0.8 million, respectively, of share-based compensation expense related to stock options granted.

As of March 31, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $ 1.3 million and $ 1.8 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 3 months and 4 months , respectively.

The following table summarizes restricted stock units activity under the 2019 Award Plan (unaudited):

Outstanding, June 30, 2025

Exercisable, June 30, 2025

As of June 30, 2025 and December 31, 2024, the weighted average remaining contractual life of options outstanding and options exercisable was 5.6 years and 6.0 years, respectively.

During the three and six months ended June 30, 2025 and 2024, the Company recognized $ 0.4 million and $ 0.9 million, $ 0.8 million and $ 1.6 million, respectively, of share-based compensation expense related to stock options granted.

As of June 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $ 0.9 million and $ 1.8 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 2 months and 4 months , respectively.

The following table summarizes restricted stock units activity under the 2019 Award Plan:

Outstanding, January 1, 2025

Outstanding, March 31, 2025

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 0.3 million and $ 0.4 million, respectively, of share-based compensation expense related to restricted stock units granted.

As of March 31, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $ 2.6 million and $ 3.0 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 19 months and 21 months , respectively.

The unrecognized compensation expense with the earnout criteria as of March 31, 2025 and December 31, 2024 of $ 4.2 million and $ 4.3 million, respectively, will be recognized when the milestones are determined to be probable over the RSUs vesting term, calculated as the period from the date the milestone was determined to be probable and the expected achievement date of the milestone.

Outstanding, June 30, 2025

During three and six months ended June 30, 2025 and 2024, the Company recognized $ 0.4 million, $ 0.9 million, $ 0.5 million and $ 1.2 million, respectively, of share-based compensation expense related to restricted stock units granted, including $ 0.3 million with earnout vesting criteria.

As of June 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $ 2.3 million and $ 3.0 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 17 months and 21 months , respectively.

The unrecognized compensation expense with the earnout criteria as of June 30, 2025 and December 31, 2024 of $ 4.1 million and $ 4.3 million, respectively, will be recognized when the milestones are determined to be probable over the RSUs vesting term, calculated as the period from the date the milestone was determined to be probable and the expected achievement date of the milestone.

2023 Incentive Award Plan

As of March 31, 2025, there were 40,398 shares of common stock available for issuance under the 2023 Award Plan.

The following table summarizes stock options activity under the 2023 Award Plan (unaudited):

As of June 30, 2025 there were 40,398 shares of common stock available for issuance under the Company’s 2023 Incentive Award Plan (the “2023 Award Plan”).

The following table summarizes stock options activity under the 2023 Award Plan:

Outstanding, January 1, 2025

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Options forfeited

Outstanding, March 31, 2025

Exercisable, March 31, 2025

The weighted average fair value of options granted as of December 31, 2024 was $ 135.50 .

The weighted average remaining contractual life of options outstanding and options exercisable as of March 31, 2025 and December 31, 2024 was 9.2 years and 9.5 years, respectively.

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 0.6 million and $ 0.1 million, respectively, of share-based compensation expense related to stock options granted.

As of March 31, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $ 4.7 million and $ 5.3 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 16 months and 19 months , respectively.

The following table summarizes restricted stock units activity under the 2023 Award Plan (unaudited):

Outstanding, June 30, 2025

Exercisable, June 30, 2025

The weighted average remaining contractual life of options outstanding and options exercisable as of June 30, 2025 and December 31, 2024 was 9.0 years and 9.5 years, respectively.

During the three and six months ended June 30, 2025 and 2024 , the Company recognized $ 0.6 million, $ 1.3 million, $ 0.4 million and $ 0.5 million respectively, of share-based compensation expense related to stock options granted.

As of June 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $ 4.0 million and $ 5.3 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 13 months and 19 months , respectively.

The following table summarizes restricted stock units activity under the 2023 Award Plan:

Outstanding, January 1, 2025

Outstanding, March 31, 2025

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 0.1 million and zero of share-based compensation expense related to restricted stock units granted.

As of March 31, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $ 0.6 million and $ 0.7 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 17 and 20 months , respectively.

Outstanding, June 30, 2025

During the three and six months ended June 30, 2025, the Company recognized $ 0.1 million, and there were no stock-based compensation expenses for the three and six months ended June 30, 2024.

As of June 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $ 0.5 million and $ 0.7 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 14 and 20 months , respectively.

In May 2025 under the 2023 Award Plan, the Board approved cash-settled restricted stock units, which are share-based awards granted to employees and directors over a vesting period that entitle the grantee to receive the cash equivalent to the value of a share of the Company’s common stock upon each vesting anniversary.

During the three and six months ended June 30, 2025, there were 5,288,059 cash-settled restricted stock units granted with weighted-average grant date fair value of $ 0.76 with four-year vesting, subject to continued service through the applicable vesting date.

There were no units vested as of June 30, 2025.

Company has elected to account for cash-settled restricted stock units in accordance with ASC 718.

In accordance with ASC 718, the Company will recognize compensation expense on the condensed consolidated statement of operations and record the associated liability to accrued compensation on the condensed consolidated balance sheets using straight-line method over the service period.

Additionally, changes in fair value of the awards will be recorded to operating costs on the condensed consolidated statement of operations at each reporting date until settlement, reflecting changes in the underlying stock price.

During the three and six months ended June 30, 2025, the Company recognized $ 0.1 million and $ 0.1 million of share-based compensation expense related to cash-settled restricted stock units granted.

As of June 30, 2025, total unrecognized compensation expense related to nonvested cash-settled restricted stock units was $ 3.9 million, which is expected to be recognized over the weighted-average remaining requisite service period of 46 months .

As of June 30, 2025, the liability related to cash-settled restricted stock units was $ 0.1 million on the condensed consolidated balance sheet.

2025 Employee Inducement Incentive Award Plan

Effective April 19, 2025, the Board adopted the 2025 Employment Inducement Incentive Award Plan (the “Inducement Plan”) and, subject to the adjustment provisions of the Inducement Plan, reserved 1,000,000 shares of the Company’s Class A common stock for issuance pursuant to equity awards granted under the Inducement Plan.

The Inducement Plan provides for the grant of equity-based awards, including non-statutory stock options, restricted stock units, restricted stock, stock appreciation rights, performance shares and performance stock units, and its terms are substantially similar to the Company’s 2023 Award Plan.

In accordance with the NYSE American Company Guide, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company or being rehired following a bona fide period of interruption of employment by the Company.

The Inducement Plan was adopted without stockholder approval pursuant to the applicable provisions of the NYSE American Company Guide.

As of June 30, 2025, there were 660,983 shares of common stock available for issuance under the Inducement Plan.

For the six months ended June 30, 2025, there were 59,034 stock options issued, with weighted average exercise price of $ 0.41 .

The weighted average fair value of options granted as of June 30, 2025 was $ 0.37 .

The weighted average remaining contractual life of options outstanding and options exercisable as of June 30, 2025 was 9.8 years.

During the three and six months ended June 30, 2025, the Company recognized de minimus amounts of share-based compensation expense related to stock options granted.

As of June 30, 2025, total unrecognized compensation expense related to nonvested stock options was $ 21 thousand, which is expected to be recognized over the weighted-average remaining requisite service period of 46 months .

For the six months ended June 30, 2025, there were 279,983 restricted stock units issued, with weighted averaged grant date fair value of $ 0.49 .

During the three and six months ended June 30, 2025, the Company recognized de minimus amounts of share-based compensation expense related to restricted stock units granted.

As of June 30, 2025, total unrecognized compensation expense related to nonvested restricted stock units was $ 0.1 million, which is expected to be recognized over the weighted-average remaining requisite service period of 46 months .

Share-based Compensation Expense and Valuation Information

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The Company records share-based compensation expense net of actual forfeitures.

During the three months ended March 31, 2025 and March 31, 2024, the Company recognized $ 1.7 million and $ 1.6 million, respectively, of share-based compensation expense, of which $ 1.3 million and $ 1.2 million, respectively, were in selling, general and administrative expenses, and $ 0.4 million and $ 0.4 million, respectively, were in research and development expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

During the three and six months ended June 30, 2025 and 2024, the Company recognized $ 1.6 million, $ 3.3 million $ 1.7 million and $ 3.3 million, respectively, of share-based compensation expense, of which $ 1.3 million, $ 2.6 million, $ 1.3 million, and $ 2.5 million, respectively, were in selling, general and administrative expenses, and $ 0.4 million $ 0.8 million, $ 0.4 million, and $ 0.8 million, respectively, were in research and development expenses in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

The fair value of stock options granted under the Award Plan was estimated using the following assumptions:

Three Months Ended

Six Months Ended

Expected volatility

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Subsequent Events

The Company has further evaluated subsequent events for recognition and remeasurement purposes as of and for the three months ended March 31, 2025.

After review and evaluation, management has concluded that there were no material subsequent events as of the date that the financial statements were available to be issued, except as described below.

The Inducement Plan was adopted without stockholder approval pursuant to the applicable provisions of the NYSE American Company Guide.

The Company has further evaluated subsequent events for recognition and remeasurement purposes as of and for the three and six months ended June 30, 2025.

After review and evaluation, management has concluded that there were no material subsequent events as of the date of the issuance of the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements