What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-14 · 76 added, 68 removed, 215 unchanged (40% of the section changed)

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Company Overview

We are a clinical stage biopharmaceutical company focused on developing our botulinum toxin complex, prabotulinumtoxinA injection (“ABP-450”), for debilitating medical conditions.

We plan to develop and seek regulatory approval of ABP-450 as a biosimilar product in the United States through submission of a Biologics License Application, or BLA, under Section 351(k) of the Public Health Service Act, or a Section 351(k) BLA, with the goal of addressing the global therapeutic botulinum toxin market, which we estimate to be at least $3.3 billion based on Abbvie’s reported global revenues for its therapeutic Botox segment for the fiscal year ended 2024.

ABP-450 is the same botulinum toxin complex that is currently approved as a biosimilar in Mexico and India and, in the U.S.

is approved to provide temporary improvement in the appearance of moderate to severe glabellar lines for certain adult patients and marketed by Evolus, Inc.

under the name Jeuveau in the United States and Nuceiva in Canada and the European Union.

We have exclusive development and distribution rights for certain therapeutic uses of ABP-450 in the United States, Canada, the European Union, the United Kingdom, and certain other international territories.

We are a biopharmaceutical company seeking accelerated and full-label United States (“U.S.”) market entry by developing our botulinum toxin complex, prabotulinumtoxinA injection (“ABP-450”) as a BOTOX Ò biosimilar for debilitating medical conditions.

We plan to develop and seek regulatory approval of ABP-450 as a biosimilar product in the U.S.

through submission of a Biologics License Application, (“ BLA”), under Section 351(k) of the Public Health Service Act, (“Section 351(k) BLA”) with the ultimate goal of addressing the global therapeutic botulinum toxin market, which we estimate to be at least $3.3 billion based on AbbVie’s reported global revenues for its therapeutic Botox segment for the fiscal year ended 2024.

ABP-450 is the same botulinum toxin complex that is currently approved as a biosimilar in Mexico, India and Philippines and, in the U.S., is approved to provide temporary improvement in the appearance of moderate to severe glabellar lines for certain adult patients and marketed by Evolus, Inc.

under the name Jeuveau in the U.S.

and Nuceiva in Canada and the European Union.

We have exclusive development and distribution rights for certain therapeutic uses of ABP-450 in the U.S ., Canada, the European Union, the United Kingdom, and certain other international territories.

We have built a highly experienced management team with specific experience in biopharmaceutical and botulinum toxin development and commercialization.

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We held an initial meeting with the FDA in the third quarter of 2024 during which we aligned with the FDA on next steps to develop a Botox biosimilar.

We 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 in the second half of 2025 to review the results from the studies.

We 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 in the fourth quarter of 2025 to review the initial results from the studies.

Botulinum toxins have proven to be a highly versatile therapeutic biologic, with over 230 potential therapeutic uses documented in published scientific literature and twelve approved therapeutic indications in the United States.

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We continue to evaluate various pathways to most efficiently advance this clinical development program .

Additionally, we have an ongoing preclinical study in rats designed to provide IND supporting safety and efficacy data.

Additionally, we performed a study in rats designed to provide IND supporting safety and efficacy data.

ABP-450 is injected into the stellate ganglion using ultrasound guidance to assess the effect on the sympathetic nervous pathway, which may inform us whether ABP-450 has the potential for utility across a broad portfolio of neuropsychiatric disorders, including post-traumatic stress disorder (PTSD).

We may initiate other preclinical studies from time to time to evaluate the potential safety and efficacy of ABP-450 in other disorders .

We license ABP-450 from Daewoong, a South Korean pharmaceutical manufacturer, and have exclusive development and distribution rights for therapeutic indications in the United States, Canada, the European Union, the United Kingdom, and certain other international territories.

We license ABP-450 from Daewoong, a South Korean pharmaceutical manufacturer, and have exclusive development and distribution rights for therapeutic indications in the U.S., Canada, the European Union, the United Kingdom, and certain other international territories.

Daewoong licenses the same 900 kDa botulinum toxin to Evolus for cosmetic indications, which Evolus markets and sells under the name Jeuveau in the United States and Nuceiva in Canada and the European Union.

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Over 2,100 adult subjects with moderate to severe glabellar lines at maximum frown participated in Evolus’ clinical development program, and each of Evolus’ Phase 3 clinical studies successfully met their respective primary safety and efficacy endpoints.

While none of these preclinical or clinical programs specifically contemplated any therapeutic use of ABP-450, given that the FDA’s regulatory requirements are generally the same for the cosmetic or therapeutic use of a toxin, we believe that the positive data derived from these preclinical and clinical studies will support the clinical development and anticipated future safety labeling of ABP-450 for migraine and cervical dystonia, in addition to other indications, at all contemplated dose ranges .

We plan to pursue approval of a BLA under Section 351(k) that exclusively contemplates therapeutic indications for ABP-450, which we believe could improve provider reimbursement for ABP-450, if approved.

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We believe ABP-450 could have therapeutic applications in a broad range of debilitating medical conditions, and we intend to continue to leverage our product assessment screening process to identify additional indications for future development.

Our management team possesses significant and relevant experience in the botulinum toxin industry in both drug development and commercialization, and we believe they are highly qualified to successfully develop and commercialize ABP-450 to enhance the lives of patients that suffer from debilitating medical conditions .

We have never been profitable from operations and, as of March 31, 2025, we had an accumulated deficit of $422.5 million.

We have never been profitable from operations and, as of June 30, 2025, we had an accumulated deficit of $429.1 million.

We have never generated revenue from ABP-450.

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As of the date of this Report, we have sufficient cash to fund our operating plan into the fourth quarter of 2025.

Any further development of ABP-450 for any indication, including the biosimilar pathway and any additional studies in cervical dystonia, will require additional funding, which may not be available to us on reasonable terms, or at all .

Any further development of ABP-450 for any indication, including the biosimilar pathway and any additional studies, will require additional funding, which may not be available to us on reasonable terms, or at all .

We do not expect to receive any revenue from ABP-450 or any future product candidates that we develop unless and until we obtain regulatory approval and commercialize ABP-450 or any future product candidates.

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Executive Overview

On March 24, 2025, the Company was notified by Marc Forth that he will be resigning as the Company’s President and Chief Executive Officer in order to pursue another opportunity, effective April 4, 2025.

Forth will remain a member of the Company’s board of directors (the “Board”), where he will continue to advise Company management and provide strategic guidance.

The Board named Jost Fischer, the current Chairman of the Board, to serve as Interim CEO following Mr.

Forth’s departure while the Board identifies Mr.

Forth’s successor.

On April 19, 2025, the Board appointed Robert Bancroft as the Company’s Principal Executive Officer, President, Chief Executive Officer and member of the Board, effective as of April 29, 2025.

Bancroft will report directly to the Board.

On April 19, 2025, the board of directors (the “Board”) appointed Robert Bancroft as the Company’s Principal Executive Officer, President, Chief Executive Officer and member of the Board, effective as of April 29, 2025, in connection with Marc Forth’s resignation as the Company’s President and Chief Executive Officer.

Bancroft reports directly to the Board.

Forth continues to serve as a member of the Board.

Liquidity and Capital Resources and Going Concern

As disclosed further below in the section titled “ Liquidity and Capital Resources ”, we have incurred operating losses and negative cash flows from operating activities since inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable.

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

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

As a result of these conditions, management has concluded that substantial doubt about our ability to continue as a going concern exists as conditions and events, considered in the aggregate, indicate that it is probable that we will be unable to meet our obligations as they become due within one year after the date that the financial statements included in this Report are issued.

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Securities and Exchange Commission on May 14, 2024, and the Company is not currently eligible for any exemption from the stockholders’ equity requirement in Section 1003(a) of the Company Guide, and as such, NYSE American deems the Company below compliance with the Minimum Requirement.

The Company was required to submit a plan by March 5, 2025, advising of actions taken or will be taken to regain compliance with the continued listings standards of the Company Guide by August 3, 2026 (the “Plan”).

The Company submitted the Plan as required in the Notice.

As required by the Notice, the Company submitted a plan to regain compliance with the continued listings standards of the Company Guide (the “Plan”).

On April 22, 2025, the Company received a notification (the “Acceptance Letter”) from NYSE American that the Plan was accepted.

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The Common Stock will continue to trade under the symbol “AEON”.

The Acceptance Letter does not affect the Company’s ongoing business operations or its reporting requirements with the Securities and Exchange Commission.

The Acceptance Letter does not affect the Company’s ongoing business operations or its reporting

requirements with the Securities and Exchange Commission.

The Company intends to consider available options to resolve the non-compliance with the Minimum Requirement by August 3, 2026.

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On January 6, 2025, we entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.

(“Aegis” or the “Underwriter”) pursuant to which the Company agreed to sell and issue, in an underwritten public offering (the “Offering”) 555,571 Common Units, each consisting of (i) one (1) share of Common Stock, (ii) one (1) Series A Registered Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $45.00 (the “Series A Warrants”) and (iii) one (1) Series B Registered Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $45.00 (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”).

(1) Series B Registered Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $45.00 (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”).

Additionally, the Company granted Aegis a 45-day option to purchase additional shares of Common Stock and/or Warrants of (i) up to 15.0% of the number of shares of Common Stock sold in the offering, (ii) up to 15.0% of the number of Series A Warrants sold in the offering and (iii) up to 15.0% of the number of Series B Warrants sold in the offering.

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Other SG&A expenses include travel expenses, market research and analysis, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses, and allocated facilities-related expenses.

As we pivot to our biosimilar strategy, we anticipate that our SG&A expenses will decrease in the near-future to focus our resources to the research and development (“R&D”) activities.

As we pivot to our biosimilar strategy, we anticipate that our SG&A expenses will decrease in the near-future to focus our resources to research and development (“R&D”) activities.

Additionally, we anticipate increased costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of NYSE American and the SEC, insurance, and investor relations costs.

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Research and Development Expenses

Our R&D expenses are primarily attributed to the development of ABP-450 as a biosimilar product in the United States through a Section 351(k) BLA, using AbbVie Inc.’s product Botox as a proposed reference product for all of the indications for which Botox is approved, other than the cosmetic uses for which we do not hold development or commercialization rights, which may include initiating a comparability study of ABP-450 in cervical dystonia.

Due to the stage of our development and our ability to use resources across all of our programs, most of our R&D costs are not recorded on a program-specific basis.

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The biosimilar pathway will require greater costs in the beginning stages in order to design, execute and complete the primary structural analysis.

Any clinical studies, such as a comparability

study for cervical dystonia, will generally incur greater development costs than those programs incurred in the earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical studies.

We expect our R&D expenses to be significant over the next years as we pursue the development of ABP-450 as a biosimilar and seek regulatory approval using Botox as the reference product.

Any clinical studies, such as a comparability study in any of the indications currently approved for use by the proposed reference product , will generally incur greater development costs than those programs incurred in the earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical studies.

We expect our R&D expenses to be significant over the next years as we pursue the development of ABP-

450 as a biosimilar and seek regulatory approval using Botox as the reference product.

As a result, we are unable to determine the duration and completion costs of our programs or when and to what extent we will generate revenue from commercialization and sale of any of our product candidates.

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Change in Fair Value of Contingent Consideration

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

Other Income (Loss), Net

Other Income (loss), net primarily consists of gains and losses resulting from the remeasurement of the fair value of our convertible notes, warrant liabilities, forward purchase agreements, and loss on issuance of warrants, each described below, at each balance sheet date.

Change in fair value of convertible notes – The Company elected the fair value option to account for its convertible notes, with the subsequent changes in fair value recorded in the consolidated statement of operations and comprehensive income (loss).

Change in fair value of warrants - Changes in the estimated fair value of our warrant liabilities are recognized as a non-cash gain or loss on the consolidated statements of operations and comprehensive income (loss).

Other (Loss) Income, Net

Other (loss) income, net primarily consists of gains and losses resulting from the remeasurement of the fair value of our convertible notes, warrant liabilities, forward purchase agreements, and loss on issuance of warrants, each described below, at each balance sheet date.

Loss on embedded forward purchase agreement and make whole derivative - the Company has determined that each of its forward purchase agreements entered in connection with the Merger is a freestanding hybrid financial instrument comprising a subscription receivable and embedded features, which were bifurcated and accounted for separately as derivative instruments.

The Company recorded the derivatives as liabilities and measured them at fair value.

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

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

Upon termination of the forward purchase agreements in the first quarter of fiscal 2024, the Company recorded a charge to the consolidated statement of operations of $20.3 million to reverse the related subscription receivable and derivative liability on the accompanying consolidated balance sheet.

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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

Comparison of the three months ended March 31, 2025 and March 31, 2024

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

Comparison of the three and six months ended June 30, 2025 and 2024

Operating Expenses

Selling, General and Administrative (SG&A) Expenses

SG&A expenses were $3.1 million for the three months ended March 31, 2025, resulting in a decrease of $1.5 million, or 33%, compared to $4.6 million during the three months ended March 31, 2024.

The decrease in SG&A expenses was primarily attributable to a decrease of $1.2 million in legal expenses and professional fees related to the Company’s registration statement filings in the prior year and a decrease of $0.2 million related to headcount reduction to preserve cash.

SG&A expenses were $3.3 million for the three months ended June 30, 2025, resulting in no change, compared to $3.3 million during the three months ended June 30, 2024.

SG&A expenses were consistent year-over year as the Company’s resources were primarily attributed to the continued support of the R&D function.

SG&A expenses were $6.4 million for the six months ended June 30, 2025, resulting in a decrease of $1.6 million, or 20%, compared to $8.0 million during the six months ended June 30, 2024.

The decrease in SG&A expenses was primarily attributable to a decrease of $0.9 million in legal expenses and professional fees related to the Company’s registration statement filings in the prior year and a decrease of $0.7 million related to headcount reduction to preserve cash that was initiated in the second quarter of fiscal 2024.

Research and Development (R&D) Expenses

R&D expenses were $0.8 million for the three months ended March 31, 2025, a decrease of $4.9 million, or 86%, compared to $5.7 million for the three months ended March 31, 2024.

The decrease was primarily attributable to a $4.6 million decrease in R&D expenses due to wind down of Phase 2 clinical trials related to chronic and episodic migraine and cervical dystonia and a decrease of $0.3 million related to headcount reduction to preserve cash.

R&D expenses were $1.1 million for the three months ended June 30, 2025, a decrease of $3.3 million, or 75%, compared to $4.4 million for the three months ended June 30, 2024.

The decrease was primarily attributable to $3.1 million decrease in R&D expenses due to wind down of Phase 2 clinical trials related to chronic and episodic migraine and cervical dystonia and a decrease of $0.2 million related to headcount reduction to preserve cash that was initiated in the second quarter of fiscal 2024.

R&D expenses were $1.9 million for the six months ended June 30, 2025, a decrease of $8.3 million, or 81%, compared to $10.2 million for the six months ended June 30, 2024.

The decrease was primarily attributable to a $8.0 million decrease in R&D expenses due to wind down of Phase 2 clinical trials related to chronic and episodic migraine and cervical dystonia and a decrease of $0.2 million related to headcount reduction to preserve cash that was initiated in the second quarter of fiscal 2024.

Change in Fair Value of Contingent Consideration

The Company recognized a gain of $3.5 million, compared to a loss of $63.8 million, related to the change in the fair value of the contingent consideration for the three months ended March 31, 2025 and March 31, 2024, respectively, related to certain contingent provisions, restrictions and forfeiture provisions for Founder Shares and certain Participating Stockholders shares, which was primarily attributable to the change in probabilities of meeting milestones and fluctuations in stock price of the Company, which was a

decrease from $38.88 as of December 31, 2024 to $0.58 as of March 31, 2025, and an increase from $518.40 as of December 31, 2023 to $835.20 as of March 31, 2024, respectively.

The Company recognized an immaterial loss and a gain of $3.5 million for the three and six months ended June 30, 2025, respectively, related to the change in the fair value of the contingent consideration related to certain contingent provisions, restrictions and forfeiture provisions for Founder Shares and certain Participating Stockholders shares.

The gain was primarily due to a decrease in the Company’s stock price from $38.88 to $0.76 as of December 31, 2024 and June 30, 2025, respectively.

For the three and six months ended June 30, 2024, the Company recognized gains of $161.2 million and $97.5 million, respectively, primarily due to changes in the milestone probabilities in the second quarter of 2024 following the announcement of the Company’s topline Phase 2 migraine results and fluctuations in the Company’s stock price from $518.40 to $835.20 to $75.60 as of December 31, 2023, March 31, 2024 and June 30, 2024, respectively.

Loss on Issuance of Warrants

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Other Income, Net

The Company recognized income of $86.7 million, compared to a loss of $20.9 million in the prior year, related to the change in the fair value of warrants.

For the three months ended June 30, 2024 and June 30, 2025, the Company recognized loss of $0.5 million compared to a gain of $5.9 million, respectively, related to the change in fair value of warrants.

For the six months ended June 30, 2025, the Company recognized income of $86.2 million, offset by $75.6 million from fair value loss at issuance related to Series A and Series B warrants issued in the first quarter of fiscal 2025, compared to a loss of $15.0 million in the prior year, related to warrants issued at the Closing.

Liquidity and Capital Resources

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We have experienced recurring losses from operations and have a net capital deficiency and negative cash flows from operations since our inception.

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

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

On May 3, 2024, we announced preliminary top-line results from a planned interim analysis of the Phase 2 trial with ABP-450 in the preventative treatment of chronic migraine, which did not meet the primary or secondary endpoints.

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We will use the net proceeds from each Convertible Note to support the late-stage clinical development of ABP-450 and for general working capital purposes.

Pursuant to the terms of the Subscription Agreement, on March 24, 2024, the Company issued and sold to Daewoong one Convertible Note in the principal amount of $5.0 million, and on April 12, 2024, the Company issued and sold to Daewoong one Convertible Note in the principal amount of $10.0 million.

Pursuant to the terms of the Subscription Agreement, on March 24, 2024, the Company issued and sold to Daewoong one Convertible Note in the principal

amount of $5.0 million, and on April 12, 2024, the Company issued and sold to Daewoong one Convertible Note in the principal amount of $10.0 million.

On March 19, 2024, we entered into the License Agreement Amendment with Daewoong, which amends the License Agreement.

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We held an initial meeting with the FDA in the third quarter of 2024 during which we aligned with the FDA on next steps to develop a Botox biosimilar.

However, 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.

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.

However, the commencement of 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.

Furthermore, the use of equity as a source of financing would dilute existing shareholders.

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We may receive additional capital from the cash exercise of the Private Placement Warrants.

However, the exercise price of our Private Placement Warrants is $828.00 per warrant and the last reported sales price of our common stock on May 7, 2025 was $0.48.

However, the exercise price of our Private Placement Warrants is $828.00 per warrant and the last reported sales price of our common stock on August 7, 2025 was $0.713.

The likelihood that holders of the Private Placement Warrants will exercise their Private Placement Warrants, and therefore the likelihood of any amount of cash proceeds that we may receive, is dependent upon the trading price of our common stock after effectiveness of the registration statement related thereto registering the issuance of common stock underlying the Private Placement Warrants.

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We will have broad discretion over the use of any proceeds from the exercise of such securities.

Any proceeds from the exercise of such securities would increase our liquidity, but we are not currently budgeting for any cash proceeds

from the exercise of the Private Placement Warrants when planning for our operational funding needs.

Any proceeds from the exercise of such securities would increase our liquidity, but we are not currently budgeting for any cash proceeds from the exercise of the Private Placement Warrants when planning for our operational funding needs.

The Private Placement Warrants may be exercised on a cashless basis at any time and we will not receive any proceeds from such exercise, even if the Private Placement Warrants are in-the-money.

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Net Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2025 was $7.9 million, consisting primarily of a net income of $9.1 million and non-cash charges of $(11.2) million, consisting primarily of $(86.7) million related to change in fair value of warrants and $(3.5) million related to change in fair value of contingent consideration, offset by $75.6 million loss on issuance of warrants, $1.7 million non-cash expenses related to stock-based compensation for our executives and directors and $1.6 million related to the change in fair value of the convertible notes.

Net cash used in operating activities for the three months ended March 31, 2024 was $8.6 million, consisting primarily of a net loss of $118.0 million and non-cash charges of $109.3 million, consisting primarily of $0.1 million related to the change in fair value of the convertible notes, $20.9 million related to change in fair value of warrants, $22.9 million related to loss on forward purchase agreement and derivative liabilities, $63.8 million related to change in fair value of contingent consideration and a $1.6 million non-cash expense related to stock-based compensation for our executives and directors.

Net cash used in operating activities for the six months ended June 30, 2025 was $10.0 million, consisting primarily of a net income of $2.5 million and non-cash charges of $7.2 million, consisting primarily of $86.2 million decrease related to change in fair value of warrants and $3.5 million decrease related to change in fair value of contingent consideration, offset by $75.6 million loss on issuance of warrants, $3.3 million non-cash expenses related to stock-based compensation for our executives and directors and $3.5 million related to the change in fair value of the convertible notes.

Decrease of $5.3 million primarily for $1.7 million from timing of clinical trial payments and $3.6 million used for continuing SG&A business needs.

Net cash used in operating activities for the six months ended June 30, 2024 was $16.7 million, consisting primarily of a net income of $46.1 million and non-cash charges of $60.8 million, consisting primarily of $97.5 million decrease related to change in fair

value of contingent consideration and $1.7 million decrease related to the change in fair value of the convertible notes, offset by $15.0 million increase related to change in fair value of warrants, $20.0 million related to loss on forward purchase agreement and derivative liabilities, and a $3.3 million of non-cash expense related to stock-based compensation for our executives and directors .

Cash Flows from Investing Activities

Net cash used in investing activities for the three months ended March 31, 2025 and March 31, 2024 were a de minimus amount and zero, respectively, related to the purchase of property and equipment.

Net cash used in investing activities for the six months ended June 30, 2025 and 2024 were a de minimus amount and zero, respectively, related to the purchase of property and equipment.

Cash Flows from Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2025 and March 31, 2024 were $18.3 million and $5.0 million, respectively, related to the public offering and convertible notes, respectively.

Net cash provided by financing activities for the six months ended June 30, 2025 and 2024 were $18.4 million and $15.0 million, respectively, related to the public offering in the first quarter of fiscal 2025 and proceeds from issuance of convertible notes in the first and second quarters of fiscal 2024, respectively.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”).

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue and expenses at the date of the financial statements as well as the

expenses incurred during the reporting period.

Generally, we base our estimates on historical experience and on various other assumptions in accordance with United States GAAP that we believe to be reasonable under the circumstances.

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On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience.

As of March 31, 2025, there have been no changes to our critical accounting policies from those reported on our Annual Report Form 10-K.

As of June 30, 2025, there have been no changes to our critical accounting policies from those reported on our Annual Report Form 10-K.

Smaller Reporting Company

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We will continue to be a smaller reporting company if either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

If we are a smaller reporting company at the time we cease to be

an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

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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 2. Management’s Discussion and Analysis