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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-12 · 103 added, 84 removed, 207 unchanged (47% of the section changed)

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Company Overview

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 are a biopharmaceutical company seeking accelerated and full-label United States (“U.S.”) market entry by developing our 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 manufactured by Daewoong Pharmaceutical in compliance with current Good Manufacturing Practice (“cGMP”), in a facility that has been approved by the U.S.

Food and Drug Administration, Health Canada, and European Medicines Agency.

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.

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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 exclusive development and distribution rights for 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.

We have completed a Phase 2 study of ABP-450 for the treatment of cervical dystonia and completed enrollment and dosing of patients for a Phase 2 double blind study of ABP-450 for the treatment of both chronic and episodic migraine.

We originally intended to pursue a submission of a BLA under Section 351(a) of the Public Health Service Act, or an Original BLA, seeking one or more potential therapeutic indications for ABP-450.

We had completed a Phase 2 study of ABP-450 for the treatment of cervical dystonia and completed enrollment and dosing of patients for a Phase 2 double blind study of ABP-450 for the treatment of both chronic and episodic migraine.

However, our Phase 2 clinical trials for episodic and chronic migraine did not meet their respective primary endpoints.

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On July 9, 2024, we announced a strategic reprioritization to pursue a 351(k) biosimilar regulatory pathway for ABP-450, 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.

The FDA regulates biosimilars under the Public Health Service Act’s 351(k) pathway, which requires developers to demonstrate that a proposed product is highly similar to an approved reference biologic with no clinically meaningful differences in safety, purity, or potency.

Analytical similarity is the scientific foundation of this process, representing the most critical and data-intensive phase of development.

Once analytical comparability across key quality attributes is established, subsequent FDA interactions focus on confirming whether any residual uncertainty requires limited clinical evaluation.

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 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.

Our initial development programs for ABP-450 were directed at migraine, cervical dystonia and gastroparesis.

We selected these initial programs based on a comprehensive product assessment screen designed to identify indications where we believe ABP-450 has the potential to deliver significant value to patients, physicians and payors and where its clinical, regulatory and commercial characteristics suggest viability.

We believe that ABP-450 has potential across a broad range of target indications and we plan to continue to explore additional development programs that satisfy our product assessment screens.

The FDA allowed our Investigational New Drug application, or IND, for ABP-450, supporting our clinical trials in the preventative treatment for migraine, to proceed in October 2020, and we began treating patients in our Phase 2 clinical study beginning in March 2021.

Prior to commencing this Phase 2 study, no Phase 1 clinical studies of ABP-450 had been performed in regard to migraine by us or any other party.

Nevertheless, given the extensive preclinical toxicology and other data developed by our licensing partner, Daewoong, and the aesthetic licensor of ABP-450, Evolus, the FDA permitted us to proceed directly to this Phase 2 clinical trial.

The FDA allowed our IND for ABP-450, which supports our clinical trials in cervical dystonia, to proceed in October 2020, and we began treating patients in our Phase 2 clinical study beginning in April 2021.

We enrolled 59 patients in this randomized, double-blind, placebo-controlled study across approximately 20 study sites in the United States.

Patients enrolled into the study received one of four different injection cycles, low dose of 150 units, mid-dose of 250 units, high dose of 350 units or placebo, with patients evenly split among the four arms.

Topline data from the Phase 2 cervical dystonia study, released in September 2022, showed that ABP-450 met all primary endpoints and a number of other key secondary endpoints, supporting the further development of ABP-450 in reducing signs and symptoms associated with cervical dystonia.

We may commence a Phase 3 study in cervical dystonia pending the results of the comparative analytical studies and discussions with the FDA in a Biological Product Development meeting.

In December 2020, we initiated a preclinical gastroparesis study with 42 primates receiving multiple injections of ABP-450 across four dose ranges.

The objective of this preclinical study was to characterize the safety and toxicology prior to entering human studies.

We completed this preclinical study in January 2022.

Following the preclinical study, we submitted an IND to the FDA and received a letter in May 2022 confirming that the IND-opening Phase 2a clinical study may proceed.

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

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 commenced analytical studies in the fourth quarter of 2024 to prepare for an anticipated, now confirmed BPD Type 2a meeting with the FDA on November 19, 2025 to review the results from the analytical studies, including comparative primary structure analysis and select functional analyses.

The initial results from our analytical studies indicate a 100% amino acid sequence match confirmed between ABP-450 and Botox, based on sequence coverage of 93% to 99% for the five proteins that comprise the 900kD botulinum toxin type A complex, using liquid chromatography/mass spectrometry (“LC/MS”) analysis of more than 3,400 peptides across multiple lots of ABP-450 and Botox, without any sequence deviations observed.

Additionally, ABP-450 also demonstrated highly similar potency across two distinct assays (LD 50 - in vivo biological activity and CBPA - cell-based potency assay) to support clinical dose predictability, comparable vial to vial active ingredient composition using ELISA - further supporting dose similarity and reliability, and functional

cleavage of SNAP-25, consistent with the mechanism of action.

The Company expects to perform additional analyses to seek regulatory approval of ABP-450 as a biosimilar to Botox for therapeutic indications.

Botulinum toxins represent a well-characterized class of biologic therapeutics with over 230 potential therapeutic uses documented in the published scientific literature and twelve FDA-approved indications in the United States.

ABP-450 has been previously evaluated in multiple clinical and preclinical programs, including Phase 2 studies in cervical dystonia and migraine and preclinical work in gastroparesis and neuropsychiatric models.

The Phase 2 cervical dystonia program met its primary and key secondary endpoints and, together with its open-label safety extension, provides human clinical data supporting the safety and efficacy of ABP-450.

We are not currently pursuing additional 351(a) indication-specific development programs, but we retain related intellectual property and know-how that could support future collaborations or lifecycle opportunities .

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.

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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, including our 351(k) biosimilar program, at all contemplated dose ranges .

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 our 351(k) biosimilar program, across all labeled 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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As a result, other botulinum toxins are required to include the sales prices of both therapeutic and cosmetic botulinum toxin sales when calculating the average selling price, or ASP, that is used to determine the reimbursement amount physicians receive for therapeutic usage.

The inclusion of a lower cosmetic sales price in the calculation of ASP can cause physicians to lose money when treating patients with existing botulinum toxins and also creates a deterrent to providing payors and/or providers with rebates or other financial incentives.

If we are successful in obtaining a BLA under Section 351(k) for therapeutic indications of ABP-450, the ASP for ABP-450 would be calculated using only therapeutic sales, which we believe would facilitate consistent and favorable reimbursement to physicians when they choose to use ABP-450 for therapeutic treatments, as well as the ability to provide payors and/or providers with rebates and other financial incentives.

The inclusion of a lower cosmetic sales price in the calculation of ASP can cause physicians that inject for therapeutic applications to lose money when treating patients with existing botulinum toxins and also creates a deterrent to providing payors and/or providers with rebates or other financial incentives.

If we are successful in obtaining a BLA under Section 351(k) for therapeutic indications of ABP-450, the ASP for ABP-450 would be calculated using only therapeutic sales, which we believe would facilitate consistent and favorable product reimbursement to physicians when they choose to use ABP-450 for therapeutic treatments, as well as the ability to provide payors and/or providers with rebates and other financial incentives.

This pricing model would be unique to us within the current therapeutic neurotoxin market, and we believe it would allow physicians to provide treatment with ABP-450 at a more competitive or the same net price as the market leader after rebates and discounts .

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 who suffer from debilitating medical conditions .

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 been profitable from operations and, as of September 30, 2025, we had an accumulated deficit of $433.7 million.

We have never generated revenue from ABP-450.

We have concluded that we do not have sufficient cash to fund our operations for 12 months from the date of our financial statements without additional financing, and as a result, there is substantial doubt about our ability to continue as a going concern.

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

As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the second quarter of 2026, including funds anticipated to be received from the first and second closings of the PIPE Financing in November 2025.

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 .

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

As of September 30, 2025, we had reported cash and cash equivalents of $5.9 million and an accumulated deficit of $433.7 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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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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(i) one and three tenths (1.3) multiplied by (ii) the quotient of (a) the principal amount of each Convertible Note and all accrued and unpaid interest to be converted divided by (b) the volume weighted average trading per share price of common stock over the five (5) trading days prior to the Company’s receipt of Daewoong’s written notice of exercise of the Optional Conversion, provided that such per share price of common stock is at least $1.00 per share.

On November 13, 2025, the Company announced that it has entered into a binding term sheet with Daewoong contemplating the exchange of the 2024 Convertible Notes of $15.0 million in principal plus accrued interest for approximately 23,103,694 shares of Class A common stock (or pre-funded warrants in lieu of shares), a $1.5 million new convertible note due 2030 with interest rate of 15.79%, and approximately 8 million cash-exercise warrants on the same term as the PIPE Warrants (the “Exchange”).

The parties expect to enter into definitive documentation for the Exchange in the coming weeks following execution of definitive documentation.

The consummation of the Exchange will be subject to stockholder approval.

Public Offering

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

(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”).

On January 6, 2025, we entered into an 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”).

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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The Company intends to use the net proceeds from the Offering for general corporate purposes, including working capital.

PIPE Financing

On November 12, 2025, the Company entered into a securities purchase agreement for a private placement (“PIPE”) financing for:

(i) the sale of 6,581,829 shares of the Company’s Class A common stock (or pre-funded warrants in lieu of shares) at a price per share of $0.9116, for gross proceeds of $6 million;

(ii) five-year warrants to purchase up to 6,581,829 shares of Class A common stock at an exercise price of $1.094 per share (the “PIPE Warrants”);

and (iii) the investors’ rights to receive anti-dilutive warrants following the exchange of the Daewoong 2024 Convertible Notes, for a number of shares not to exceed 6,581,829 shares (the “anti-dilutive Warrants”).

The PIPE financing will close in two stages.

The first closing is expected to occur in November 2025, subject to the satisfaction of customary closing conditions, and result in $1.79 million in gross proceeds to the Company.

The second closing will be subject to stockholder approval, the closing of the exchange of the Daewoong 2024 Convertible Notes, and other customary closing conditions.

The PIPE Warrants and anti-dilutive Warrants will be issued only at the second closing.

The Company plans to use net proceeds to further advance analytical work for its ABP-450 biosimilar program, and for general corporate purposes.

Components of Our Results of Operations

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We expect to incur increased costs associated with establishing sales, marketing, and commercialization functions in advance of potential future regulatory approvals and commercialization of our product candidates.

If ABP-450 obtains United States regulatory approval for any indication, we expect that we would incur significantly increased expenses associated with building a sales and marketing team and funding commercial activities.

If ABP-450 obtains United States regulatory approval for any

indication, we expect that we would incur significantly increased expenses associated with building a sales and marketing team and funding commercial activities.

Research and Development Expenses

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We expect our R&D expenses to increase as we, subject to raising additional capital, develop and seek regulatory approval of ABP-450 .

R&D expenses associated with these activities may include third-party costs such as expenses incurred under agreements with CROs, the cost of consultants who assist with the development of ABP-450 on a program-specific basis, investigator grants, sponsored research, product costs in connection with acquiring ABP-450 from Daewoong and Botox for use in conducting preclinical and clinical studies, and other third-party expenses attributable to the development of our product candidates.

R&D expenses associated with these activities may include third-party costs such as expenses incurred under agreements with clinical research organizations, the cost of consultants who assist with the development of ABP-450 on a program-specific basis, investigator grants, sponsored research, product costs in connection with acquiring ABP-450 from Daewoong and Botox for use in conducting preclinical and clinical studies, and other third-party expenses attributable to the development of our product candidates.

R&D activities will be critical to achieving our business strategy.

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

The biosimilar pathway will require significant costs in order to design, execute and complete the primary structural analysis and any additional analyses.

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.

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.

Our R&D activities may be subject to change from time to time as we evaluate our priorities and available resources.

Our R&D activities may be subject to change from time to time as we evaluate our strategic plan, priorities and available resources.

Change in Fair Value of Contingent Consideration

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Loss on issuance of warrants – the Company’s issued Warrants in the first quarter of 2025 had grant date fair values of $94.0 million on January 7, 2025 and was recorded as a liability as of grant date.

Proceeds were allocated to the warrant liability based on the fair value as of grant date of the warrants of $94.0 million.

Proceeds were allocated to the warrant liability based on

the fair value as of grant date of the warrants of $94.0 million.

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

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

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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

Comparison of the three and nine months ended September 30, 2025 and 2024

Operating Expenses

Selling, General and Administrative (SG&A) Expenses

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.

SG&A expenses were $1.9 million for the three months ended September 30, 2025, resulting in a decrease of $1.1 million, or 36%, compared to $3.0 million during the three months ended September 30, 2024.

The decrease in SG&A expenses was primarily attributable to a decrease of $1.0 million related to reversal of share-based compensation expense related to restricted stock units (“RSU”) with earnout criteria determined to be improbable in the third quarter of 2025, $0.4 million gain on the settlement with Odeon in the third quarter of 2025 and a $0.1 million decrease in business insurance costs due to lower renewal premiums, offset by $0.5 million of expense related to cash-settled restricted stock units (“RSU”) that were issued in the second quarter of 2025.

SG&A expenses were $8.3 million for the nine months ended September 30, 2025, resulting in a decrease of $2.7 million, or 25%, compared to $11.0 million during the nine months ended September 30, 2024.

The decrease in SG&A expenses was primarily attributable to a decrease of $1.0 million related to reversal of share-based compensation expense related to RSU with earnout criteria determined to be improbable in the third quarter of 2025, $1.2 million decrease in legal expenses and professional fees for the Company’s registration statement filings in the prior year, $0.4 million gain on the settlement with Odeon in the third quarter of 2025, $0.4 million decrease in business insurance costs due to lower renewal premiums and a $0.3 million decrease in salaries due to headcount reduction in the prior year to preserve cash, offset by $0.7 million of expense related to cash-settled RSU that were issued in the second quarter of 2025.

Research and Development (R&D) Expenses

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.

R&D expenses were $0.6 million for the three months ended September 30, 2025, a decrease of $0.4 million, or 40%, compared to $1.0 million for the three months ended September 30, 2024.

The decrease was primarily attributable to $1.1 million decrease in R&D expenses due to wind down of Phase 2 clinical trials related to chronic and episodic migraine and cervical dystonia, including $0.6 million gain related to settlement of outstanding liabilities with the Company’s clinical research organization related to its cervical dystonia and migraine programs, offset by an increase of $0.7 million for biosimilar consulting.

R&D expenses were $2.5 million for the nine months ended September 30, 2025, a decrease of $8.7 million, or 80%, compared to $11.1 million for the nine months ended September 30, 2024.

The decrease was primarily attributable to a $9.4 million decrease in R&D expenses due to wind down of Phase 2 clinical trials related to chronic and episodic migraine and cervical dystonia, including $0.6 million related to settlement of outstanding liabilities with the Company’s clinical research organization related to its cervical dystonia and migraine programs, and $0.3 million decrease in salaries due to headcount reduction in the prior year to preserve cash, offset by an increase of $1.1 million for biosimilar consulting.

Change in Fair Value of Contingent Consideration

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.

The Company recognized gains of de minimus and $3.5 million for the three and nine months ended September 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 $0.81 as of December 31, 2024 and September 30, 2025, respectively.

For the three and nine months ended September 30, 2024, the Company recognized gains of $0 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 $75.60 as of December 31, 2023 and September 30, 2024, respectively.

Loss on Issuance of Warrants

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Other Income, Net

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.

For the three and nine months ended September 30, 2025 and September 30, 2024, the Company recognized losses of $1.9 million, $5.4 million, $1.9 million, and $0.2 million related to change in fair value of convertible notes due to changes in stock price and conversion probabilities of the Daewoong convertible notes.

For the three months ended September 30, 2025 and 2024, the Company recognized losses of $0.2 million and $0.4 million, respectively, related to the change in fair value of warrants.

For the nine months ended September 30, 2025 and September 30, 2024, the Company recognized income of $86.0 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 $15.4 million in the prior year, related to warrants issued at the Closing.

For the nine months ended September 30, 2024, the Company recognized a loss of $19.9 million related to the termination of the forward purchase agreements in 2024.

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 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.

We originally intended to pursue submission of an Original BLA seeking one or more potential therapeutic indications for ABP-450.

However, in May 2024, we announced the discontinuation of our Phase 2 clinical trials for episodic and chronic migraine in order to implement certain cash preservation measures.

As of September 30, 2025, we had reported cash and cash equivalents of $5.9 million and an accumulated deficit of $433.7 million.

On March 19, 2024, we entered into the Subscription Agreement with Daewoong relating to our sale and issuance of Convertible Notes in the principal amount of up to $15.0 million, which are convertible into shares of common stock, subject to certain conditions and limitations set forth in each Convertible Note.

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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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The Termination Purchase Right will terminate and expire upon Daewoong’s sale of 50% of its common stock, including common stock held by its affiliates and common stock that would be issued upon an Automatic Conversion or Optional Conversion (as defined in the Convertible Notes).

On July 9, 2024, we announced a strategic reprioritization to pursue a Section 351(k) biosimilar regulatory pathway for ABP-450, using AbbVie Inc.’s product Botox as a proposed reference product.

The parties expect to enter into definitive documentation for the Exchange in the coming weeks following execution of definitive documentation.

The consummation of the Exchange will be subject to stockholder approval.

We originally intended to pursue submission of an Original BLA seeking one or more potential therapeutic indications for ABP-450.

However, in May 2024, we announced the discontinuation of our Phase 2 clinical trials for episodic and chronic migraine in order to implement certain cash preservation measures.

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

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On January 7, 2025, Aegis exercised its over-allotment option with respect to 83,334 Series A Warrants and 83,334 Series B Warrants.

The Offering closed on January 7, 2025, and the Company received net proceeds of approximately $18.3 million from the Offering, after deducting the offering expenses payable by the Company, including the Underwriter’s fees and expenses.

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

The Offering closed on January 7, 2025, and the Company received net proceeds of

approximately $18.3 million from the Offering, after deducting the offering expenses payable by the Company, including the Underwriter’s fees and expenses.

On November 12, 2025, the Company entered into a securities purchase agreement for a private placement (“PIPE”) financing for:

(i) the sale of 6,581,829 shares of the Company’s Class A common stock (or pre-funded warrants in lieu of shares) at a price per share of $0.9116, for gross proceeds of $6 million;

(ii) five-year warrants to purchase up to 6,581,829 shares of Class A common stock at an exercise price of $1.094 per share (the “PIPE Warrants”);

The PIPE financing will close in two stages.

The first closing is expected to occur in November 2025, subject to the satisfaction of customary closing conditions, and result in $1.79 million in gross proceeds to the Company.

The second closing will be subject to stockholder approval, the closing of the exchange of the Daewoong 2024 Convertible Notes, and other customary closing conditions.

The PIPE Warrants and anti-dilutive Warrants will be issued only at the second closing.

The Company plans to use net proceeds to further advance analytical work for its ABP-450 biosimilar program, and for general corporate purposes.

We will actively attempt to secure additional capital to fund our operations.

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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 August 7, 2025 was $0.713.

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 November 10, 2025 was $0.935.

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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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.

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.

To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product licenses on terms that may not be favorable to us.

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Net Cash Used in Operating Activities

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 .

Net cash used in operating activities for the nine months ended September 30, 2025 was $12.6 million, consisting of a net loss of $2.1 million, non-cash gain of $4.7 million and changes in operating assets and liabilities of $5.8 million.

Non-cash gain primarily consists of $86.0 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, $3.7 million related to stock-based compensation for our executives and directors and $5.4 million related to the change in fair value of the convertible notes.

Decrease in cash used in operating activities of $7.1 million is primarily attributable to timing of clinical trial payments.

Net cash used in operating activities for the nine months ended September 30, 2024 was $19.7 million, consisting primarily of a net income of $39.9 million and non-cash charges of $(57.0) million, consisting primarily of $4.9 million non-cash expense related to stock-based compensation for our executives and directors, $0.2 million related to the change in fair value of the convertible notes, $15.4 million related to change in fair value of warrants, $19.9 million related to loss on forward purchase agreement and derivative liabilities, and $(97.5) million related to change in fair value of contingent consideration .

Cash Flows from Investing Activities

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.

Net cash used in investing activities for the nine months ended September 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 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.

Net cash provided by financing activities for the nine months ended September 30, 2025 and 2024 were $18.5 million and $15.1 million, respectively, primarily 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.

expenses incurred during the reporting period.

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

Actual results may differ materially from these estimates under different assumptions or conditions and such differences could be material to the financial position and results of operations.

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

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.

As of September 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 remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of Priveterra’s initial public offering (December 31, 2026), (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company,” as such term is defined in Rule 12b-2 of the Exchange Act, meaning that the market value of our common stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year.

We are also a “smaller reporting company,” as such term is defined in Rule 12b-2 of the Exchange Act, meaning that the market value of our common stock held by non-affiliates is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year.

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