What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-14 · 310 added, 315 removed, 354 unchanged (64% of the section changed)

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(in thousands, except share data and par value amounts)

September 30,

Current assets:

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Total current liabilities

Convertible notes at fair value, including related party amount of $ 17,051 and $ 11,689 , at September 30, 2025 and December 31, 2024, respectively

Convertible notes at fair value, including related party amount of $ 1,542 and $ 34,600 at March 31, 2026 and December 2025, respectively

Operating lease liability

Warrant liability

Derivative liability

Warrant liabilities

Contingent consideration liability

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Class A common stock, $ 0.0001 par value;

1,040,000,000 and 500,000,000 shares authorized at September 30, 2025 and December 31, 2024, and 11,643,786 and 555,511 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

1,040,000,000 and 500,000,000 shares authorized at March 31, 2026 and December 31, 2025, and 25,303,058 and 12,105,902 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

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Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

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Total operating costs and expenses

(Loss) income from operations

Loss from operations

Other (loss) income:

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Loss on issuance of warrants

Loss on embedded forward purchase agreements and derivative liabilities, net

Loss on extinguishment of debt

Loss on derivative liability

Other income, net

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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

Basic and diluted net (loss) income per share

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

See accompanying notes to the condensed consolidated financial statements

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Balance as of January 1, 2026

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

Issuance of pre-funded warrants related to PIPE financing

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

Issuance of shares related to exchange of convertible notes

Modification of cash-settled restricted stock units

Stock-based compensation expense

Balance as of September 30, 2025

Balance as of March 31, 2026

Balance as of January 1, 2025

Termination of Forward Purchase Agreements

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

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

Issuance of common stock

Stock-based compensation expense

Balance as of September 30, 2024

Stockholders'

Balance as of July 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 September 30, 2025

Balance as of July 1, 2024

Issuance of shares related to cashless warrant exercises

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

Issuance of common stock

Stock-based compensation expense

Balance as of September 30, 2024

Balance as of March 31, 2025

See accompanying notes to the condensed consolidated financial statements

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

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

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

Net (loss) income

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

Stock-based compensation expense

Loss on issuance of warrants

Loss on extinguishment of debt

Change in fair value of convertible notes

Change in fair value of warrants

Change in fair value of embedded forward purchase agreements and derivative liabilities

Loss on derivative liability

Change in fair value of contingent consideration

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Cash flows from financing activities:

Proceeds from issuance of convertible notes

Proceeds from PIPE financing

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

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Net cash provided by financing activities

Net increase (decrease) in cash

Net increase in cash

Cash and cash equivalents at beginning of period

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Non-cash financing activities:

Settlement of convertible notes with common shares

Reclassification of derivative liability to equity and warrant liabilities in connection with PIPE financing

Modification of cash-settled restricted stock units

Cashless warrant exercises

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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”), as a biosimilar to BOTOX® for debilitating medical conditions.

(“AEON” or the “Company”) is a biopharmaceutical company advancing its botulinum toxin complex, ABP-450, as a biosimilar to Botox® (onabotulinumtoxinA) to achieve full-label United States (“U.S.”) market entry for debilitating medical conditions.

The Company is headquartered in Irvine, California.

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

Reverse Stock Split

On February 24, 2025, following a Special Meeting of Shareholders, the board of directions of the Company (the “Board”) approved the filing of a Certificate of Amendment to the Certificate of Incorporation to effect a reverse stock split at a split ratio of 1 -for-72 (the “Reverse Stock Split”).

As a result of the Reverse Stock Split, each 72 pre-split shares of Common Stock outstanding was automatically combined into one new share of Common Stock without any action on the part of the holders.

The Reverse Stock Split affected all of the Company’s stockholders uniformly and did not affect any stockholder’s percentage ownership interests in the Company.

No fractional shares were issued in connection with the Reverse Stock Split.

In lieu of fractional shares, any person who would otherwise be entitled to a fractional share of Common Stock as a result of the reclassification and combination following the effective time of the Reverse Stock Split (after taking into account all fractional shares of Common Stock otherwise issuable to such holder) instead received a number of shares rounded up to the nearest whole share.

Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of the Company’s outstanding equity awards and warrants, as well as the applicable exercise price, except in cases where the applicable agreement provides otherwise.

All share and per share amounts in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented.

Liquidity and Going Concern

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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 September 30, 2025, the Company reported cash and cash equivalents of $ 5.9 million and an accumulated deficit of $ 433.7 million.

As of March 31, 2026, the Company reported cash and cash equivalents of $ 6.2 million and an accumulated deficit of $ 482.6 million.

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

On May 3, 2024, the Company announced preliminary top-line results from its 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.

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

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

On July 9, 2024, the Company 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 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 an anticipated, and now

confirmed Biosimilar Biological Product Development (“BPD”) Type 2a meeting with the FDA to review the results from the analytical studies, including comparative primary structure analysis and select functional analyses, on November 19, 2025.

The Company is seeking full-label U.S.

market entry by developing its ABP-450 as a biosimilar through submission of a BLA under Section 351(k), 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 the Company does not hold development or commercialization rights.

The Company held an initial meeting with 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 BPD Type 2a meeting with the FDA that was held in January 2026.

During the meeting, the FDA reviewed the Company’s proposed analytical similarity strategy under the 351(k) biosimilar pathway, acknowledged the scientific challenges associated with characterizing a 900 kDa botulinum neurotoxin complex, provided constructive feedback on the Company’s proposed development approach and analytical assessment plan, and noted that the analytical methodologies appeared reasonable to support advancement of the program toward a comprehensive analytical similarity package.

The Company believes this feedback provides a clear framework for the remaining analytical components of its biosimilar development program and plans to complete the majority of its analytical comparability program in 2026.

The Company is currently planning to request a BPD Type 2b meeting in 2026 to discuss the next phase of the development program to support approval of ABP-450 as a biosimilar to Botox® across all approved therapeutic indications.

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 (No.

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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.

For the three months ended September 30, 2025, there were 105,916 shares issued under the ATM for net proceeds of approximately $ 84,000 .

As of September 30, 2025, the cumulative shares issued under the ATM were 379,010 shares, net proceeds were received of approximately $ 0.3 million, and approximately $ 49.7 million of common stock remains available to be sold under the ATM.

For the three months ended March 31, 2026, there were 1,278,776 shares issued under the ATM for net proceeds of approximately $ 1.7 million.

As of March 31, 2026, the cumulative shares issued under the ATM were 1,657,786 shares, net proceeds were received of approximately

$ 2.0 million, and approximately $ 47.9 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 additional studies, preparation for anticipated BPD meetings and any further development of ABP-450 would require additional funding in the form of equity financings or debt.

On November 12, 2025, the Company entered into a Securities Purchase Agreement with certain investors whereby the Company issued and sold to the investors certain PIPE Shares, PIPE Pre-Funded Warrants, PIPE Warrants and True-up Warrants (each, as defined below) for total gross proceeds of $ 6.0 million.

The Company received gross proceeds of $ 1.8 million and $ 4.2 million upon the First Closing on November 18, 2025 (the “First Closing”) and the Second Closing on January 27, 2026 (the “Second Closing”), respectively.

See Note 4 Private Placement Financing for additional information.

On November 12, 2025, the Company entered into a Term Sheet with Daewoong (the “Term Sheet”) relating to the exchange of the outstanding senior secured convertible notes of the Company held by Daewoong of $ 5.0 million and $ 10.0 million in principal with maturity dates of March 2027 and April 2027, respectively (the “Exchange”).

On December 15, 2025, the Company entered into an Agreement with Daewoong (the “Exchange Agreement”) consistent with the terms of the Term Sheet pursuant to which the Existing Notes (as defined below) held by Daewoong would be exchanged for (i) newly issued shares of common stock of the Company equal to (x) the principal and accrued interest of the Existing Notes as of the closing of the Exchange less (y) the principal amount of the New Convertible Note (as defined below), divided by $ 1.00 , and then multiplied by 1.3 (and rounded down to the nearest whole share of common stock) and/or pre-funded warrants to purchase shares of common stock (the “Daewoong Pre-Funded Warrants”) in lieu of any shares of common stock that would result in Daewoong’s beneficial ownership of common stock exceeding 49.99 % (the “Exchange Shares”), (ii) a new senior secured convertible note for $ 1.5 million (the “New Convertible Note”), and (iii) warrants to purchase up to 8.0 million shares of common stock at an exercise price of $ 1.09392 per share (the “Daewoong Warrants”).

The Daewoong Warrants, which contain the same terms as the PIPE Warrants (as defined below), may only be exercised for cash.

The Daewoong Warrants are immediately exercisable after issuance and may be exercised at any time until the five-year anniversary of the Second Closing.

See Note 5 Daewoong Convertible Notes for additional information.

The commencement of additional 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.

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

The Company is actively attempting to secure additional capital to fund its operations.

However, there can be no assurance that the Company will be able to raise additional capital on commercially reasonable terms or at all.

As a result of these conditions, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that these condensed consolidated financial statements are issued.

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Unaudited Interim Financial Information

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

The accompanying interim condensed consolidated balance sheets as of March 31, 2026, condensed consolidated statements of operations and comprehensive (loss) income and stockholders’ deficit for the three months ended March 31, 2026 and 2025, condensed consolidated statement of cash flows for the three months ended March 31, 2026 and 2025, and the related note disclosures are unaudited.

The balance sheet information as of December 31, 2025 is derived from the audited financial statements.

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

comprehensive (loss) income for the three and nine months ended September 30, 2025 and September 30, 2024 and cash flows for the nine months ended September 30, 2025 and 2024.

The results for the three and nine months ended September 30, 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 March 31, 2026 and its results of operations and comprehensive (loss) income for the three months ended March 31, 2026 and 2025 and cash flows for the three months ended March 31, 2026 and 2025.

The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or any other interim period.

Use of Estimates

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GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes.

The Company’s most significant estimates relate to the research and development accruals, valuation of stock-based compensation, and the fair values of contingent consideration, forward purchase agreements, warrant liabilities, convertible notes, among others.

The Company’s most significant estimates relate to the research and development accruals, valuation of stock-based compensation, and the fair values of warrant liabilities, convertible notes, and derivative liability, among others.

Although the Company bases estimates on historical experience, knowledge of current events and actions it may undertake in the future, and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments over the carrying values of assets and liabilities, this process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements.

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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:

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

Three Months Ended

Nine Months Ended

September 30,

Segment operating expenses:

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Total operating costs and expenses

(Loss) income from operations

Loss from operations

Other segment items:

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Loss on issuance of warrants

Loss on embedded forward purchase agreements and derivative liabilities, net

Loss on extinguishment of debt

Loss on derivative liability

Other income, net

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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.

(“Daewoong”), a South Korean pharmaceutical manufacturer, as an exclusive and sole supplier to manufacture the Company’s source material for product candidates.

Any termination or loss of significant rights, including exclusivity, under the Company’s license and supply agreement with Daewoong (the “Daewoong Agreement”) would materially and adversely affect the Company’s commercialization of its products.

The Company relies on Daewoong, a South Korean pharmaceutical manufacturer, as an exclusive and sole supplier to manufacture the Company’s source material for product candidates.

Any termination or loss of significant rights, including exclusivity, under the Company’s license and supply agreement with Daewoong would materially and adversely affect the Company’s commercialization of its products.

See Note 7 Commitments and Contingencies for a discussion of the Daewoong Agreement.

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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 September 30, 2025 and December 31, 2024 are as follows (in thousands):

September 30,

Property and equipment, net, as of March 31, 2026 and December 31, 2025 are as follows (in thousands):

Furniture and fixtures

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Other accrued expenses were as follows (in thousands):

September 30,

Legal expenses

1 unchanged sentence

Operating lease liability - short term portion

Daewoong vial usage

Daewoong supplies & analytical testing

SG&A consulting expenses

R&D consulting expenses

Remaining other accrued expenses

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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 (loss) income.

Forward Purchase Agreements

Based on the applicable guidance in ASC 480, ASC 815, Equity (“ASC 505”) and Staff Accounting Bulletin Topic 4.E, Receivables from Sale of Stock (“SAB 4E”), the Company had determined that each of its forward purchase agreements was 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 each reporting period.

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 (loss) income.

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 (loss) income.

Derivative Liability

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

The Company identified that the First Closing of the PIPE contained pre-funded warrants, a tranche right obligation and a True-Up Warrant obligation, and the Second Closing contained pre-funded warrants, PIPE Warrants and True-Up Warrants.

The PIPE Pre-Funded Warrants and True-Up Warrants were determined to be equity classified under ASC 815 upon their issuance.

The PIPE Warrants and the tranche right obligation (which encompasses the obligation to issue PIPE Pre-Funded Warrants,

PIPE Warrants, and the True-Up Warrants as of the Second Closing) were determined to not be indexed to the Company’s own stock under ASC 815, and as such were classified as liabilities.

The PIPE Warrants were initially measured at fair value using a Black-Scholes calculation and recorded as a liability on the issuance date 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 (loss) income.

The valuation is subject to inputs and assumptions that have variability, including stock price, risk free rate and volatility.

As stock price, risk-free rate and/or volatility increases or decreases, this may result in an increase or decrease, respectively, in the liability.

The Company recognized the PIPE Pre-Funded Warrants and True-Up Warrants based on their relative fair values in additional paid-in capital on the issuance date, net of issuance costs.

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 meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

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 (loss) income.

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

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

The valuation is subject to inputs and assumptions that have variability, including stock price, risk free rate and volatility.

As the stock price, risk free rate and/or volatility increases or decreases, this may result in an increase or decrease, respectively, in the liabilities.

Fair Value of Financial Instruments

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Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable.

the underlying asset unless the implicit rate is readily determinable.

The Company determines the lease term as the noncancellable period of the lease, and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

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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 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.

Costs incurred in obtaining technology licenses are charged to acquired in-process research and development 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 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.

The Company settled outstanding liabilities with its clinical research organization for the cervical dystonia and migraine programs and recorded a gain of $ 0.6 million in research and development expenses on the condensed consolidated statement of operations for the three and nine months ended September 30, 2025.

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

There have been no material adjustments to the Company’s estimates for clinical trial expenses through March 31, 2026.

Stock-Based Compensation

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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.

Due to their nominal exercise price, the shares underlying outstanding pre-funded warrants are also included in the calculation of basic net (loss) income per share.

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.

Since the company was in a loss position for three and nine months ended September 30, 2025 and three months ended September 30, 2024, 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, while the nine months ended September 30, 2024 contained dilutive securities.

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

Three months ended September 30, 2025

Weighted average shares of common stock outstanding, basic and diluted

Net loss per share, basic and diluted

Nine months ended September 30, 2025

Since the Company was in a loss position for the three months ended March 31, 2026, 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, while for the three months ended March 31, 2025, there were no dilutive shares.

Basic and diluted net (loss) income per share for the three months ended March 31, 2026 and 2025 were calculated as follows (in thousands, except share and per share amounts):

Three months ended March 31, 2026

Weighted average shares of common stock outstanding, basic and diluted

Net loss per share, basic and diluted

Three months ended September 30, 2024

Three months ended March 31, 2025

Weighted average shares of common stock outstanding, basic and diluted

Net loss per share, basic and diluted

Nine months ended September 30, 2024

Weighted average shares of common stock outstanding, basic

Net income per share, basic

Weighted average shares of common stock outstanding, diluted

Net income per share, diluted

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

Nine Months Ended

September 30,

Contingent consideration

Common stock options and restricted stock units

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Accounting Pronouncements Not Yet Adopted

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 taxes paid.

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

The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is intended to improve financial reporting by requiring disaggregated disclosure of certain costs and expenses.

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The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

Daewoong Convertible Notes

On March 19, 2024, the Company entered into a subscription agreement with Daewoong (the “Subscription Agreement”) relating to the sale and issuance by the Company of senior secured convertible notes (each, a “2024 Convertible Note” and together, the “2024 Convertible Notes”) in the principal amount of up to $ 15.0 million, which are convertible into shares of the Company’s common stock, subject to certain conditions and limitations set forth in each Convertible Note.

Each Convertible Note contains customary events of default, accrues interest at an annual rate of 15.79 % and has a maturity date that is three years from the funding date, unless earlier repurchased, converted or redeemed in accordance with its terms prior to such date.

The Company will use the net proceeds from each Convertible Note to support the late-stage clinical development of its lead product candidate 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.

On March 19, 2024, the Company entered into a Fourth Amendment to the License Agreement (the “License Agreement Amendment”) with Daewoong, which amends that certain License and Supply Agreement, by and between the Company and Daewoong, dated December 20, 2019, as previously amended on July 29, 2022, January 8, 2023 and April 24, 2023 (the “License Agreement”).

Pursuant to the terms of the License Agreement Amendment, the License Agreement will terminate if, over any six month period, (a) the Company ceases to commercialize ABP-450 in certain territories specified in the License Agreement and (b) the Company ceases to advance any clinical studies of ABP-450 in such territories.

The License Agreement Amendment also provides that, in the event that the License Agreement is terminated for the foregoing reasons, Daewoong will have the right to purchase all Know-How (as defined in the License Agreement) related to ABP-450 for a price of $ 1.00 (the “Termination Purchase Right”).

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).

Due to certain embedded features within the convertible notes, the Company elected the fair value option to account for its convertible notes, including any paid-in-kind principal and interest, and the embedded features.

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

During the three and nine months ended September 30, 2025, the Company recognized $ 1.9 million and $ 5.4 million, respectively, of expense related to the increase in the fair value of the 2024 Daewoong Convertible Notes.

During the three and nine months ended September 30, 2024, the Company recognized $ 1.9 million and $ 0.2 million, respectively, of expense related to the increase in the fair value of the 2024 Daewoong Convertible Notes.

As of September 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 $ 17.1 million and $ 11.7 million, respectively.

In December 2025, the FASB issued ASU No.

2025-11 Interim Reporting (Topic 270), which clarifies interim disclosure requirements and enhances clarity in the application of Topic 270.

2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

Early adoption is permitted.

The amendments of this ASU can be applied prospectively or retrospectively.

The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

Public Offering

On January 6, 2025, the Company 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 (the “Series A Warrants”) at an exercise price of $ 45.00 (the “Exercise Price”) and (iii) one (1) Series B Registered Common Warrant to purchase one (1) share of Common Stock per warrant (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) at an Exercise Price of $ 45.00 .

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.

(“Aegis” or the “Underwriter”) pursuant to which the Company agreed to sell and issue, in an underwritten public offering (the “Offering”) 555,571

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 (the “Series A Warrant”) at an exercise price of $ 45.00 (the “Exercise Price”) and (iii) one (1) Series B Registered common warrant to purchase one (1) share of common stock per warrant (the “Series B Warrant”) at an Exercise Price of $ 45.00 .

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

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.

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

The Series A Warrants were exercisable beginning on February 24, 2025, the date of approval by stockholders of the Company (the “Stockholder Approval Date” or the “Initial Exercise Date”), and will expire in February 2030, the sixty ( 60 ) month anniversary of the Initial Exercise Date.

The Series B Warrants were exercisable beginning on the Initial Exercise Date and will expire in August 2027, on the thirty ( 30 ) month anniversary of the Initial Exercise Date.

Upon issuance, the Warrants have an initial exercise price of $ 45.00 , which will be reset on the eleventh trading date after the Stockholder Approval Date (the “Reset Date”).

Prior to the Stockholder Approval Date, the Warrants had a floor price of $ 20.23 , and following stockholder approval, the Warrants will have a floor price of $ 8.06 .

The reset price would be the greater of (i) the lowest single trading day volume-weighted average price (“VWAP”) of the Company’s common stock during the reset period and (ii) the floor price, as defined in the agreement.

On February 24, 2025, the Company held a special stockholder meeting, at which stockholders voted, among other matters, to authorize stockholder approval of the Warrants within the context of the agreements for such Warrants.

As such, as of February 24, 2025, the Warrants became exercisable.

The Series A Warrants were exercisable beginning on February 24, 2025, the date of approval by stockholders of the Company (the “Stockholder Approval Date” or the “Initial Exercise Date”), and expire in February 2030, the sixty ( 60 ) month anniversary of the Initial Exercise Date.

The Series B Warrants were exercisable beginning on the Initial Exercise Date and expire in August 2027, on the thirty ( 30 ) month anniversary of the Initial Exercise Date.

Upon issuance, the Series A Warrants and Series B Warrants had an initial exercise price of $ 45.00 , which was reset on the eleventh trading date after the Stockholder Approval Date (the “Reset Date”).

Prior to the Stockholder Approval Date, the Series A Warrants and Series B Warrants had a floor price of $ 20.23 , and following stockholder approval, the Series A Warrants and Series B Warrants had a floor price of $ 8.06 .

The reset price was the greater of (i) the lowest single trading day volume-weighted average price (“VWAP”) of the Company’s common stock during the reset period and (ii) the floor price, as defined in the agreement.

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.

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.

The purchase price per additional share of Common Stock is equal to the public offering price of one Common Unit (less $0.01 allocated to each full Warrant), less the underwriting discount.

The purchase price per additional Warrant is $ 0.01 .

Additionally, the Company granted Aegis a 45 -day option to purchase additional shares of common stock and/or Series A Warrants and Series B 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.

The purchase price per additional share of common stock is equal to the public offering price of one unit (less $0.01 allocated to each full Series A Warrant and Series B Warrant), less the underwriting discount.

The purchase price per additional Series A Warrant or Series B Warrant is $ 0.01 .

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 holders of Series A Warrants can effect a cashless exercise if there is no effective registration statement at the time of exercise.

The number of common shares to be issued would be calculated as VWAP minus exercise price of the Series A Warrants multiplied by the number Series A Warrants to be cashlessly exercised.

The number of common shares to be issued would be calculated as VWAP minus exercise price of the Series A Warrants multiplied by the number of Series A Warrants to be cashlessly exercised.

The holders of Series B Warrants may effect an alternative cashless exercise whether or not an effective registration statement is available for the issuance of shares.

In such event, the number of shares to be issued would be calculated as the number of Series B Warrants to be cashlessly exercised multiplied by a factor of 3.0 .

During the nine months ended September 30, 2025, certain holders of the Series B Warrants exercised 3,438,095 Series B Warrants, in accordance with the alternative cashless exercise provision in the Series B Warrants, resulting in the issuance of 10,314,285 shares of Common Stock of the Company.

There were no exercises of Series B Warrants for the three months ended September 30, 2025.

The fair value of the warrants exercised on the respective exercise dates for the nine months ended September 30, 2025 was $ 6.9 million.

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

As of September 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 nine months ended September 30, 2025, the Company recognized $ 58.3 million of income related to the change in fair value of the exercised Series B Warrants.

For the three and nine months ended September 30, 2025, the Company recognized $( 0.2 ) million and $ 18.6 million of (expense) income related to the change in fair value of the remaining outstanding Series A Warrants, respectively, and de minimus and $ 7.9 million of income related to the change in fair value of the remaining outstanding Series B Warrants, respectively.

In such event, the number of shares to be issued would be calculated as the number of Series B Warrants multiplied by a factor of 3.0 .

There were no exercises of Series A Warrants and Series B Warrants during the three months ended March 31, 2026.

During the three months ended March 31, 2025, there were 3,142,511 Series B Warrants exercised in accordance with the alternative cashless exercise provision, resulting in the issuance of 9,427,533 shares of common stock.

The fair value of the Series B 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, 2026, there were 3,565,245 units and 62,263 units of Series A Warrants and Series B Warrants outstanding, respectively.

The Company recognized a loss on issuance of warrants in the first quarter of 2025 of $ 75.6 million, which reflects the fair value of the Series A Warrants and Series B Warrants in excess of the proceeds received.

For the three months ended March 31, 2026 and 2025, the Company recognized $ 0.3 million and $ 19.4 million of income related to the change in fair value of the outstanding Series A Warrants, respectively, and $ 21 thousand and $ 7.9 million of income related to the change in fair value of the remaining outstanding Series B Warrants, respectively.

Refer to Note 6 Fair Value Measurements for additional information.

Private Placement Financing

Securities Purchase Agreement

On November 12, 2025, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain investors (the “Investors”) whereby the Company agreed to issue and sell to the Investors in a private placement (the “PIPE Financing”):

(i) shares (the “PIPE Shares”) of its common stock, par value $ 0.0001 per share, (ii) pre-funded warrants (the “PIPE Pre-Funded Warrants”) to purchase shares of common stock, (iii) warrants (the “PIPE Warrants”) to purchase shares of common stock, and (iv) True-Up Warrants (as defined below) to purchase shares of common stock.

The purchase price paid by the Investors was

$ 0.9116 per Share (or $ 0.9115 per PIPE Pre-Funded Warrant in lieu of shares), the closing price of the Company’s stock on November 12, 2025.

At the First Closing, the Company issued 1,964,905 PIPE Pre-Funded Warrants in exchange for cash of $ 1.8 million.

At the Second Closing, the Company issued 4,616,924 PIPE Pre-Funded Warrants, 6,581,829 PIPE Warrants and 6,581,829 True-Up Warrants in exchange for cash of $ 4.2 million.

Following the Second Closing and the consummation of the Exchange, the Company issued to each Investor who purchased the securities contemplated in the Securities Purchase Agreement, a warrant (the “True-Up Warrant”) to purchase the number of shares of common stock necessary for the Investor’s Post-Exchange Investment Percentage (as defined in the Securities Purchase Agreement) following the issuance of the Exchange Shares to be equal to the Investor’s Pre-Exchange Investment Percentage (as defined in the Securities Purchase Agreement) (rounded down to the nearest whole share of common stock), provided, however, that in no event shall the number of shares of common stock issuable under an Investor’s True-Up Warrants exceed the total number of shares or PIPE Pre-Funded Warrants (as defined below) issued or issuable to an Investor pursuant to the Securities Purchase Agreement.

Subject to the terms and conditions therein, the Securities Purchase Agreement also grants to the Investors, until such time as the earlier of (i) the date that no PIPE Warrants remain outstanding and (ii) the 18 -month anniversary of the Second Closing, a right to participate in any financing not registered under the Securities Act and involving the issuance by the Company of common stock or common stock equivalents for cash.

Terms of the PIPE Pre-Funded Warrants, PIPE Warrants and True-Up Warrants

The PIPE Pre-Funded Warrants are being offered in lieu of shares of common stock and each PIPE Pre-Funded Warrant is exercisable for one share of common stock at an exercise price of $ 0.0001 per share.

The PIPE Pre-Funded Warrants are immediately exercisable after issuance and may be exercised at any time until all of the PIPE Pre-Funded Warrants are exercised in full.

Each of the PIPE Warrants are exercisable for the number of shares, or pre-funded warrants in lieu of shares, purchased by each Investor under the Securities Purchase Agreement (but excluding any shares issuable upon the exercise of the True-Up Warrants), at an exercise price of $ 1.09392 per share and may only be exercised for cash.

The PIPE Warrants are immediately exercisable after issuance and may be exercised at any time until the five -year anniversary of the Second Closing.

Each True-Up Warrant is exercisable for one share of common stock at an exercise price of $ 0.0001 per share.

The True-Up Warrants are immediately exercisable after issuance and may be exercised at any time until all of the True-Up Warrants are exercised in full.

The exercise prices and the number of shares issuable upon exercise of the PIPE Pre-Funded Warrants, PIPE Warrants and True-Up Warrants are subject to customary adjustments in the case of stock dividends, stock splits, pro rata distributions, and similar events in respect of the common stock.

In addition, the number of shares of the common stock underlying, and the exercise price of, the PIPE Warrants is subject to full ratchet antidilution protection and standard adjustments in the event of a share split, reverse share split, share dividend, share combination recapitalization or other similar transaction involving the common stock;

provided, however, that in no event will the exercise price of the PIPE Warrants equal less than $ 0.30387 per share of common stock.

In connection with the First Closing, the Company determined that the PIPE Financing included derivative liabilities to issue a variable number of warrants at a future date, and as such, recorded a derivative liability for the tranche right obligation to issue the PIPE Pre-Funded Warrants, PIPE Warrants, and True-Up Warrants with fair value in excess of the cash proceeds received in the Second Closing.

For the First Closing, proceeds were allocated to the derivative liability based on the fair value as of grant date of $ 12.4 million.

As the fair value of the tranche right obligation was greater than the proceeds received, the Company recognized a loss on derivative liability issued of $ 10.6 million in the fourth quarter of 2025.

As of December 31, 2025, the derivative liability was $ 14.9 million.

For the three months ended March 31, 2026, the Company recognized change in fair value of derivative liability of $ 1.7 million.

Upon the Second Closing, the Company satisfied the obligations underlying the derivative liability, and the fair value of the derivative liability upon the Second Closing of $ 16.6 million plus the proceeds of $ 4.2 million received in the Second Closing were allocated to the PIPE Warrants at grant date fair value of $ 7.4 million, and the residual value of $ 13.4 million was allocated between the PIPE Pre-Funded Warrants and the True-Up Warrants based on relative fair value to additional paid in capital on the condensed consolidated balance sheets.

The PIPE Warrants were initially measured at fair value using a Black-Scholes calculation and recorded as a liability on the issuance date, and remeasured at each reporting period with changes to fair value recorded to the condensed consolidated statements of operations and comprehensive (loss) income.

The changes in fair value of the derivative liability was a loss of $ 1.7 million and was recorded in the condensed consolidated statement of operations and comprehensive (loss) income for the three months ended March 31, 2026.

Refer to Note 6 Fair Value Measurements for additional information.

Daewoong Convertible Notes

On March 19, 2024, the Company entered into a subscription agreement with Daewoong (the “Subscription Agreement”) relating to the sale and issuance by the Company of senior secured convertible notes (each, a “Convertible Note” and together, the “Convertible Notes”) in the principal amount of $ 15.0 million, which are convertible into shares of the Company’s common stock, subject to certain conditions and limitations set forth in each Convertible Note.

On November 12, 2025, the Company entered into the Term Sheet with Daewoong relating to the Exchange of the Convertible Notes.

On December 15, 2025, the Company entered into the Exchange Agreement to which the Convertible Notes held by Daewoong would be exchanged for (i) newly issued shares of common stock of the Company equal to (x) the principal and accrued interest of the Convertible Notes as of the closing of the Exchange, less (y) the principal amount of the New Convertible Note, divided by $ 1.00 , and then multiplied by 1.3 (and rounded down to the nearest whole share of common stock) and/or Daewoong Pre-Funded Warrants in lieu of any shares of common stock that would result in Daewoong’s beneficial ownership of common stock exceeding 49.99 %, (ii) the New Convertible Note of $ 1.5 million, and (iii) the Daewoong Warrants to purchase up to 8.0 million shares of common stock at an exercise price of $ 1.09392 per share.

At the closing of the Exchange, the number of Exchange Shares issued was 11,918,380 shares of common stock and 11,236,631 Daewoong Pre-Funded Warrants.

Upon the closing of the Exchange, the Convertible Notes were immediately and automatically terminated.

The Daewoong Warrants, which contain the same terms as the PIPE Warrants, are immediately exercisable after issuance at an exercise price of $ 1.09392 per share, may be exercised at any time until the five-year anniversary of the Second Closing and may only be exercised for cash.

The Exchange was approved and executed upon approval at the special meeting of shareholders on January 21, 2026.

The Exchange is accounted for as an extinguishment of debt and a loss on extinguishment of $ 7 6 thousand was recognized upon the closing of the Exchange.

The Exchange Agreement provided that the Company nominate one designee of Daewoong to the Company’s board of directors to serve as a Class III director at the 2026 annual meeting of stockholders, of which the director designee is currently Seongsoo Park.

Park currently serves on the Company’s board of directors and is scheduled for renomination at the 2026 annual meeting of stockholders.

During the three months ended March 31, 2026 and March 31, 2025, the Company recognized $ 8.7 million and $ 1.6 million, respectively, of expense related to the increase in the fair value of the Convertible Notes.

New Convertible Note

The New Convertible Note issued on January 21, 2026, contains customary events of default, accrues interest at an annual rate of 15.79 % payable in cash at maturity and has a maturity date of April 12, 2030 (the “New Maturity Date”), unless earlier converted or redeemed in accordance with its terms prior to such date.

The Company may not prepay the New Convertible Note or accrued interest prior to the New Maturity Date.

If, prior to the New Maturity Date, the Company consummates a bona-fide third-party financing after the issuance of the New Convertible Note in the form of common stock or any securities convertible into, or exchangeable or exercisable for, common stock (subject to certain exceptions as described in the New Convertible Note), in one or more transactions or a series of related and substantially similar and simultaneous transactions at the same purchase price from third parties unaffiliated with Daewoong and its affiliates, for aggregate gross cash proceeds to the Company of at least $ 30.0 million (a “Qualified Financing”), then, upon written notice thereof to Daewoong by the Company, on the closing date of such Qualified Financing, the New Convertible Note will automatically convert in whole, without any further action by Daewoong, into a number of shares of common stock or pre-funded warrants equal to:

If, prior to the New Maturity Date, the Company provides (i) written notice to Daewoong that it has publicly announced the submission of a BLA filing for ABP-450 as a biosimilar to Botox® (onabotulinumtoxinA) or (ii) a written notice that the Company has consummated a Change of Control (as defined in the New Convertible Note), Daewoong will have the right for thirty ( 30 ) days following receipt of either such notice, at Daewoong’s option (the “Optional Conversion”), to convert all (but not less than all) of the remaining outstanding portion of the New Convertible Note (subject to any limitations under the rules of NYSE American) into an amount of shares of common stock or pre-funded warrants equal to:

(i) one and three tenths ( 1.3 ) multiplied by (ii) the quotient of (a) the principal amount of the New 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.

The New Convertible Note includes a covenant that restricts the Company and AEON Sub’s ability to issue debt securities senior or pari passu to such New Convertible Note without Daewoong’s prior written consent.

The New Convertible Note also includes a covenant that restricts the Company and AEON Sub’s ability to issue debt securities junior to such New Convertible Note except as expressly permitted under a security agreement to be entered into between the Company, AEON Sub and Daewoong in connection with closing of the Exchange.

In connection with issuing the New Convertible Note, the Company and AEON Sub granted a first-priority security interest on substantially all of their respective assets, other than certain permitted liens described in the New Convertible Note.

Upon the occurrence and continuation of an event of default, Daewoong will be entitled to, among other things, foreclose on the assets that are the subject of the security interest.

The New Convertible Note was recognized at its fair value of $ 1.5 million on January 21, 2026.

During the three months ended March 31, 2026, the Company recognized $ 42 thousand of expense related to the increase in the fair value of the new Convertible Note.

As of March 31, 2026, the principal amount outstanding under the new Convertible Note was $ 1.5 million, with an estimated fair value of $ 1.5 million.

The Daewoong Pre-Funded Warrants and Daewoong Warrants

Under the Exchange Agreement, 11,236,631 Daewoong Pre-Funded Warrants were issued in lieu of shares of common stock and each Daewoong Pre-Funded Warrant is exercisable for one share of common stock at an exercise price of $ 0.0001 per share.

The Daewoong Pre-Funded Warrants are immediately exercisable after issuance and may be exercised at any time until all of the Daewoong Pre-Funded Warrants are exercised in full.

The 8.0 million Daewoong Warrants are substantially identical to the PIPE Warrants, which are exercisable at an exercise price of $ 1.09392 per share and may only be exercised for cash.

The Daewoong Warrants are immediately exercisable after issuance and may be exercisable at any time until the five-year anniversary of issuance.

The Daewoong Warrants are liability classified and were recognized at their fair value of $ 10.3 million on January 21, 2026.

As of March 31, 2026, the fair value of the Daewoong Warrant liability was $ 7.3 million.

During the three months ended March 31, 2026, the Company recognized $ 3.0 million of gain related to the decrease in the fair value of the Daewoong Warrants.

The exercise prices and the number of shares issuable upon exercise of the Daewoong Pre-Funded Warrants and the Daewoong Warrants are subject to customary adjustments in the case of stock dividends, stock splits, pro rata distributions, and similar events in respect of the common stock.

In addition, the number of shares of the common stock underlying, and the exercise price of the Daewoong Warrants will be subject to full ratchet antidilution protection and standard adjustments in the event of a share split, reverse share split, share dividend, share combination recapitalization or other similar transaction involving the common stock.

Fair Value Measurements

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For more information on convertible notes, see Note 3 Daewoong Convertible Notes .

The fair value of the convertible notes was determined based on Level 3 inputs using a scenario-based analysis that estimated the fair value of the convertible notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholders, including various qualified financings, corporate transaction and dissolution scenarios.

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 September 30, 2025 and 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

On March 18, 2024, the Company and ACM ARRT J LLC (“ACM”) entered into a termination agreement (the “ACM Termination Agreement”) terminating that certain Forward Purchase Agreement, dated June 29, 2023, by and among the Company and ACM (the “ACM FPA”).

The ACM Termination Agreement provides that ACM will retain 43,056 previously issued shares of common stock held by ACM pursuant to the ACM FPA and its respective subscription agreement (the “ACM Retained Shares”).

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

On March 18, 2024, the Company and Polar Multi-Strategy Fund (“Polar”) entered into a termination agreement (the “Polar Termination Agreement”) terminating that certain Forward Purchase Agreement, dated June 29, 2023, by and among the Company and Polar (the “Polar FPA”).

The Polar Termination Agreement provides that Polar will retain 44,098 previously issued shares of common stock held by Polar pursuant to the Polar FPA and its respective subscription agreement (the “Polar Retained Shares”).

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 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.

Financial Group, LLC, acting through its Cohen & Company Capital Markets division (“CCM”), provided certain consulting services, initially to Priveterra and subsequently to AEON, pursuant to an engagement letter, by and between the Company and CCM, dated July 27, 2023 and amended July 1, 2024 (the “CCM Engagement Letter”).

On July 5, 2024, pursuant to the CCM Engagement Letter, the Company issued 5,556 shares of the Company’s common stock to CCM.

The fair value of the convertible notes was determined based on Level 3 inputs using a scenario-based analysis that estimated the fair value of the convertible notes based on the probability-weighted present value of multiple settlement scenarios and expected future investment returns, considering each of the possible outcomes available to the noteholders, including repayment at maturity, mandatory conversion upon future financing events, and optional conversion upon achievement of certain milestones or a change in control.

The probabilities assigned to each scenario consider the timing and likelihood of potential triggering events as of the measurement date.

The significant unobservable input assumptions that can significantly change the fair value included (i) the discount rates, (ii) the timing of payments, and (iii) the probability of certain settlement scenarios.

Although the convertible notes were issued to a related party, the Company estimated fair value using a market participant framework as required under ASC 820.

In determining the discount rate, management considered the note’s secured status, senior priority relative to other indebtedness, long contractual maturity, and the Company’s pre-revenue operating profile, and concluded that a discount rate in the range of 15.5 % to 16.5 % appropriately reflects market participant return requirements as of March 31, 2026.

On December 15, 2025, the Company entered into an Exchange Agreement with Daewoong pursuant to which the $15.0 million Existing Notes held by Daewoong would be exchanged for (i) newly issued shares of common stock of the Company equal to (x) the principal and accrued interest of the Existing Notes as of the closing of the Exchange less (y) the principal amount of the New Convertible Note, divided by $ 1.00 , and then multiplied by 1.3 (and rounded down to the nearest whole share of common stock) and/or Daewoong Pre-Funded Warrants, (ii) a new senior secured convertible note for $ 1.5 million, and (iii) warrants to purchase up to 8.0 million shares of common stock.

At the closing of the Exchange, the number of Exchange Shares issued was 11,918,380 shares of common stock and 11,236,631 Daewoong Pre-Funded Warrants.

Upon the closing of the Exchange, the Existing Notes were immediately and automatically terminated.

As of December 31, 2025, the principal amount outstanding under the Existing Notes was $ 15.0 million, with an estimated fair value of $ 34.6 million.

The New Convertible Note was recognized at its fair value of $ 1.5 million on January 21, 2026.

During the three months ended March 31, 2026, the Company recognized $ 42 thousand of expense related to the increase in the fair value of the new Convertible Note.

As of March 31, 2026, the principal amount outstanding under the new Convertible Note was $ 1.5 million, with an estimated fair value of $ 1.5 million.

See Note 5 Daewoong Convertible Notes for more information.

Contingent Consideration and Contingent Founder Shares

As part of the Business Combination Agreement, certain Founder Shares and Participating Stockholders shares (together, “Contingent Consideration Shares”), as further discussed below, contain certain contingent provisions.

On April 27, 2023, concurrently with the amendment of the Business Combination Agreement, Priveterra amended the Sponsor Support Agreement to include restriction and forfeiture provisions related to the Founder Shares.

In addition, following the Closing, certain AEON stockholders will be issued up to 222,653 additional shares of common stock.

Pursuant to the terms of the amended Sponsor Support Agreement, effective immediately after the Closing, 50 % of the Founder Shares (i.e., 47,921 Founder Shares) (the “Contingent Founder Shares”) were unvested and subject to the restrictions and forfeiture provisions set forth in this Sponsor Support Agreement, of which 13,980 of such Contingent Founder Shares were forfeited on June 30, 2025 as the result of a vesting event not occurring.

As part of the Merger, each share of Priveterra Class B common stock (“Founder Shares”), par value of $ 0.0001 per share, issued and outstanding immediately prior to the Merger converted into one share of common stock totaling 95,842 common shares.

In addition, certain holders of common stock in Old AEON (the “Participating Stockholders”) will be issued a portion of up to 222,653 additional shares of common stock.

Therefore, the Contingent Founder Shares and Participating Stockholder shares (together, “Contingent Consideration Shares”) contain certain contingent provisions as further discussed below.

Pursuant to the terms of the amended Sponsor Support Agreement, 50 % of the Founder Shares (i.e., 47,921 Founder Shares) (the “Contingent Founder Shares”) were unvested and subject to the restrictions and forfeiture provisions set forth in this Sponsor Support Agreement, of which 13,980 of such Contingent Founder Shares were forfeited in the second quarter of 2025 as the result of a vesting event not occurring.

The remaining 50 % of the Founder Shares were not subject to such restrictions and forfeiture provisions.

The remaining Contingent Founder Shares shall vest, and shall become free of the provisions as follows:

● 13,890 of the Contingent Founder Shares shall vest upon the achievement of the conditions for the issuance of the CD BLA Contingent Consideration Shares (as defined below) on or prior to the CD BLA Outside Date;

● 20,141 of the Contingent Founder Shares shall vest upon the earlier of (x) the achievement of the conditions for the issuance of the Episodic Migraine Contingent Consideration Shares (as defined below) on or before the Episodic Migraine Outside Date (as defined below) and (y) the achievement of the conditions for the issuance of the Chronic Migraine Contingent Consideration Shares (as defined below) on or before the Chronic Migraine Outside Date (as defined below).

● 13,890 of the Contingent Founder Shares (the “CD BLA Contingent Founder Shares”) shall vest upon the achievement of the conditions for the issuance of the CD BLA Contingent Consideration Shares on or prior to the CD BLA Outside Date;

● 20,141 of the Contingent Founder Shares (the “Episodic/Chronic Migraine Contingent Founder Shares”) shall vest upon the earlier of (x) the achievement of the conditions for the issuance of the Episodic Migraine Contingent Consideration Shares on or before the Episodic Migraine Outside Date and (y) the achievement of the conditions

for the issuance of the Chronic Migraine Contingent Consideration Shares on or before the Chronic Migraine Outside Date .

The Priveterra Sponsor, LLC (the “Sponsor”) has agreed not to vote the Contingent Founder Shares during any period of time that such Contingent Founder Shares are subject to vesting.

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 may be issued a portion of up to 208,657 additional shares of common stock, subject to the occurrence of the following milestones:

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:

● 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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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 and nine months ended September 30, 2025 and September 30, 2024, the Company recognized $ 37 thousand, $ 3.5 million, $ 0 and $ 97.5 million of 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 September 30, 2025 and December 31, 2024, the contingent consideration liability was $ 32 thousand 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”).

Public warrants related to the Closing

Each whole public warrant entitles the holder to purchase one share of the Company’s common stock at a price of $ 828.00 per share.

The public warrants became exercisable 30 days after the completion of the Merger, and will expire at 5:00 p.m., New York City time, on July 21, 2028, the five-year anniversary of the completion of the Merger, or earlier upon redemption or liquidation.

Warrant holders may, until such time as there is an effective registration statement and during any period when the Company has failed to maintain an effective registration statement covering the shares of the Company’s common stock issuable upon exercise of the warrants, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exception.

When exercised on a cashless basis, the number of shares received per warrant is capped at 1 .0.

The Company may call the public warrants for redemption for cash:

● in whole and not in part;

● at a price of $ 0.72 per warrant;

● upon not less than 30 days ’ prior written notice of redemption to each warrant holder (the “ 30 -day redemption period”);

● if, and only if, there is an effective registration statement under the Securities Act of 1933 covering the issuance of the shares of common stock issuable upon exercise of the warrants, and a current prospectus relating thereto, available through the 30-day redemption period;

● if, and only if, the closing price of the Company's common stock equals or exceeds $ 1,296.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading day period ending three business days before the Company sends to the notice of redemption to the warrant holders.

The Company may also call the public warrants for redemption:

● in whole and not in part;

● at $ 7.20 per warrant upon a minimum of 30 days ’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares to be determined by reference to a table in the Warrant Agreement, based on the redemption date and the “fair market value” (as defined in the Warrant Agreement) of common stock except as otherwise described below;

● if, and only if, the closing price of the Company’s common stock equals or exceeds $ 720.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 -trading day period ending three business days before the Company sends to the notice of redemption to the warrant holders.

On March 29, 2024, the Company delivered notice of redemptions to warrant holders with a redemption date of April 29, 2024 for cashless redemptions of the Company’s outstanding public warrants.

The number of shares of common stock that each exercising warrant holder received by virtue of the cashless exercise (instead of paying the $ 11.50 per public warrant cash exercise price) was calculated in accordance with the terms of the Warrant Agreement.

Any remaining unexercised public warrants on the redemption date were cancelled and the public warrant holders received the redemption price of $ 0.10 for each public warrant.

The Company paid $ 21 thousand in April 2024 related to the cancellation of the remaining 2,881 public warrants on the redemption date.

For the three months ended March 31, 2026 and 2025, the Company recognized a de minimis, and $ 3.5 million of 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 changes in the Company’s stock price during the period.

As of March 31, 2026 and December 31, 2025, the contingent consideration liability was $ 38 thousand and $ 42 thousand, respectively.

Private Placement Warrants related to the Closing

Each private placement warrant was identical to the public warrants initially sold by Priveterra in the IPO, except that the private placement warrants, so long as they are held by the Sponsor or its permitted transferees, (i) will not be redeemable by the Company and (ii) may be exercised by the holders on a cashless basis.

Warrant exercises for Warrants related to the Closing

There were no warrants related to the Closing exercised during the three and nine months ended September 30, 2025 and the three months ended September 30, 2024.

During the nine months ended September 30, 2024, there were 142,828 warrants exercised on a cashless basis for 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 nine months ended September 30, 2025 and 2024 is as follows:

Issued and Outstanding, January 1, 2025

Number of warrants issued

Number of warrants exercised

Number of warrants cancelled

Issued and Outstanding, September 30, 2025

Issued and Outstanding, January 1, 2024

Number of warrants exercised

Number of warrants cancelled

Issued and Outstanding, September 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.

As of March 31, 2026 and December 31, 2025, there were 55,403 private placement warrants outstanding related to the closing of the Merger (“SPAC Warrants”).

There were no SPAC Warrants exercised during the three months ended March 31, 2026 and 2025 .

The SPAC Warrants are accounted for as a liability with changes in the fair value recorded to the condensed consolidated statement of operations and comprehensive (loss) income.

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 September 30, 2025 and December 31, 2024 were de minimus and $ 1.2 million, respectively.

For the three and nine months ended September 30, 2025 and 2024, the Company recorded de minimus, $ 1.2 million, $( 0.4 ) million, and $( 15.4 ) million, respectively, of income (expense) related to the change in fair value of the warrants related to the Closing.

Series A and Series B Warrants

The measurement of fair value for 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 September 30, 2025.

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:

September 30,

The fair value of the SPAC Warrants as of March 31, 2026 and December 31, 2025 were de minimis.

For the three months ended March 31, 2026 and 2025, the change in fair value of the SPAC Warrants were de minimis.

Series A Warrants and Series B Warrants

The measurement of fair value for the Series A Warrants and Series B warrants were determined utilizing a Black-Scholes model considering all relevant assumptions as of each reporting period.

The fair value on grant date was recorded as a liability on the condensed consolidated balance sheets, and changes in fair value are recognized at each reporting period on the condensed consolidated statement of operations and comprehensive (loss) income.

The table below summarizes the significant assumptions as of each reporting period:

Exercise Price

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Expected dividend yield

The grant date fair values for these warrants were $ 94.0 million, comprised of $ 20.7 million and $ 73.3 million for Series A and Series B Warrants, respectively, on January 7, 2025 and was recorded as a liability as of the grant date due to certain exercise price adjustment provisions occurring in connection with future events.

The grant date fair values for the Series A Warrants and Series B Warrants were $ 94.0 million, comprised of $ 20.7 million and $ 73.3 million for Series A Warrants and Series B Warrants, respectively, on January 7, 2025 and was recorded as a liability as of the grant date due to certain exercise price adjustment provisions occurring in connection with future events.

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 common shares and the warrants of $ 75.6 million.

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

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

A summary of activity for the Company’s issued and outstanding Series A Warrants and Series B Warrants for the three months ended March 31, 2026 and 2025 are as follows:

Issued and Outstanding, January 1, 2026

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Number of warrants exercised

Issued and Outstanding, March 31, 2026

Issued and Outstanding, January 1, 2025

Number of warrants issued

Number of warrants exercised

( 3,142,511 )

Issued and Outstanding, September 30, 2025

Issued and Outstanding, March 31, 2025

Odeon Warrants

In October 2025, the Company entered into a settlement agreement with Odeon Capital Group LLC to settle a lawsuit filed against the Company in exchange for $ 1.0 million in cash, $ 0.3 million shares of common stock and 125,000 warrants (the “Odeon Warrants”) with exercise price of $ 2.00 and a three year term.

The Company recorded a gain on settlement of $ 0.4 million to selling, general and administrative expenses on the condensed consolidated statement of operations and comprehensive (loss) income in the third quarter of 2025.

The Odeon Warrants were initially measured at fair value using a Black-Scholes calculation and recorded as a liability on the issuance date and remeasured at each reporting period with changes to fair value recorded to the condensed consolidated statements of operations and comprehensive (loss) income.

As of March 31, 2026, there were 125,000 Odeon Warrants outstanding with a fair value of $ 0.1 million.

There were no exercises during the three months ended March 31, 2026.

During the three months ended March 31, 2026, the Company recognized a de minimis gain related to the decrease in the fair value of the Odeon Warrants.

PIPE Warrants and Daewoong Warrants

The PIPE Warrants and Daewoong Warrants were initially measured at fair value using a Black-Scholes calculation and recorded as a liability on the issuance date, and remeasured at each reporting period with changes to fair value recorded to the condensed consolidated statements of operations and comprehensive (loss) income.

The PIPE Warrants and Daewoong Warrants had a grant date fair value of $ 7.4 million and $ 10.3 million, respectively

As of March 31, 2026, there were 6.5 million PIPE Warrants and 8.0 million Daewoong Warrants outstanding.

There were no exercises during the three months ended March 31, 2026.

During the three months ended March 31, 2026, the Company recognized $ 1.4 million of gain related to the decrease in the fair value of the PIPE Warrants.

During the three months ended March 31, 2026, the Company recognized $ 3.0 million of gain related to the decrease in the fair value of the Daewoong Warrants.

The table below summarizes the significant assumptions as of March 31, 2026 and respective issuance dates of the warrants:

Exercise Price

Expected volatility

Risk-free interest rate

Expected life (in years)

Expected dividend yield

Summary of Recurring Fair Value Measurements

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Contingent Consideration

Embedded Forward Purchase Agreement and Make Whole Derivative

Derivative Liability

Balance, January 1, 2026

Issuance of convertible notes

Issuance of warrants

Change in fair value

Warrant cashless exercise

Termination of forward purchase agreements

Balance, September 30, 2025

Exchange of convertible notes

Settlement of derivative liability

Balance, March 31, 2026

Convertible Notes

Warrant Liabilities

Contingent Consideration

Balance, January 1, 2025

Issuance of convertible notes

Issuance of warrants

Change in fair value

Warrant cashless exercise

Termination of forward purchase agreements

Balance, September 30, 2024

Balance, March 31, 2025

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 September 30, 2025 (in thousands):

The following table summarizes supplemental balance sheet information related to the operating lease as of March 31, 2026 (in thousands):

Minimum lease payments by fiscal year

2025 (Remaining)

Total future minimum lease payments

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Discount rate

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

The following table summarizes supplemental disclosures of operating cost and cash flow information related to operating leases for the three months ended March 31, 2026 and 2025 (in thousands).

Three Months Ended

Nine Months Ended

September 30,

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 and $ 0 as a liability in accrued expenses on the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 for ABP-450 supplies, respectively.

In connection with the Exchange, on January 21, 2026, the Company entered into a Fifth Amendment to the License and Supply Agreement (the “License Agreement Amendment”) with Daewoong, which amended the Daewoong Agreement, by and between the Company and Daewoong, dated December 20, 2019, as amended on July 29, 2022, January 8, 2023, April 24, 2023 and March 19, 2024.

Pursuant to the terms of the License Agreement Amendment, the definition of “Notes” reflects the Exchange and the Termination Purchase Right (as defined in the License Agreement Amendment) 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 conversion of the New Convertible Note.

The License Agreement, as amended from time to time, also provides that the License Agreement will terminate if, over any six-month period, (a) the Company ceases to commercialize ABP-450 in certain territories specified in the License Agreement and (b) the Company ceases to advance any clinical studies of ABP-450 in such territories.

Additionally, the License Agreement also provides that, in the event that the License Agreement is terminated for the foregoing reasons, Daewoong will have the right to purchase all Know-How (as defined in the License Agreement) related to ABP-450 for a price of $ 1.00 .

The Company has recorded $ 0.4 million and $ 0.4 million as liabilities in accrued expenses and accounts payable on the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively, for ABP-450 supplies, supplies and analytical testing performed by Daewoong.

For the three months ended March 31, 2026 and 2025, the Company recorded de minimis of research and development expenses on the condensed consolidated statement of operations and comprehensive (loss) income.

Legal Proceedings

The Company, from time to time, is involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation.

Other than as described below, the Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its accompanying financial position, results of operations or cash flows.

On September 18, 2023, Odeon Capital Group LLC (“Odeon”) filed a lawsuit against the Company in the Supreme Court of the State of New York, alleging that the Company failed to pay Odeon’s deferred underwriting fee of $ 1.25 million, and seeking monetary damages for the full amount of its claimed underwriting fee, punitive damages, attorneys’ fees and other amounts, totaling approximately $ 1.7 million, which was recorded in other accrued expenses on the condensed consolidated balance sheets as of December 31, 2024.

On October 31, 2025, the Company entered into a settlement agreement with Odeon to settle the lawsuit in exchange for $ 1.0 million in cash, $ 0.3 million shares of common stock and 125,000 warrants to purchase shares of common stock with an exercise price of $ 2.00 and a three-year term.

The Company recorded a gain on settlement of $ 0.4 million to selling, general and administrative expenses on the condensed consolidated statement of operations for the three and nine months ended September 30, 2025.

Other than as described below, the Company is not subject

to any currently pending legal matters or claims that would have a material adverse effect on its accompanying financial position, results of operations or cash flows.

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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See Note 2 Summary of Significant Accounting Policies for additional information.

On February 24, 2025, the Company held a special stockholder meeting, at which stockholders voted, among other matters, to amend the Company’s Certificate of Incorporation, as amended and restated, to increase the number of authorized common stock from 500,000,000 to 1,040,000,000 shares of common stock at par value of $ 0.0001 per share.

In February 2025, the Company held a special stockholder meeting, at which stockholders voted, among other matters, to amend the Company’s Certificate of Incorporation, as amended and restated, to increase the number of authorized common stock from 500,000,000 to 1,040,000,000 shares of common stock at par value of $ 0.0001 per share.

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 September 30, 2025, there have been no cash dividend declared to date.

As of March 31, 2026, there has 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 September 30, 2025 and December 31, 2024:

September 30,

The table below summarizes the Company’s reserved common stock for further issuance as of March 31, 2026 and December 31, 2025:

Stock options issued and outstanding

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Shares available for future issuance under the stock incentive plans and employee stock purchase plan

Pre-funded warrants

Contingent consideration

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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 September 30, 2025, there were 19,419 shares available for issuance.

As of March 31, 2026, there were 149,036 shares available for issuance.

There have been no shares issued under the 2023 ESPP.

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Options forfeited

Outstanding, September 30, 2025

Exercisable, September 30, 2025

As of September 30, 2025 and December 31, 2024, the weighted average remaining contractual life of options outstanding and options exercisable was 5.3 years and 6.0 years, respectively.

During the three and nine months ended September 30, 2025 and 2024, the Company recognized $ 0.3 million and $ 1.3 million, $ 0.7 million and $ 2.3 million, respectively, of share-based compensation expense related to stock options granted.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $ 0.5 million and $ 1.8 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 1 month and 4 months , respectively.

Outstanding, March 31, 2026

Exercisable, March 31, 2026

As of March 31, 2026 and December 31, 2025, the weighted average remaining contractual life of options outstanding and options exercisable was 4.8 years and 5.0 years, respectively.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 0.2 million and $ 0.6 million, respectively, of share-based compensation expense related to stock options granted.

As of March 31, 2026, there was no unrecognized compensation expense related to nonvested stock options.

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

Outstanding, January 1, 2026

Outstanding, September 30, 2025

During three and nine months ended September 30, 2025 and 2024, the Company recognized $ 0.3 million, $ 1.0 million, $ 0.3 million and $ 1.1 million, respectively, of share-based compensation expense related to restricted stock units granted, excluding restricted stock units with earnout vesting criteria.

For the restricted stock units with earnout vesting criteria, the Company recognized $ 0.1 million and $ 0.5 million for the three and nine months ended September 30, 2024.

As of September 30, 2025, the Company determined that the earnout vesting criteria was no longer probable, as such, the Company reversed $ 1.0 million of share-based compensation expense related to the restricted stock units with earnout criteria during the three and nine months ended September 30, 2025.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $ 2.0 million and $ 3.0 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 14 months and 21 months , respectively.

The unrecognized compensation expense with the earnout criteria as of September 30, 2025 and December 31, 2024 of $ 5.1 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.

Outstanding, March 31, 2026

During the three months ended March 31, 2026 and 2025, the Company recognized $ 0.3 million and $ 0.3 million, respectively, of share-based compensation expense related to restricted stock units granted, excluding restricted stock units with earnout vesting criteria.

For the restricted stock units with earnout vesting criteria, in the third quarter of 2025, the Company determined that the earnout vesting criteria was no longer probable and as such, there was no share-based compensation expense during the three months ended March 31, 2026.

During the three months ended March 31, 2025, the Company recognized $ 0.1 million of share-based compensation expense related to the restricted stock units with earnout vesting criteria.

As of March 31, 2026, total unrecognized compensation expense related to nonvested restricted stock units, excluding restricted stock units with earnout vesting criteria, was $ 1.4 million, which is expected to be recognized over the weighted-average remaining requisite service period of 10 months .

The unrecognized compensation expense for restricted stock units with the earnout criteria as of March 31, 2026 of $ 4.7 million 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 September 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”).

As of March 31, 2026, there were 17,847,331 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:

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Options forfeited

Outstanding, September 30, 2025

Exercisable, September 30, 2025

The weighted average remaining contractual life of options outstanding and options exercisable as of September 30, 2025 and December 31, 2024 was 8.7 years and 9.5 years, respectively.

During the three and nine months ended September 30, 2025 and 2024, the Company recognized $ 0.6 million, $ 1.9 million, $ 0.5 million and $ 1.0 million respectively, of share-based compensation expense related to stock options granted.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested stock options was $ 3.4 million and $ 5.3 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 10 months and 19 months , respectively.

Outstanding, March 31, 2026

Exercisable, March 31, 2026

The weighted average remaining contractual life of options outstanding and options exercisable as of March 31, 2026 and December 31, 2025 was 8.2 years and 8.5 years, respectively.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 0.5 million, and $ 0.6 million respectively, of share-based compensation expense related to stock options granted.

As of March 31, 2026, total unrecognized compensation expense related to nonvested stock options was $ 2.1 million, which is expected to be recognized over the weighted-average remaining requisite service period of 17 months .

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

Outstanding, January 1, 2026

Outstanding, September 30, 2025

During the three and nine months ended September 30, 2025, the Company recognized $ 0.1 million and $ 0.3 million, and de minimus stock-based compensation expenses for the three and nine months ended September 30, 2024.

As of September 30, 2025 and December 31, 2024, total unrecognized compensation expense related to nonvested restricted stock units was $ 0.4 million and $ 0.7 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 11 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 nine months ended September 30, 2025, there were 5,288,059 cash-settled restricted stock units granted with weighted-average grant date fair value of $ 0.81 with one, three, and four-year vesting, subject to continued service through the applicable vesting date.

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

The Company has elected to account for cash-settled restricted stock units 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 nine months ended September 30, 2025, the Company recognized $ 0.6 million and $ 0.7 million of share-based compensation expense related to cash-settled restricted stock units granted.

As of September 30, 2025, total unrecognized compensation expense related to nonvested cash-settled restricted stock units was $ 3.6 million, which is expected to be recognized over the weighted-average remaining requisite service period of 34 months .

As of September 30, 2025, the liability related to cash-settled restricted stock units was $ 0.7 million in accrued compensation on the condensed consolidated balance sheet.

Outstanding, March 31, 2026

In May 2025, due to equity pool limitations, the Company’s board of directors approved the issuance of cash-settled restricted stock units 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.

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

The Company will recognize compensation expense on the condensed consolidated statement of operations and comprehensive (loss) income 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 and comprehensive (loss) income at each reporting date until settlement, reflecting changes in the underlying stock price.

In March 2026, the Company’s board of directors approved the conversion of all cash-settled restricted stock units awards into share-settled restricted stock units.

The Company assessed the modification in accordance with ASC 718 Stock-based Compensation, and recorded $ 2.0 million to additional paid in capital, representing the fair value of the converted awards on the modification date.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 0.9 million and $ 0.1 million stock-based compensation expenses related to restricted stock units granted.

As of March 31, 2026, total unrecognized compensation expense related to nonvested restricted stock units was $ 9.1 million, which is expected to be recognized over the weighted-average remaining requisite service period of 35 months .

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

For the nine months ended September 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 September 30, 2025 was $ 0.37 .

The weighted average remaining contractual life of options outstanding and options exercisable as of September 30, 2025 was 9.6 years.

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

As of September 30, 2025, total unrecognized compensation expense related to nonvested stock options was $ 20 thousand, which is expected to be recognized over the weighted-average remaining requisite service period of 43 months .

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

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

As of September 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 43 months .

As of March 31, 2026, there were 1,268,825 shares of common stock available for issuance under the 2025 Employee Inducement Incentive Award Plan (the “2025 Plan”), including 1,000,000 shares that were approved in March 2026 by the Company’s board of directors to be added to the 2025 Plan.

The following table summarizes stock options activity under the 2025 Plan:

Outstanding, January 1, 2026

Options granted

Options forfeited

Outstanding, March 31, 2026

Exercisable, March 31, 2026

The weighted average remaining contractual life of options outstanding and options exercisable as of March 31, 2026 and December 31, 2025 was 9.1 years and 9.3 years, respectively.

During the three months ended March 31, 2026, the Company recognized de minimis amounts of share-based compensation expense related to stock options granted.

As of March 31, 2026, total unrecognized compensation expense related to nonvested stock options was $ 17 thousand, which is expected to be recognized over the weighted-average remaining requisite service period of 37 months .

The following table summarizes restricted stock units activity under the 2025 Plan.

Outstanding, January 1, 2026

Outstanding, March 31, 2026

During the three months ended March 31, 2026, the Company recognized de minimis amounts of share-based compensation expense related to restricted stock units granted.

As of March 31, 2026, total unrecognized compensation expense related to nonvested restricted stock units was $ 1.0 million, which is expected to be recognized over the weighted-average remaining requisite service period of 44 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 and nine months ended September 30, 2025 and 2024, the Company recognized $ 1.0 million, $ 4.4 million $ 1.6 million and $ 4.9 million, respectively, of share-based compensation expense, of which $ 0.6 million, $ 3.3 million, $ 1.2 million, and $ 3.7 million, respectively, were in selling, general and administrative expenses, and $ 0.3 million and $ 1.1 million and $ 0.4 million and $ 1.3 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:

Nine Months Ended

September 30,

Expected volatility

Risk-free interest rate

3.7 % – 4.3 %

Expected life (in years)

Expected dividend yield

During the three months ended March 31, 2026 and 2025, the Company recognized $ 1.9 million and $ 1.7 million, respectively, of share-based compensation expense, of which $ 1.5 million, and $ 1.3 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 (loss) income.

Subsequent Events

The Company has further evaluated subsequent events for recognition and remeasurement purposes as of and for the three and nine months ended September 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, except as described below.

On October 31, 2025, the Company entered into a settlement agreement with Odeon to settle a lawsuit filed against the Company in exchange for $ 1.0 million in cash, $ 0.3 million shares of common stock and 125,000 warrants with exercise price of $ 2.00 and a three year term.

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.

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.

The Company has further evaluated subsequent events for recognition and remeasurement purposes as of and for the three months ended March 31, 2026.

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, other than as disclosed below.

In April 2026, the Company entered into a sublease agreement for its existing corporate office space, which was finalized with landlord consent in May 2026.

Under the terms of the sublease, the subtenant is expected to take occupancy in the third quarter of 2026, subject to customary conditions.

The Company is actively evaluating alternative office locations and expects to relocate to a smaller space prior to the subtenant’s occupancy.

The Company intends to occupy the space until the commencement of a fully executed sublease.

From April 1, 2026 through May 11, 2026, the Company issued 1,004,153 shares under the ATM for net proceeds of $ 0.9 million, and approximately $ 47.0 million of common stock remained available to be sold under the ATM.

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