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Item 2. Management’s Discussion and Analysis

2026-08-12 compared with 2026-05-14 · 122 added, 90 removed, 235 unchanged (47% of the section changed)

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We are a biopharmaceutical company focused on developing ABP-450 as a biosimilar to BOTOX® (onabotulinumtoxinA) for therapeutic indications.

Our strategy is to initially pursue regulatory approval in the United States through Section 351(k).

Our strategy is to pursue biosimilarity across all clinically relevant dimensions of the reference product, including label breadth, dosing and dilution, clinical performance and physician workflow, in order to minimize switching friction for prescribers and payers, and to initially pursue regulatory approval in the United States through Section 351(k).

We hold exclusive development and commercialization rights for ABP-450 in therapeutic indications across the United States, Canada, the European Union, the United Kingdom, and certain other international territories.

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This large and continually growing market has historically been dominated by a single branded product, BOTOX®.

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

We believe this market has remained highly concentrated in part due to the reference product’s broad label covering all twelve FDA- approved therapeutic indications, which has limited the adoption of competing products with narrower labels.

Based on qualitative interviews conducted by a third-party market research firm with a small number of neurologists and payers, physicians reported operational complexity and economic constraints associated with existing therapeutic neurotoxins, including limited flexibility under buy-and-bill reimbursement dynamics and challenges associated with managing products with differing dosing, dilution and labeling requirements.

These interviewees indicated that, despite these challenges, BOTOX® remains the predominant product due to its comprehensive label and established clinical workflows.

We believe these dynamics may contribute to continued reliance on a single product and highlight the importance of a biosimilar approach designed for full-label alignment and workflow compatibility.

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

under the name Jeuveau® in the U.S.

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ABP-450 is manufactured by Daewoong Pharmaceutical Co., Ltd.

in a facility designed to be compliant with current Good Manufacturing Practice (“cGMP”) that has manufactured products approved by the U.S.

(“Daewoong”) pursuant to a license and supply agreement under which we hold exclusive development and commercialization rights to ABP-450 for therapeutic indications in the United States, Canada, the European Union, the United Kingdom, and certain other international territories.

ABP-450 is manufactured by Daewoong in a facility designed to be compliant with current Good Manufacturing Practice (“cGMP”) that has manufactured products approved by the U.S.

Food and Drug Administration, Health Canada, and the European Commission.

These facilities have been inspected by global regulatory authorities, including the FDA and EMA.

The same botulinum toxin complex is commercially available in multiple international markets and is approved in the United States for aesthetic use under the brand name Jeuveau®.

Our development program is focused exclusively on therapeutic indications, where we believe the biosimilar pathway may enable efficient development and broad label access, subject to regulatory review.

We believe the U.S.

therapeutic neurotoxin market is characterized by a concentrated prescriber and payer base, which may enable an efficient commercialization approach.

Based on third-party claims data analyses, a relatively small number of high-volume neurologists account for a significant portion of therapeutic neurotoxin utilization, and a limited number of payers cover a majority of treated patients.

We believe this concentration may allow for targeted engagement strategies focused on key prescribers and payers.

We held an initial meeting with the FDA in the third quarter of 2024 during which we obtained feedback from the FDA on the next steps to develop a BOTOX® biosimilar.

We 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.

We 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.

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We believe this feedback provides a clear framework for the remaining analytical components of our biosimilar development program and plan to complete the majority of our analytical comparability program in 2026.

We are 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.

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

Additionally, ABP-450 also demonstrated highly similar potency across two distinct assays (LD50 - in vivo biological activity and CBPA cell-based potency assay) to support clinical dose predictability, comparable vial-to-vial active ingredient composition using ELISA - further supporting dose similarity and reliability, and functional cleavage of SNAP-25, consistent with the mechanism of action.

We anticipate receiving written feedback from a BPD Type 2b meeting with the FDA in the second half of 2026 regarding the next phase of the development program to support approval of ABP-450 as a biosimilar to BOTOX® across all approved therapeutic indications.

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

Additionally, ABP-450 also demonstrated highly similar potency across two distinct assays (LD50 — an in vivo biological activity assay and CBPA — a cell-based potency assay) to support clinical dose predictability, comparable vial-to-vial active ingredient composition using ELISA — further supporting dose similarity and reliability, and functional cleavage of SNAP-25, consistent with the mechanism of action.

These results contribute to our assessment of analytical similarity by characterizing key structural attributes of ABP-450 relative to the reference product and are intended to reduce residual uncertainty and potentially limit the need for further clinical assessments.

Additional analytical and functional studies are ongoing as part of our broader analytical similarity assessment.

Prior to licensing the botulinum toxin complex to Evolus, Daewoong conducted a broad preclinical development program for ABP-450 that was primarily focused on safety to support any clinical indication.

Subsequently, Evolus completed a comprehensive clinical development program of the same botulinum toxin complex and has received approval from regulatory authorities in the United States, the European Union and Canada to market and sell Jeuveau® in the United States and Nuceiva® in Canada and the European Union for the temporary improvement in the appearance of moderate to severe glabellar, or frown lines in adults.

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

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

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

Prior to licensing the botulinum toxin complex to Evolus, Daewoong conducted a broad preclinical development program for ABP-450 and has received approval from over 69 regulatory authorities.

Subsequently, Evolus completed a comprehensive clinical development program of the same botulinum toxin complex and has received approval in the United States, the European Union and Canada to market and sell Jeuveau® in the United States and Nuceiva® in Canada and the European Union for the temporary improvement in the appearance of moderate to severe glabellar, or frown lines in adults.

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

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Existing botulinum toxins, including BOTOX®, are approved under a single BLA for both therapeutic and cosmetic indications.

As a result, other botulinum toxins are required to include the sales prices of both therapeutic and cosmetic botulinum toxin sales when calculating the average selling price, or ASP, that is used to determine the reimbursement amount physicians receive for therapeutic usage.

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

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

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

We have never been profitable from operations and, as of March 31, 2026, we had an accumulated deficit of $482.6 million.

As a result of this and other factors, other botulinum toxins are required to include the sales prices of both therapeutic and cosmetic botulinum toxin sales when calculating the average selling price, or ASP, that is used to determine the reimbursement amount physicians receive for therapeutic usage.

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

If we are successful in obtaining approval of a Section 351(k) BLA for therapeutic indications of ABP-450, we believe this could facilitate more consistent reimbursement economics for providers administering ABP-450 in therapeutic settings while also providing greater flexibility to support contracting strategies with payors.

Subject to pricing, reimbursement and formulary decisions, these characteristics may create greater alignment between provider reimbursement incentives and payor objectives to manage treatment costs.

We believe such alignment, if achieved, could support adoption of ABP-450 in therapeutic indications.

This pricing approach would be unique within the current therapeutic neurotoxin market and, we believe, could provide flexibility to offer competitive net pricing to payers while maintaining favorable reimbursement dynamics for providers.

In addition, under the Medicare Part B buy-and-bill framework, biosimilars are generally reimbursed at the biosimilar’s own ASP plus an add-on payment equal to 6% of the reference product’s ASP,

which, because the reference product typically has a higher ASP than the biosimilar, can result in a larger per-unit margin for providers administering the biosimilar relative to the reference product.

However, our expected pricing model has not been finalized and may differ from current expectations.

We have never been profitable from operations and, as of June 30, 2026, we had an accumulated deficit of $483.8 million.

We have never generated revenue from ABP-450.

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

As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the third quarter of 2026, including funds of $4.2 million received from the Second Closing.

As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the first quarter of 2027, including net proceeds of $13.6 million from the 2026 Offering and Over-Allotment that were received in July 2026.

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

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We expect to continue to incur significant expenses and increasing net operating losses for the foreseeable future as we seek regulatory approval, prepare for and, if approved, proceed to commercialization of ABP-450.

Executive Overview

On March 6, 2026, the Company’s board of directors appointed John Bencich as the Company’s Chief Financial Officer, effective as of March 9, 2026 and principal financial officer, effective as of April 1, 2026.

Bencich’s appointment is part of the Company’s strategic plan to strengthen its executive leadership team as it advances key regulatory and financing milestones.

Liquidity and Capital Resources and Going Concern

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

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

As of June 30, 2026, we had reported cash and cash equivalents of $3.4 million and an accumulated deficit of $483.8 million.

In July 2026, we received aggregate net proceeds of approximately $13.6 million from the 2026 Offering and the subsequent over-allotment closing, subject to final closing-cost reconciliation.

Based on our current operating plan, which does not assume any proceeds from future warrant exercises, additional ATM sales or other financings, we expect our existing cash and cash equivalents to fund operations into the first quarter of 2027.

This estimate is subject to significant uncertainty, including the timing and cost of analytical studies, regulatory activities, clinical-startup work, payments to vendors and Daewoong, and other operating expenses.

We will require additional capital before completing our planned development program, and there can be no assurance that financing will be available on acceptable terms or at all.

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

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Notice of Noncompliance

On February 3, 2025, the Company received a written notice of non-compliance (the “Notice”) from NYSE American stating that the Company is not in compliance with continued listing standards of Section 1003(a)(i) of the NYSE American Company Guide (the “Company Guide”), which requires stockholders’ equity of $2.0 million or more if the listed company has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years (the “Minimum Requirement”), as defined in Section 1003(a)(i) of the Company Guide.

Pursuant to the Notice, the Company reported a stockholders’ deficit of $32.1 million at September 30, 2024 and had losses in the two most recent fiscal years ended December 31, 2023 based on the Company’s Annual Report on Form 10-K/A filed with the U.S.

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

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

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

In the Acceptance Letter, NYSE American granted the Company until August 3, 2026 (the “Plan Period”) to regain compliance with the continued listing standards.

During the Plan Period, the Company will be subject to periodic review by NYSE American on its progress with the goals and initiatives outlined in the Plan.

The Company intends to take all reasonable measures available to regain compliance with Sections 1003(a)(i), (ii) and (iii) of the Company Guide during the Plan Period.

If the Company does not regain compliance with NYSE American listing standards by August 3, 2026, or if the Company does not make sufficient progress consistent with the Plan during the Plan Period, then NYSE American may initiate delisting proceedings.

On March 31, 2026, the Company received an additional notice indicating that the Company is additionally not in compliance with Section 1003(a)(ii) of the Company Guide, which requires stockholders’ equity of $4.0 million or more if the listed company has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years.

This determination was based on the Company’s reported stockholders’ deficit of approximately $55 million as of December 31, 2025, and losses from continuing operations and/or net losses in three of its four most recent fiscal years, as reported in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2026.

This Notice reflects an expected progression of the Company’s previously disclosed compliance status following its 2025 year-end results.

The Company remains subject to the terms of the original notice and continues to execute against the NYSE American approved Plan to regain compliance with NYSE American continued listing standards within the Plan Period.

The additional notice does not have an immediate impact on the Company’s current listing, Plan Period, or Plan to regain compliance.

The Acceptance Letter has no immediate impact on the listing of the Company’s shares of Class A common stock, par value $0.0001 per share (the “Common Stock”), which will continue to be listed and traded on NYSE American during the Plan Period, subject to the Company’s compliance with the other listing requirements of NYSE American.

The Common Stock will continue to trade under the symbol “AEON.” The Acceptance Letter does not affect the Company’s ongoing business operations or its reporting requirements with the Securities and Exchange Commission.

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

However, there can be no assurance that the Company will be able to regain compliance with the Minimum Requirement.

On February 3, 2025, the Company received a notice from NYSE American that it was not in compliance with Section 1003(a)(i) of the NYSE American Company Guide due to a stockholders’ deficit of $32.1 million as of September 30, 2024 and losses in two of its three most recent fiscal years.

The Company subsequently submitted a plan to regain compliance, which NYSE American accepted on April 22, 2025, granting the Company until August 3, 2026 to regain compliance (the “Plan Period”).

During the Plan Period, the Company remained subject to periodic review by NYSE American and its Class A common stock continued to trade on NYSE American under the symbol “AEON.”

On March 31, 2026, the Company received an additional notice that it was not in compliance with Section 1003(a)(ii) of the Company Guide due to a stockholders’ deficit of approximately $55 million as of December 31, 2025 and losses in three of its four most recent fiscal years.

The additional notice did not affect the Company’s listing status, Plan Period, or previously accepted compliance plan.

On August 3, 2026, following completion of the July 2026 offering and related over-allotment exercise, the Company received notification from NYSE American that it had regained compliance with the continued listing standards, including the deficiencies previously identified under Sections 1003(a)(i) and 1003(a)(ii) of the Company Guide.

The Company remains subject to NYSE American’s ongoing continued listing monitoring procedures.

2025 Public Offering

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The Company received net proceeds of approximately $18.3 million from the 2025 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.

PIPE Financing

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At the First Closing, we issued 1,964,905 PIPE Pre-Funded Warrants and received gross proceeds of $1.8 million.

Following the approval of the PIPE Financing at the special shareholder meeting on January 21, 2026, and the consummation of the Exchange (as defined below), the second closing of the PIPE Financing occurred on January 27, 2026 (the “Second Closing”).

Following the approval of the PIPE Financing at the special stockholder meeting on January 21, 2026, and the consummation of the Exchange (as defined below), the second closing of the PIPE Financing occurred on January 27, 2026 (the “Second Closing”).

Upon the Second Closing and the consummation of the Exchange, the Company issued to each Investor pursuant to 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 (as defined below) 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 Warrant exceed the total number of PIPE Shares or PIPE Pre-Funded Warrant Shares issued or issuable to an Investor pursuant to the Securities Purchase Agreement.

At the Second Closing, we issued 4,616,924 PIPE Pre-Funded Warrants, 6,581,829 PIPE Warrants and 6,581,829 True-Up Warrants to the Investors, and the Company received gross proceeds of $4.2 million.

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

Subject to the terms and conditions therein, the Securities Purchase Agreement also granted 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.

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

Each PIPE Warrant is exercisable for the number of PIPE 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 able to be exercised at any time until the five-year anniversary of the Second Closing.

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 able to be exercised at any time until all the True-Up Warrants are exercised in full.

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

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The Daewoong Warrants, which are on the same terms as the PIPE Warrants, 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 able to be exercised at any time until the five-year anniversary of the Second Closing.

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

The Exchange Agreement provides 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.

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

Park currently serves on the Company’s board of directors.

The Exchange was approved at the special meeting of stockholders on January 21, 2026.

New Convertible Note

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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:

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 per share price of the common stock sold in the Qualified Financing.

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

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.

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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.

2026 Public Offering

On July 13, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as representative of the several underwriters named therein (the “Representative”), relating to the Company's underwritten public offering (the “2026 Offering”) of (i) 17,851,599 shares (the “Shares”) of the Company's Class A common stock, par value $0.0001 per share (the “Common Stock”), and (ii) pre-funded warrants to purchase 24,837,008 shares of Common Stock (the “Pre-Funded Warrants”).

Each share of Common Stock and each Pre-Funded Warrant was accompanied with (i) one two-year milestone warrant to purchase shares of Common Stock (the “Two-Year Milestone Warrant”) and (ii) one five-year milestone warrant to purchase shares of Common Stock (the “Five-Year Milestone Warrant”, collectively with the Two-Year Milestone Warrant, the “Milestone Warrants,” and together with the Pre-Funded Warrants, the “Warrants”).

The combined public offering price was $0.3221 per share of Common Stock and accompanying Milestone Warrants and $0.3220 per Pre-Funded Warrant and accompanying Milestone Warrants.

Pursuant to the Underwriting Agreement, the Company also granted the Representative a 30-day option to purchase up to 6,403,291 additional shares of Common Stock or Pre-Funded Warrants to purchase up to 6,403,291 shares of Common Stock in lieu thereof (or any combination thereof), accompanied by corresponding Milestone Warrants, solely to cover over-allotments, if any (the “Over-Allotment”).

The 2026 Offering closed on July 15, 2026.

The Company received net proceeds of approximately $12.2 million from the 2026 Offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

On July 14, 2026, the Representative partially exercised the Over-Allotment to purchase Two-Year Milestone Warrants to purchase 6,403,290 shares of Common Stock and Five-Year Milestone Warrants to purchase 6,403,290 shares of Common Stock.

On July 23, 2026, the Company issued and sold to the Underwriters pursuant to the Representative’s partial exercise of the Over-Allotment, 4,696,102 shares of the Company's Common Stock, for additional net proceeds of approximately $1.4 million, after deducting underwriting discounts and commissions.

The Company intends to use the net proceeds of the 2026 Offering and Over-Allotment for working capital and general corporate purposes, including conducting comparative analytical testing on ABP-450 to support biosimilarity to BOTOX®.

ATM Offering of Common Stock

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.

For the six months ended June 30, 2026, the Company issued 2,282,929 shares under the ATM for net proceeds of $2.6 million.

Although the ATM agreement provides for aggregate gross sales of up to $50.0 million, the Company’s ability to make additional sales under the ATM is subject to applicable Form S-3 limitations, the continued availability of an effective registration statement, contractual restrictions, market conditions and other factors.

Accordingly, the remaining nominal program amount should not be viewed as committed or currently available financing.

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

Components of Our Results of Operations

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Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses, consist primarily of compensation for personnel, including stock-based compensation, management, finance, legal, and regulatory functions.

Selling, general and administrative (“SG&A”) expenses consist primarily of compensation for personnel, including stock-based compensation, in management, finance, legal, and regulatory functions.

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

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

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

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

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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.

The Company recognized gains of $4 thousand and $3.5 million for the three months ended March 31, 2026 and 2025, respectively, related to the change in the fair value of the contingent consideration related to certain contingent provisions, restrictions and forfeiture provisions for Founder Shares and certain Participating Stockholders shares.

The gains were primarily due to impact of stock price fluctuation period over period.

The Company recognized de minimis change in fair value of contingent consideration for the three months ended June 30, 2026 and 2025 and six months ended June 30, 2026.

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

The gain was primarily due to decreases in the Company’s stock price, resulting in decrease in fair value of the contingent consideration as of the reporting period.

Other (Loss) Income, Net

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

The significant unobservable input assumptions that can significantly change the fair value included (i) stock price, (ii) risk-free rate, (iii) volatility and (iv) term of warrant.

The significant unobservable input

assumptions that can significantly change the fair value included (i) stock price, (ii) risk-free rate, (iii) volatility and (iv) term of warrant.

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

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Additionally, the subsequent changes in fair value of the derivative liability was a loss of $2.5 million and was recorded in the condensed consolidated statement of operations and comprehensive (loss) income for the year ended December 31, 2025.

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

For the six months ended June 30, 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, and the derivative liability was derecognized from the condensed consolidated balance sheet.

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Three Months Ended

Six Months Ended

Operating expenses:

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Net (loss) income

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

Comparison of the three months ended March 31, 2026 and 2025

Basic net (loss) income per share

Diluted net (loss) income per share

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

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

Comparison of the three and six months ended June 30, 2026 and 2025

Operating Expenses

Selling, General and Administrative (SG&A) Expenses

SG&A expenses were $3.9 million for the three months ended March 31, 2026, resulting in an increase of $0.8 million, or 26%, compared to $3.1 million during the three months ended March 31, 2025.

The increase in SG&A expenses was primarily attributable to increases in payroll-related expenses including bonuses achieved in the current year compared to prior year, stock-based compensation related to RSUs issued in the first quarter of 2026, and increase in professional and legal fees for strategy consulting and financing activities.

SG&A expenses were $3.0 million for the three months ended June 30, 2026, resulting in a decrease of $0.3 million, or 9%, compared to $3.3 million during the three months ended June 30, 2025.

The decrease in SG&A expenses was primarily attributable to a decrease in professional and legal fees in the second quarter of 2026 compared to the second quarter of 2025, slightly offset by increases in payroll-related expenses including accrued compensation expense in the current year compared to prior year and an increase in headcount in 2026 compared to the prior year.

SG&A expenses were $6.9 million for the six months ended June 30, 2026, resulting in an increase of $0.5 million, or 8%, compared to $6.4 million during the six months ended June 30, 2025.

The increase in SG&A expenses was primarily attributable to stock-based compensation related to RSU’s issued in the first quarter of 2026, payroll-related expenses including accrued compensation expense in the current year compared to prior year, and an increase in professional fees.

Research and Development (R&D) Expenses

R&D expenses were $2.0 million for the three months ended March 31, 2026, an increase of $1.2 million, or 150%, compared to $0.8 million for the three months ended March 31, 2025.

The increase was primarily attributable to increases in biosimilar R&D consulting expense, payroll-related expenses including bonuses achieved in the current year compared to prior year and stock-based compensation related to RSUs issued in the first quarter of 2026.

R&D expenses were $2.9 million for the three months ended June 30, 2026, an increase of $1.8 million, or 164%, compared to $1.1 million for the three months ended June 30, 2025.

The increase was primarily attributable to increases in biosimilar R&D consulting expense and slight increase in compensation from new employees hired after second quarter of 2025.

R&D expenses were $5.0 million for the six months ended June 30, 2026, an increase of $3.1 million, or 163%, compared to $1.9 million for the six months ended June 30, 2025.

The increase was primarily attributable to biosimilar R&D consulting expenses and payroll-related expenses including bonuses achieved in the current year compared to prior year and stock-based compensation related to RSUs issued in the first quarter of 2026.

Change in Fair Value of Contingent Consideration

The Company recognized gain of de minimis and $3.5 million for the three months ended March 31, 2026 and 2025, respectively, related to the change in the fair value of the contingent consideration related to certain contingent provisions, restrictions and

forfeiture provisions for Founder Shares and certain Participating Stockholders shares.

The gain was primarily due to decreases in the Company’s stock price, resulting in decreases in fair value of the contingent consideration as of each reporting period.

The change in fair value of contingent consideration for the three months ended June 30, 2026 and 2025 and six months ended June 30, 2026 were de minimis.

The gain was primarily due to decreases in the Company’s stock price, resulting in decrease in fair value of the contingent consideration as of the reporting period.

Other (Loss) Income, Net

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

The Company recognized losses of $8.7 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively, primarily due to changes in conversion probabilities of the Daewoong convertible notes and changes in the Company’s stock price.

On January 21, 2026, the Exchange Agreement resulted in the extinguishment of debt of $76 thousand.

The Company recognized losses of $8.9 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively, primarily due to changes in conversion probabilities of the Daewoong convertible notes and changes in the Company’s stock price.

On January 21, 2026, the Exchange Agreement resulted in the extinguishment of debt of $76,000.

For the three months ended March 31, 2026 the Company recognized gain of $4.7 million primarily related to change in fair value of the Daewoong warrants and PIPE Warrants, compared to a gain of $86.7 million for the three months ended March 31, 2025 primarily due to fair value of the Series A Warrants and Series B Warrants issued and due to fluctuations in stock price and decrease in warrants outstanding due to cashless exercise of Series B Warrants in the first quarter of 2025.

Loss on issuance of warrants – The Company issued Series A Warrants and Series B Warrants in the first quarter of 2025 related to the Offering in that had grant date fair values of $94.0 million on January 7, 2025 and was recorded as a liability as of grant date.

For the six months ended June 30, 2026 the Company recognized gain of $9.6 million primarily related to change in fair value of the Daewoong warrants and PIPE Warrants, compared to a gain of $86.2 million for the six months ended June 30, 2025 primarily due to fair value of the Series A Warrants and Series B Warrants issued and due to fluctuations in stock price and decrease in warrants outstanding due to cashless exercise of Series B Warrants in the first quarter of 2025.

Loss on issuance of warrants – The Company issued Series A Warrants and Series B Warrants in the first quarter of 2025 related to the 2025 Offering that had grant date fair values of $94.0 million on January 7, 2025 and was recorded as a liability as of grant date.

Proceeds were allocated to the warrant liabilities based on the fair value as of grant date of the Series A Warrants and Series B Warrants of $94.0 million.

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

For the six months ended June 30, 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, and the derivative liability was derecognized from the condensed consolidated balance sheet.

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

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

As of June 30, 2026, we had reported cash and cash equivalents of $3.4 million and an accumulated deficit of $483.8 million.

On January 6, 2025, we entered into the Underwriting Agreement with Aegis pursuant to which the Company agreed to sell and issue shares of common stock and certain Series A Warrants and Series B Warrants.

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The Daewoong Warrants, which contain the same terms as the PIPE Warrants, 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 able to be exercised at any time until the five-year anniversary of the Second Closing.

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

In July 2026, we received aggregate net proceeds of approximately $13.6 million from the 2026 Offering and the subsequent over-allotment closing, subject to final closing-cost reconciliation.

We are a biopharmaceutical company seeking accelerated and full-label U.S.

market entry by developing our 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 we do not hold development or commercialization rights.

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

We held an initial meeting with the FDA in the third quarter of 2024 during which we obtained feedback

from the FDA on next steps to develop a BOTOX® biosimilar.

We commenced analytical studies in the fourth quarter of 2024 to prepare for a BPD Type 2a meeting with the FDA that was held on January 21, 2026.

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We anticipate receiving written FDA feedback from a BPD Type 2b meeting in the second half of 2026 regarding the next phase of the development program to support approval of ABP-450 as a biosimilar to BOTOX® across all approved therapeutic indications.

However, 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.

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If we sell common stock, convertible securities, or other equity securities in more than one transaction, stockholders may be further diluted by subsequent sales.

Additionally, future equity financings

may result in new investors receiving rights superior to our existing stockholders.

Additionally, future equity financings may result in new investors receiving rights superior to our existing stockholders.

Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities.

As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.

We may receive additional capital from the cash exercise of the SPAC Warrants, Series A Warrants, Series B Warrants, Odeon Warrants, PIPE Warrants and Daewoong Warrants.

However, the exercise price of such warrants range from $1.09 to $828.00 per warrant and the last reported sales price of our common stock on May 11, 2026 was $0.882.

We may receive additional capital from the cash exercise of the SPAC Warrants, Series A Warrants, Series B Warrants, Odeon Warrants, PIPE Warrants, Daewoong Warrants, Two-Year Milestone Warrants and Five-Year Milestone Warrants.

However, the exercise prices of such warrants range from $0.3221 to $828.00 per warrant and the last reported sales price of our common stock on August 6, 2026 was $0.2825.

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

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Our ability to continue as a going concern is dependent upon our ability to successfully accomplish our business plans and secure sources of financing and ultimately attain profitable operations.

As of the date of this Report, we expect to have sufficient cash to fund our operating plan into the third quarter of 2026.

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

However, we cannot assure you that we will be able to raise additional capital on commercially reasonable terms or at all.

This estimate does not assume any proceeds from future warrant exercises, additional ATM sales or other financings, and is subject to significant uncertainty, including the timing and cost of analytical studies, regulatory activities, clinical-startup work, payments to vendors and Daewoong, and other operating expenses.

We will require additional capital before completing our planned development program, and there can be no assurance that financing will be available on acceptable terms or at all.

Net Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2026 was $2.6 million, consisting primarily of a net loss of $11.8 million, non-cash gain of $7.8 million and changes in operating assets and liabilities of $1.4 million.

Non-cash gain primarily consists of $8.7 million related to an increase in the fair value of convertible notes, $1.9 million related to stock-based compensation expense for our executives and directors, $1.7 million loss on derivative liability related to the Second Closing of the PIPE Financing, offset by $4.7 million related to decreases in the fair value of warrants.

The change in operating assets and liabilities is primarily due to modification of cash-settled restricted stock units to equity-settled restricted stock units in the first quarter of 2026.

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

Net cash used in operating activities for the six months ended June 30, 2026 was $6.3 million, consisting primarily of a net loss of $12.9 million, non-cash gain of $4.8 million and changes in operating assets and liabilities of $1.8 million.

Non-cash gain primarily consists of $8.9 million related to a loss on the fair value of convertible notes, $3.6 million related to stock-based compensation expense for our executives and directors, $1.7 million loss on derivative liability related to the Second Closing of the PIPE Financing, offset by $9.6 million related to decreases in the fair value of warrants.

The change in operating assets and liabilities is primarily due to timing of payments to R&D service providers in accounts payable.

Net cash used in operating activities for the six months ended June 30, 2025 was $10.0 million, consisting primarily of a net income of $2.5 million and non-cash charges of $7.2 million and changes in operating assets and liabilities of $5.3 million, consisting primarily of $86.2 million related to change in the fair value of warrants and $3.5 million decrease related to change in the fair value of contingent consideration, offset by $75.6 million loss on issuance of warrants, $3.3 million non-cash expenses related to stock-based compensation for our executives and directors and $3.5 million related to and a change in the fair value of the convertible notes.

The change in operating assets and liabilities is primarily due to $1.7 million from timing of clinical trial payments and $3.6 million for working capital and general corporate purposes.

Cash Flows from Investing Activities

Net cash used in investing activities for the three months ended March 31, 2026 and 2025 were zero and a de minimis amount, respectively, related to the purchase of property and equipment in 2025.

Net cash used in investing activities for the six months ended June 30, 2026 and 2025 were zero and a de minimis amount, respectively, related to the purchase of property and equipment in 2025.

Cash Flows from Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2026 was $5.9 million, primarily from proceeds from the PIPE Financing and ATM, compared to $18.3 million for the three months ended March 31, 2025, primarily related to the public offering in the first quarter of fiscal 2025.

Net cash provided by financing activities for the six months ended June 30, 2026 was $6.8 million, primarily from proceeds from the PIPE Financing and ATM, compared to $18.4 million for the six months ended June 30, 2025, primarily related to the 2025 Offering in the first quarter of fiscal 2025.

Critical Accounting Policies and Estimates

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

As of March 31, 2026, there have been no changes to our critical accounting policies from those reported on our Annual Report on Form 10-K.

As of June 30, 2026, there have been no changes to our critical accounting policies from those reported on our Annual Report on Form 10-K.

Smaller Reporting Company

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

Investors could find our common stock less attractive to the extent

we rely on these exemptions.

Investors could find our common stock less attractive to the extent we rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and the trading price may be more volatile .

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis