AEON Biopharma(AEON) - 2023 Q3 - Quarterly Report

Financial Performance - The company reported an accumulated deficit of $423.1 million as of September 30, 2023, with no revenue generated from ABP-450[154]. - Losses from operations were$29.6 million for the Predecessor period and $57.9 million for the Successor period from July 22, 2023, to September 30, 2023[154]. - The total operating expenses for the period from July 22, 2023 to September 30, 2023 (Successor) were$(57.9) million, compared to $29.6 million for the nine months ended September 30, 2022 (Predecessor)[164]. - The company incurred a loss from operations of$(2.6) million for the period from July 1, 2023 to July 21, 2023 (Predecessor) and a gain of $57.9 million for the period from July 22, 2023 to September 30, 2023 (Successor)[164]. - The company recorded a net loss of$(5.0) million for the period from July 1, 2023 to July 21, 2023 (Predecessor) and a net income of $43.9 million for the period from July 22, 2023 to September 30, 2023 (Successor)[164]. - Other income (loss), net was a loss of$14.0 million for the period from July 22, 2023 to September 30, 2023 (Successor), compared to a loss of $0.5 million during the same period in 2022 (Predecessor)[166]. Research and Development - The Phase 2 clinical trial for episodic migraine did not meet its primary endpoint but showed statistical significance on multiple secondary endpoints, including a 50$16.2 million in cash, which is insufficient to fund operations for the next 12 months without additional financing[154]. - The company has entered into Forward Purchase Agreements totaling $66.7 million, which may affect its liquidity and capital needs[156]. - The company closed a merger on July 21, 2023, with approximately$30 million of committed financing from existing and new investors available at closing[169]. - The company has sufficient cash to fund its operating plan through mid-December 2023 but is actively seeking additional capital to fund operations[169]. - The company may seek to raise additional capital through the sale of equity or convertible debt securities, which could lead to substantial dilution for existing stockholders[171]. - Net cash used in operating activities from January 1, 2023, to September 30, 2023, was $36.8 million, consisting of a net loss of$38.0 million and non-cash charges of 53.2 million[172]. Expenses and Costs - The company anticipates increased SG&A expenses due to the costs associated with being a public company and establishing sales and marketing functions[158]. - R&D expenses for the period from July 22, 2023 to September 30, 2023 (Successor) were 6.3 million, a decrease of 4% compared to 25.2 million during the nine months ended September 30, 2022 (Predecessor)[164]. - SG&A expenses increased by 4.2 million, or 175%, to $5.5 million for the period from July 22, 2023 to September 30, 2023 (Successor) compared to$2.4 million during the same period in 2022 (Predecessor)[166]. Contingent Consideration and Stock - The company has a contingent consideration liability of $72.1 million as of September 30, 2023, with an income of$69.7 million recognized related to the change in fair value of contingent consideration for the period from July 22, 2023, to September 30, 2023[193]. - The company plans to issue up to 4,000,000 shares of common stock contingent upon FDA acceptance for the BLA for episodic migraine treatment, which could increase to 11,000,000 shares under certain conditions[193]. - The company may issue up to 16,000,000 additional shares of common stock as contingent consideration based on specific milestones related to clinical studies and FDA submissions[191]. - The company has recorded a total of 45,272 ABP Sub options, converting into options to purchase 3,515,218 shares of common stock, and 15,059 RSU awards converting into 1,169,366 shares[204]. Company Classification and Reporting - The company is classified as an emerging growth company under the JOBS Act, allowing it to rely on certain exemptions from public company reporting requirements[207]. - The company remains an emerging growth company until the earliest of December 31, 2026, or achieving total annual gross revenue of at least $1.235 billion[209]. - The company qualifies as a smaller reporting company, with a market value of common stock held by non-affiliates less than$700 million and annual revenue below $100 million[209]. - As a smaller reporting company, the company may present only the two most recent fiscal years of audited financial statements in its Annual Report[209]. - Reduced disclosure obligations regarding executive compensation apply to the company as both an emerging growth and smaller reporting company[209].