AEON Biopharma(US:AEON)2025-05-14 20:10Part I: Financial Information Financial Statements AEON Biopharma reported a $9.1 million net income for Q1 2025, driven by non-cash gains, despite ongoing going concern doubts and a strategic shift Condensed Consolidated Balance Sheets As of March 31, 2025, cash increased to $10.4 million, total assets to $13.8 million, and stockholders' deficit improved to $(11.3) million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $10,446 | $13 | | Total current assets | $12,321 | $1,590 | | Total assets | $13,799 | $3,142 | | Liabilities & Stockholders' Deficit | | | | Total current liabilities | $8,640 | $14,149 | | Total liabilities | $25,122 | $31,711 | | Total stockholders' deficit | $(11,323) | $(28,569) | | Total liabilities and stockholders' deficit | $13,799 | $3,142 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) The company reported a $9.1 million net income for Q1 2025, a significant turnaround from a $118.0 million net loss in Q1 2024, driven by non-cash gains Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Selling, general and administrative | $3,125 | $4,649 | | Research and development | $825 | $5,732 | | Loss from operations | $(462) | $(74,150) | | Change in fair value of warrants | $86,729 | $(20,903) | | Loss on issuance of warrants | $(75,644) | — | | Net income (loss) | $9,095 | $(118,018) | | Basic and diluted net income (loss) per share | $2.28 | $(227.87) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $7.9 million, offset by $18.3 million from financing, resulting in a $10.4 million net cash increase Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,909) | $(8,600) | | Net cash used in investing activities | $(4) | — | | Net cash provided by financing activities | $18,346 | $5,000 | | Net increase (decrease) in cash | $10,433 | $(3,600) | Notes to Condensed Consolidated Financial Statements Key notes include a reverse stock split, substantial doubt about going concern, a strategic shift to a biosimilar pathway for ABP-450, and details on financing and complex liabilities - The company has experienced recurring losses and negative cash flows, leading management to conclude there is substantial doubt about its ability to continue as a going concern within one year2427 - In July 2024, the company announced a strategic reprioritization to pursue a Section 351(k) biosimilar regulatory pathway for ABP-450, using Botox as a reference product, after discontinuing its Phase 2 migraine trials25 - On January 7, 2025, the company closed a public offering, receiving net proceeds of approximately $18.3 million68 - In March 2024, the company entered into an agreement for up to $15.0 million in senior secured convertible notes with its supplier, Daewoong61 - The issuance of Series A and B Warrants in January 2025 resulted in a recognized loss on issuance of $75.6 million, as the fair value of the warrants exceeded the proceeds received76101 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the strategic pivot to developing ABP-450 as a biosimilar, significant cost reductions, and the need for additional funding to address going concern doubts - The company has pivoted its strategy to develop ABP-450 as a biosimilar product under a Section 351(k) BLA pathway, using AbbVie's Botox as a reference product, after discontinuing its Phase 2 trials for migraine133134 - As of the report date, the company has sufficient cash to fund its operating plan only into the fourth quarter of 2025, and additional funding is required for further development of ABP-450145187 Operating Expense Comparison (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Selling, General & Administrative | $3,125 | $4,649 | -33% | | Research & Development | $825 | $5,732 | -86% | - The decrease in R&D expenses was primarily due to the wind-down of Phase 2 clinical trials for migraine and cervical dystonia, while SG&A decreased mainly due to lower legal and professional fees174175 - The company received a notice of non-compliance from NYSE American in February 2025 for failing to meet the minimum stockholders' equity requirement, but the exchange accepted its compliance plan, granting it until August 2026 to regain compliance150151 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, AEON Biopharma is not required to provide information under this item - The Company is a smaller reporting company and is not required to provide information under this item207 Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in risk assessment and segregation of duties, with remediation efforts underway - The company's certifying officers concluded that disclosure controls and procedures were not effective as of March 31, 2025212 - Material weaknesses were identified related to ineffective risk assessment over complex transactions and a lack of segregation of duties in financial reporting213 - Remediation efforts are in progress, including engaging additional resources and implementing enhanced controls and processes216217 Part II: Other Information Legal Proceedings The company is involved in a lawsuit with Odeon Capital Group LLC over an alleged $1.25 million unpaid deferred underwriting fee from the 2023 merger, with the breach of contract claim proceeding - Odeon Capital Group LLC filed a lawsuit against the Company for an alleged unpaid deferred underwriting fee of $1.25 million from the 2023 merger113221 - The company successfully had non-breach of contract claims dismissed in April 2024, but the breach of contract claim is still proceeding113221 Risk Factors No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K filed on March 24, 2025 - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K filed on March 24, 2025222 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities occurred during the period223 Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - No defaults upon senior securities occurred during the period224 Mine Safety Disclosures This item is not applicable to the company's business - This item is not applicable to the company225 Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter226 Exhibits This section provides an index of exhibits filed with the quarterly report, including agreements, corporate governance documents, and certifications - The report includes an index listing all exhibits filed, such as the Business Combination Agreement, Certificate of Incorporation, Warrant Agreements, and officer certifications227229