AEON Biopharma(AEON) - 2025 Q2 - Quarterly Report

Financial Performance - The company reported a net loss of $6.6 million for the three months ended June 30, 2025, compared to a net income of $164.1 million for the same period in 2024[187]. - The company recognized a loss on the issuance of warrants amounting to $75.6 million due to the fair value of warrants exceeding proceeds received[185]. - The company incurred net cash used in operating activities of $10.0 million for the six months ended June 30, 2025, compared to $16.7 million for the same period in 2024[212][213]. - The company recognized a gain of $3.5 million related to the change in fair value of contingent consideration for the six months ended June 30, 2025[193]. - Net cash provided by financing activities for the six months ended June 30, 2025, was $18.4 million, compared to $15.0 million for the same period in 2024, primarily due to a public offering in Q1 2025 and proceeds from convertible notes in 2024[216]. Market and Product Development - The global therapeutic botulinum toxin market is estimated to be at least $3.3 billion based on AbbVie's reported revenues for its therapeutic Botox segment for the fiscal year ended 2024[147]. - The company plans to pursue a 351(k) biosimilar regulatory pathway for ABP-450, using Botox as a proposed reference product for all approved indications except cosmetic uses[148][157]. - The company has exclusive development and distribution rights for ABP-450 in the U.S., Canada, the EU, the UK, and other territories[156]. - The company completed a Phase 2 study of ABP-450 for cervical dystonia, which met all primary endpoints, supporting further development[153]. - The company intends to explore additional therapeutic indications for ABP-450 based on a comprehensive product assessment screening process[158]. Regulatory and Compliance Issues - The company received a notice of non-compliance from NYSE American due to a stockholders' deficit of $32.1 million as of September 30, 2024[164]. - The NYSE American accepted the company's plan to regain compliance, granting until August 3, 2026, to meet listing standards[165]. - Management has expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows[211]. - 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[219]. - The market value of the company's common stock held by non-affiliates is less than $700 million, qualifying it as a smaller reporting company[220]. Financial Strategy and Funding - The company entered into a Subscription Agreement with Daewoong for the sale of Convertible Notes totaling up to $15.0 million, with an annual interest rate of 15.79% and a maturity date three years from the funding date[168]. - The company issued a Convertible Note of $5.0 million on March 24, 2024, and an additional $10.0 million Convertible Note on April 12, 2024, to support late-stage clinical development of ABP-450[168]. - The company expects to have sufficient cash to fund operations into Q4 2025 but will actively seek additional capital[205]. - The company anticipates increased costs associated with being a public company, including compliance and investor relations expenses[176]. Research and Development - R&D expenses for the six months ended June 30, 2025, were $1.9 million, a decrease from $10.2 million in the same period in 2024, reflecting a shift in focus towards biosimilar strategy[188]. - The company expects R&D expenses to increase as it develops and seeks regulatory approval for ABP-450, with significant costs anticipated in later-stage clinical studies[178]. - R&D expenses decreased to $1.1 million for Q2 2025, down 75% from $4.4 million in Q2 2024, primarily due to the wind down of Phase 2 clinical trials[190]. - For the six months ended June 30, 2025, R&D expenses were $1.9 million, an 81% decrease from $10.2 million in the same period of 2024[192]. Accounting and Reporting - The company has not made any changes to its critical accounting policies as of June 30, 2025, compared to those reported in the Annual Report Form 10-K[217]. - The company is permitted to rely on certain exemptions from public company reporting requirements due to its status as an emerging growth company[218]. - The company may continue to rely on exemptions from certain disclosure requirements as a smaller reporting company if it meets specific criteria[222]. - The company has provided only two years of unaudited financial statements in this report due to its emerging growth company status[218]. - The company has not disclosed information under Item 3 regarding market risk as it is classified as a smaller reporting company[225].