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| Part I · · · |
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| Item 1. | | Business | | 2 |
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| Item 1A. | | Risk Factors | | 20 |
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| Item 1B. | | Unresolved Staff Comments | | 65 |
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| Item 1C. | | Cybersecurity | | 65 |
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| Item 2. | | Properties | | 66 |
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| Item 3. | | Legal Proceedings | | 66 |
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| Item 4. | | Mine Safety Disclosures | | 67 |
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| Part II | | | | |
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| Item 5. | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 68 |
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| Item 6. | | Reserved | | 68 |
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| Item 7. | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 69 |
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| Item 7A. | | Quantitative and Qualitative Disclosures About Market Risk | | 84 |
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| Item 8. | | Financial Statements and Supplementary Data | | 85 |
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| Item 9. | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | 119 |
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| Item 9A. | | Controls and Procedures | | 119 |
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| Item 9B. | | Other Information | | 120 |
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| Item 9C. | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | 120 |
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| Part III | | | | |
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| Item 10. | | Directors, Executive Officers and Corporate Governance | | 121 |
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| Item 11. | | Executive Compensation | | 121 |
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| Item 12. | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 121 |
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| Item 13. | | Certain Relationships and Related Transactions, and Director Independence | | 121 |
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| Item 14. | | Principal Accounting Fees and Services | | 121 |
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| Part IV | | | | |
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| Item 15. | | Exhibits and Financial Statement Schedules | | 122 |
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| Exhibit Index | | 123 | |
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| Signatures | | 127 | |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Report”) contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). All statements other than statements of historical facts contained in this Report, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Report and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the risks, uncertainties and assumptions. These forward-looking statements are subject to numerous risks, including, without limitation, the following:
| ● | the projected financial information, anticipated growth rate and market opportunities of AEON Biopharma, Inc. (“AEON”); |
| ● | the ability to maintain the listing of Class A common stock on NYSE American LLC (“NYSE American”); |
| ● | AEON’s public securities’ potential liquidity and trading; |
| ● | AEON’s ability to raise financing in the future and to continue as a going concern; |
| ● | AEON’s success in retaining or recruiting, or changes required in, officers, key employees, scientific personnel or directors; |
| ● | factors relating to the business, operations and financial performance of AEON; |
| ● | the initiation, cost, timing, progress and results of research and development activities, preclinical studies or clinical trials with respect to AEON’s current and potential future product candidates; |
| ● | AEON’s ability to identify, develop and commercialize its main product candidate, botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection (“ABP-450”); |
| ● | AEON’s ability to obtain approval of a Biologics License Application (“BLA”) for therapeutic uses of ABP-450; |
| ● | AEON’s ability to advance its current and potential future product candidates into, and successfully complete, preclinical studies and clinical trials; |
| ● | AEON’s ability to obtain and maintain regulatory approval of its current and potential future product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate; |
| ● | AEON’s ability to obtain and maintain intellectual property protection for its technologies and any of its product candidates; |
| ● | AEON’s ability to successfully commercialize its current and any potential future product candidates; |
| ● | the rate and degree of market acceptance of AEON’s current and any potential future product candidates; |
| ● | regulatory developments in the United States and international jurisdictions; |
| ● | potential liability, lawsuits and penalties related to AEON’s technologies, product candidates and current and future relationships with third parties; |
| ● | AEON’s ability to effectively manage the growth of its operations; |
| ● | AEON’s ability to contract with third-party suppliers and manufacturers and their ability to perform adequately under those arrangements, particularly its license and supply agreement with Daewoong Pharmaceutical Co., LTD. (“Daewoong”) (the “Daewoong Agreement”); |
| ● | anticipated Biosimilar Biological Product Development (“BPD”) meetings with the FDA; |
| ● | anticipated results from our analytical studies; |
| ● | AEON’s ability to compete effectively with existing competitors and new market entrants; |
| ● | potential effects of extensive government regulation; |
| ● | AEON’s future financial performance and capital requirements; |
| ● | AEON’s ability to implement and maintain effective internal controls; |
| ● | the impact of supply chain disruptions; and |
| ● | the impact of macroeconomic developments beyond our control, such as health epidemics or pandemics, macro-economic uncertainties, tariffs, social unrest, hostilities, natural disasters or other catastrophic events, on AEON’s business. |
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this Report, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included elsewhere in this Report are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements included elsewhere in this Report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements included elsewhere in this Report, they may not be predictive of results or developments in future periods.
Any forward-looking statement that we make in this Report speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Report. For all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Reform Act.
As used in this Report, unless otherwise stated or the context otherwise requires: “we,” “us,” “our,” “AEON,” the “Company,” and similar references refer to AEON Biopharma, Inc. and its subsidiaries, and “common stock” refers to our Class A common stock.
Our business is subject to numerous risks and uncertainties, including those described in the “Risk Factors” section of this Annual Report. You should carefully consider these risks and uncertainties when investing in our common stock. Some of the principal risks and uncertainties include the following:
| ● | Our management has concluded that uncertainties around our ability to raise additional capital raise substantial doubt about our ability to continue as a going concern. We will require additional financing to fund our future operations. Any failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations. |
| ● | Our future success currently depends entirely on the successful and timely regulatory approval and commercialization of our only product candidate, ABP-450. The development and commercialization of pharmaceutical products is subject to extensive regulation, and we may not obtain regulatory approvals for ABP-450 on a timely basis or at all. |
| ● | Clinical product development involves a lengthy, expensive and uncertain process. We may incur greater costs than we anticipate or encounter substantial delays or difficulties in our clinical studies. |
| ● | Even if ABP-450 receives regulatory approval for any of our proposed indications, it may fail to achieve the broad degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. |
| ● | ABP-450, if approved, will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration and expansion. |
| ● | If we fail to attract and keep senior management and key scientific personnel, we may be unable to successfully develop ABP-450 in any of our proposed therapeutic indications, conduct our clinical studies and commercialize ABP-450. |
| ● | We rely on the Daewoong Agreement to provide us with exclusive rights to commercialize and distribute ABP-450 in certain territories. Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect our development or commercialization of ABP-450. |
| ● | We currently rely solely on Daewoong to manufacture ABP-450, and as such, any production or other problems with Daewoong could adversely affect us. The manufacture of biologics is complex and Daewoong may encounter difficulties in production that may impact our ability to provide supply of ABP-450 for clinical studies, our ability to obtain marketing approval, or our ability to obtain commercial supply of our products, which, if approved, could be delayed or stopped. |
| ● | Third-party claims of intellectual property infringement, misappropriation or violation, or challenges related to the invalidity or unenforceability of any issued patents we may obtain or in-license may prevent or delay our development and commercialization efforts or otherwise adversely affect our results of operations. |
| ● | Our business and products are subject to extensive government regulation. |
| ● | Legislative or regulatory healthcare reforms in the United States and other countries may make it more difficult and costly for us to obtain regulatory clearance or approval of ABP-450 and to produce, market, and distribute our products after clearance or approval is obtained. |
| ● | The price of our common stock may be volatile. |
| ● | Sales of a substantial number of our securities in the public market by our existing securityholders could cause the price of our common stock and warrants to fall. |
| ● | We will require additional capital, for which additional financing may result in restrictions on our operations or substantial dilution to our stockholders, to support the growth of our business, and this capital might not be available on acceptable terms, if at all. |
| ● | If we fail to regain or maintain compliance with the continued listing requirements of the NYSE American, our common stock may be delisted, which could significantly reduce its liquidity, market visibility, and trading volume, increase price volatility, and negatively impact our ability to raise capital on favorable terms. Such a delisting could materially adversely affect the market price of our common stock and our overall financial condition. |
Part I
