S-1/A

As filed with the Securities and Exchange Commission on October 4, 2021.

Registration No. 333-259609   

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

AEON BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

Delaware	2834	45-4777018
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

4040 MacArthur Blvd., Suite 260

Newport Beach, California 92660

Telephone: (949) 354-6499

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Marc Forth

Chief Executive Officer

4040 MacArthur Blvd., Suite 260

Newport Beach, California 92660

Telephone: (949) 354-6499

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

B. Shayne Kennedy Drew Capurro Latham & Watkins LLP 650 Town Center Drive, 20th Floor Costa Mesa, California 92626 Telephone: (714) 540-1235 Fax: (714) 755-8290 Arthur McGivern Seo Salimi Nicole Daley Goodwin Procter LLP 100 Northern Ave. Boston, Massachusetts 02210 Telephone: (617) 570-1000 Fax: (617) 523-1231

Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or and “emerging growth company.” See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	X	Smaller reporting company	X
		Emerging growth company	X

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.  X

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(3)
Common Stock, par value $0.0001 per share	$92,000,000	$8,529

(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2) Includes the offering price of additional shares that the underwriters have the option to purchase.

(3) The Registrant previously paid $8,183 of this amount with the previous filing of this Registration Statement.  

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED October 4, 2021

PRELIMINARY PROSPECTUS

5,000,000 Shares

Common Stock

This is an initial public offering of shares of common stock of AEON Biopharma, Inc. All shares of common stock are being sold by the company.

Prior to this offering, there has been no public market for the common stock.  The initial public offering price is expected to be between $14.00 and $16.00 per share. We have applied to list our common stock on the Nasdaq Global Market, or Nasdaq, under the symbol “AEON.”

We are an “emerging growth company” and a “smaller reporting company” as defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for future filings.

Investing in our common stock involves a high degree of risk. See the section titled “Risk Factors” beginning on page 14 to read about factors you should consider before buying shares of the common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions(1)	$	$
Proceeds, before expenses, to us	$	$

(1) See “Underwriting” for additional information regarding compensation payable to the underwriters.

We have granted the underwriters a 30-day option to purchase up to 750,000 additional shares of common stock from us at the initial public offering price, less the underwriting discounts and commissions, solely to cover the underwriters’ option to purchase additional shares.

The underwriters expect to deliver the shares against payment in New York, New York on                    , 2021.

Wells Fargo Securities	Cantor
Mizuho Securities
H.C. Wainwright & Co.

Prospectus dated       , 2021.

TABLE OF CONTENTS

Prospectus Summary	1
The Offering	8
Summary Consolidated Financial Data	11
Risk Factors	14
Special Note Regarding Forward-Looking Statements	55
Use of Proceeds	57
Dividend Policy	58
Capitalization	59
Dilution	61
Management’s Discussion and Analysis of Financial Condition and Results of Operations	64
Business	85
Management	111
Executive and Director Compensation	117
Certain Relationships and Related Party Transactions	131
Principal Stockholders	137
Description of Capital Stock	139
Shares Eligible for Future Sale	144
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders	146
Underwriting	150
Legal Matters	155
Experts	155
Additional Information	155
Index to Financial Statements	F-1

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is current only as of its date.  

Through and including        , 2021 (the 25th day after the date of this prospectus) all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

For investors outside the United States: Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside the United States.

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Trademarks

“AEON BIOPHARMA”, the AEON Biopharma logo and other trademarks, trade names or service marks are the property of AEON Biopharma, Inc. All other service marks, trademarks and trade names appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and tradenames referred to in this prospectus appear without the ^® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and tradenames.

Market And Industry Data

This prospectus contains estimates, projections and other statistical data and information concerning our industry, our business and the markets for our product candidate for our proposed therapeutic indications. Some data and statistical information contained in this prospectus are based on management’s estimates and calculations, which are derived from our review and interpretation of the independent sources, our internal research and knowledge of the industry and market in which we operate.

This information, to the extent it contains estimates or projections, involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates or projections. Industry publications and other reports we have obtained from independent parties generally state that the data contained in these publications or other reports have been obtained in good faith or from sources considered to be reliable, but they do not guarantee the accuracy or completeness of such data. The industry in which we operate is subject to risks and uncertainties due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these publications and reports.

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Prospectus Summary

This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes thereto and the information set forth under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case included in this prospectus. Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See the section titled “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, we use the terms “the Company,” “the company,” “we,” “us” and “our” in this prospectus to refer to AEON Biopharma, Inc. and its consolidated subsidiaries.

Overview

We are a clinical stage biopharmaceutical company focused on developing our proprietary botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection, or ABP-450, for debilitating medical conditions, with an initial focus on the neurology and gastroenterology markets. We plan to develop ABP-450 to address the estimated $2.2 billion global therapeutic botulinum toxin market, which is projected to grow to $4.4 billion in 2027.  ABP-450 is the same botulinum toxin complex that is currently approved and marketed for cosmetic indications by Evolus, Inc., or Evolus, under the name Jeuveau. ABP-450 is manufactured by Daewoong Pharmaceuticals Co., Ltd., or Daewoong, in compliance with current Good Manufacturing Practice, or cGMP, in a facility that has been approved by FDA, Health Canada and EMA to manufacture Jeuveau in the United States and Nuceiva in Canada and the European Union.  We have exclusive development and distribution rights for therapeutic indications of ABP-450 in the United States, Canada, the European Union, the United Kingdom, and certain other international territories. We have built a highly experienced management team with specific experience in biopharmaceutical and botulinum toxin development and commercialization.  

Botulinum toxins have proven to be a highly versatile therapeutic biologic, with over 230 therapeutic uses documented in published scientific literature and 10 approved therapeutic indications in the United States. Our initial development programs for ABP-450 are directed at migraine, cervical dystonia and gastroparesis. We selected these initial indications based on a comprehensive and proprietary product assessment screen designed to identify indications where we believe ABP-450 can deliver significant value to patients, physicians and payors and where its clinical, regulatory and commercial characteristics suggest viability. We believe that ABP-450 has application in a broad range of indications and we plan to continue to explore additional indications that satisfy our product assessment screens.

Our Investigational New Drug, or IND, application for ABP-450 as a preventative treatment for migraine was accepted by U.S. Food and Drug Administration, or FDA, in the fourth quarter of 2020 and we initiated enrolling patients for our Phase 2 clinical study in the first quarter of 2021.  We plan to announce topline data related to our migraine study in the second half of 2022.  Our IND application for ABP-450 as a treatment for cervical dystonia was accepted by

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FDA in the third quarter of 2020 and we initiated our Phase 2 clinical study in the first quarter of 2021.  We plan to announce topline data in early 2022.  In December 2020, we initiated a preclinical gastroparesis study. We expect to complete this preclinical study in the third quarter of 2021. Following the preclinical study, we expect to submit an IND to FDA in late 2021 to support the initiation of a Phase 2a clinical study in 2022.

ABP-450 has the same 900 kilodalton, or kDa, complex size as Botox. We believe physicians generally prefer the performance characteristics of the complete 900 kDa botulinum toxin complex for therapeutic uses and that this characteristic will provide ABP-450, if approved, a competitive advantage over other non-Botox therapeutic botulinum toxins currently on the market or in development. ABP-450, if approved, will be the only therapeutic botulinum toxin with significantly similar physiochemical properties as Botox.

We license ABP-450 from Daewoong, a South Korean pharmaceutical manufacturer, and have exclusive development and distribution rights for therapeutic indications in the United States, Canada, the European Union, the United Kingdom, and certain other international territories. Daewoong licenses the same 900 kDa botulinum toxin to Evolus, for cosmetic indications, which it markets and sells under the name Jeuveau. 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. 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. While none of these preclinical or clinical programs specifically contemplated any therapeutic uses of ABP-450, given that the FDA’s regulatory requirements are generally the same for the cosmetic or therapeutic use of a toxin, we believe that the positive data derived from these preclinical and clinical studies will support the clinical development and anticipated future safety labeling of ABP-450 for migraine and cervical dystonia at all contemplated dose ranges.

We plan to pursue approval of an original Biologics License Application, or BLA, that exclusively contemplates therapeutic indications for ABP-450, which we believe could improve reimbursement amounts for ABP-450, if approved. 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 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 an original BLA for therapeutic indications of ABP-450, the ASP for ABP-450 would be calculated using only therapeutic sales, which we believe would facilitate consistent and favorable 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 traditional pricing model would be unique to us within the current therapeutic neurotoxin market.

We believe ABP-450 could have therapeutic applications in a broad range of debilitating medical conditions and we intend to continue to leverage our product assessment screening process to identify additional indications for future development. Our management team possesses significant and relevant experience in the botulinum toxin industry in both drug development and commercialization, and we believe they are uniquely qualified to successfully develop and commercialize ABP-450 to enhance the lives of patients that suffer from debilitating medical conditions.

Our Pipeline

Migraine

Migraine is a complex neurological condition characterized by recurrent episodes of headaches. Patients that suffer from migraine headaches experience symptoms including throbbing recurring pain, nausea, vomiting, dizziness and sensitivity to light, sound, touch and smell. Migraine attacks usually last between four and 72 hours.

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Industry sources and published research estimate that approximately 15.1% of U.S. adults experience migraine or severe headache.  Based on U.S. census data from 2017, this represents approximately 40 million people in the United States.  When the U.S. is combined with the estimated 1 billion people worldwide that suffer from migraines, migraine is the third most prevalent illness in the world.

Using prevalence rates from various published sources, we estimate that approximately 4.0 million in the United States suffer from chronic migraines, defined as migraine occurring on 15 or more days per month and headache lasting for four or more hours per day, and 9.4 million people in the United States suffer from episodic migraines, defined as migraine occurring from six to 14 times per month.  In 2006, the American Migraine and Prevalence and Prevention Study determined that only approximately 56% of patients are diagnosed with migraine and an even smaller percentage actually receive prophylactic treatment. We believe our target market consists of the combined population of patients experiencing six or more migraines per month in the United States, which represents approximately 13.4 million patients.  Based on our proposed treatment protocol and anticipated pricing, we estimate our target market to represent a potential U.S. market opportunity of approximately $65 billion. While the current global therapeutic botulinum toxin market is estimated to be $2.2 billion and projected to grow to $4.4 billion in 2027, we believe these market estimates are constricted due to the significant number of untreated and undiagnosed patients, as well as a lack of approved indications for botulinum toxin. As patients evolve from treating lower to higher frequency episodic migraine and for those patients that develop chronic migraine, preventive treatments become a more important part of the overall approach.  We believe that the migraine prevention market will expand as patient and physician awareness and diagnosis rates for migraine increase due in part to market growth of injectable monoclonal antibody therapies that target calcitonin gene-related peptide inhibitors, or CGRPs, as well as the introduction of oral CGRP for migraine prevention into the market.

We are developing ABP-450 for the preventative treatment of migraine, which is inclusive of both chronic migraine and episodic migraine. Migraine treatment is broadly divided into two strategies: acute and prophylactic treatment. The primary goal of acute treatment is to provide relief from the pain and associated symptoms after a migraine attack has started. The primary goal of prophylactic, or preventative, treatment is to preemptively decrease the frequency, severity and duration of future migraine attacks. The use of botulinum toxins is generally a third-line therapy in the prophylactic treatment of migraine patients. As a third-line treatment, Botox is the only botulinum toxin approved by the FDA for prophylaxis of headaches in adult patients with chronic migraine and with a patented treatment protocol that designates a total dose of 155 units into 31 injection sites across seven areas of the head and neck. There is no botulinum toxin approved for prevention of episodic migraine.  Another third-line treatment for migraine, referred to as CGRP-targeting medications, has recently been approved.  CGRPs, or calcitonin gene-related peptides, are present in many organs in the body and when released around the nerves of the head, they can cause inflammation and result in migraines.  CGRP-targeting medications seek to block the peptide itself in an effort to prevent the migraine.  FDA-approved CGRPs include Aimovig, Emgality and Ajovy.  

Our Phase 2 clinical study utilizes our patent-pending injection protocol. We believe that, if approved, our proprietary injection protocol would differentiate ABP-450 from Botox as a third-line therapy for the prevention of chronic migraine and establish a new treatment option for the prevention of episodic migraine. Our novel injection protocol is also designed to simplify the administration of ABP-450 and mitigate some of the risk of common adverse events associated with Botox’s approved injection regimen, which include eyelid ptosis, commonly known as “drooping eyelid,” neck pain and muscle weakness. We believe our proposed treatment protocol, as combined with our exclusive focus on therapeutic indications and the same 900 kDa property as Botox, would create a compelling pharmacoeconomic opportunity to payors, while enhancing the physician and patient treatment experience.

FDA accepted an IND for our Phase 2 clinical study studying ABP-450 for the prevention of migraine in the fourth quarter of 2020 and we initiated enrolling patients in the first quarter of 2021, and began patient dosing in the second quarter of 2021. We plan to enroll 690 patients into the randomized, double-blind, placebo-controlled study across approximately 60 study sites in the United States, Canada and Australia.  This study will include migraine patients that experience six or more migraines per month, which is inclusive of chronic migraine patients that experience 15 or more migraines per month, as well as certain episodic migraine patients that experience six to 14 migraines per month.  Patients enrolled in the study will receive two injection cycles using our proprietary injection protocol at a low dose of 150 units utilizing 22 active injection sites and four placebo injection sites, high dose of 195 units utilizing 26 active injection sites, with patients evenly split among the three arms.  We plan to announce topline data related to our migraine study in the second half of 2022.

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Cervical Dystonia

Cervical dystonia, also known as spasmodic torticollis, is a neurological condition characterized by involuntary muscle contractions of the neck which may present as spasms, contractions or abnormal posture. It is a chronic condition with no cure, causing significant pain and challenges to mobility due to abnormal postures, affecting quality of life and daily activities. Botulinum toxin is the standard of care for the treatment of cervical dystonia, helping to improve pain, posture, and disability. We estimate based on U.S. census data and published clinical studies that there are approximately 50,000 addressable cervical dystonia patients in the United States, of which 30,000 are currently treated.  Based on our proposed treatment protocol and anticipated pricing, we estimate that the addressable cervical dystonia patients represent a potential U.S. market opportunity of approximately $360 million.

FDA accepted an IND for our Phase 2 clinical study studying ABP-450 for the treatment of cervical dystonia in the third quarter of 2020 and we initiated enrolling patients and dosing in the first quarter of 2021. This clinical study will include 60 patients across approximately 40 sites in the United States. The clinical study patients will be randomized in a 1:1:1:1 ratio, receiving low dose 150 units of ABP-450, medium dose 250 units of ABP-450, high dose 350 units of ABP-450, or placebo.  Due to the nature of the disease, dosing in initial sessions will be tailored to the individual patient based on the patient’s head and neck position, localization of pain, muscle hypertrophy, patient response, and adverse event history.  The safety and efficacy of the three dose cohorts of ABP-450 or placebo will be evaluated over a maximum of 20 weeks.  At the completion of the Phase 2 clinical study, all patients, irrespective of treatment group, will have the option to receive treatment with ABP-450 by rolling over into a 52 week open-label extension study.  We expect to report topline data from this clinical study in early 2022.  

Gastroparesis

Gastroparesis is a gastrointestinal disorder characterized by the slowing or stoppage of movement of food and liquid from the stomach to the small intestine. We estimate based on U.S. census data and published clinical studies that there are approximately 400,000 addressable gastroparesis patients in the United States, of which over 200,000 have moderate to severe symptoms and would be eligible for treatment with a botulinum toxin.  Based on our proposed treatment protocol and anticipated pricing, we estimate that the addressable gastroparesis patients represent a potential U.S. market opportunity of approximately $900 million.

We believe that an unmet need for the treatment of gastroparesis exists and, if approved, ABP-450 could serve as an effective third-line treatment for patients that do not achieve effective results with first-line diet therapy and second-line medication or discontinue use of medication due to poor tolerability.  Metoclopramide is currently the only drug approved by the FDA for the treatment of gastroparesis with limited usage due to significant side effects, including extrapyramidal effects.  In a research study report published in February 2017 by the International Foundation of Functional Gastrointestinal Disorders, 60% of gastroparesis patients are not satisfied with current treatments.

In December 2020, we initiated a preclinical study of ABP-450 related to the treatment of gastroparesis. We expect to complete this preclinical study in the third quarter of 2021 and use the data to support an IND submission in late 2021.  If our IND is accepted, we expect to initiate a Phase 2a clinical study in 2022 to study the safety and efficacy of injecting a therapeutic dose of ABP-450 through a sclerotherapy needle into the pyloric sphincter.

Our Strategy

Our goal is to change patients’ lives by enhancing the therapeutic botulinum toxin treatment paradigm for patients suffering from debilitating conditions. To achieve this goal, we plan to:

• Develop and seek regulatory approval for ABP-450 in our initial indications;

• Expand the field of therapeutic applications for botulinum toxins;

• Enhance the economics of botulinum toxin treatments to drive value for payors and physicians; and

• Participate in the growing therapeutic botulinum toxin market by optimizing value of ABP-450.

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Our Competitive Strengths

We believe the successful pursuit of our strategy will be driven by the following competitive strengths:

• Well-Established 900 kDa Botulinum Toxin Complex.  ABP-450 is the same botulinum toxin complex that has been approved by regulatory authorities in the United States, the European Union and Canada for a cosmetic indication.To receive these global approvals, Daewoong and Evolus have completed rigorous clinical development programs using Botox as an active comparator and consistently showed that ABP-450 was non-inferior to Botox at doses ranging from 20 units to 360 units. While we have not yet demonstrated non-inferiority of ABP-450 to Botox, we expect to design our studies, if successful, to demonstrate that one unit of ABP-450 will produce a substantially similar effect as one unit of Botox. We believe the similar 900 kDa molecular weighting of the two products will facilitate physician adoption of ABP-450 more rapidly and sustainably than other botulinum toxins that compete with therapeutic uses of Botox.

• ABP-450 Has Potential Application Across a Broad Range of Indications. ABP-450 is a single product candidate that we believe can produce a diverse product development platform spanning a broad spectrum of indications. We believe that our cervical dystonia program has an established regulatory pathway that, if successful, would allow us to participate in an established market. Our migraine program, if successful, represents an important expansion of treatments available in the $17.8 billion episodic migraine market, combined with a streamlined injection protocol for all indicated migraine patients. Our gastroparesis program, if successful, would be a novel indication for botulinum toxins in a market characterized by high unmet need and low competitive intensity. We have identified six additional, undisclosed therapeutic indications that we intend to pursue that offer similar market opportunities.

• Differentiated Business Model Designed to Deliver Enhanced Value to Payors and Physicians. We believe our exclusive focus on developing ABP-450 for therapeutic indications provides us with a competitive advantage against current and known prospective botulinum toxin competitors.  We believe this focus will enable us to pursue an original BLA dedicated to therapeutic uses of ABP-450 that, if obtained, would allow physicians to receive consistent and favorable reimbursement from payors, while also providing us with the flexibility to provide economic incentives, including rebates, to payors and/or providers. Market competitors that receive marketing approval for their botulinum toxin products have traditionally obtained an original BLA for their initial indication, with follow-on supplemental BLAs as they expand their product labels to include cosmetic and therapeutic indications.  As a consequence of that structure, the ASPs for therapeutic reimbursement are negatively affected by promotional activity associated with cosmetic pricing.  If we receive an original BLA, we believe that we will not have a negative pricing influence from cosmetic indications, which should allow us to uniquely manage our ASP in a manner that enhances value to payors and physicians.

• Management Team with Significant and Relevant Experience and Expertise in the Therapeutic Use of Botulinum Toxins. Our management team has extensive experience in the botulinum toxin market, in multiple therapeutic areas, in the development, market launch and commercialization of major medical products, execution and integration of business development transactions and understanding of the regulatory environment of the healthcare markets.

Historical Background and Restructuring

We were formed in 2012 and, in our early history, acquired numerous controlling and non-controlling ownership interests in several different businesses that we have since disposed of. We wholly owned Evolus prior to its initial public offering in February 2018. Evolus was included in our consolidated results through May 2019, when we determined that we no longer held control and deconsolidated the entity and recorded the fair value of the retained equity interest in Evolus. Until September 2020, we also operated a business that provides introductory financing services on a limited basis to patients to pay for elective medical procedures and owned a non-controlling interest in a private company. Through the third quarter of 2020, results from the patient financing business are reflected in our results of operations and ownership interest in the private company is reflected on our balance sheet, each of which were immaterial to our financial results.

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In September 2018, we exercised a contractual option with Daewoong to obtain exclusive development and distribution rights for ABP-450 for therapeutic indications; our license and supply agreement with Daewoong was subsequently executed in December 2019. Since acquiring those therapeutic rights in 2018, we have devoted substantially all our efforts to identify and recruit personnel, design clinical studies, and seek regulatory approval for our ABP-450 product candidate for therapeutic applications. In May 2019, we hired Marc Forth to be our Chief Executive Officer, and subsequently have devoted significant resources to applying our portfolio planning screening process to construct and execute our development strategy for ABP-450.

In January 2020, we contributed our interest in Evolus to a newly formed entity in exchange for membership units, and then distributed all of the units of said entity to our existing stockholders. In September 2020, we contributed the patient financing business and our non-controlling interest in another private company each to a newly formed entity in exchange for membership units, and then distributed all of the units of said entities to our existing stockholders. We refer to these transactions collectively as the Divestiture Transactions. As such, our business is now exclusively focused on developing ABP-450 for debilitating medical conditions.

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock. These risks are more fully described in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:

• We have a limited operating history and have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it.

• 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 in any of the indications for which we plan to develop it on a timely basis or at all.

• We currently rely solely on Daewoong to manufacture ABP-450, and any production or other problems with Daewoong or our relationship with Daewoong would materially and adversely affect our development or commercialization of ABP-450.

• Adverse outcomes in litigation to which we or Daewoong are party could have a material adverse effect on our business.

• The COVID-19 pandemic has had, and may continue to have, an adverse effect on our operations, as well as the business or operations of our manufacturers, clinical research organizations or other third parties with whom we conduct business.

• We may not be successful in obtaining an original BLA that contemplates exclusively therapeutic uses of ABP-450.

• Even after this offering, we will require additional financing to fund our future operations, and a failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations.

• We have concluded that we do not have sufficient cash to fund our operations and to meet our obligations as they become due within one year from the date that our consolidated financial statements are issued, and as a result, there is substantial doubt about our ability to continue as a going concern.

• If we are unable to adequately protect our intellectual property rights, or if we are accused of infringing on the intellectual property rights of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights.

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Our Corporate Information

We were incorporated under the laws of the State of Delaware on February 24, 2012 under the name Alphaeon Corporation. On December 18, 2019, we changed our company name to AEON Biopharma, Inc. Our principal executive offices are located at 4040 MacArthur Blvd., Suite 260, Newport Beach, California 92660, and our telephone number is (949) 354-6499. Our corporate website address is www.aeonbiopharma.com. Information contained in, or that can be accessed through, our website is not a part of, and is not incorporated into, this prospectus. We have included our website in this prospectus solely as an inactive textual reference.

Implications of Being an Emerging Growth Company and Smaller Reporting Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, enacted in April 2012, and we may remain an emerging growth company for up to five years following the completion of this offering. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this prospectus, we have provided only two years of audited consolidated financial statements and have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. We may choose to take advantage of some but not all of these reduced reporting burdens.

We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have $1.07 billion or more in annual revenue; (ii) the date on which we first qualify as a large accelerated filer under the rules of the U.S. Securities and Exchange Commission, or the SEC; (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We are also a “smaller reporting company” as defined in the rules promulgated under the Securities Exchange Act of 1934, as amended. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates on the last business day of our second fiscal quarter is less than $250.0 million, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and nonvoting common stock held by non-affiliates on the last business day of our second fiscal quarter in that fiscal year is less than $700.0 million.

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The Offering

Common stock offered	5,000,000 shares
Option to purchase additional shares	750,000 shares
Common stock to be outstanding immediately after this offering	21,996,103 shares (or 22,746,103 shares if the underwriters exercise their option to purchase additional shares in full).
Use of proceeds	We estimate that the net proceeds from this offering will be approximately $67.8 million (or approximately $78.2 million if the underwriters exercise their option to purchase additional shares in full), based upon the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
	We intend to use the net proceeds from this offering to fund our clinical and regulatory development of ABP-450, including Phase 2 clinical studies and other future clinical studies, and for general corporate purposes, including working capital, operating expenses and capital expenditures. See the section titled “Use of Proceeds.”
Risk factors	You should read the section titled “Risk Factors” in this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Proposed Nasdaq symbol	“AEON”

The number of shares of our common stock to be outstanding after this offering is based on 16,996,103 shares of our common stock outstanding as of June 30, 2021, assuming the Preferred Stock Conversion, the Note Conversions and the Daewoong PIK Issuance, in each case as described below, and excludes:

▪ 2,974,268 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2021, with a weighted-average exercise price of $14.30 per share, of which 1,760,408 are vested with a weighted-average exercise price of $24.16 per share;

▪ 703,311 shares of common stock issuable upon the exercise of options granted after June 30, 2021, with a weighted-average exercise price of $13.49 per share;

▪ 29,787 shares of common stock issuable upon the exercise of a warrant outstanding as of June 30, 2021 to purchase 29,787 shares of our Series B convertible preferred stock at an exercise price of $124.26 per share, which will convert into a warrant to purchase shares of common stock immediately prior to the completion of this offering;

▪ 1,128,482 shares of common stock that were reserved for issuance as of June 30, 2021 under our Amended and Restated 2013 Stock Incentive Plan, or the 2013 Plan;

▪ 2,639,532 shares of common stock reserved for future issuance under our 2021 Incentive Award Plan, or the 2021 Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the completion of this offering; and

▪ 219,661 shares of common stock reserved for future issuance under our 2021 Employee Stock Purchase Plan, or the ESPP, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective on the day the ESPP is adopted.

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Except as otherwise indicated, all information in this prospectus reflects or assumes the following:

▪ the effectiveness of our amended and restated certificate of incorporation and amended and restated bylaws in connection with the completion of this offering;

▪ the conversion of all of our outstanding shares of our convertible preferred stock into an aggregate of 2,902,665 shares of common stock immediately prior to completion of this offering, or the Preferred Stock Conversion;

▪ the conversion of (i) our SCH Convertible Note and the 2019 Convertible Notes, into an aggregate of 3,208,336 shares of common stock, based upon the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus and (ii) all outstanding principal under our Daewoong Convertible Notes into an aggregate of 2,088,759 shares of common stock, which represents 11.99% of the number of shares outstanding immediately prior to this offering, and the interest earned per the terms or the Note Conversions;

▪ the issuance of 57,864 shares of common stock to Daewoong as payment for the paid-in-kind principal and accrued and unpaid interest under the Daewoong Convertible Note, based upon the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, or the Daewoong PIK Issuance;

▪ the issuance of options to purchase 3,058,439 shares of our common stock with a weighted average exercise price of $11.82 per share in exchange for options outstanding as of the date of this prospectus at our wholly-owned subsidiary, ABP Sub Inc., or ABP, which options will be issued upon the merger of ABP with us immediately prior to the closing of this offering.  For additional information regarding this issuance, see “—ABP Sub Inc. Merger” below;

▪ no exercise of outstanding options or the outstanding warrant after June 30, 2021;

▪ the Divestiture Transactions;

▪ an initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus;

▪ no exercise of the underwriters’ option to purchase 750,000 additional shares of our common stock in this offering; and

▪ a 1-for-17 reverse split of our common stock effected on October 4, 2021.

Our convertible notes include the SCH Convertible Note, the 2019 Convertible Notes and the Daewoong Convertible Note, each described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness—Convertible Notes.” These convertible notes will convert into shares of common stock in connection with this initial public offering. The number of shares of common stock issuable upon conversion of the SCH Convertible Note is equal to 175% of the principal amount of the SCH Convertible Note, divided by the initial public offering price. The number of shares of common stock issuable upon conversion of the 2019 Convertible Notes is equal to 175% of the principal amount of the 2019 Convertible Notes, divided by the initial public offering price. As of June 30, 2021, the aggregate amount that would be converted into shares of our common stock under our SCH Convertible Note and the 2019 Convertible Notes was $48.1 million.  At an assumed initial public offering price of $15.00 per share, the midpoint of the price range on the cover page of this prospectus, we will issue 3,208,336 shares of common stock upon conversion of the SCH Convertible Note and the 2019 Convertible Notes at the close of this offering.  You can estimate the actual number of shares to be issued upon the conversion of these notes at the closing of this offering by dividing $48.1 million by the initial public offering price.

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Subject to certain conditions, in connection with an initial public offering, we may elect to pay the paid-in-kind principal plus all accrued and unpaid interest under the Daewoong Convertible Note either in cash or by the issuance of additional shares of our common stock at the initial public offering price. As of June 30, 2021, the outstanding paid-in-kind principal and accrued and unpaid interest under the Daewoong Convertible Note was $0.6 million. You can estimate the number of additional shares to be issued in connection with the payment of paid-in-kind principal and all accrued and unpaid interest under the Daewoong Convertible Note at the closing of this offering by dividing $0.6 million by the initial public offering price.

In connection with a settlement and license agreement we entered into with Medytox, Inc., or Medytox, we initially issued Medytox 1,569,442 shares of our common stock in June 2021.  Pursuant to the terms of the agreement, we agreed to deliver Medytox additional shares of our common stock if its ownership of our common stock represented less than 10% of our total outstanding shares immediately following this offering.  You can determine the number of additional shares that we might issue to Medytox at the closing of this offering by calculating the number of additional shares Medytox would need to acquire to own 10% of our total outstanding shares after this offering.

ABP Sub Inc. Merger

Prior to this offering, all of our options were granted as options to purchase shares of common stock of our wholly-owned subsidiary, ABP. Prior to the closing of this offering, ABP will merge with and into us so that we are the surviving corporation, or the Merger. Pursuant to the merger, all options of ABP that are outstanding immediately prior to the merger will be converted into substantially similar options to purchase shares of our common stock, with an adjustment to the number of shares issuable upon exercise and the exercise price to reflect the economic value of the new option within our capital structure. We determined the conversion ratio of the ABP options by dividing the number of shares of our common stock outstanding on an as-converted basis by the number of shares of common stock of ABP outstanding, and then dividing the quotient by 0.85 to account for the options representing 15% of ABP’s shares outstanding. This resulted in a conversion ratio of 83 to 1 shares.  As of the date of this prospectus, ABP had granted options to purchase an aggregate of 36,854 shares of its common stock which will convert into options to purchase 3,058,439 shares of our common stock.

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SummaryCONSOLIDATED Financial Data

The following tables set forth a summary of our historical consolidated statements of operations and comprehensive income (loss) for the periods indicated and our consolidated balance sheet data on the dates indicated. The summary consolidated statements of operations and comprehensive income (loss) data for the years ended December 31, 2019 and 2020 (except for the pro forma net income (loss) per share and the pro forma share information) are derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary consolidated statements of operations and comprehensive (loss) income data for the six months ended June 30, 2020 and 2021 and the summary consolidated balance sheet data as of June 30, 2021 are derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited interim financial statements in accordance with U.S. generally accepted accounting principles on the same basis as the audited financial statements and, in the opinion of management, reflected all adjustments, which only include normal recurring adjustments, necessary for the fair presentation of our financial position as of June 30, 2021 and our results of operations and comprehensive (loss) income for the six months ended June 30, 2020 and 2021. The following summary financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in any future period, and our interim results are not necessarily indicative of the expected results for future interim periods or the full year. The summary financial data in this section are not intended to replace the financial statements and are qualified in their entirety by the financial statements and related notes included elsewhere in this prospectus.

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	Year Ended December 31,						Six Months Ended June 30,
	2019			2020			2020			2021
							(Unaudited)
Consolidated Statements of Operations and Comprehensive     Income (Loss) Data
(in thousands, except share and per share data)
Revenue:
Services	$	3,342		$	2,518		$	1,391		$	—
Other revenue		15			—			—			—
Total revenue		3,357			2,518			1,391			—
Operating costs and expenses:
Cost of revenue		1			—			—			—
Selling, general and administrative		46,037			11,587			5,474			4,552
Research and development		4,814			7,319			1,558			10,203
Litigation settlement and license expense		—			—			—			28,966
Change in fair value of contingent royalty obligation to    Evolus Founders		5,596			—			—			—
Depreciation and amortization		875			—			—			—
Total operating costs and expenses		57,323			18,906			7,032			43,721
Loss from operations		(53,966	)		(16,388	)		(5,641	)		(43,721	)
Other income (loss):
Interest income		720			—			—			—
Interest expense		(5,177	)		(1	)		—			—
Interest expense on related party borrowings		(2,293	)		(14	)		(14	)		—
Gain on deconsolidation of Evolus, Inc.		254,106			—			—			—
Gain on transfer of equity investment at fair value		6,597			—			—			—
Change in fair value of equity investment		(49,299	)		346			346			—
Change in fair value of convertible notes		(5,161	)		(5,498	)		680			(2,182	)
Loss on extinguishment of related party borrowings		—			(11,241	)		(11,241	)		—
Gain on cancellation of unwind fee		—			—			—			9,550
Gain on PPP loan forgiveness		—			139			—			—
Gain (loss) on equity-method investment		136			(140	)		(107	)		—
Other income (loss), net		7			(116	)		18			(100	)
Total other income (loss)		199,636			(16,525	)		(10,318	)		7,268
Income (loss) before taxes		145,670			(32,913	)		(15,959	)		(36,453	)
Income tax benefit		(14,645	)		—			—			—
Net income (loss) and comprehensive income (loss)		160,315			(32,913	)		(15,959	)		(36,453	)
Net loss and comprehensive loss attributable to    noncontrolling interest		(12,605	)		—			—			—
Net income (loss) and comprehensive income (loss) attributable to    AEON Biopharma, Inc. common stockholders	$	172,920		$	(32,913	)	$	(15,959	)	$	(36,453	)
Basic net income (loss) per share attributable to AEON    Biopharma, Inc. common stockholders	$	20.74		$	(7.65	)	$	(4.93	)	$	(5.44	)
Diluted net income (loss) per share attributable to AEON    Biopharma, Inc. common stockholders	$	20.57		$	(7.65	)	$	(4.93	)	$	(5.44	)
Weighted average shares of common stock outstanding used to    compute basic net income (loss) per share attributable to    AEON Biopharma, Inc. common stockholders		6,597,642			6,596,756			6,596,756			6,674,794
Weighted average shares of common stock outstanding used to    compute diluted net income (loss) per share attributable to    AEON Biopharma, Inc. common stockholders		6,645,673			6,596,756			6,596,756			6,674,794
Proforma basic and diluted net (loss) income per share attributable to    AEON Biopharma, Inc. common stockholders (unaudited)				$	(1.85	)				$	(1.68	)
Proforma weighted average shares of common stock outstanding used to compute basic and diluted net (loss) income per share attributable to AEON Biopharma, Inc. common stockholders (unaudited)					14,796,516						16,365,958

__________

(1) See Note 2 to our consolidated financial statements included elsewhere in this prospectus for an explanation of the method used to calculate basic and diluted net income (loss) per share and weighted average shares of common stock outstanding and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Unaudited Pro Forma Information” for an explanation of the calculations of our pro forma net (loss) income per share, basic and diluted and the number of shares used in the computation of the per share amounts.

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	As of June 30, 2021
	Actual			Pro Forma(1)	Pro Forma As Adjusted(2)(3)
				(Unaudited)
Consolidated Balance Sheet Data:
(in thousands)
Cash	$	10,605		$         10,605	$         78,355
Working capital(4)		8,616		8,616	76,366
Total assets		18,796		18,796	86,546
Convertible notes at fair value		79,342		—	—
Convertible preferred stock		137,949		—	—
Total AEON Biopharma, Inc. stockholders’ (deficit) equity		(215,760	)	1,532	69,281

(1) Gives effect to (i) the Preferred Stock Conversion, (ii) the Note Conversions and (iii) the Daewoong PIK Issuance. The number of shares of common stock issuable upon conversion of our convertible notes, and the number of additional shares we may issue to Medytox upon the closing of this offering, are subject to adjustment as described in “Prospectus summary—The offering.”

(2) Gives effect to: (i) the pro forma adjustments described above in footnote (1) and (ii) the sale by us of 5,000,000 shares of common stock in this offering at an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(3) Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) each of our pro forma as adjusted cash, working capital, total assets and total AEON Biopharma, Inc. stockholders’ equity by $4.7 million, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million in the number of shares offered by us in this offering would increase (decrease) each of our pro forma as adjusted amount of each of cash, working capital, total assets and total AEON Biopharma, Inc. stockholders’ equity by $14.0 million, assuming the initial public offering price remains the same and after deducting the estimated underwriting discounts commissions and estimated offering expenses payable by us.

(4) We define working capital as current assets less current liabilities. See our consolidated financial statements and related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities.

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Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information in this prospectus, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could have a material adverse effect on our business, results of operations, financial condition, prospects and stock price. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. As used in these risk factors, the terms “we,” “us,” “our,” and the “Company” refer to AEON Biopharma, Inc.

Risks Related to Our Business Operations and Financial Position

We have a limited operating history and have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it.

We are a clinical stage biopharmaceutical company with a limited operating history. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We were originally incorporated in 2012, but did not begin focusing our efforts and financial resources on the clinical development and regulatory approval of ABP-450 for therapeutic indications until 2019. The operating history upon which investors must evaluate our business and prospects is extremely limited. Consequently, any predictions about our future success, performance or viability may not be as accurate as they could be if we had a longer operating history or a history of commercial operations. In addition, as an organization, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in the biopharmaceutical market. To date, we have not obtained any regulatory approvals for ABP-450 or generated any revenue from product sales relating to therapeutic uses of ABP-450.

We are not permitted to market ABP-450 for therapeutic use in the United States or in any other territory, and as such, we have not generated any revenue from sales of ABP-450 to date. We have recorded losses from operations of $54.0 million and $16.4 million for the years ended December 31, 2019 and 2020, respectively, and $5.6 million and $43.7 million for the six months ended June 30, 2020 and 2021, respectively, and had an accumulated deficit of $403.1 million as of June 30, 2021. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue to seek regulatory approval for, and begin to commercialize, ABP-450, if approved. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity (deficit) and working capital. Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of increased expenses, or when, if at all, we will be able to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock and our ability to raise capital and continue 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 in any of the indications for which we plan to develop it on a timely basis or at all.

Marketing approval of biologics in the United States requires the submission of a biologics license application, or BLA, to the U.S. Food and Drug Administration, or the FDA, and we are not permitted to market any product candidate in the United States until we obtain approval from the FDA of the BLA for that product. A BLA must be supported by extensive clinical and preclinical data, as well as extensive information regarding pharmacology, chemistry, manufacturing and controls. FDA approval of a BLA is not guaranteed, and the review and approval process is an expensive and uncertain process that may take several years. The FDA also has substantial discretion in the approval process. The number and types of preclinical studies and clinical studies that will be required for BLA approval varies depending on the product candidate, the disease or the condition that the product candidate is designed to treat and the regulations applicable to any particular product candidate.

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The FDA, the European Medicines Agency, or the EMA, and other regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including the following:

• a product candidate may not be deemed safe, effective, pure or potent;

• the data from preclinical studies and clinical studies may not be deemed sufficient;

• the FDA, the EMA and other regulatory agencies might not approve our third-party manufacturers’ processes or facilities;

• deficiencies in the formulation, quality control, labeling, or specifications of a product candidate or in response to citizen petitions or similar documents filed in connection with the product candidate;

• a general requirement intended to address risks associated with a class of drugs, such as a new risk evaluation and mitigation strategy, or REMS, requirement for botulinum toxins;

• the enactment of new laws or promulgation of new regulations that change the approval requirements; or

• the FDA, the EMA and other regulatory agencies may change their approval policies or adopt new regulations.

If ABP-450 fails to demonstrate safety and efficacy in our clinical studies or does not gain approval in any of our proposed therapeutic indications, our business and results of operations will be materially and adversely harmed.

We currently have plans to pursue three therapeutic indications that are associated with one product candidate, ABP-450, and our business presently depends entirely on our ability to obtain regulatory approvals for ABP-450 for our planned indications and to successfully commercialize it in a timely manner. As an organization, we have never completed a clinical study related to the therapeutic uses of ABP-450. We have no biological products currently approved for sale and we may never be able to develop marketable products. We are not permitted to market ABP-450 in the United States until we receive approval of a BLA from the FDA, in the European Union until we receive approval of a marketing authorization application, or MAA, from the EMA, in Canada until we receive approval of a new drug submission, or NDS, from Health Canada or in any other countries permitted under our license and supply agreement, or the Daewoong Agreement, with Daewoong Pharmaceuticals Co., Ltd., or Daewoong, until we receive the requisite approval from the applicable regulatory authorities in such countries. We will need to conduct a significant amount of clinical testing before we receive regulatory approval for any of our planned indications, and do not know if or when we will receive any such approvals or whether we will need to make modifications or significant additional expenditures to obtain any such approvals. We can provide no assurances that ABP-450 will be successful in clinical studies or will ultimately receive regulatory approval in any therapeutic indication. Even if ABP-450 demonstrates efficacy, our injection protocols, including the selection of injection sites and amount of product injected at each injection site, may produce negative or inconclusive results or may result in the occurrence of serious adverse events. In addition, if we receive approval in one country for an indication, we may not receive a similar approval in any other jurisdiction, or in the same country for a different indication.

Even if regulatory approvals for one or more of our therapeutic indications are obtained, we may never be able to successfully commercialize ABP-450. We will need to transition at some point from a company with a development focus to a company capable of supporting commercial activities, including by obtaining approval for coverage and adequate reimbursement from third-party and government payors, but we may not be successful in such a transition. Accordingly, we may not be able to generate sufficient revenue through the sale of ABP-450 in each of our therapeutic indications to continue our business.

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The COVID-19 pandemic has had, and may continue to have, anadverse effect on our operations, as well as the business or operations of our manufacturers, clinical research organizations, or CROs, or other third parties with whom we conduct business.

Our business has been and could continue to be adversely affected by the evolving COVID-19 pandemic, which was declared by the World Health Organization as a global pandemic. As a result of COVID-19, we may experience ongoing disruptions that could severely impact our business, preclinical studies and clinical studies, including:

• delays or difficulties in enrolling and retaining an adequate number of patients in our clinical studies;

• delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

• delays in receiving authorizations from regulatory authorities to initiate future clinical trials;

• diversion of healthcare resources away from the conduct of clinical studies, including the diversion of healthcare facilities serving as our clinical study sites and staff supporting the conduct of our clinical studies;

• interruption of key clinical study activities, such as clinical study site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical study subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints;

• risk that participants enrolled in our clinical studies will contract COVID-19 while the clinical study is ongoing, which could impact the results of the clinical study, including by increasing the number of observed adverse events;

• interruptions in preclinical studies due to restricted or limited operations at our laboratory facility;

• interruption of or delay in receiving supply of ABP-450 for our preclinical studies and clinical studies, including due to potential disruptions in the manufacturing of ABP-450 and the ability to import supply of ABP-450 from South Korea;

• delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees;

• interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines;

• changes in local regulations as part of a response to the evolving COVID-19 pandemic, which may require us to change the ways in which our clinical studies are conducted, which may result in unexpected costs, or to discontinue such clinical studies altogether; and

• limitations in employee or consultant resources that would otherwise be focused on the conduct of our preclinical studies and clinical studies, including because of sickness of employees or consultants, or their families, or the desire of employees or consultants to avoid contact with large groups of people.

Our clinical studies have been, and may in the future be, affected by the COVID-19 pandemic. For example, the COVID-19 pandemic caused us to delay enrollment to institute new procedures for the safety of patients and investigators may in the future further impact patient enrollment in our two ongoing clinical studies. If patient enrollment is delayed for an extended period of time, our ongoing and planned clinical studies could be delayed or otherwise adversely affected. Similarly, our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, may be adversely impacted.

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In addition, there may be changes in local regulations or guidance as part of a response to the evolving COVID-19 pandemic, which may require us to change the ways in which our clinical studies are conducted. For example, we and our CROs have made certain adjustments to the operation of our studies in an effort to ensure the monitoring and safety of patients and minimize risks to study integrity during the pandemic in accordance with the guidance issued by the FDA, and may need to make further adjustments in the future. Additionally, we have amended our clinical study protocols to enable remote visits to mitigate any potential impacts as a result of the COVID-19 pandemic. As a result of this home health component, the overall costs of our clinical studies have increased and may continue to increase in the future. Many of these adjustments are new and untested, may not be effective, may affect the integrity of data collected, and may have unforeseen effects on the progress and completion of our clinical studies and the findings from such clinical studies.

In addition, we may encounter a shortage in supplies of, or in delays in shipping, our study drug or other components of the clinical study vital for successful conduct of the study. Three vaccines for COVID-19 were granted Emergency Use Authorization by the FDA in late 2020 and early 2021, and more are likely to be authorized in the coming months. The resultant demand for vaccines and potential for manufacturing facilities and materials to be commandeered under the Defense Production Act of 1950, or equivalent foreign legislation, may make it more difficult to obtain materials or manufacturing slots for the products needed for our clinical studies, which could lead to delays in these studies.

In addition, quarantines, shelter-in-place, and similar government orders, or the perception that such orders, shutdowns, or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at our CROs or third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which could disrupt the supply chain for ABP-450. To the extent our suppliers and service providers are unable to comply with their obligations under our agreements with them or they are otherwise unable to deliver or are delayed in delivering goods and services to us due to the COVID-19 pandemic, our ability to continue meeting clinical supply demand for ABP-450 or otherwise advancing development of ABP-450 may become impaired.

The global outbreak of the COVID-19 coronavirus continues to rapidly evolve including with the identification of new variants of the virus around the world. The extent to which the COVID-19 coronavirus may impact our business, preclinical studies and clinical studies will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

The spread of COVID-19 and actions taken to reduce its spread may also materially affect us economically. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, there could be a significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and financial position. In addition, the trading prices for other companies have been highly volatile as a result of the COVID-19 pandemic. As a result, we may face difficulties raising capital through sales of our common stock or such sales may be on unfavorable terms.

In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described in this “Risk Factors” section.

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.

We may not commercialize, market, promote or sell any product candidate without obtaining marketing approval from the FDA, the EMA or other regulatory agencies, and we may never receive such approvals. Clinical testing is expensive, is difficult to design and implement, can take many years to complete and is uncertain as to outcome. As a company, we are conducting and overseeing the conduct of preclinical and clinical studies of ABP-450 through contracts with CROs. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical studies can occur at any stage of testing. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical studies have nonetheless failed to obtain marketing approval of their products.

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We may experience numerous unforeseen events prior to, during, or as a result of, clinical studies that could delay or prevent our ability to receive marketing approval or commercialize ABP-450 in our proposed therapeutic indications, including the following:

• delays in reaching a consensus with regulatory authorities on the design or implementation of our clinical studies;

• regulators or institutional review boards and ethics committees may not authorize us or our investigators to commence a clinical study or conduct a clinical study at a prospective study site;

• delays in reaching agreement on acceptable terms with prospective CROs and clinical study sites;

• delays or failures by Daewoong to comply with current good manufacturing practices, or cGMPs, or other applicable requirements, or to provide sufficient supply of ABP-450 for use in our clinical studies;

• the number of patients required for clinical studies of ABP-450 in our proposed therapeutic indications may be larger than we anticipate, enrollment in these clinical studies may be slower than we anticipate, participants may drop out of these clinical studies at a higher rate than we anticipate or fail to return for post-treatment follow-up or we may fail to recruit suitable patients to participate in a study;

• clinical studies of ABP-450 in our proposed therapeutic indications may produce negative or inconclusive results;

• imposition of a clinical hold by regulatory authorities as a result of a serious adverse event, concerns with a class of product candidates or after an inspection of our clinical study operations, study sites or manufacturing facilities;

• occurrence of serious adverse events associated with ABP-450 in any of our proposed therapeutic indications that are viewed to outweigh its potential benefits;

• changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

• we may decide, or regulators may require us, to conduct additional clinical studies or abandon product development programs; or

• the impacts of the COVID-19 pandemic on our ongoing and planned clinical studies.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue from future product sales or other sources. In addition, if we make manufacturing or formulation changes to ABP-450, we may need to conduct additional testing to bridge our modified product candidate to earlier versions. Clinical study delays could also shorten any periods during which we may have the exclusive right to commercialize ABP-450, if approved in any currently proposed or future therapeutic indications, or allow our competitors to bring competing products to market before we do, which could impair our ability to successfully commercialize ABP-450 and may harm our business, financial condition, results of operations and prospects.

Additionally, if the results of our clinical studies are inconclusive or if there are safety concerns or serious adverse events associated with ABP-450 in any of our proposed therapeutic indications, we may:

• be delayed in obtaining marketing approval, or not obtain marketing approval at all;

• obtain approval for indications or patient populations that are not as broad as intended or desired;

• obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

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• be subject to additional post-marketing testing requirements;

• be required to perform additional clinical studies to support approval or be subject to additional post-marketing testing requirements;

• have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a REMS;

• be subject to the addition of labeling statements, such as warnings or contraindications;

• be sued; or

• experience damage to our reputation.

Our product development costs will also increase if we experience delays in testing or obtaining marketing approvals. We do not know whether any of our preclinical studies or clinical studies will begin as planned, need to be restructured or be completed on schedule, if at all. Additionally, the COVID-19 pandemic continues to evolve and any impacts on our projected milestones are highly uncertain and cannot be predicted with confidence.

Further, we, the FDA, a foreign regulatory authority, an ethics committee or an institutional review board may suspend our clinical studies at any time if it appears that we or our collaborators are failing to conduct a study in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice, or GCP, regulations, that we are exposing participants to unacceptable health risks, or if the FDA, the EMA or other regulatory agencies finds deficiencies in our investigational new drug applications, or INDs, or clinical study applications, respectively, or the conduct of these studies. Moreover, to the extent our filing schedule for a new IND is dependent on further preclinical or manufacturing progress, we may not be able to file such INDs on the timelines we expect. Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical studies. If we experience delays in the commencement or completion of our clinical studies, or if we terminate a clinical study prior to completion, the commercial prospects of ABP-450 could be negatively impacted, and our ability to generate revenue from ABP-450 may be delayed.

Additionally, certain of our scientific advisors or consultants who receive compensation from us are likely to be investigators for our future clinical studies. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study. The FDA may therefore question the integrity of the data generated at the applicable clinical study site and the utility of the clinical study itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of ABP-450 in one or more indications. If we experience delays in the completion of, or termination of, any clinical study of ABP-450, the commercial prospects of ABP-450 will be harmed, and our ability to generate product revenue will be delayed. Moreover, any delays in completing our clinical studies will increase our costs, slow down our development and approval process and jeopardize our ability to commence product sales and generate revenues which may harm our business, financial condition and prospects significantly.

Enrollment and retention of patients in clinical studies is an expensive and time-consuming process and could be delayed, made more difficult or rendered impossible by multiple factors outside our control. If we experience delays or difficulties in enrolling patients in clinical studies, our receipt of necessary regulatory approval could be delayed or prevented.  

Identifying and qualifying patients to participate in our clinical studies is critical to our success. The number of patients suffering from cervical dystonia is small and other indications we may pursue may have similarly small patient populations. We may encounter difficulties in enrolling patients in our clinical studies and may compete against other clinical studies for the same pool of potential patients, thereby delaying or preventing development and approval of ABP-450 in any of our proposed therapeutic indications. For example, the activation of investigators and sites for our migraine prevention Phase 2 clinical study was initially slower than we expected. Even once enrolled, we may be

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unable to retain a sufficient number of patients to complete any of our studies on a timely basis or at all. Patient enrollment and retention in clinical studies depends on many factors, including the size of the patient population, the nature of the study protocol, the existing body of safety and efficacy data, the number and nature of competing treatments and ongoing clinical studies of competing therapies for the same indication, the proximity of patients to clinical study sites, the eligibility criteria for the study and other factors we may not be able to control that may limit patients, principal investigators or staff or clinical site availability, including the COVID-19 pandemic.

Our clinical studies have been, and may in the future be, affected by the COVID-19 pandemic. For example, the COVID-19 pandemic caused us to delay enrollment to institute new procedures for the safety of patients and investigators and may in the future further impact patient enrollment in our ongoing clinical studies. In particular, some sites may pause enrollment to focus on, and direct resources to, COVID-19, while at other sites, patients may choose not to enroll or continue participating in the clinical study as a result of the pandemic. As a result, current or potential patients in our ongoing and planned clinical studies may choose to not enroll, not participate in follow-up clinical visits, or drop out of the study as a precaution against contracting COVID-19. Further, some patients may not be able or willing to comply with clinical study protocols if quarantines impede patient movement or interrupt healthcare services.

Further, if patients drop out of our clinical studies, miss scheduled doses or follow-up visits, or otherwise fail to follow clinical study protocols, whether as a result of the COVID-19 pandemic, actions taken to slow the spread of COVID-19 or otherwise, the integrity of data from our clinical studies may be compromised or not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the applicable program.

Our efforts to build relationships with patient communities may not succeed, which could result in delays in patient enrollment in our clinical studies. Any negative results we may report in clinical studies of ABP-450 in any of our proposed therapeutic indications may make it difficult or impossible to recruit and retain patients in other clinical studies of that same product candidate. Delays or failures in planned patient enrollment or retention, whether as a result of the COVID-19 pandemic, actions taken to slow the spread of the COVID-19 or otherwise, may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop ABP-450 in any of our proposed therapeutic indications or could render further development impossible. In addition, we may rely on CROs and clinical study sites to ensure proper and timely conduct of our future clinical studies and, while we intend to enter into agreements governing their services, we will be limited in our ability to ensure their actual performance.

Even after this offering, we will require additional financing to fund our future operations, and a failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations.

We expect that we will continue to expend substantial resources for the foreseeable future in order to complete development and seek regulatory approval for ABP-450 for the treatment of migraine, cervical dystonia and gastroparesis, identify future potential therapeutic applications for ABP-450 and establish sales and marketing capabilities to commercialize ABP-450 across approved indications.

We anticipate that the net proceeds from this offering, along with our cash, will be sufficient to fund our operating plan through at least the next 12 months. We have based these estimates, however, on assumptions that may prove to be wrong, and we could spend our available capital resources much faster than we currently expect or require more capital to fund our operations than we currently expect. Our future capital requirements depend on many factors, including:

• the timing of, and the costs involved in, obtaining regulatory approvals for ABP-450 in our proposed therapeutic indications;

• the scope, progress, results and costs of researching and developing ABP-450, and conducting preclinical and clinical studies;

• the cost of commercialization activities if ABP-450 is approved in any of our proposed therapeutic indications for sale, including marketing, sales and distribution costs;

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• costs under our third-party manufacturing and supply arrangements for ABP-450 and any products we commercialize;

• the degree and rate of market acceptance of ABP-450 or any future approved products;

• the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products;

• costs associated with any acquisition or in-license of products and product candidates, technologies or businesses, and the terms and timing of any strategic collaboration or other arrangement; and

• costs of operating as a public company.

If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidate, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings or offerings of securities convertible into our equity, the ownership interest of our existing stockholders will be diluted and the terms of any such securities may have a preference over our common stock. Debt financing, receivables financing and royalty financing may also be coupled with an equity component, such as warrants to purchase our capital stock, which could also result in dilution of our existing stockholders’ ownership, and such dilution may be material. Additionally, if we raise additional capital through debt financing, we will have increased fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures to meet specified financial ratios, and other operational restrictions, any of which could restrict our ability to commercialize ABP-450 in our proposed therapeutic indications or operate as a business and may result in liens being placed on our assets. If we were to default on any of our indebtedness, we could lose such assets. Additional funding may not be available on acceptable terms, or at all. As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly or more dilutive. If we do not raise capital, whether in this offering or otherwise, there will remain substantial doubt about our ability to continue as a going concern.

We have concluded that we do not have sufficient cash to fund our operations and to meet our obligations as they become due within through one year from the date that our consolidated financial statements are issued and as a result, there is substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is an issue raised as a result of ongoing operating losses and a lack of financing commitments to meet cash requirements, and is subject to our ability to generate a profit or obtain appropriate financing from outside sources, including obtaining additional funding from the sale of our securities or obtaining loans from third parties where possible. If we cannot continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our stockholders may lose some or all of their investment in us. After this offering, we may not raise the funding we require such that substantial doubt about our ability to continue as a going concern continues. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all.

ABP-450 may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval in any of our proposed therapeutic indications, limit its commercial potential or result in significant negative consequences following any potential marketing approval.

During the conduct of clinical studies, patients report changes in their health, including illnesses, injuries and discomforts, to their doctor. Often, it is not possible to determine whether or not the product candidate being studied

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caused or contributed to these conditions and regulatory authorities may draw different conclusions from us and require additional testing to confirm these determinations, if they occur. We are collecting data about ABP-450 from ongoing clinical and toxicology studies and any adverse events or undesirable side effects caused by, or other unexpected properties of, ABP-450 could cause us, any future collaborators, an IRB or ethics committee or regulatory authorities to interrupt, delay or halt clinical studies of ABP-450 and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.

In addition, it is possible that as we test ABP-450 in larger, longer and more extensive clinical studies, or as use of ABP-450 becomes more widespread if it receives regulatory approval for any of our proposed indications, illnesses, injuries, discomforts and other adverse events that were not observed in earlier studies conducted by us, or, in the case of ABP-450, by others using the same botulinum toxin, as well as conditions that did not occur or went undetected in previous studies, will be reported by subjects or patients. Many times, side effects are only detectable after investigational products are tested in large-scale pivotal studies or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that ABP-450 has side effects or causes serious or life-threatening side effects in any of our proposed therapeutic indications, the development of ABP-450 in that indication may fail or be delayed. Additionally, there is the risk that as botulinum toxins other than ABP-450 are approved for and studied in connection with a broader range of diseases and conditions and across a more diverse population, additional safety signals and other adverse events may be identified. All botulinum toxin products are required to include a class labeling that contains a boxed warning related to safety and we could be required to include additional warnings on our product labeling, if approved.

If ABP-450 receives regulatory approval, and we or others identify undesirable side effects of ABP-450, a number of potentially significant negative consequences could result, such as regulatory authorities revoking such approval or imposing additional restrictions on the marketing and promotion of the product, or we may be required to recall the product or implement changes to the way the product is administered. We could also be sued and held liable for harm caused to patients, which could hinder commercial acceptance of ABP-450 and adversely affect our business, financial condition, results of operations and prospects.

Results of other parties’ clinical studies involving the sameor a nearly identical botulinum toxin complex as ABP-450, or results in any preclinical studies we conduct, may not be predictive of future results of our clinical studies.

Success in clinical studies conducted by Daewoong and Evolus, Inc., or Evolus, involving a botulinum toxin that is identical or nearly identical to ABP-450 does not ensure that any clinical studies we conduct using ABP-450 will be successful and we will still need to submit our independently generated data to applicable regulatory agencies to support regulatory approval of ABP-450 in any of our proposed therapeutic indications. Similarly, success in any preclinical studies or clinical studies that we conduct will not ensure that later clinical studies will be successful. A number of companies in the biotechnology and pharmaceutical industries have suffered significant setbacks in clinical studies, even after positive results in earlier preclinical studies and earlier clinical studies. These setbacks have been caused by, among other things, preclinical findings made while clinical studies were underway and safety or efficacy observations made in clinical studies, including previously unreported adverse events. Notwithstanding any potential promising results in earlier studies, we cannot be certain that we will not face similar setbacks.

Additionally, our clinical studies may utilize an “open-label” trial design. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate for either an existing approved drug or placebo. Most typically, open-label clinical studies test only the investigational product candidate and may do so at different dose levels. Open-label clinical studies are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical studies are aware when they are receiving treatment. Open-label clinical studies may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. In addition, open-label clinical studies may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical studies are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. The results from an open-label trial may not be predictive of future clinical trial results with any of our product candidates when studied in a controlled environment with a placebo or active control.

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Interim or preliminary data from our clinical studies that we may announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim or preliminary data from our clinical studies. Interim and preliminary data for the studies we may complete are subject to the risk that one or more clinical outcomes may materially change as patient enrollment continues or more patient data become available. Interim and preliminary data also remains subject to audit and verification procedures that may result in the final data being materially different from the preliminary data previously published. As a result, any interim or preliminary data should be viewed with caution until final data is available. Material adverse changes in the final data could result in significant harm to our business prospects.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of our product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular pharmaceutical or biological product, pharmaceutical or biological product candidate or our business. If the interim or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidate in any currently proposed or future therapeutic indications may be harmed, which could harm our business, operating results, prospects or financial condition.

Due to our limited resources and access to capital, we must prioritize development of certain therapeutic uses of ABP-450; these decisions may prove to be wrong and may adversely affect our business.

While our initial focus is on the development and approval of ABP-450 for the treatment of migraine, cervical dystonia and gastroparesis, a key element of our strategy is to identify additional conditions for which ABP-450 may be an effective therapy. However, there can be no assurances that we will be successful in identifying such conditions. Even if we are successful in identifying such conditions, we may experience difficulties in identifying a proper treatment regimen, or we may fail to secure regulatory approval for a particular indication. If we are unable to gain regulatory approval for indications in addition to the indications for the treatment of migraine, cervical dystonia and gastroparesis on which we are currently focused, or if FDA or other regulatory agencies require us to pursue a narrower indication than we have currently identified, we may be limited in our ability to grow our business.

Efforts to identify and pursue additional therapeutic uses of ABP-450 require substantial technical, financial and human resources, regardless of whether they are ultimately successful. Because we have limited financial and personnel resources, we may forgo or delay pursuit of opportunities with potential target indications that later prove to have greater commercial potential or a greater likelihood of success. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. We may focus our efforts and resources on potential therapeutic uses of ABP-450 that ultimately prove to be unsuccessful.

We may not be successful in obtaining an original BLA that contemplates exclusively therapeutic uses of ABP-450.

Part of our regulatory strategy includes initially pursuing an original BLA that contemplates exclusively therapeutic uses of ABP-450, as opposed to a BLA supplement to the Jeuveau BLA. We believe that such a BLA, if approved, would provide us a competitive advantage over other companies that sell botulinum toxins for both therapeutic and aesthetic indications. In particular, if an original BLA were approved, we believe we would be able to offer consistent, favorable reimbursement to physicians and have the pricing flexibility to enhance the rebates to payors and/or providers, since reimbursement would not be influenced by pricing dynamics that affect the aesthetic market. However, there can be no assurance that we will be able to obtain such a BLA, and other companies that sell botulinum toxins for both therapeutic and aesthetic indications have experienced regulatory issues and denials by the FDA that led them to abandon the approach of applying for separate original BLAs that would cover the separate markets. There can be no assurance that, even if we successfully obtain an original BLA, that we will be able to realize the economic

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advantages that are predicated on the separation of therapeutic sales of ABP-450 and cosmetic sales of Jeuveau to calculate the average selling price, or ASP, for purposes of reimbursement. In the event we are not able to obtain an original BLA, we may not be able to ensure the consistent pricing that we believe an original BLA would offer, and the ASP of our products could be adversely affected.

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.

Even if ABP-450 receives marketing approval for one or more therapeutic indications, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community for those indications. The commercial success of ABP-450, if approved in any currently proposed or future therapeutic indications, will depend significantly on the broad adoption and use of the resulting product by physicians for approved indications. The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including but not limited to:

• the convenience and ease of administration compared to alternative treatments and therapies;

• the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

• the efficacy and potential advantages compared to alternative treatments and therapies;

• the availability of third-party coverage and adequate reimbursement, and patients’ willingness to pay out-of-pocket in the absence of third-party coverage or adequate reimbursement;

• the effectiveness of sales and marketing efforts;

• the strength of our relationships with patient communities;

• the timing of market introduction of our product candidate in relation to other potentially competitive products;

• the cost of treatment in relation to alternative treatments and therapies;

• the amount of upfront costs or training required for physicians to administer our product candidate;

• our ability to offer such product for sale at competitive prices;

• the strength of marketing and distribution support;

• the presence or perceived risk of potential product liability claims;

• the prevalence and severity of any side effects; and

• any restrictions on the use of the product together with other medications.

Our efforts to educate physicians, patients, third party payors and others in the medical community on the benefits of our products, if approved, may require significant resources and may never be successful.

If ABP-450 fails to gain market acceptance, this will have a material adverse impact on our ability to generate revenues to provide a satisfactory, or any, return on our investments. Even if some therapeutic indications achieve market acceptance, the market may prove not to be large enough to allow us to generate significant revenues.

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ABP-450, if approved in any currently proposed or future therapeutic indications, will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration and expansion.

The pharmaceutical industry is highly competitive and requires an ongoing, extensive search for technological innovation. It also requires, among other things, the ability to effectively discover, develop, test and obtain regulatory approvals for novel products, as well as the ability to effectively commercialize, market and promote approved products, including communicating the effectiveness, safety and value of products to actual and prospective customers and medical professionals. Numerous companies are engaged in the development, manufacture and marketing of products competitive with those that we are developing. Our primary competitors for ABP-450 in the injectable botulinum toxin pharmaceutical market for therapeutic use are:

• Botox, which is marketed by Allergan, and since its original approval by the FDA in 1989 has been approved for multiple therapeutic indications, including migraine,cervical dystonia, upper and lower limb spasticity, strabismus, blepharospasm, incontinence, axillary hyperhidrosis, and overactive bladder;

• Dysport, which is marketed by Ipsen Ltd. as an injectable botulinum toxin for the therapeutic indications of cervical dystonia and upper and lower limb spasticity;

• Xeomin, which is marketed by Merz Pharmaceuticals, LLC as an injectable botulinum toxin for the therapeutic indications of cervical dystonia, blepharospasm, and upper limb spasticity; and

• Revance Therapeutics, Inc., or Revance, which is currently studying its injectable botulinum toxin, daxibotulinumtoxinA for the therapeutic indications of cervical dystonia, plantar fasciitis, adult upper limb spasticity and migraine, and has also entered into a collaboration and license agreement with Viatris Inc. to develop and commercialize a biosimilar to Botox.

We are also aware of competing botulinum toxins currently being developed or commercialized in the United States, European Union, Asia, South America and other markets. While some of these products may not meet U.S. regulatory standards, the companies operating in these markets may be able to produce products at a lower cost than U.S. and European manufacturers. In addition to the injectable botulinum toxin dose forms, we are aware that other companies are developing topical botulinum toxins for therapeutics indications.

We will also face competition in our target therapeutic markets from other pharmaceutical products. For the treatment of cervical dystonia, in addition to other injectable botulinum toxins, we will face competition from orally administered anticholinergic, GABA receptor agonist, benzodiazepine, dopaminergic and anticonvulsant pharmaceuticals. For the treatment of migraine, we will face competition from calcitonin gene-related peptide agonists, or CGRPs, including Aimovig (erenumab) marketed by Amgen Inc., Ajovy (fremenezumab) marketed by Teva Pharmaceutical Industries Ltd., and Emgality (galcenezumab) marketed by Eli Lilly and Company, as well as certain orally administered anti-epileptic, beta-blocker and triptan pharmaceuticals. For the treatment of gastroparesis, we will face competition from prokinetic agents, including REGLAN (metoclopramide), which is the only medication currently approved by FDA for the treatment of gastroparesis.  

Many of our competitors have greater financial and other resources than we have. This enables them, among other things, to leverage their financial resources to make greater research and development, marketing and promotion investments than us. Our competitors may also have more experience and expertise in obtaining marketing approvals from the FDA and other regulatory authorities. Our technologies and products may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors. For example, Revance has published data related to the treatment of cervical dystonia that indicates that its botulinum toxin may have a duration of effect of at least 24 weeks, which may compare favorably to the duration of effect of ABP-450. As more companies develop new intellectual property in our markets, the possibility of a competitor acquiring patent or other rights that may limit our products or potential products increases, which could lead to litigation. In addition to product development, testing, approval and promotion, other competitive factors in the pharmaceutical industry includes industry consolidation, product quality and price, product technology, reputation, customer service and access to technical information.

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If approved, ABP-450 may face competition sooner than anticipated.

With the enactment of the Biologics Price Competition and Innovation Act of 2009, or the BPCIA, as part of the Patient Protection and Affordable Care Act, an abbreviated pathway for the approval of biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product was created. The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics. Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until twelve years from the date on which the reference product was first licensed. During this twelve-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical studies to demonstrate the safety, purity and potency of their product. The law is complex and is still being interpreted and implemented by the FDA. As a result, its ultimate impact, implementation, and meaning are subject to uncertainty. While it is uncertain when such processes intended to implement the BPCIA may be fully adopted by the FDA, any such processes could have a material adverse effect on the future commercial prospects for our biological products.

We have not determined whether ABP-450 would qualify for the twelve-year period of exclusivity based on submission of an original BLA, a shorter period or any exclusivity at all. Even if we are able to obtain separate twelve-year exclusivity, or a shorter exclusivity period, there is a risk that any exclusivity could be shortened due to congressional action or otherwise, that the FDA attempts to adopt an alternate interpretation of law that precludes exclusivity, or that the FDA will not consider ABP-450 to be a reference product for competing products, potentially creating the opportunity for competition sooner than anticipated. Moreover, the extent to which a biosimilar product, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear and will depend on a number of marketplace and regulatory factors that are still developing. If we are unable to obtain an original BLA, and ABP-450 receives a supplemental BLA, we would not qualify for the exclusivity period.

If we are unable to establish sales and marketing capabilities on our own or through third parties, we will be unable to successfully commercialize ABP-450, if approved in any proposed therapeutic indication, or generate product revenue.

We do not have a sales or marketing infrastructure and have little experience in the sale, marketing, or distribution of pharmaceutical products. To successfully commercialize ABP-450, if approved in any proposed therapeutic indication, in the United States, the European Union, Canada and other jurisdictions we may seek to enter, we will need to build out our sales and marketing capabilities, either on our own or with others. The establishment and development of our own commercial team or the establishment of a contract sales force to market ABP-450 will be expensive and time-consuming and may divert significant management focus and resources, potentially delaying any product launch.Moreover, we cannot be certain that we will be able to successfully develop this capability, and have no experience as a company in commercializing products. We may seek to enter into collaborations with other entities to utilize their established marketing and distribution capabilities, but we may be unable to enter into or maintain such agreements on favorable terms or at all. We can provide no assurance that any future collaborators will provide effective sales forces or marketing and distribution capabilities. We compete with many companies that currently have extensive, experienced and well-funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel, and will have to compete with those companies to recruit, hire, train and retain any of our own marketing and sales personnel. We will likely also face competition if we seek third parties to assist us with the sales and marketing efforts of ABP-450 in our proposed therapeutic indications. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of September 17, 2021, we had six employees. As the clinical development of ABP-450 progresses, we also expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, development, regulatory affairs and, if ABP-450 receives marketing approval for any of our proposed indications, sales, marketing and distribution. In addition, we also expect to hire additional personnel in

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order to operate as a public company. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel. In addition, we must effectively integrate, develop and motivate a growing number of new employees, and maintain the beneficial aspects of our corporate culture. The expansion of our operations may lead to significant costs and may divert our management and business development resources. We may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. Any inability to manage growth could delay the execution of our development and strategic objectives or disrupt our operations.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on third parties, including independent organizations, advisors and consultants, such as Strathspey Crown Holdings Group, LLC, or SCH, and CROs to provide certain services to support and perform our operations. There can be no assurance that the services of these third parties will continue to be available to us on a timely basis when needed, or that we can find qualified replacements. In addition, if we are unable to effectively manage our outsourced activities or if the quality, accuracy or quantity of the services provided, in particular the services provided by our CROs, is compromised for any reason, our clinical studies may be delayed or terminated, and we may not be able to obtain, or may be substantially delayed in obtaining, regulatory approval of ABP-450 in any of our proposed therapeutic indications or otherwise advance our business. There can be no assurance that we will be able to manage our existing consultants or find other suitable outside contractors and consultants on economically reasonable terms, or at all.

Our employees, independent contractors, consultants, commercial collaborators, principal investigators, vendors and other agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

We are exposed to the risk that our employees, independent contractors, consultants, commercial collaborators, principal investigators, vendors and other agents may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct or disclosure of unauthorized activities to us that violates applicable regulations, including those laws requiring the reporting of true, complete and accurate information to regulatory agencies, manufacturing standards, and federal and state healthcare laws and regulations. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. We could face liability under the federal Anti-Kickback Statute and similar state laws. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, referrals, customer incentive programs and other business arrangements. Misconduct by these parties could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical studies, which could result in significant regulatory sanctions and serious harm to our reputation. Further, should violations include promotion of unapproved (off-label) uses one or more of our products, we could face significant regulatory sanctions for unlawful promotion, as well as substantial penalties under the federal False Claims Act, or FCA, and similar state laws. Similar concerns could exist in jurisdictions outside of the United States as well. We intend to adopt, prior to the completion of this offering, a code of conduct applicable to all of our employees, but it is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. The precautions we take to detect and prevent misconduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business, financial condition and results of operations.

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Our proposed international operations will expose us to risks, and failure to manage these risks may adversely affect our operating results and financial condition.

We expect to have operations both inside and outside the United States if ABP-450 is approved for commercial sale in multiple jurisdictions. International operations are subject to a number of inherent risks, and our future results could be adversely affected by a number of factors if we seek and obtain the necessary approvals, including:

• requirements or preferences for domestic products, which could reduce demand for our products;

• differing existing or future regulatory and certification requirements;

• management communication and integration problems resulting from cultural and geographic dispersion;

• greater difficulty in collecting accounts receivable and longer collection periods;

• difficulties in enforcing contracts;

• difficulties and costs of staffing and managing non-U.S. operations;

• the uncertainty of protection for intellectual property rights in some countries;

• tariffs and trade barriers, export regulations and other regulatory and contractual limitations on our ability to sell our products;

• more stringent data protection standards in some countries;

• regulatory concerns limiting ability to import or export products;

• greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including export and antitrust regulations, the U.S. Foreign Corrupt Practices Act, or the FCPA, quality assurance and other healthcare regulatory requirements and any trade regulations ensuring fair trade practices;

• heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;

• foreign currency exchange rates;

• potentially adverse tax consequences, including multiple and possibly overlapping tax structures and difficulties relating to repatriation of cash; and

• political and economic instability, political unrest and terrorism.

These and other factors associated with international operations could harm our ability to gain future revenue and, consequently, materially impact our business, operations results and financial condition.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of ABP-450.

We face an inherent risk of product liability as a result of the clinical testing of ABP-450 and will face an even greater risk if we commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted

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under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our products. Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

• decreased demand for ABP-450;

• termination of clinical study sites or entire study programs;

• injury to our reputation and significant negative media attention;

• withdrawal of clinical study participants or cancellation of clinical studies;

• significant costs to defend the related litigation;

• a diversion of management’s time and our resources;

• substantial monetary awards to study participants or patients;

• regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;

• loss of revenue;

• the inability to commercialize any products we develop; and

• a decline in our shareprice.

Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of ABP-450 in any current or future proposed therapeutic indication. We currently carry product liability insurance covering our clinical studies. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses. If and when we obtain approval for marketing ABP-450, we intend to expand our insurance coverage to include the sale of ABP-450, however, we may be unable to obtain this liability insurance on commercially reasonable terms.

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.

Our success depends in part on our continued ability to attract, retain and motivate highly qualified management. We believe that our future success is highly dependent upon the contributions of our senior management, particularly Marc Forth, our Chief Executive Officer, as well as other members of our senior management team. The loss of services of any of these individuals could delay or prevent the successful development of our product pipeline, completion of our planned clinical studies or the commercialization of ABP-450 in each of our therapeutic indications or any future products we develop.

In addition, we could experience difficulties attracting and retaining qualified employees in the future. For example, competition for qualified personnel in the pharmaceuticals field is intense due to the limited number of individuals who possess the skills and experience required by our industry. We may not be able to attract and retain quality

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personnel on acceptable terms, or at all. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information or that their former employers own their research output.

Our business involves the use of hazardous materials, and we and our third-party manufacturer and supplier must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our research and development and manufacturing activities in the future may, and Daewoong’s manufacturing and supplying activities presently do, involve the controlled storage, use and disposal of hazardous materials, including botulinum toxin type-A, a key component of ABP-450, and other hazardous compounds. We and Daewoong are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. In some cases, these hazardous materials and various wastes resulting from their use are stored at Daewoong’s facilities pending their use and disposal. We and Daewoong cannot eliminate the risk of contamination, which could cause an interruption of Daewoong’s manufacturing processes, our commercialization efforts, business operations and environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. Although we believe that the safety procedures utilized by Daewoong for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, this may not eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources, and state or federal or other applicable authorities may curtail our use of certain materials and interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOLs, and other pre-change tax attributes, such as research tax credits, to offset its post-change taxable income or income tax liabilities, as applicable, may be limited. As of December 31, 2020, we had $50.4 million of federal NOLs available to offset our future federal taxable income, if any, and federal research and development tax credit carryforwards of $0.4 million. These federal research and development tax credit carryforwards and $48.9 million of our federal NOLs expire at various dates beginning in 2036. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change NOLs to offset federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. Similar rules may apply under state tax laws. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. We had no state NOLs as of December 31, 2020.

Changes in tax laws, including as a result of the 2020 United States presidential and congressional elections, may impact our future financial position and results of operations.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, or interpreted, changed, modified or applied adversely to us, any of which could adversely affect our business operations and financial performance. In particular, the recent presidential and congressional elections in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on suppliers. For example, United States tax legislation has been proposed that, if enacted, would make significant changes to the taxation of business entities including, among others, a permanent increase in the corporate income tax rate, an increase in the tax rate applicable to the global intangible low-taxed income and elimination of certain exemptions, and the imposition of minimum taxes or surtaxes on certain types of income. The likelihood of these changes being enacted or implemented in their proposed form is unclear. We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business. To the extent that such changes have a negative impact on us or our suppliers, including as a result of related uncertainty, these changes may materially and adversely impact our business, financial condition, results of operations and cash flows.

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Risks Related to our Reliance on Third Parties

We rely on the Daewoong Agreement to provide us 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.

Pursuant to our license and supply agreement, or the Daewoong Agreement, we have secured an exclusive license from Daewoong, a South Korean pharmaceutical manufacturer, to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit ABP-450 for therapeutic indications in the United States, European Union, the United Kingdom, Canada, Australia, Russia, Commonwealth of Independent States and South Africa. The Daewoong Agreement imposes on us obligations relating to exclusivity, territorial rights, development, commercialization, funding, payment, diligence, sublicensing, intellectual property protection and other matters. We are obligated to conduct development activities, obtain regulatory approval of ABP-450 and obtain from Daewoong all of our product supply requirements for ABP-450. In addition, under the Daewoong Agreement, we are required to submit our commercialization plan to a Joint Steering Committee, or JSC, comprised of an equal number of development and commercial representatives from Daewoong and us, for review and input. Although the Daewoong Agreement provides us with final decision-making power regarding the marketing, promotion, sale and/or distribution of ABP-450, any disagreement among the JSC would be referred to Daewoong’s and our respective senior management for resolution if the JSC is unable to reach a decision within thirty days, which may result in a delay in our ability to implement our commercialization plan or harm our working relationship with Daewoong.

The initial term of the Daewoong Agreement will expire on the later of December 20, 2029 or the fifth anniversary of our receipt of marketing approval in any of the aforementioned territories. The Daewoong Agreement will renew for unlimited additional three year terms after the expiration of the initial term. We or Daewoong may terminate the Daewoong Agreement if the other party breaches any of its duties or obligations and such breach continues without cure for ninety days, or thirty days in the case of a payment breach, or if we declare bankruptcy or assign our business for the benefit of creditors.

We will be the sole owner of any marketing authorization we pursue and clinical study results from our current or future studies related to therapeutic indications of ABP-450 in a covered territory. This will include ownership of any BLA that we may submit to the FDA, MAA that we may submit to the EMA, NDS that we may submit to Health Canada, and any other approvals that we may receive in a covered territory. However, if we do not renew the Daewoong Agreement or upon termination of the Daewoong Agreement due to a breach by us, we are obligated to transfer our rights to Daewoong.

If we breach any material obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages to Daewoong and Daewoong may have the right to terminate our license. Any termination or loss of rights under the Daewoong Agreement would materially and adversely affect our ability to develop and commercialize ABP-450, which in turn would have a material adverse effect on our business, operating results and prospects. If we were to lose our rights under the Daewoong Agreement, we believe it would be difficult or impossible for us to find an alternative supplier of a botulinum toxin type-A complex. In addition, to the extent the alternative supplier has not secured regulatory approvals in a jurisdiction, we would have to expend significant resources, including performing additional clinical studies, to obtain regulatory approvals that may never be obtained or require several years to obtain, which could significantly delay commercialization. We may be unable to raise additional capital to fund our operations during this extended time on terms acceptable to us or at all. If we were to commercialize ABP-450 and later experienced delays as a result of a dispute with Daewoong, the demand for ABP-450 could be materially and adversely affected.

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, if approved, could be delayed or stopped.

We have no experience in biologic manufacturing and do not own or operate, and we do not expect to own or operate, facilities for product manufacturing, storage and distribution, or testing. We depend solely upon Daewoong to manufacture ABP-450. Any failure or refusal by Daewoong to supply ABP-450 could delay, prevent or impair our

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clinical development or commercialization efforts. Although alternative sources of supply may exist, the number of third-party suppliers with the necessary manufacturing and regulatory expertise and facilities is limited, and it could be expensive and take a significant amount of time to arrange for alternative suppliers, which could have a material adverse effect on our business. New suppliers of any product candidate would be required to qualify under applicable regulatory requirements and would need to have sufficient rights under applicable intellectual property laws to the method of manufacturing the product candidate. Obtaining the necessary FDA approvals or other qualifications under applicable regulatory requirements and ensuring non-infringement of third-party intellectual property rights could result in a significant interruption of supply and could require the new manufacturer to bear significant additional costs which may be passed on to us. We will also need to verify, such as through a manufacturing comparability study, that any new CMO or manufacturing process will produce our product candidate according to the specifications previously submitted to the FDA or another regulatory authority. We may be unsuccessful in demonstrating the comparability of clinical supplies which could require conducting additional clinical studies.

In addition, there are risks associated with large scale manufacturing for clinical studies or commercial scale including, among others, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, compliance with good manufacturing practices, lot consistency and timely availability of raw materials. Even if we obtain marketing approval for ABP-450, there is no assurance that Daewoong will be able to manufacture the approved product to specifications acceptable to the FDA or other comparable foreign regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential commercial launch of the product or to meet potential future demand. If Daewoong is unable to produce sufficient quantities for clinical studies or for commercialization, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.

Our reliance on Daewoong entails additional risks, including reliance on Daewoong for regulatory compliance and quality assurance, the possible breach of the Daewoong Agreement by Daewoong, and the possible termination or nonrenewal of the Daewoong Agreement at a time that is costly or inconvenient for us. Our failure, or the failure of Daewoong, to comply with applicable regulations, such as cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation, could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of the product candidate or drugs, import alerts or detentions preventing import of product into the United States or other territories, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of ABP-450. Our dependence on Daewoong also subjects us to all of the risks related to Daewoong’s business, which are all generally beyond our control. Daewoong’s ability to perform its obligations under the Daewoong Agreement is dependent on its operational and financial health, which could be negatively impacted by several factors, including changes in the economic, political and legislative conditions in South Korea and the broader region in general and the ability of Daewoong to continue to successfully attract customers and compete in its market. Furthermore, Daewoong’s recently constructed manufacturing facility is Daewoong’s directly owned facility meeting FDA and EMA cGMP requirements. Daewoong’s lack of familiarity with, or inability to effectively operate, the facility and produce products of consistent quality, may harm our ability to compete in our market.

In addition, we are ultimately responsible for distribution of products under any authorization or approval we hold to investigate or market ABP-450.  We do not own a manufacturing facility and we have never supervised manufacturing operations, but we have regulatory obligations to review batch records and release of the investigational product for our clinical studies. Further, we will have similar regulatory obligations if the product is marketed and could be held responsible for any distribution of adulterated or misbranded ABP-450, even if caused by Daewoong’s noncompliance.

The FDA conducted a cGMP and pre-approval inspection of Daewoong’s manufacturing facility in South Korea related to Evolus’ BLA for Jeuveau from November 8, 2017 to November 17, 2017. At the end of the inspection, the FDA issued an FDA Form 483 with ten inspectional observations of regulatory noncompliance to Daewoong. The Form 483 includes observations relating to the need for adherence to and improved procedures, processes and documentation relating to investigations of and corrective actions for non-compliance with specifications for batches and components, environmental monitoring, drug substance testing, computer system access, material handling and staff training. Daewoong timely responded to the FDA with a plan for implementing corrective actions related to these observations. Daewoong provided complete responses to the Form 483; however, the time to correct the observations,

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submit the complete response and FDA review and acceptance of the responses delayed approval of Evolus’ BLA. Neither the FDA, Health Canada nor the EMA have conducted a repeat inspection of Daewoong manufacturing facility per usual FDA Quality Review Practices to confirm continued compliance with cGMP regulations. A separate pre-licensure inspection may be required for any BLA we submit for any of our product candidates. Should the repeat inspection find serious deviation from cGMP manufacturing regulations, or repeated observations, Daewoong may be required to expend significant time and resources to correct any observations, which could cause delays and adversely affect availability of drug product to support our research and development operations. For example, the FDA is permitted to deny entry of any imported product that “appears” to be adulterated or misbranded, meaning it does not actually need to be violative to be prohibited from entry, just that the FDA believes it might be violative. FDA-483 observations, particularly if eventually escalated into an FDA untitled or warning letter, could result in an import alerts which ban entry of a product into the United States until issues are resolved to the FDA’s satisfaction, and they have reinspected the facility to confirm all corrections have been implemented, which could potentially take a considerable amount of time. In addition, failure to have an observation-free inspection during a pre-approval inspection can result in delay or denial or FDA approval. Similar issues could occur in other jurisdictions as well.

Additionally, if Daewoong’s facility were to be damaged, destroyed or otherwise unable to operate or comply with regulatory requirements, whether due to earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural disasters, employee malfeasance, terrorist acts, political unrest, power outages or otherwise, or if operations at the facility were disrupted for any other reason, such an event could negatively affect our ongoing preclinical studies and clinical studies and, if ABP-450 is approved, jeopardize Daewoong’s ability to manufacture ABP-450 as promptly as we or our customers expect or possibly at all. If such an event occurred that prevented Daewoong from using all or a significant portion of its manufacturing facility that damaged critical infrastructure, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for Daewoong to supply enough ABP-450 to continue our business for a substantial period of time.

A material breach by us of the terms of our license and settlement agreement with Medytox, Inc. could have a material adverse effect on our business.

In May 2021, Medytox, Inc., or Medytox, brought a case in the United States District Court for the Central District of California in May 2021, or the Medytox Litigation, alleging, among other things, that Daewoong stole Medytox’s botulinum toxin bacterial strain, or the BTX strain, and misappropriated certain trade secrets of Medytox, including the process used to manufacture ABP-450 using the BTX strain, and that our and Daewoong’s activities conducted in the United States give rise to liability for misappropriation of trade secrets. Medytox seeks, among other things, (i) actual, consequential and punitive damages, (ii) a reasonable royalty, as appropriate, (iii) disgorgement of any proceeds or profits, (iv) injunctive relief prohibiting us from using Medytox’s trade secrets to manufacture, offer to sell, or sell therapeutic BTX products, including ABP-450, and (v) attorneys’ fees and costs.

The Medytox Litigation was another step in an ongoing dispute involving Medytox and Allergan, on the one side, and Evolus, Daewoong and us on the other side.  In June 2017, Medytox brought a civil lawsuit of a similar nature against Evolus, Daewoong and us in the Superior Court of the State of California, which we refer to as the Superior Court Litigation, and a separate lawsuit in October 2017 against Daewoong in South Korea, which we refer to as the Korea Litigation. The lawsuit filed in the Superior Court of the State of California alleged claims substantially similar to the Medytox Litigation and was subsequently stayed on grounds of forum non conveniens, because the underlying facts that gave rise to the complaint occurred in South Korea, among other reasons. In October 2017, Medytox initiated the Korea Litigation against Daewoong, and its parent company, Daewoong Co. Ltd., in the Seoul Central District Court in Seoul, South Korea, related to the same subject matter, and is seeking, among other things, money damages, injunctive relief and destruction of related documents and products. We are not a party to the Korea Litigation. In April 2018, the Superior Court of the State of California dismissed Medytox’s suit against Daewoong without prejudice on the basis that Medytox had brought a substantially similar proceeding against Daewoong in South Korea, and continued a stay of the case as to us and Evolus. In February 2021, the Superior Court of the State of California dismissed Medytox’s suit against us without prejudice, following Medytox’s filing of a notice of settlement of the case based on a settlement it entered with Evolus.

Additionally, in January 2019, Allergan and Medytox filed a complaint against Daewoong and Evolus in the U.S. International Trade Commission, or the ITC, alleging that the BTX strain used in Evolus’ Jeuveau product is manufactured based on misappropriated trade secrets of Medytox and therefore its importation is an unfair act. The

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Administrative Law Judge issued a final determination in December 2020. The final determination concluded that a violation of Section 337 of the Tariff Act of 1930 had occurred, and the ITC issued a limited exclusion order forbidding entry of Jeuveau into the United States for 21 months and a cease and desist order prohibiting Daewoong and Evolus from engaging in the importations, sale for importation, marketing, distribution, offering for sale, the sale after the importation of, or otherwise transferring Jeuveau within the United States for 21 months. The 21 month ban was stayed as a result of a settlement agreement between Evolus and Medytox in February 2021.

Effective June 21, 2021, we entered into a settlement and license agreement with Medytox, pursuant to which, among other things, Medytox agreed (a) to dismiss all claims against us in the Medytox Litigation, (b) to pursue dismissal of the appeals related to the December 2020 final determination of the United States International Trade Commission and agreed that as a result of such dismissal the final determination would be vacated, (c) to file appropriate documents in the Korean Litigation and related actions in support of the terms of the settlement, and (d) not to revive or otherwise pursue the Superior Court Litigation with respect to us.  In addition, Medytox granted us a non-exclusive, royalty bearing, irrevocable license to commercialize and manufacture ABP-450. In exchange for the license, we issued Medytox 1,569,442 shares of our common stock, par value $0.0001 per share agreed to pay Medytox single-digit royalties on the net sales of licensed products for 15 years. Moreover, in the event the shares of common stock we issued to Medytox represent less than 10% of our total outstanding shares immediately following the closing of our initial public offering, or the Target Ownership, we will issue additional shares of our common stock to Medytox sufficient to cause Medytox to achieve the Target Ownership.  On June 28, 2021, the claims against us in the Medytox Litigation were dismissed with prejudice.  

Medytox can terminate the license and settlement agreement if we materially breach any material provision of the agreement.  If the license and settlement agreement were terminated, Medytox would be able to revive the Medytox Litigation, the Superior Court Litigation and the Korea Litigation, any one of which could result in us losing access to ABP-450 and the manufacturing process and require us to negotiate a new license with Medytox for continued access to ABP-450. We may not be able to successfully negotiate such license on terms acceptable to us or at all. If we are unable to license ABP-450, we may not be able to find a replacement product, if at all, without expending significant resources and being required to seek additional regulatory approvals, which would be uncertain, time consuming and costly.

SCH currently performs or supports many of our general and administrative corporate functions and will continue to do so after the completion of this offering pursuant to a services agreement, and if we are unable to replicate or replace these functions if the services agreement is terminated, our operations could be adversely affected.

SCH currently performs or supports many general and administrative corporate functions for our company. For example, SCH provides certain general management, communication, human resources, office, rent and information technology services. Our financial statements reflect charges for these services on an allocation basis.

In August 2019, we entered into a services agreement with Strathspey Crown Limited, LLC, an affiliate of SCH, or Strathspey Crown Limited, with an effective date of January 2019. The services agreement sets forth certain agreements between Strathspey Crown Limited and us that will continue to govern the respective responsibilities and obligations between Strathspey Crown Limited and us following this offering.

Pursuant to the services agreement, Strathspey Crown Limited provides us certain administrative and development support services, including certain general management, communication, human resources, office, rent and information technology services. We have agreed to pay Strathspey Crown Limited our allocable share of the actual cost incurred by Strathspey Crown Limited in providing such services, plus a 10% markup, as well as our allocable share of Strathspey Crown Limited’s overhead expenses, including office rent, depreciation, maintenance, utilities and supplies. We do not anticipate that receiving such services will contribute significantly to the fundamental risks of business success or failure of us or Strathspey Crown Limited.

The services agreement has a one-year term and will renew for successive one year terms unless sooner terminated by either party. We or Strathspey Crown Limited may terminate the services agreement upon sixty days’ notice to the other party.

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In the event the services agreement is terminated by us or Strathspey Crown Limited, we will need to replicate or replace certain functions, systems and infrastructure to which we will no longer have the same access. We may also need to make investments or hire additional employees to operate without the same access to Strathspey Crown Limited’s existing operational and administrative infrastructure. These initiatives may be costly to implement. Due to the scope and complexity of the underlying projects relative to these efforts, the amount of total costs could be materially higher than our estimate, and the timing of the incurrence of these costs is subject to change.

In addition, we may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost, comparable to those that we will receive from Strathspey Crown Limited under the services agreement. When we begin to operate these functions separately, if we do not have our own adequate systems and business functions in place, or are unable to obtain them from other providers, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline.

We rely, and will continue to rely, on third parties and consultants to conduct all of our preclinical studies and clinical studies. If these third parties or consultants do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for ABP-450.

We do not currently have the ability to independently conduct any preclinical studies or clinical studies. We rely, and will continue to rely, on medical institutions, clinical investigators, contract laboratories, collaborative partners and other third parties, such as CROs, to conduct preclinical studies and clinical studies on ABP-450. The third parties with whom we currently or may in the future contract for execution of any of our preclinical studies and clinical studies play a significant role in the conduct of these studies and studies and the subsequent collection and analysis of data. However, these third parties are not our employees, and except for contractual duties and obligations, we have limited ability to control the amount or timing of resources that they devote to any of our current or future programs. Although we rely on these third parties to conduct our preclinical studies and clinical studies, we remain responsible for ensuring that each of our preclinical studies and clinical studies is conducted in accordance with the investigational plan and protocol. Moreover, the FDA and other similar regulatory authorities require us to observe both good laboratory practices, or GLP, and animal welfare requirements for preclinical studies, and to comply with GCPs for conducting, monitoring, recording and reporting the results of clinical studies to ensure that the data and results are scientifically credible and accurate, and that the study subjects are adequately informed of the potential risks of participating in clinical studies. We also rely, and will continue to rely, on consultants to assist in the execution, including data collection and analysis, of any of our future clinical studies.

In addition, the execution of preclinical studies and clinical studies, and the subsequent compilation and analysis of the data produced, requires coordination among various parties. In order for these functions to be carried out effectively and efficiently, it is imperative that these parties communicate and coordinate with one another. Moreover, these third parties may also have relationships with other commercial entities, some of which may compete with us. If the third parties or consultants conducting our clinical studies do not perform their contractual duties or obligations, experience work stoppages, do not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of the preclinical or clinical data they obtain is compromised due to the failure to adhere to GLPs, or our clinical study protocols or GCPs, or for any other reason, we may need to conduct additional clinical studies or enter into new arrangements with alternative third parties, which could be difficult, costly or impossible, and our preclinical studies and clinical studies may be extended, delayed or terminated or may need to be repeated. Further, any noncompliance that results in data integrity issues could put any regulatory approval we receive at risk of withdrawal, and could subject us to regulatory sanctions due to failure to adequately oversee the third parties we rely upon. If any of the foregoing were to occur, we may not be able to obtain, or may be delayed in obtaining, regulatory approval for and will not be able to, or may be delayed in our efforts to, successfully commercialize ABP-450 in any of our proposed therapeutic indications.

We may use third-party collaborators to help us develop, validate or commercialize any new products, and our ability to commercialize such products could be impaired or delayed if these collaborations are unsuccessful.

We may license or selectively pursue strategic collaborations for the development, validation and commercialization of ABP-450 in any current or future proposed therapeutic indications. In any third-party collaboration, we would be dependent upon the success of the collaborators in performing their responsibilities and their continued cooperation. Our collaborators may not cooperate with us or perform their obligations under our agreements with them. Our

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collaborators may choose to pursue alternative technologies in preference to those being developed in collaboration with us. The development, validation and commercialization of ABP-450 will be delayed if collaborators fail to conduct their responsibilities in a timely manner or in accordance with applicable regulatory requirements or if they breach or terminate their collaboration agreements with us. Disputes with our collaborators could also impair our reputation or result in development delays, decreased revenues and litigation expenses.

In addition, we may face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator's evaluation of a number of factors. Those factors may include the design or results of clinical studies, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for ABP-450 in our proposed therapeutic indications, the costs and complexities of manufacturing and delivering ABP-450 to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate. Collaborations are complex and time-consuming to negotiate and document.

We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of ABP-450 in any of our proposed therapeutic indications, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop ABP-450 in any of our proposed therapeutic indications or bring it to market and generate revenue.

Risks Related to Intellectual Property

If we or any of our current or future licensors, including Daewoong, are unable to maintain, obtain or protect intellectual property rights related to ABP-450, we may not be able to compete effectively in our market.

We and Daewoong currently rely upon a combination of trademarks, trade secret protection, confidentiality agreements and proprietary know-how. We also intend to protect our proprietary technology and methods by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions, methods of use, and improvements that are important to the development and implementation of our business. However, the composition of matter for botulinum toxin cannot be patented, as it is produced by Clostridium botulinum, a gram-positive, rod-shaped, anaerobic, spore-forming, motile bacterium with the ability to produce the botulinum toxin. Daewoong has obtained a U.S. patent related to its proprietary botulinum toxin manufacturing process. In addition, we have filed certain provisional patent applications with the U.S. Patent and Trademark Office, or USPTO, related to certain novel and proprietary methods of utilizing ABP-450 for therapeutic purposes. These patent applications may fail to result in issued patents with claims that cover ABP-450 in any currently proposed or future therapeutic indications, in the United States or in other foreign countries, and the issued patents may be declared invalid or unenforceable. Under the Daewoong Agreement, we license the trademark associated with ABP-450. Our trade secrets and other confidential proprietary information and those of our licensors could be disclosed or competitors could otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we or any of our current or future licensors may encounter significant problems in protecting and defending our or their intellectual property both in the United States and internationally. If we or any of our current or future licensors are unable to prevent material disclosure of the non-patented intellectual property related to ABP-450 to third parties, we may not be able to establish or maintain a competitive advantage in our market, which could adversely affect our business.

In addition to the protection afforded by patents, trademarks, confidentiality agreements and proprietary know-how, we may in the future rely upon in-licensed patents or proprietary technology for the development of ABP-450 in any currently proposed or future therapeutic indications. We may not be able to in-license third party patents necessary to commercialize ABP-450 on commercially reasonable terms, or at all, which could materially harm our business. The strength of patents we may in-license in the technology and healthcare fields involves complex legal and scientific

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questions and can be uncertain. The patent applications that we may in-license may fail to result in issued patents with claims that cover ABP-450 in any currently proposed or future therapeutic indications, in the United States or in other foreign countries, and the issued patents that we may in-license may be declared invalid or unenforceable.

We are reliant on the ability of Daewoong, as the licensor of our only product candidate, to maintain its intellectual property and protect its intellectual property against misappropriation, infringement or other violation. We may not have primary control over Daewoong’s or our future licensors’ patent prosecution activities. Furthermore, we may not be allowed to comment on prosecution strategies, and patent applications currently being prosecuted may be abandoned by the patent owner without our knowledge or consent. With respect to patents that are issued to our licensors, or patents that may issue on patent applications, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated. As a licensee, we are reliant on Daewoong and our future licensors to defend any third-party claims. Our licensors may not defend or prosecute such actions as vigorously or in the manner that we would have if entitled to do so, and we may be impacted by any judgment or settlement resulting from such actions. Also, a third-party may challenge the validity of our in-licensing transactions. Furthermore, even if they are unchallenged, any of our future in-licensed patents and patent applications may not adequately protect the licensors or our intellectual property or prevent others from designing around their or our claims.

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts or otherwise adversely affect our results of operations.

Our commercial success depends in part on our avoiding infringement of the proprietary rights of third parties. Competitors and other entities that possess intellectual property rights related to the use of botulinum toxins in the fields of neurology and gastroenterology have developed large portfolios of patents and patent applications in fields relating to our business. In particular, there are patents held by third parties that relate to the treatment with botulinum toxin-based products. There may also be patent applications that have been filed but not published that, when issued as patents, could be asserted against us. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the technology, medical device and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions and inter-party reexamination proceedings before the USPTO. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we plan to develop ABP-450. As the technology, medical device and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidate may be subject to claims of infringement of the patent rights of third parties.

In the past, Medytox asserted that we and Daewoong were employing their proprietary technology without authorization, and other third parties may make similar assertions about us or any of our current or future licensors, including Daewoong, in the future. There may be third-party patents or patent applications with claims to materials, methods of manufacture or methods for treatment related to the use or manufacture of ABP-450. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that ABP-450 may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of ABP-450, the holders of any such patents may be able to block our ability to commercialize ABP-450 in any proposed therapeutic indication unless we obtain a license under the applicable patents or until such patents expire. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our methods of use, the holders of any such patent may be able to block our ability to develop and commercialize ABP-450 unless we obtain a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all.

In addition to claims of patent infringement, third parties may bring claims against us asserting misappropriation of proprietary technology or other information in the development, manufacture and commercialization of ABP-450. Defense of such a claim would require dedicated time and resources, which time and resources could otherwise be used by us toward the maintenance of our own intellectual property and the development and commercialization of ABP-450 in any current or future proposed therapeutic indication or by any of our current or future licensors for operational upkeep and manufacturing of our product.

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Parties making claims against us or any of our current or future licensors may request and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize ABP-450. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement, we or any of our current or future licensors may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties which may not be commercially or more available, pay royalties or redesign our infringing products or manufacturing processes, which may be impossible or require substantial time and monetary expenditure. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research, manufacture clinical study supplies or allow commercialization of ABP-450 in any current or future proposed therapeutic indication. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize ABP-450 in one or more of our proposed therapeutic indications, which could harm our business significantly. Similarly, third-party patents could exist that might be enforced against our products, resulting in either an injunction prohibiting our sales, or with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties.

We may become involved in lawsuits to protect or enforce our intellectual property or the patents and other intellectual property of our licensors, which could be expensive and time-consuming.

Competitors may infringe our intellectual property, including any future patents we may acquire, or the patents and other intellectual property licensed to us by our licensors, including Daewoong. As a result, we or any of our current or future licensors may be required to file infringement claims to stop third-party infringement or unauthorized use. This can be expensive, particularly for a company of our size, and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or any of our current or future licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patent claims do not cover its technology or that the factors necessary to grant an injunction against an infringer are not satisfied.

An adverse determination of any litigation or other proceedings could put one or more of such patents at risk of being invalidated or interpreted narrowly. Interference, derivation or other proceedings brought at the USPTO may be necessary to determine the priority or patentability of inventions with respect to any of our future patent applications or those of our licensors or collaborators. Litigation or USPTO proceedings brought by us or any of our current or future licensors may fail or may be invoked against us or our licensors by third parties. Even if we are successful, domestic or foreign litigation or USPTO or foreign patent office proceedings may result in substantial costs and distraction to our management or the management of any of our current or future licensors, including Daewoong. We may not be able, alone or with any of our current or future licensors or collaborators, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or proceedings. In addition, during the course of this kind of litigation or proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.

Most of our competitors are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain the costs of complex patent litigation longer than we could. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property. In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical studies, continue our internal research programs, or in-license needed technology. There could also be public announcements of the results of the hearing, motions, or other interim proceedings or developments. If securities analysts or investors perceive those results to be negative, it could cause the price of shares of our common stock to decline.

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We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States and in some cases may even force us to grant a compulsory license to competitors or other third parties. Consequently, we may not be able to prevent third parties from using our inventions in all countries outside the United States or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

In addition, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in domestic and foreign intellectual property laws.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patents for our product candidate, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.

We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, collaborators, consultants, advisors and other third parties. We expect to enter into confidentiality and invention assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.

We employ individuals who were previously employed at other pharmaceutical companies including certain of our anticipated competitors. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties. We may also be subject to claims that former employers or other third parties have an ownership interest in our patents. Litigation may be necessary to defend against these claims. We may not be successful in defending these claims, and even if we are successful, litigation could result in substantial cost and be a distraction to

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our management and other employees. Any litigation or the threat thereof may adversely affect our ability to hire employees. A loss of key personnel or their work product could diminish or prevent our ability to commercialize ABP-450, which could have an adverse effect on our business, results of operations and financial condition.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition by potential partners or customers in our markets of interest. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.

Third parties may assert that we are using trademarks or trade names that are confusingly similar to their marks. If any third-party were able to establish that our trademarks or trade names were infringing their marks, that third-party may be able to block our ability to use the infringing trademark or trade name. In addition, if a third-party were to bring such a claim, we would be required to dedicate time and resources to fight the claim, which time and resources could otherwise be used toward the maintenance of our own intellectual property.

Parties making claims against us may request and obtain injunctive or other equitable relief, which could prevent our ability to use the subject trademarks or trade names. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement. We may be required to re-brand one or more of our products or services offered under the infringing trademark or trade name, which may require substantial time and monetary expenditure. Third parties could claim senior rights in marks which might be enforced against our use of trademarks or trade names, resulting in either an injunction prohibiting our sales under those trademarks or trade names.

Risks Related to Government Regulation

Our business and products are subject to extensive government regulation.

We are subject to extensive, complex, costly and evolving regulation by federal and state governmental authorities in the United States, the European Union, Canada and other countries, principally by the FDA, the EMA, Health Canada and other similar regulatory authorities. Daewoong is also subject to extensive regulation by the FDA and the South Korean regulatory authorities as well as other regulatory authorities. Our failure to comply with all applicable regulatory requirements, or Daewoong’s failure to comply with applicable regulatory requirements, including those promulgated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and the Controlled Substances Act, may subject us to operating restrictions and criminal prosecution, monetary penalties and other enforcement or administrative actions, including, sanctions, warning letters, import alerts, product seizures, recalls, fines, injunctions, suspension, revocation of approvals, or exclusion from future participation in the Medicare and Medicaid programs.

In the event our products receive regulatory approval, we, and our direct and indirect suppliers, including Daewoong, will remain subject to the periodic inspection of our plants and facilities, review of production processes, and testing of our products to confirm that we are in compliance with all applicable regulations. Adverse findings during regulatory inspections may result in requirements that we implement REMS programs, requirements that we complete government mandated clinical studies, and government enforcement actions including those relating to labeling, advertising, marketing and promotion, as well as regulations governing manufacturing controls.

If we experience delays in obtaining approval or if we fail to obtain approval of ABP-450 in any of our proposed therapeutic indications, the commercial prospects for ABP-450 may be harmed and our ability to generate revenue will be materially impaired.

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In addition, in the course of our activities we may collect information from clinical study subjects or other individuals that subjects us to a variety of rapidly evolving laws regarding privacy, data protection and data security, including those related to the collection, storage, handling, use, disclosure, transfer and security of personal data. Data breaches or other violations of these laws could subject our business to significant penalties and reputational harm.

Even if we receive regulatory approval for ABP-450 in any therapeutic indication, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, limit or delay regulatory approval and subject us to penalties if we fail to comply with applicable regulatory requirements.Additionally, ABP-450, if approved in any therapeutic indication, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

If regulatory approval is granted, ABP-450 will be subject to continual regulatory review by the FDA, the EMA and other similar regulatory authorities. Any regulatory approvals that we or our collaborators receive for ABP-450 in any currently proposed or future therapeutic indication may also be subject to limitations on the approved indications for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase IV clinical studies, and surveillance to monitor the safety and efficacy of the product. In addition, if the applicable regulatory agency approves ABP-450 in any therapeutic indication, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP requirements and GCPs, for any clinical studies that we conduct post-approval. Later discovery of previously unknown problems with ABP-450, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

• impose restrictions on the marketing or manufacturing of the product, suspend or withdraw product approvals or revoke necessary licenses;

• issue warning letters, show cause notices or untitled letters describing alleged violations, which may be publicly available;

• mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

• require revisions to the labeling, including limitation on approved uses or the addition of additional warnings, contraindications or other safety information;

• require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

• commence criminal investigations and prosecutions;

• impose injunctions;

• impose other civil or criminal penalties;

• suspend any ongoing clinical studies;

• delay or refuse to approve pending applications or supplements to approved applications filed by us;

• refuse to permit products or active ingredients to be imported or exported to or from the United States;

• suspend or impose restrictions on operations, including costly new manufacturing requirements; or

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• seize or detain products or require us to initiate a product recall; and

• injunctions or the imposition of civil or criminal penalties.

Additionally if ABP-450 receives marketing approval for any of our proposed indications, the FDA could require us to adopt a REMS to ensure that the benefits of the therapy outweigh its risks, which may include, among other things, a medication guide outlining the risks for distribution to patients and a communication plan to health care practitioners. Any of these events could prevent us from achieving or maintaining market acceptance of ABP-450 in the proposed therapeutic indication and could significantly harm our business, prospects, financial condition and results of operations.

The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of ABP-450 in any of our proposed therapeutic indications. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

In addition, given the similarity of ABP-450 to Jeuveau, any adverse developments with respect to Jeuveau, including adverse events or changes in regulatory status, may also directly impact the development, commercialization or regulation of ABP-450, if approved.

If we fail to obtain regulatory approvals in foreign jurisdictions for ABP-450, we will be unable to market our products outside of the United States.

In addition to regulations in the United States, we are and will be subject to a variety of foreign regulations governing manufacturing, clinical studies, commercial sales and distribution of our future products. Whether or not we obtain FDA approval for a product candidate, we must obtain approval of the product by the comparable regulatory authorities of foreign countries before commencing clinical studies or marketing in those countries. The approval procedures vary among countries and can involve additional clinical testing, and the time required to obtain approval may differ from that required to obtain FDA approval. Clinical studies conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign countries or by the FDA. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not be able to file for regulatory approvals or to do so on a timely basis, and even if we do file, we may not receive necessary approvals to commercialize our products in markets outside of the United States.

The misuse or off‑label use of our approved products, if any, may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.

The FDA and other regulatory agencies strictly regulate the marketing and promotional claims that are made about pharmaceutical products. In particular, a product may not be promoted for uses or indications that are not specifically approved by the FDA, the EMA or other regulatory agencies as reflected in the product’s approved labeling. For example, if we receive marketing approval for ABP-450 in any therapeutic indication, physicians could use ABP-450 on their patients in a manner that is inconsistent with the approved label, such as for the treatment of other aesthetic or therapeutic indications for which other similar botulinum toxins are approved. Although ABP-450, if approved, will be similar to Jeuveau, we will not be able to market ABP-450 as being interchangeable with Jeuveau. If we are found to have promoted such uses that are not part of ABP-450’s approved labeling, we may be subject to enforcement action from the FDA, the EMA and other regulatory agencies, and become subject to significant liability, which would materially harm our business. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. If we become

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the target of such an investigation or prosecution based on our marketing and promotional practices, we could face similar sanctions, which would materially harm our business. In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation could be damaged. The FDA has also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed in order to resolve FDA enforcement actions. If we are deemed by the FDA to have engaged in the promotion of our products for off-label use, we could be subject to FDA prohibitions or other restrictions on the sale or marketing of our products and other operations or significant fines and penalties, and the imposition of these sanctions could also affect our reputation and position within the industry.In addition, off-label promotion could expose us to liability under the FCA, as well as similar state laws.

Physicians may also misuse ABP-450, if approved, or use improper techniques, potentially leading to adverse results, side effects or injury, which may lead to product liability claims. If ABP-450 is misused or used with improper techniques or is determined to cause or contribute to patient harm, we may become subject to costly litigation by our customers or their patients. Product liability claims could divert management’s attention from our core business, be expensive to defend, result in sizable damage awards against us that may not be covered by insurance and subject us to negative publicity resulting in reduced sales of our products. Furthermore, the use of ABP-450, if approved, for indications other than those cleared by the FDA may not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients. Any of these events could harm our business and results of operations and cause our stock price to decline.

Our relationships with healthcare providers and physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

We are subject to applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the FCA, which may constrain the business or financial arrangements and relationships through which we sell, market and distribute our products. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry (e.g., healthcare providers, physicians and third party payors), are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commission(s), certain customer incentive programs and other business arrangements generally. We also may be subject to patient information and privacy and security regulation by both the federal government and the states and foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not limited to:

• The Anti-Kickback Statute prohibits the knowing and willful offer, receipt, or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that would be paid for in whole or part by Medicare, Medicaid or other federal health care programs. Remuneration has been broadly defined to include anything of value, including but not limited to cash, improper discounts, and free or reduced price items and services. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Further, courts have found that if “one purpose” of remuneration is to induce referrals, the federal Anti-Kickback Statute is violated. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution; but the exceptions and safe harbors are drawn narrowly and require strict compliance in order to offer protection. A claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. Many states have similar laws that apply to their state health care programs as well as private payors. Violations of anti-kickback and other applicable laws can result in exclusion from federal health care programs and substantial civil and criminal penalties.

• The federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA, prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs,

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knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. The FCA has been used to prosecute persons submitting claims for payment that are inaccurate or fraudulent, that are for services not provided as claimed, or for services that are not medically necessary. The FCA includes a whistleblower provision that allows individuals to bring actions on behalf of the federal government and share a portion of the recovery of successful claims. Some state law equivalents of the above federal laws, such as the Anti-Kickback Statute and FCA, apply to items or services regardless of whether the good or service was reimbursed by a government program, so called all-payor laws. These all-payor laws could apply to our sales and marketing activities even if the Anti-Kickback Statute and FCA laws are inapplicable.

• The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it.

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementing regulations, and as amended again by the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without appropriate authorization by covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information also implicate our business. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.

• The federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act, or the ACA, and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the United States Department of Health and Human Services, or HHS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulatory guidance. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies, healthcare providers and other third parties, including charitable foundations, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Responding to investigations can be time-and resource-consuming and can divert management’s attention from the business. Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

If our marketing or other arrangements were determined to violate anti-kickback or related laws, including the FCA or an all-payor law, then we could be subject to penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual

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imprisonment, reputational harmand the curtailment or restructuring of our operations,as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.Any action for violation of these laws, even if successfully defended, could cause us to incur significant legal expenses and divert management’s attention from the operation of the business. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect our business in an adverse way. Efforts to ensure that our business arrangements will comply with applicable healthcare laws may involve substantial costs.

State and federal authorities have aggressively targeted pharmaceutical companies for alleged violations of these anti-fraud statutes, based on improper research or consulting contracts with doctors, certain marketing arrangements with pharmacies and other healthcare providers that rely on volume-based pricing, off-label marketing schemes, and other improper promotional practices. Companies targeted in such prosecutions have paid substantial fines, have been ordered to implement extensive corrective action plans, and have in many cases become subject to consent decrees severely restricting the manner in which they conduct their business, among other consequences. Additionally, federal and state regulators have brought criminal actions against individual employees responsible for alleged violations. If we become the target of such an investigation or prosecution based on our contractual relationships with providers or institutions, or our marketing and promotional practices, we could face similar sanctions, which would materially harm our business.

Also, the FCPA and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our internal control policies and procedures may not protect us from reckless or negligent acts committed by our employees, future distributors, partners, collaborators or agents. Violations of these laws, or allegations of such violations, could result in fines, penalties or prosecution and have a negative impact on our business, results of operations and reputation.

Even if we receive marketing approval, coverage and adequate reimbursement may not be available for ABP-450 in any currently proposed or future therapeutic indications, which could make it difficult for us to sell the product profitably, if approved.

Market acceptance and sales of ABP-450, if approved, will depend in part on the extent to which reimbursement for these product and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and other private health insurers. Obtaining coverage and adequate reimbursement approval for a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide supporting scientific, clinical and cost effectiveness data for the use of our products to the payor.

Third-party payors decide which therapies they will pay for and establish reimbursement levels. While no uniform policy for coverage and reimbursement exists in the United States, third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for ABP-450 will be made on a payor-by-payor basis. Therefore, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs and biological products, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products. In addition, because certain of our proposed indications of ABP-450 will require the product to be physician-administered, separate reimbursement for the product itself may or may not be available. Instead, the administering physician may only be reimbursed for providing the treatment or procedure in which our product is used.

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There may be significant delays in obtaining such coverage and reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA. Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, sale and distribution expenses. Interim reimbursement levels for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors, by any future laws limiting pharmaceutical prices and by any future relaxation of laws that presently restrict imports of product from countries where they may be sold at lower prices than in the United States.

Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize ABP-450.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe a continued emphasis on cost containment initiatives in Europe, Canada and other countries could continue to put pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.

The delivery of health care in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy. National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context. In general, however, the health care budgetary constraints in most European Union member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever increasing European Union and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post approval activities and affect our ability to commercialize any products for which we obtain marketing approval.

Moreover, increasing efforts by governmental and third party payors in the European Union, the United States and other jurisdictions to cap or reduce health care costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed health care, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on health care costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

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.

From time to time, legislation is drafted and introduced in the U.S. Congress or other countries that could significantly change the statutory provisions governing the regulatory clearance or approval, manufacture, and marketing of regulated products or the reimbursement thereof. In addition, regulations and guidance are often revised or reinterpreted by the FDA and other regulatory authorities in ways that may significantly affect our business and our

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products. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of ABP-450. Such changes could, among other things, require:

• changes to manufacturing or marketing methods;

• changes to product labeling or promotional materials;

• recall, replacement, or discontinuance of one or more of our products; and

• additional recordkeeping.

Each of these would likely entail substantial time and cost and could materially harm our business and our financial results. In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any future products would harm our business, financial condition, and results of operations.

Inadequate funding for the FDA, the SEC and other government agencies, including from government shut downs, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Since March 2020 when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis. The FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic inspections. As of May 2021, certain inspections, such as foreign preapproval, surveillance, and for-cause inspections that are not deemed mission-critical, remain temporarily postponed. In April 2021, the FDA issued guidance for industry formally announcing plans to employ remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates and in May 2021 announced plans to continue progress toward resuming standard operational levels. Should FDA determine that an inspection is necessary for approval and an inspection cannot be completed during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be adequate, the agency has stated that it generally intends to issue a complete response letter or defer action on the application until an inspection can be completed. In 2020 and 2021, a number of companies announced receipt of complete response letters due to the FDA's inability to complete required inspections for their applications. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities. If a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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Future shutdowns or other disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets.

Risks Related to This Offering and Our Common Stock

An active trading market for our common stock may not develop or, if one develops, be sustained.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock was determined through negotiations between us and the underwriters and may bear no relationship to the price at which the common stock will trade upon the closing of this offering. An active trading market for our shares may never develop or be sustained following this offering. If an active trading market for our common stock does not develop, it may be difficult for you to sell the shares that you purchase in this offering without depressing the market price for the common stock or to sell your shares at all.

Our stock price is likely to be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, some of which are beyond our control, including:

• announcements of regulatory approval or disapproval of ABP-450 in any of our proposed therapeutic indications;

• adverse results from or delays in clinical studies of ABP-450 in our proposed therapeutic indications, including unanticipated safety concerns;

• any termination or loss of rights under the Daewoong Agreement;

• FDA or other U.S. or foreign regulatory or legal actions or changes affecting us or our industry;

• general economic, industry and market conditions, including the COVID-19 pandemic,

• the size and growth, if any, of the therapeutic botulinum toxin market or the pharmaceutical industry more generally;

• introductions and announcements of new technologies and products by us or our competitors, and the timing of these introductions and announcements;

• announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, joint ventures or capital commitments;

• variations in our financial results or those of companies that are perceived to be similar to us;

• changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;

• rumors and market speculation involving us or other companies in our industry;

• operating and stock performance of other companies that investors deem comparable to us and overall performance of the equity markets;

• sales of substantial amounts of our stock by our significant stockholders or our insiders, or the expectation that such sales might occur;

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• additions or departures of key personnel;

• intellectual property, product liability or other litigation against us, our manufacturer or other parties on which we rely or litigation against our general industry;

• changes in our capital structure, such as future issuances of securities and the incurrence of additional debt;

• changes in accounting standards, policies, guidelines, interpretations or principles; and

• other factors described in this “Risk Factors” section.

In addition, in the past, stockholders have initiated class action lawsuits against pharmaceutical companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources.

Our historical financial data included in this prospectus may not be a reliable indicator of our future results.

Our financial results for historical periods reflect the results of operations that are unrelated to the development of ABP-450. We were formed in 2012 and, in our early history, acquired numerous controlling and non-controlling ownership interests in several different businesses that we have since disposed of. We wholly owned Evolus prior to its initial public offering in February 2018. Evolus was included in our consolidated results through May 2019, when we determined that we no longer held control and deconsolidated the entity and recorded the fair value of the retained equity interest in Evolus. Until September 2020, we also operated a business that provides introductory financing services on a limited basis to patients to pay for elective medical procedures and owned a non-controlling interest in a private company. Through the third quarter of 2020, results from the patient financing business are reflected in our results of operations and ownership interest in the private company is reflected on our balance sheet, each of which were immaterial to our financial results.

In September 2018, we exercised a contractual option with Daewoong to obtain exclusive development and distribution rights for ABP-450 for therapeutic indications; our license and supply agreement with Daewoong was subsequently executed in December 2019. Since acquiring those therapeutic rights in 2018, we have devoted substantially all our efforts to identify and recruit personnel, design clinical studies, and seek regulatory approval for our ABP-450 product candidate for therapeutic applications.

In January 2020, we contributed our interest in Evolus to a newly formed entity in exchange for membership units, and then distributed all of the units of said entity to our existing stockholders. In September 2020, we contributed the patient financing business and our non-controlling interest in the private company each to a newly formed entity in exchange for membership units, and then distributed all of the units of said entities to our existing stockholders. We refer to these transactions collectively as the Divestiture Transactions. As such, our business is now exclusively focused on developing ABP-450 for debilitating medical conditions. The results of operations and related financial data for the periods presented in this prospectus are not indicative of our future results associated with the development of ABP-450.

In addition, SCH currently performs or supports many general and administrative corporate functions for our company, and pursuant to the services agreement will continue to do so after this offering for a period of time. Our historical financial data included in this prospectus does not reflect the financial condition, results of operations or cash flows that we would have achieved as a stand-alone company during the periods presented or those we will achieve in the future. This is primarily the result of the following factors:

• our historical financial data reflects expense allocations for certain support functions that are provided on a centralized basis within SCH, such as expenses for business technology, facilities, legal, finance, human resources and business development that may be higher or lower than the comparable expenses that we would have actually incurred, or will incur in the future, as a stand-alone company following termination of the services agreement; and

• we anticipate significant increases will occur in our cost structure as a result of this offering, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act.

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Our directors, officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.

After this offering, our officers, directors and principal stockholders each holding more than 5% of our common stock will collectively control approximately 72% of our outstanding common stock. As a result, these stockholders, if they act together, will be able to control the management and affairs of our company and most matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change of control and might adversely affect the market price of our common stock. This concentration of ownership may not be in the best interests of our other stockholders.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell their shares, could result in a decrease in the market price of our common stock. Immediately after this offering, we will have 21,996,103 outstanding shares of common stock based on the number of shares outstanding as of June 30, 2021. This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Of the remaining 16,996,103 shares, substantially all are currently restricted as a result of securities laws or 180-day lock-up agreements but will be able to be sold after the offering as described in the section of this prospectus titled “Shares Eligible for Future Sale.” Moreover, after this offering, holders of an aggregate of up to 3,996,237 shares of our common stock, including shares of our common stock issuable upon the conversion of the shares of our convertible preferred stock that will be outstanding immediately prior to the consummation of this offering, will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders as described in the section of this prospectus titled “Description of Capital Stock—Registration Rights” and “Medytox Registration Rights.” We also intend to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market, subject to volume limitations applicable to affiliates and the lock-up agreements described in the section of this prospectus titled “Underwriting.”

Because the initial public offering price of our common stock will be substantially higher than the net tangible book value per share of our outstanding common stock following this offering, new investors will experience immediate and substantial dilution.

The initial public offering price will be substantially higher than the net tangible book value per share of our common stock immediately following this offering based on the total value of our tangible assets less our total liabilities. Therefore, if you purchase shares of our common stock in this offering, you will experience immediate dilution of $11.54 per share, based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and our pro forma as adjusted net tangible book value per share as of June 30, 2021.

Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as Delaware law, could discourage a takeover.

Our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law contain provisions or will contain provisions that might enable our management to resist a takeover and might make it more difficult for an investor to acquire a substantial block of our common stock. These include the following provisions:

• permitting our board of directors to issue shares of preferred stock, with any rights, preferences and privileges as they may designate, without stockholder approval, which could be used to dilute significantly the ownership of a hostile bidder;

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• providing that the authorized number of directors may be changed only by resolution of our board of directors and that a director may only be removed for cause by the affirmative vote of the holders of at least 66 2/3% of our voting stock;

• providing that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

• dividing our board of directors into three classes, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

• requiring that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;

• providing that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specifying requirements as to the form and content of a stockholder’s notice, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company;

• prohibiting cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and

• providing that special meetings of our stockholders may be called only by the chairman of the board, our Chief Executive Officer or by our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors, which may delay the ability of our stockholders to force consideration by our company of a take-over proposal or to take certain corporate actions, including the removal of directors.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, we are subject to Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. This provision could have the effect of delaying or preventing a change-of-control, whether or not it is desired by or beneficial to our stockholders.

Furthermore, our amended and restated certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for most legal actions involving actions brought against us by stockholders; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the Exchange Act, or by any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. Our amended and restated certificate of incorporation will also provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act of 1933, as amended, or the Securities Act. We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. However, these provisions may have the effect of discouraging lawsuits against our directors and officers. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in

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other jurisdictions, which could harm our business, financial condition, and operating results. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented to this exclusive forum provision, but will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

Our management will have broad discretion over the actual amounts and timing of the expenditure of the proceeds of this offering and might not apply the proceeds in ways that enhance our operating results or increase the value of your investment.

We intend to allocate a significant amount of the net proceeds from this offering to fund our clinical and regulatory development of ABP-450, including our Phase 2 clinical studies and other future clinical studies, and for general corporate purposes, including working capital, operating expenses and capital expenditures Our management will have broad discretion over the actual amounts and timing of the expenditure of the net proceeds from this offering within those categories, and accordingly, investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds, with only limited information concerning management’s specific intentions. Our management might not apply the proceeds in ways that enhance our operating results or increase the value of your investment. Pending our use of the net proceeds from this offering, we plan to invest the net proceeds in a variety of capital preservation investments, including short and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

We have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. Additionally, our ability to pay cash dividends or other distributions on our common stock may be restricted by the terms of any future debt or preferred securities or future credit facility. If we do not pay dividends, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

General Risks

Our business and operations would suffer in the event of computer system failures.

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusions, including by computer hackers, foreign governments, and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our current or future product development programs. For example, the loss of clinical study data from completed or any future ongoing or planned clinical studies could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, damage to our reputation, and the further development of our product candidate could be delayed.

If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will rely in part on the research and reports that equity research analysts publish about us and our business. We do not currently have and may never obtain research coverage by equity research analysts. Equity research analysts may elect not to provide research coverage of our common stock after the

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closing of this offering, and such lack of research coverage may adversely affect the market price of our common stock. In the event we obtain equity research analyst coverage, we will not have any control of the analysts or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our common stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause the trading price or trading volume of our common stock to decline.

We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

We will incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the Exchange Act and regulations regarding corporate governance practices. The listing requirements of Nasdaq and the rules of the Securities and Exchange Commission, or SEC, require that we satisfy certain corporate governance requirements. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, the reporting requirements, rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our consolidated net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.

We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would harm our business.

After this offering, we will be subject to Section 404 of the Sarbanes-Oxley Act, or Section 404, and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. In order to maintain effective internal controls, we will need to assume certain functions that have historically been provided by SCH and we will need additional financial personnel, systems and resources. Beginning with the second annual report on Form 10-K that we will be required to file with the SEC, Section 404 requires an annual management assessment of the effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (i) following the fifth anniversary of the completion of this offering, (ii) in which we have total annual gross revenue of at least $1.07 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

To date, we have never conducted a review of our internal controls for the purpose of providing the reports required by these rules. During the course of our review and testing, we may identify deficiencies and be unable to remediate

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them before we must provide the required reports. Furthermore, if we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we will be required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from Nasdaq or other adverse consequences that would materially harm our business and reputation.

We are an “emerging growth company,” and the reduced reporting requirements available to emerging growth companies could make our common stock less attractive to investors.

We qualify as an “emerging growth company,” as defined in the JOBS Act. For as long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies. These provisions include, but are not limited to:

• being permitted to have only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations disclosure;

• an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;

• reduced disclosure about executive compensation arrangements in our periodic reports, registration statements and proxy statements; and

• exemptions from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements.

To the extent we take advantage of any of these exemptions, the information that we provide stockholders may be different than what is available with respect to other public companies.

We are also a “smaller reporting company” as defined in the rules promulgated under the Exchange Act. Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including exemption from compliance with the auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates on the last business day of our second fiscal quarter is less than $250.0 million, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates on the last business day of the second quarter of that fiscal year is less than $700.0 million. Investors could find our common stock less attractive because we may 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 our trading price may be more volatile.

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Special Note Regarding Forward-Looking Statements

This prospectus, including the sections titled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” contains forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this prospectus include, among other things, statements about:

• estimates of our addressable market, future revenue, expenses, capital requirements and our needs for additional financing;

• our research and development plans, including our plans to explore the therapeutic potential of ABP-450 in additional indications;

• the timing, progress and results of clinical studies for ABP-450, including statements regarding the timing of initiation and completion of studies or studies and related preparatory work, the period during which the results of the studies will become available and our research and development programs;

• the timing of and our ability to obtain and maintain marketing approvals for our product candidate;

• the rate and degree of market acceptance and clinical utility of our product candidate in any of our proposed therapeutic indications for which we receive marketing approval;

• competitive companies and technologies and our industry;

• regulatory developments in the United States and foreign countries;

• the performance of our third-party manufacturer;

• our ability to develop sales and marketing capabilities;

• our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidate in any of our proposed therapeutic indications and our ability to operate our business without infringing on the intellectual property rights of others;

• our ability to hire and retain key personnel;

• the impacts of the ongoing COVID-19 pandmic on our clinical studies and business;

• our ability to obtain additional financing, when needed;

• the volatility of the trading price of our common stock;

• our expectations regarding use of proceeds from this offering; and

• our expectations about market trends.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” and elsewhere in this prospectus. Moreover, we operate in a competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of

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factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations, except as required by law.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the Securities and Exchange Commission as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

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Use of Proceeds

We estimate that we will receive net proceeds of approximately $67.8 million from the sale of shares of common stock in this offering, or approximately $78.2 million if the underwriters exercise their option to purchase additional shares in full, based on an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) the net proceeds to us from this offering by $4.7 million, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million in the number of shares offered by us in this offering would increase (decrease) the net proceeds that we receive from this offering by $14.0 million, assuming the initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We currently intend to use the net proceeds we receive from this offering, along with our cash, as follows:

• approximately $20million to $40million to fund the ongoing clinical development of ABP-450 for the treatment of migraine, which we anticipate should enable us to complete a Phase 2 study in this indication;

• approximately $5 million to $10million to fund the ongoing clinical development of ABP-450 for the treatment of cervical dystonia, which we anticipate should enable us to complete a Phase 2 study in this indication;

• approximately $1million to $5million to engage in preclinical development of ABP-450 for the treatment of gastroparesis; and

• the remainder for general corporate purposes, including working capital, operating expenses and capital expenditures.

We believe that the net proceeds from this offering, along with our cash, will be sufficient to fund our operating plan through at least the next 12 months.

The expected use of the net proceeds from the offering represents our intentions based upon our current plans and business conditions. The amounts we actually expend in these areas, and the timing thereof, may vary significantly from our current intentions and will depend on a number of factors, including the success of our clinical development efforts, cash generated from future financings and actual expenses to operate our business. We may use a portion of the net proceeds for the acquisition of, or investment in, businesses, assets or technologies that we believe complement our business, although we have no present commitments or agreements.

We will have broad discretion over the actual amounts and timing of the expenditure of the net proceeds from this offering. Pending the uses described above, we intend to invest the net proceeds from this offering in a variety of capital preservation investments, including short and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

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Dividend Policy

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors may deem relevant. Our ability to pay cash dividends or other distributions on our common stock may be restricted by the terms of any future debt or preferred securities or future credit facility.

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Capitalization

The following table sets forth our cash and capitalization as of June 30, 2021 on:

▪ on an actual basis;

▪ on a pro forma basis to give effect to: (i) the Preferred Stock Conversion, (ii) the Note Conversions, (iii) the Daewoong PIK Issuance, and (iv) the filing and effectiveness of our restated certificate of incorporation immediately prior to the completion of this offering; and

▪ on a pro forma as adjusted basis, giving effect to: (i) the pro forma adjustments set forth above; and (ii) the sale by us of 5,000,000 shares of common stock in this offering at an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The number of shares of common stock issuable upon conversion of our convertible notes, and the number of additional shares we may issue to Medytox upon the closing of this offering, are subject to adjustment as described in “Prospectus summary—The offering.” The pro forma and pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering as determined at pricing. You should read this table together with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	As of June 30, 2021
	Actual			Pro Forma		Pro Forma As Adjusted (1)
				(unaudited)
	(in thousands, except share and per-share data)
Cash	$	10,605		$	10,605	$	78,355
Convertible notes at fair value		79,342			—		—
Convertible preferred stock, $0.0001 par value;    44,666,035 shares authorized, 21,257,708(2)    shares issued and outstanding, actual; no shares    issued or outstanding, pro forma or pro forma    as adjusted		137,949			—		—
Stockholders’ equity (deficit):
Preferred stock, $0.0001 par value: no shares authorized, issued or outstanding, actual; 10,000,000 shares authorized, no shares issued or outstanding pro forma and pro forma as as adjusted		—			—		—
Common stock, $0.0001 par value; 207,450,050 shares authorized, 8,167,540 shares issuedand 8,166,174 shares outstanding, actual; 150,000,000 sharesauthorized, pro forma and pro forma as adjusted; 16,996,103 shares issued and outstanding,pro forma; 21,996,103 shares issued and outstanding, pro forma as adjusted	14				2		2
Additional paid-in capital		187,348			404,652		472,401
Accumulated deficit		(403,099	)		(403,099)		(403,099	)
Treasury stock, at cost, 1,342 shares		(23	)		(23)		(23)
Total AEON Biopharma, Inc. stockholders’ (deficit) equity		(215,760	)		1,532		69,281
Total capitalization	$	1,532		$	1,532	$	69,281

(1) Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) each of our pro forma as adjusted cash, additional paid-in-capital, total AEON Biopharma, Inc. stockholders’ equity and total capitalization by approximately $4.7 million, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million in the number of shares offered by us in this offering would increase (decrease) each of our pro forma as adjusted cash, additional paid-in-capital, total AEON Biopharma, Inc. stockholders’ equity and total

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capitalization by approximately $14.0 million, assuming the initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(2) Represents actual shares outstanding as of June 30, 2021. In connection with this offering and the Preferred Stock Conversion, will convert into an aggregate of 2,902,665 shares of common stock immediately prior to the completion of this offering.

The number of shares of our common stock to be outstanding after this offering is based on 16,996,103 shares of our common stock outstanding as of June 30, 2021, assuming (i) the Preferred Stock Conversion, (ii) the Note Conversions and (iii) the Daewoong PIK Issuance, and excludes:

▪ 2,974,268 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2021, with a weighted-average exercise price of $14.30 per share, of which 1,760,408 are vested with a weighted-average exercise price of $24.16 per share;

▪ 703,311 shares of common stock issuable upon the exercise of options granted after June 30, 2021, with a weighted-average exercise price of $13.49 per share;

▪ 29,787 shares of common stock issuable upon the exercise of a warrant outstanding as of June 30, 2021 to purchase 29,787 shares of our Series B convertible preferred stock at an exercise price of $124.26 per share, which will convert into a warrant to purchase shares of common stock immediately prior to the completion of this offering;

▪ 1,128,482 shares of common stock that were reserved for issuance as of June 30, 2021 under our 2013 Plan;

▪ 2,639,532 shares of common stock reserved for future issuance under our 2021 Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the completion of this offering; and

▪ 219,661 shares of common stock reserved for future issuance under our ESPP, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective on the day the ESPP is adopted.

The number of shares of common stock issuable upon conversion of our convertible notes, and the number of additional shares we may issue to Medytox upon the closing of this offering, are subject to adjustment as described in “Prospectus summary—The offering.”

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Dilution

If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the amount per share paid by purchasers of shares of common stock in this offering and the pro forma as adjusted net tangible book value per share of common stock immediately after this offering.

Net tangible book value (deficit) per share is determined by dividing our total tangible assets (which excludes deferred offering costs) less our total liabilities and convertible preferred stock by the number of shares of common stock outstanding. Our historical net tangible book value (deficit) as of June 30, 2021 was $(209.0) million, or $(25.59) per share of our common stock, based on 8,166,174 shares of common stock outstanding as of June 30, 2021.

Our pro forma net tangible book value as of June 30, 2021 was approximately $8.3 million, or $0.49 per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets (which excludes deferred offering costs) reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of June 30, 2021, after giving effect to (i) the Preferred Stock Conversion, (ii) the Note Conversions and (iii) the Daewoong PIK Issuance. The number of shares of common stock issuable upon conversion of our convertible notes, and the number of additional shares we may issue to Medytox upon the closing of this offering, are subject to adjustment as described in “Prospectus summary—The offering.”

After giving effect to (i) the pro forma adjustments set forth above; and (ii) our sale in this offering of 5,000,000 shares of our common stock at an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2021 would have been approximately $76.0 million, or $3.46 per share of common stock. This represents an immediate increase in pro forma net tangible book value of $2.97 per share to our existing stockholders and an immediate dilution of $11.54 per share to investors in this offering. Net tangible book value dilution per share to new investors in this offering represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the pro forma as adjusted net tangible book value per share of common stock immediately after completion of this offering. The following table illustrates this dilution on a per share basis:

Assumed initial public offering price, per share				$	15.00
Historical net tangible book value (deficit) per    share as of June 30, 2021	$	(25.59	)
Increase attributable to pro forma adjustments	26.08
Pro forma net tangible book value per share as    of June 30, 2021	0.49
Increase in pro forma net tangible book value per    share attributable to new investors in this    offering	2.97
Pro forma as adjusted net tangible book value per    share after this offering					3.46
Dilution per share to new investors in this offering				$	11.54

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering.

Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value by $4.7 million, or $0.21 per share and the dilution in pro forma as adjusted net tangible book value per share to new investors in this offering by $0.79 per share, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase of 1.0 million in the number of shares offered by us in this offering would increase our pro forma as adjusted net tangible book value by approximately $14.0 million, or approximately $0.46 per share, and would decrease dilution per share to new investors in this offering by approximately $(0.46) per share, and each decrease of 1.0 million in the number of shares offered

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by us in this offering would decrease our pro forma as adjusted net tangible book value by approximately $14.0 million, or approximately $(0.50)per share, and would increase dilution per share to new investors in this offering by approximately $0.50per share, in each case assuming the initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option in full to purchase additional shares, the pro forma as adjusted net tangible book value per share after this offering would be $3.80 per share, the increase in pro forma as adjusted net tangible book value per share to existing stockholders would be $3.31 per share and the dilution to new investors in this offering would be $11.20 per share.

The following table shows, as of June 30, 2021, on a pro forma as adjusted basis described above, the number of shares of our common stock, the total consideration and the average price per share (i) paid to us by existing stockholders; and (ii) to be paid by new investors acquiring our common stock in this offering at an assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the over page of this prospectus, before deducting underwriting discounts and commission and estimated offering expenses payable by us:

	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			Per Share
Existing stockholders		16,996,103	77.3		%	$	187,349,412		71.4	%	$	11.02
New investors		5,000,000	22.7				75,000,000		28.6		$	15.00
Total		21,996,103		100.0	%	$	262,349,412		100.0	%	$	11.93

The information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering.

Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) total consideration paid by new investors by approximately $5.0 million, assuming that the number of shares offered by us, as set forth on the cover of this prospectus, remains the same. Similarly, each increase (decrease) of 1.0 million in the number of shares offered by us in this offering would increase (decrease) total consideration paid by new investors by approximately $15.0 million, assuming the initial public offering price remains the same.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’ option to purchase additional shares. If the underwriters exercise their option to purchase 750,000 additional shares in full, our existing stockholders would own 74.7% and our new investors would own 25.3% of the total number of shares of our common stock outstanding upon the completion of this offering.

The foregoing tables and calculations exclude:

▪ 2,974,268 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2021, with a weighted-average exercise price of $14.30 per share, of which 2,973,904 are vested with a weighted-average exercise price of $24.16 per share;

▪ 703,311 shares of common stock issuable upon the exercise of options granted after June 30, 2021, with a weighted-average exercise price of $13.49 per share;

▪ 29,787 shares of common stock issuable upon the exercise of a warrant outstanding as of June 30, 2021 to purchase 29,787 shares of our Series B convertible preferred stock at an exercise price of $124.26 per share, which will convert into a warrant to purchase shares of common stock immediately prior to the completion of this offering;

▪ 1,128,482 shares of common stock that were reserved for issuance as of June 30, 2021 under our 2013 Plan;

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▪ 2,639,532 shares of common stock reserved for future issuance under our 2021 Plan, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective immediately prior to the completion of this offering; and

▪ 219,661 shares of common stock reserved for future issuance under our ESPP, as well as any automatic increases in the number of shares of our common stock reserved for future issuance under this plan, which will become effective on the day the ESPP is adopted.

We may choose to raise additional capital through the sale of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. In addition, to the extent that any outstanding options or the outstanding warrant are exercised or new options are issued under our stock-based compensation plans, or we issue additional shares of common stock in the future, investors in this offering will experience further dilution.

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Management’s Discussion and Analysis of

Financial Condition And Results of Operations

The following discussion and analysis of our consolidated financial condition and results of operations should be read together with our audited and unaudited consolidated financial statements and related notes appearing elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans, objectives, expectations, projections and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors identified below and those set forth in the “Risk Factors” section of this prospectus, our actual results and the timing of selected events could differ materially from the forward-looking statements contained in the following discussion and analysis. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a clinical stage biopharmaceutical company focused on developing our proprietary botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection, or ABP-450, for debilitating medical conditions, with an initial focus on the neurology and gastroenterology markets. We plan to develop ABP-450 to address the estimated $2.2 billion global therapeutic botulinum toxin market, which is projected to grow to $4.4 billion in 2027.  ABP-450 is the same botulinum toxin complex that is currently approved and marketed for cosmetic indications by Evolus under the name Jeuveau. ABP-450 is manufactured by Daewoong in compliance with current Good Manufacturing Practice, or cGMP, in a facility that has been approved by FDA, Health Canada and EMA to manufacture Jeuveau in the United States and Nuceiva in Canada and the European Union.  We have exclusive development and distribution rights for therapeutic indications of ABP-450 in the United States, Canada, the European Union, the United Kingdom, and certain other international territories. We have built a highly experienced management team with specific experience in biopharmaceutical and botulinum toxin development and commercialization.  

Botulinum toxins have proven to be a highly versatile therapeutic biologic, with over 230 therapeutic uses documented in published scientific literature and 10 approved therapeutic indications in the United States. Our initial development programs for ABP-450 are directed at migraine, cervical dystonia and gastroparesis. We selected these initial indications based on a comprehensive and proprietary product assessment screen designed to identify indications where we believe ABP-450 can deliver significant value to patients, physicians and payors and where its clinical, regulatory and commercial characteristics suggest viability. We believe that ABP-450 has application in a broad range of indications and we plan to continue to explore additional indications that satisfy our product assessment screens.

Our IND application for ABP-450 as a preventative treatment of migraine was accepted by FDA in the fourth quarter of 2020 and we initiated enrolling patients for our Phase 2 clinical study in the first quarter of 2021. We plan to announce topline data in the second half of 2022.

Our IND application for ABP-450 as a treatment for cervical dystonia was accepted by FDA in the third quarter of 2020 and we initiated our Phase 2 clinical study in the first quarter of 2021.  We plan to announce topline data in early 2022.

In December 2020, we initiated a preclinical gastroparesis study. We expect to complete this preclinical study in the third quarter of 2021. Following the preclinical study, we expect to submit an IND to FDA in late 2021 to support the initiation of a Phase 2a clinical study in 2022.

ABP-450 has the same 900 kDa complex size as Botox. We believe physicians generally prefer the performance characteristics of the complete 900 kDa botulinum toxin complex for therapeutic uses and that this characteristic will provide ABP-450, if approved, a competitive advantage over other non-Botox therapeutic botulinum toxins currently on the market or in development. ABP-450, if approved, will be the only therapeutic botulinum toxin with significantly similar physiochemical properties as Botox.  

We license ABP-450 from Daewoong, a South Korean pharmaceutical manufacturer, and have exclusive development and distribution rights for therapeutic indications in the United States, Canada, the European Union, the United

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Kingdom, and certain other international territories. Daewoong licenses the same 900 kDa botulinum toxin to Evolus, for cosmetic indications, which it markets and sells under the name Jeuveau. Prior to licensing the botulinum toxin complex to Evolus, Daewoong conducted a broad preclinical development program for ABP-450 that was primarily focused on safetyto 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 Jeuveauin the United States and Nuceiva in Canada and the European Unionfor 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. While none of these preclinical or clinical programs specifically contemplated any therapeutic uses of ABP-450, given that the FDA’s regulatory requirements are generally the same for the cosmetic or therapeutic use of a toxin, we believe that the positive data derived from these preclinical and clinical studies will support the clinical development and anticipated future safety labeling of ABP-450 for migraine and cervical dystonia at all contemplated dose ranges.

We have never been profitable from operations and, as of December 31, 2019 and 2020 and June 30, 2021, we had a consolidated accumulated deficit of $333.7 million, $366.6 million, and $403.1 million respectively. We have never generated revenue from ABP-450. Losses from operations were $54.0 million, $16.4 million, and $43.7 million for the years ended December 31, 2019 and 2020, and the six months ended June 30, 2021 respectively.  Consolidated net income attributable to our common stockholders was $172.9 million for the year ended December 31, 2019, primarily as a result of a non-cash gain recognized upon deconsolidation of our subsidiary, Evolus in May 2019, following our assessment that we no longer held a controlling financial interest. Consolidated net losses attributable to our common stockholders were $32.9 million for the year ended December 31, 2020 and $36.5 million for the six months ended June 30, 2021. As of June 30, 2020, we had $10.6 million in cash. We have concluded that we do not have sufficient cash to fund our operations 12 months from the date of our financial statements included within this registration statement, without additional financing, and as a result, there is substantial doubt about our ability to continue as a going concern.

We do not expect to receive any revenue from ABP-450 or any future product candidates that we develop unless and until we obtain regulatory approval and commercialize ABP-450 or any future product candidates. We expect to continue to incur significant expenses and increasing NOLs for the foreseeable future as we seek regulatory approval, prepare for and, if approved, proceed to commercialization of ABP-450. We utilize clinical research organizations, or CROs, to carry out our clinical development and we do not yet have a sales organization. We expect to incur significant expenses related to building our commercialization infrastructure, including marketing, sales and distribution functions, inventory build prior to commercial launch and training and deploying a specialty sales force and implementing a targeted marketing campaign. Based on our estimated use of proceeds, we anticipate that the net proceeds from this offering will not be sufficient to fund our operating plan through the launch and initial commercialization of ABP-450.

Historical Background

We were formed in 2012 and, in our early history, acquired numerous controlling and non-controlling ownership interests in several different businesses that we have since disposed of and now have no interest in. We wholly owned Evolus prior to its initial public offering in February 2018. Evolus was included in our consolidated results of operations through May 2019, when we determined that we no longer held control and deconsolidated the entity and recorded the fair value of the retained equity interest in Evolus. Until September 2020, we also operated a business that provides introductory financing services on a limited basis to patients to pay for elective medical procedures and owned a non-controlling interest in a private company. Through the third quarter of 2020, results from the patient financing business are reflected in our results of operations and ownership interest in the private company is reflected on our balance sheet, each of which were immaterial to our financial results.

In September 2018, we exercised a contractual option with Daewoong to obtain exclusive development and distribution rights for ABP-450 for therapeutic indications; our license and supply agreement with Daewoong was subsequently executed in December 2019. Since acquiring those therapeutic rights in 2018, we have devoted substantially all our efforts to identify and recruit personnel, design clinical studies, and seek regulatory approval for our ABP-450 product candidate for therapeutic applications. In May 2019, we hired Marc Forth to be our Chief Executive Officer, and subsequently have devoted significant resources to applying our portfolio planning screening process to construct and execute our development strategy for ABP-450.

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In January 2020, we contributed our interest in Evolus to Alphaeon 1 LLC, a newly formed entity in exchange for member units, and then distributed all of the units of Alphaeon 1 LLC to our existing stockholders. In September 2020, we contributed Alphaeon Credit, Inc., or Alphaeon Credit, the patient financing business, and our investment interest in Zelegent, a private company, each to a newly formed entity, and then distributed all of the units in said entities to our existing stockholders. We refer to these transactions collectively as the Divestiture Transactions. As a result,our business is now exclusively focused on developing ABP-450 for debilitating medical conditions.

Business Segments

During 2018, we operated in three operating and reportable segments – AEON Biopharma Core, Alphaeon Credit and Evolus, which was then our majority-owned subsidiary. On May 20, 2019, our ownership percentage in Evolus’ common stock was reduced to approximately 36% and we no longer held a controlling financial interest in Evolus. As a result, subsequent to May 20, 2019, we operated in two operating and reportable segments - AEON Biopharma Core and Alphaeon Credit. On September 30, 2020, we contributed our interest in Alphaeon Credit to a newly-formed entity and distributed all of the units of that entity to our stockholders.  As a result, we now have one operating and reportable segment.

Components of Our Results of Operations

Revenue

Our revenue primarily relates to introductory financing services provided on a limited basis to patients. We have divested all businesses and equity interests that are not related to the development of ABP-450, and thus do not anticipate deriving any product revenue unless and until we receive regulatory approval for, and are able to successfully commercialize, ABP-450.

Operating Expenses

Research and Development Expenses

Our research and development, or R&D, expenses to date have been primarily attributed to consolidated Evolus results, the license of the rights to ABP-450, the development of ABP-450 for migraine, cervical dystonia and gastroparesis, and the consolidated expenses of Evolus. Due to the stage of development and our ability to use resources across all of our programs, most of our research and development costs are not recorded on a program-specific basis.  For the period from January 1, 2019 through May 20, 2019, Evolus results accounted for a material portion of our reported R&D expenses. We expect to increase our R&D expenses related to our core operations as we initiate Phase 2 clinical studies for ABP-450 to treat migraine, cervical dystonia and gastroparesis. R&D expenses associated with these studies will include third-party costs such as expenses incurred under agreements with Contact Research Organizations, or CROs, the cost of consultants who assist with the development of ABP-450 on a program-specific basis, investigator grants, sponsored research, product costs in connection with acquiring ABP-450 from Daewoong for use in conducting nonclinical studies and clinical studies, and other third-party expenses attributable to the development of our product candidates.

R&D activities will be critical to achieving our business strategy. As our pipeline programs enter the later stages of clinical development, we will generally incur greater development costs than those programs in the earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical studies. We expect our R&D expenses to be significant over the next several years as we advance the clinical development of ABP-450 and prepare to seek regulatory approval.

It is difficult to determine with certainty the duration and completion costs of any clinical study we may conduct. The duration, costs and timing of clinical studies of our current and future product candidates will depend on a variety of factors that include:

• the number of studies required for approval;

• the per patient study costs;

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• the number of patients that participate in the studies;

• the number of sites included in the studies;

• the countries in which the study is conducted;

• the length of time required to enroll eligible patients;

• the number of doses that patients receive;

• the drop-out or discontinuation rates of patients;

• the potential additional safety monitoring or other studies requested by regulatory agencies;

• the duration of patient follow-up; the timing and receipt of regulatory approvals;

• the costs of clinical study material; and

• the efficacy and safety profile of the product candidate.

As a result, we are unable to determine the duration and completion costs of our programs or when and to what extent we will generate revenue from commercialization and sale of any of our product candidates. Our research and development activities may be subject to change from time to time as we evaluate our priorities and available resources.

Selling, General and Administrative Expenses

Selling, general and administrative, or SG&A, expenses to date consist primarily of consolidated Evolus results, compensation for personnel, including stock-based compensation, 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. For the period from January 1, 2019 through May 20, 2019, consolidated Evolus results accounted for a material portion of our SG&A expenses. We anticipate that our SG&A expenses related to our core operations will increase in the future to support our continued R&D activities, potential commercialization efforts and increased costs of operating as a public company. These increases will likely include increased costs related to the hiring of additional personnel, professional fees and additional rent and other facilities related costs, among other expenses. Additionally, we anticipate increased costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of The Nasdaq Global Market, or Nasdaq, 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 U.S. 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.

Litigation settlement and license expense

Litigation settlement and license expense primarily consists of the fair value of common stock issued by us in June 2021 in a settlement and license agreement with Medytox, Inc. The shares of common stock issued to Medytox were valued at the date of the agreement, which was the issuance date, by management with input from an independent third-party valuation specialist, using a Monte Carlo simulation, or MCS. The analysis considered a scenario analysis (probability-weighted expected return model, or PWRM), considering two IPO scenarios with a combined 83% weighting and a delayed exit scenario with 17% weighting. The MCS then simulated the future equity value within each scenario to estimate the payoff for each simulation path, given the potential requirement to issue additional shares depending on the dilution impact from the IPO or other future financings. Key inputs included (1) our equity value in each scenario, (2) the fair value of Divestiture Transactions, (3) our capital structure, (4) the weighting on each scenario, (5) the expected time to exit in each scenario, (6) the volatility in each scenario, (7) the risk-free interest rate over the period to exit in each scenario, and (8) the discount for lack of marketability of the common stock in each

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scenario. The equity value was estimated based on the total invested capital value less the fair value of the outstanding debt. Our total invested capital value was estimated using a risk-adjusted and probability-adjusted discounted cash flow (DCF) method based upon future cash flow generation. Inputs for the DCF analysis included (1) forecasted financial projections for the next nine years developed by management, (2) a terminal value assigned using an exit multiple method, (3) a discount rate based on the weighted average cost of capital, and (4) the probability of success. We also considered the expected IPO pricing based on input from and discussions with underwriters.

Interest Income (Expense) including from Related Party Borrowings

Interest income (expense) consists primarily of interest incurred on our outstanding indebtedness and non-cash interest related to the accretion to principle premium, debt discount and issuance costs associated with our convertible and promissory note agreements. Accretion of the discount related to the contingent promissory notes and convertible notes is recorded in interest expense in the consolidated statement of operations and comprehensive income (loss) with a corresponding increase to contingent promissory and convertible note payable balances, respectively, in the consolidated balance sheets.

Gain on Deconsolidation and Sale of Evolus and Changes in Fair Value

On May 20, 2019, following the sale for cash proceeds and distribution to convertible noteholders of Evolus stock, we determined we no longer had a controlling financial interest in Evolus. We deconsolidated the assets and liabilities of Evolus effective May 20, 2019 and recognized a pre-tax gain.  

We elected to account for our remaining retained equity investment in Evolus’ common stock subsequent to the deconsolidation of Evolus on May 20, 2019 at fair value. We recorded the equity investment in Evolus’ common stock at fair value on May 20, 2019 and subsequent changes in fair value were recorded in the consolidated statement of operations and comprehensive (loss) income. In January 2020, we contributed our equity investment in Evolus common stock to Alphaeon 1 LLC in exchange for member units and then distributed all of the member units of Alphaeon 1 LLC to our stockholders.

Change in Fair Value of Convertible Notes

We elected to account for the 2019 Convertible Notes and the SCH Convertible Note, each described below under the heading “—Liquidity and Capital Resources—Indebtedness,” at fair value. We recorded the 2019 Convertible Notes and the SCH Convertible Note at fair value at inception with subsequent changes in fair value recorded as a component of other income (loss) in the consolidated statements of operations and comprehensive income (loss) or other comprehensive income (loss) for changes related to instrument-specific credit risk.

Loss on Extinguishment of Related Party Borrowing

Effective as of January 2, 2020, we and SCH cancelled all obligations under our intercompany credit line promissory note, or the Strathspey Crown Note, and in exchange we issued the SCH Convertible Note with a principal amount of $17.5 million. We accounted for the debt exchange as an extinguishment of the Strathspey Crown Note and recognized a loss on debt extinguishment of $11.2 million, representing the difference between the fair value of the SCH Convertible Note of $26.5 million on January 2, 2020 and total obligations outstanding under the Strathspey Crown Note of $15.8 million less the unamortized borrowing cost of $0.5 million.

Other Income (Loss), Net

Other income (loss), net primarily consists of gains and losses resulting from the remeasurement of the fair value of our preferred stock warrant liability at each balance sheet date. We will continue to record adjustments to the estimated fair value of the preferred stock warrants until they are exercised or expire, which we expect to occur in connection with this offering. At that time, the final fair value of the warrant liability will be reclassified to stockholders’ deficit and we will no longer record any related periodic fair value adjustments.

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Clarion Unwind Fee

In 2014, we acquired all outstanding voting equity interests of Clarion pursuant to a shareholders’ agreement. The shareholders’ agreement provided the previous equity holders of Clarion the right to an unwind fee of approximately $9.55 million to unwind our acquisition of Clarion. In 2016, the previous equity holders of Clarion exercised the unwind right and the unwind fee became a joint and several obligation of the us and SCH, our majority stockholder.

In November 2017, we and SCH entered into a side letter and guarantee agreement with Clarion and the previous equity holders of Clarion in which we agreed to cause Evolus to enter into an exclusive distribution and supply agreement, dated as of November 30, 2017, or the Distribution Agreement, with Clarion. The Distribution Agreement provided terms pursuant to which Evolus would exclusively supply DWP-450 to Clarion in Canada, if Evolus obtained the necessary regulatory approval from Health Canada. Evolus received approval from Health Canada in August 2018 for the temporary improvement in the appearance of moderate to severe glabellar lines in adult patients under 65 years of age. The Distribution Agreement also sets forth that a portion of the proceeds received by Evolus from each unit of DWP-450 purchased by Clarion shall be paid directly to the previous equity holders of Clarion, and will reduce, on a dollar-for-dollar basis, the amount of the unwind fee owed by us until paid in full.

Pursuant to the Side Letter, we and SCH were obligated to pay the unwind fee upon an acceleration event within 30 days of such event. For purposes of the Side Letter, each of the following events constitutes an acceleration event: (i) the unwind fee is not paid in full by December 31, 2022, (ii) there is a material default of obligations by Evolus under the Distribution Agreement, (iii) a claim or interruption of more than 60 days occurs under the Distribution Agreement that impairs Clarion’s ability to sell DWP-450 in Canada as the sole distributor, (iv) an initial public offering or any change in control involving us or Evolus that results in either company receiving net proceeds of $700 million, (v) the bankruptcy or assignment for the benefit of creditors of us or Evolus, or (vi) the termination of the License and Supply Agreement, dated as of September 30, 2013, as amended, by and between Evolus and Daewoong.

In addition, pursuant to the Side Letter, we and SCH re-affirmed to the previous equity holders of Clarion the obligation of us and SCH to pay the unwind fee should Evolus fail to supply DWP-450 to Clarion or cause the Distribution Agreement to terminate. We and SCH further agreed to pay the unpaid amount of the unwind fee on December 31, 2022, if demanded by the previous equity holders of Clarion.

As of December 31, 2020, no amounts were paid towards the unwind fee, which was included in other liabilities in the consolidated balance sheets.

On March 23, 2021, Evolus, Clarion, and Daewoong entered into an addendum to the Distribution Agreement to provide for Clarion to purchase Jeuveau directly from Daewoong. Our obligation under the Distribution Agreement to pay the unwind fee to the previous equity holders of Clarion was therefore cancelled. We recognized a gain on cancellation of the unwind fee of $9.55 million during the six months ended June 30, 2021 with a corresponding decrease in other liabilities in the consolidated financial statements.  

Income Taxes (Benefit) Provision

Our tax provision is comprised of U.S. and state income taxes. We currently record a full valuation allowance against our net deferred tax assets. We have provided for the tax effects of uncertain tax positions in our tax provision.

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Results of Operations

The following table summarizes our results of operations for the periods indicated (in thousands):

	Year Ended December 31,						Six Months Ended June 30,
	2019			2020			2020			2021
Revenue:
Services	$	3,342		$	2,518		$	1,391		$	-
Other revenue		15			—			—			—
Total revenue		3,357			2,518			1,391			—
Operating costs and expenses:
Cost of revenue		1			—			—			—
Selling, general and administrative		46,037			11,587			5,474			4,552
Research and development		4,814			7,319			1,558			10,203
Litigation settlement and license expense		—			—			—			28,966
Change in fair value of contingent royalty    obligation to Evolus Founders		5,596			—			—			—
Depreciation and amortization expense		875			—			—			—
Total operating costs and expenses		57,323			18,906			7,032			43,721
Loss from operations		(53,966	)		(16,388	)		(5,641	)		(43,721	)
Other income (loss):
Interest income		720			—			—			—
Interest expense		(5,177	)		(1	)		—			—
Interest expense on related party borrowings		(2,293	)		(14	)		(14	)		—
Gain on deconsolidation of Evolus, Inc.		254,106			—			—			—
Gain on transfer of equity investment at fair value		6,597			—			—			—
Change in fair value of equity investment		(49,299	)		346			346			—
Change in fair value of convertible notes		(5,161	)		(5,498	)		680			(2,182	)
Loss on extinguishment of related party borrowings		—			(11,241	)		(11,241	)		—
Gain on cancellation of Clarion unwind fee		—			—			—			9,550
Gain on PPP loan forgiveness		—			139			—			—
(Loss) gain on equity-method investment		136			(140	)		(107	)		—
Other income, net		7			(116	)		18			(100	)
Total non-operating expenses		199,636			(16,525	)		(10,318	)		7,268
(Loss) income before taxes	$	145,670		$	(32,913	)	$	(15,959	)	$	(36,453	)

Comparison of Years Ended December 31, 2020 and 2019 and Six Months Ended June 30, 2020 and 2021

Revenue

Revenue was $3.4 million and $2.5 million during the years ended December 31, 2019 and 2020, respectively. Revenue for years ended December 31, 2019 and 2020 were primarily derived from our introductory financing services, which we disposed of in September 2020.

Revenue was $1.4 million and $0.0 million during the six months ended June 30, 2020 and 2021, respectively. Revenue for the six months ended June 30, 2020 was primarily derived from our introductory financing services, which we disposed of in September 2020.

Operating Expenses

Selling, General and Administrative Expenses

SG&A expenses were $11.6 million during the year ended December 31, 2020, a decrease of $34.5 million, or 75%, compared to $46.0 million during the year ended December 31, 2019. SG&A expenses in the year ended December 31, 2019 were primarily attributable to $36.3 million of consolidated Evolus SG&A expenses. We deconsolidated Evolus

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in May 2019 and subsequent to that date, and for the year ended December 31, 2020 we did not record any SG&A expenses for the entity.  This decrease was offset partly with increases attributable to employees, legal expenses, and third-party consulting fees during the year ended December 31, 2020.

SG&A expenses were $4.6 million during the six months ended June 30, 2021, a decrease of $0.9 million, or 17%, compared to $5.5 million during the six months ended June 30, 2020. The decrease was primarily related to operating expenses included in our divesting of the Alphaeon Credit business in September 2020. SG&A expenses in the six months ended June 30, 2021 were attributable to employees, legal expenses, and third-party consulting fees.

Research and Development Expenses

R&D expenses were $7.3 million during the year ended December 31, 2020, an increase of $2.5 million, or 52%, compared to $4.8 million during the year ended December 31, 2019.  The increase was primarily attributable to a $3.8 million increase in clinical expenses associated with the development of ABP-450, stock based compensation for employees and consultants of $1.3 million, which were partially offset by a $2.6 million decrease as we deconsolidated Evolus in May 2019 and no longer recorded expenses for that entity.

R&D expenses were $10.2 million during the six months ended June 30, 2021, an increase of $8.7 million or, 555%, compared to $1.6 million during the six months ended June 30, 2020. The increase was primarily attributed to a $8.2 million increase in clinical expense related to the commencement and ongoing development of our two Phase 2 clinical studies of ABP-450 in both migraine and cervical dystonia as well as initiation of preclinical studies in gastroparesis and $0.4 million in stock-based compensation.

Litigation Settlement and License Expense

As a result of a settlement and license agreement executed with Medytox, Inc. in June 2021, and corresponding share issuance agreement, we issued 1,569,442 shares of our common stock, which was valued at $29.0 million.

Contingent Royalty Obligation to Evolus Founders, a related party

Revaluation of the contingent royalty obligation to the former stockholders of Evolus, or the Evolus Founders, was $5.6 million for the year ended December 31, 2019. Such change of the fair value is recorded in operating expenses. As a result of the deconsolidation of Evolus in our financial statements subsequent to May 20, 2019, we have not recorded a revaluation of such contingent royalty obligation since that date, and any subsequent revaluation of the contingent royalty obligation will not impact our results of operations. Evolus is solely responsible for the contingent royalty obligations to Evolus Founders.

There was no revaluation of the contingent royalty obligation to the Evolus Founders in the six months ended June 30, 2021 and 2020.

Other Income (Loss)

Other income (expense) was $(16.5) million for the year ended December 31, 2020, compared to $199.6 million for the year ended December 31, 2019, and included loss on extinguishment of related party borrowing, gain on deconsolidation and sale of Evolus and changes in fair value, all items described below in more detail, as well as other income (loss) of  $(5.6) million for the year ended December 31, 2020, compared to $(11.8) million for the year ended December 31, 2019. Interest expense for the year ended December 31, 2020 consisted primarily of $5.5 million related to the change in fair value for the Notes described below under the heading “—Liquidity and Capital Resources—Indebtedness”. Interest expense for the year ended December 31, 2019 consisted primarily interest income of $0.7 million offset by $5.2 million related to the change in fair value of the 2019 Convertible Notes, $2.3 million related to interest expense related to the SCH Convertible Note, $3.3 million related to the accretion of a redemption premium recorded for the Notes and $1.9 million of consolidated Evolus interest expense.

Other income (loss) was income of $7.3 million for the six months ended June 30, 2021, compared to loss of $(10.3) million for the six months ended June 30, 2020. Other income for the six months ended June 30, 2021 consisted

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primarily of a non-cash gain of $9.6 million recognized upon the cancellation of an unwind fee to Clarion that was previously recorded as a liability and $(2.2) million related to the fair value change in convertible notes. Other income (loss) for the six months ended June30, 2020 primarily included $(11.2) million on the loss on extinguishment of related party borrowing, $0.4 million change in fair value of an equity investment and loss on equity-method investment and $0.7 million of changes in fair value of convertible notes.

Loss on Extinguishment of Related Party Borrowing

For the quarter ended June 30, 2020 and year ended December 31, 2020 we accounted for the debt exchange of the Strathspey Crown Note for the SCH Convertible Note as an extinguishment and recognized a loss on debt extinguishment of $11.2 million, representing the difference between the fair value of the SCH Convertible Note of $26.5 million at January 2, 2020 and total obligations outstanding under the Strathspey Crown Note of $15.8 million less the unamortized borrowing cost of $0.5 million. See below for a discussion of the SCH Convertible Notes.

Gain on Deconsolidation and Sale of Evolus and Changes in Fair Value

Gain on deconsolidation of Evolus as of May 20, 2019 was $254.1 million. We recorded the fair value of the retained interest in Evolus on the balance sheet of $173.1 million and recorded a revaluation loss of $49.3 million in the year ended December 31, 2019, and $0.3 million revaluation gain in the year ended December 31, 2020, reflecting the change in price of the underlying shares of Evolus. We also recorded $6.6 million in the year ended December 31, 2019 related to a gain on the sale of shares of Evolus held by us.

Unaudited Pro Forma Information

Upon the closing of this offering, all of our outstanding shares of convertible preferred stock and outstanding convertible notes will automatically convert into an aggregate of 8,199,760 shares of our common stock assuming the sale of shares in this offering at the assumed public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus. The pro forma net (loss) per share attributable to AEON common stockholders, basic and diluted for the year ended December 31, 2020 and the six months ended June 30, 2021, were computed using the weighted average shares of common stock outstanding, basic and diluted including the pro forma effect of the conversion of all outstanding shares of convertible preferred stock and outstanding convertible notes into shares of common stock, as if such conversion had occurred at the beginning of the period, or their issuance dates if later. Pro forma net (loss) per share attributable to AEON common stockholders does not include the shares expected to be sold in this offering.

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The following table sets forth the computation of the pro forma net (loss) income per share attributable to common stockholders, basic and diluted for the period presented (in thousands, except per share amount):

	Year Ended December 31, 2020			SixMonths Ended June 30, 2021
Numerator:
Net (loss)	$	(32,913	)	$	(36,453	)
Change in fair value of convertible notes1		5,498			2,182
Change in fair value of preferred stock warrant liabilities		(29	)		(23	)
Pro forma net (loss) available to AEON common stockholders	$	(27,444	)	$	(34,294	)
Denominator:
Weighted average shares of common stock outstanding, basic		6,596,756			8,166,174
Pro forma adjustments to reflect assumed weighted average effect    of conversion of convertible preferred stock		2,902,665			2,902,665
Pro forma adjustments to reflect assumed weighted average effect    of conversion of convertible notes		5,297,095			5,297,095
Pro forma weighted average shares of common stock    outstanding, basic and diluted		14,796,516			16,365,934
Pro forma basic and diluted net (loss) per share attributable to    AEON common stockholders	$	(1.85	)	$	(1.68)

(1) Includes the assumed issuance of shares of our common stock to Daewoong to settle the paid-in-kind principal and interest on Daewoong Convertible Notes.

Liquidity and Capital Resources

To date, our primary sources of capital have been private placements of preferred stock, sales of shares of Evolus, debt financing agreements and revenue from introductory financing services. As of June 30, 2021, we had $10.6 million of cash and we had a consolidated accumulated deficit of $403.1 million, including an aggregate of $79.3 million in the 2019 Convertible Notes, the Strathspey Crown Note and the Daewoong Note.

We 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. We expect to continue to incur substantial costs in order to conduct research and development activities necessary to develop and commercialize our product candidates. Until such time, if ever, as we can generate substantial product revenue from sales of ABP-450, we will need additional capital to undertake these activities and commercialization efforts, and, therefore, we intend to raise such capital through the issuance of additional equity, borrowings, and potentially strategic alliances with other companies. However, if such financing is not available at adequate levels or on acceptable terms, we could be required to significantly reduce operating expenses and delay, reduce the scope of or eliminate some of the development programs or commercialization efforts, out-license intellectual property rights to our product candidates and sell unsecured assets, or a combination of the above, any of which may have a material adverse effect on our business, results of operations, financial condition and/or our ability to fund our scheduled obligations on a timely basis or at all. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish these plans and secure sources of financing and ultimately attain profitable operations.

Our primary use of cash is to fund operating expenses, which consist of R&D expenditures as well as SG&A expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay or prepay these expenses.

To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If these sources are insufficient to satisfy our liquidity requirements, we will seek to raise additional funds through future equity or debt financings. If we raise additional funds by issuing equity securities, our

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stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. There can be no assurance that our efforts to procure additional financing will be successful or that, if they are successful, the terms and conditions of such financing will be favorable to us or our stockholders. If we are unable to raise additional financing when needed, we may be required to delay, reduce, or terminate the development, commercialization and marketing of our products and scale back our business and operations.

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 are issued. The financial information throughout this prospectus and the financial statements included elsewhere in this prospectus have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. This financial information and our consolidated financial statements do not include any adjustments that may result from an unfavorable outcome of this uncertainty. 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.

Net Cash Used in Operating Activities

Net cash used in operating activities for the year ended December 31, 2020 was $9.5 million, consisting primarily of a net loss of $32.9 million and non-cash charges of $23.5 million. Non-cash increases of $5.5 million and $4.8 million were related to the change in fair value of the Notes and stock-based compensation for our executives and directors, respectively. In addition, non-cash increases of $11.2 million and $1.5 million were related to a loss on the extinguishment of debt for the SCH Note and the change in assets and liabilities, respectively.

Net cash used in operating activities for the year ended December 31, 2019 was $44.7 million, consisting primarily of a net income of $160.3 million and non-cash charges of $205.0 million. Non-cash charges of $211.4 million were related to deconsolidation of Evolus on May 20, 2019 and subsequent changes in fair value of our retained equity interest in Evolus. In addition, non-cash increases of $5.2 million and $5.3 million were related to the change in fair value of the 2019 Convertible Notes and stock-based compensation for our executives and directors, respectively. Non-cash increases of $5.6 million reflected the change in fair value of the Evolus contingent royalty obligation prior to deconsolidation in May 2019 and a $14.6 million release of a deferred tax asset by Evolus upon regulatory approval to commercialize its product.

Net cash used in operating activities for the six months ended June 30, 2021 was $14.4 million, consisting primarily of a net loss of $36.5 million and non-cash charges of $22.0 million consisting primarily of a non-cash legal settlement and license expense of $29.0 million, a non-cash gain of $9.6 million recognized upon the cancellation of the Clarion unwind fee previously recorded as a liability and $2.3 million expense related to stock-based compensation for our executives and directors. Net cash used in operating activities for the six months ended June 30, 2020 was $3.9 million, consisting primarily of a net loss of $16.0 million and non-cash charges of $12.0 million primarily related to a loss of $11.2 million on the extinguishment of debt for the SCH Note.

Net Cash Provided by Investing Activities

Net cash used in investing activities in the year ended December 31, 2020 was $1.3 million related to the deconsolidation of Alphaeon Credit upon its spin-off in September 2020.

Net cash used in investing activities in the year ended December 31, 2019 was $117.3 million and related primarily to the deconsolidation of Evolus. Specifically, cash of $36.5 million held by Evolus was not consolidated by us subsequent to May 20, 2019, and purchases of short-term investments of $89.0 million by Evolus prior to deconsolidation.

There was no net cash provided by or used in investing activities for the six months ended June 30, 2021 and 2020.

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Net Cash Provided by Financing Activities

Net cash provided by financing activities in the year ended December 31, 2020 was $24.6 million primarily related to a $25.0 million issuance of the Daewoong Convertible Notes in August and September 2020. In addition, financing activities included $0.3 million and $0.5 million for payment on a note payable and for offering costs incurred related to our initial public offering. We also received $0.4 million in a loan provided from the Paycheck Protection Program (PPP) keeping our workforce employed during the Coronavirus (COVID-19) crisis.

Net cash provided by financing activities in the year ended December 31, 2019 was $73.2 million, of which $10.0 million related to proceeds from the issuance of the 2019 Convertible Notes. The remaining amounts relate to proceeds of $77.0 million from the sale of Evolus shares used to make principal payments of $74.2 million on our previously outstanding convertible notes and related party borrowing, as well as other Evolus-related cash flows prior to deconsolidation that provided net proceeds of $60.4 million.

Net cash provided by financing activities for the six months ended June 30, 2021 of $4.9 million related to proceeds from the issuance of convertible notes. For the six months ended June 30, 2020 there was $0.3 million of notes payable and offering costs.

Indebtedness

Bridge Note and Warrants In 2016, we entered into two separate debt transactions: (i) a Secured Convertible Bridge Note and Warrant Agreement, or the Bridge Note with one of our stockholders, Longitude Venture Partners II, L.P., or Longitude, with a principal amount of $2.5 million and (ii) a Secured Convertible Note Purchase Agreement with one of our stockholders, Dental Innovations BVBA, or Dental Innovations, as collateral agent, pursuant to which we could issue up to an aggregate of $55.0 million, which we refer to as the Note Facility and together with the Bridge Note, as the Notes. In April 2017, the purchase agreement was amended and restated to, among other things, set forth the terms for the issuance of up to $30.0 million in principal amount of Notes contemplated but not yet issued under the Note Facility.

The Notes, as amended from time to time, have substantially similar terms and pay interest monthly in arrears at a rate of ten percent (10%) per annum, subject to adjustment pursuant to the terms of the Notes. The Notes could be paid at a redemption price equal to 2.5 times the face amount of the Notes less any prepayment of principal and any principal amount of the Notes that could convert into shares of our capital stock on (i) maturity on December 23, 2018 or, if an extension event occurs, on June 23, 2019, (ii) a required prepayment event, or (iii) prepayment at any time at our election. Upon the occurrence of certain corporate events at the company, at the election of the holder, the Notes would convert into a variable number of shares of our capital stock with an aggregate fair value equaling the principal value of the Notes or such Notes will continue to maturity as unsecured promissory notes with a reduced interest rate. Our obligations under the Notes were secured by a first priority lien and security interest in substantially all of our assets.

In addition, pursuant to the terms of the Bridge Note, in 2016 we issued Longitude warrants to purchase 342,011 shares of our Series B convertible preferred stock at an exercise price of $7.3097 per share. The warrants are exercisable, in whole or in part, from the date of issuance and expire on May 31, 2023. We account for the warrants as a liability, which were initially recorded at their fair value of $0.8 million on the date of issuance and are subject to remeasurement at each subsequent balance sheet date. Any change in fair value of the warrants as a result of the remeasurement is recognized as a component of other income (loss), net in our consolidated statements of operations and comprehensive income (loss). As of December 31, 2019 and 2020, and June 30 2021 the estimated fair value of the warrants was $66,000, $37,000 and $14,000 respectively, which was included in other liabilities in the consolidated balance sheets. During the years ended December 31, 2019 and 2020, and the six months ended June 30, 2021 and 2020, we recognized $(4,000), $29,000, $24,000, and $19,000 of income (expense), respectively, related to the change in the estimated fair value of the warrants.

The redemption premium, representing 1.5 times the principal amount of the Notes, was being accreted using the effective interest method over the term of the Notes and was recognized as interest expense in our consolidated statements of operations and comprehensive (loss) income. As of January 1, 2018, the carrying amount of the Notes was $86.6 million and total note obligations outstanding were $138.7 million (2.5 times the total outstanding principal

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amount of $55.5 million). In early 2018, we issued additional $0.8 million in principal amount of the secured convertible promissory note, which increased the total note obligations outstanding to $140.7 million (2.5 times the total outstanding principal amount of $56.3 million). During 2018, we recorded $57.8 million as interest expense associated with the Notes, including the accretion of the redemption premium of $53.3 million.

During 2018, we settled $56.3 million of the total outstanding principal amount of the Notes, of which $48.3 million was paid in cash and $8.0 million was settled by us distributing to the holders of the Notes 573,888 shares of Evolus common stock previously held by us. As of December 31, 2018, total remaining note obligations outstanding were $84.4 million, representing the redemption premium of the Notes. In 2019, we settled the remaining outstanding note obligations of $84.4 million plus accrued interest of $3.5 million, of which $62.7 million was paid in cash and $25.2 million was settled by us distributing to the holders of the Notes 1,307,940 shares of Evolus common stock previously held by us.

Convertible Notes

Our convertible notes include the Strathspey Crown Note, the 2019 Convertible Notes and the Daewoong Convertible Note, each described in more detail below.

Strathspey Crown Note and SCH Convertible Note. Since December 2013, we had been party to the Strathspey Crown Note, pursuant to which SCH, our majority stockholder, had advanced borrowings to us to fund our capital requirements. The Strathspey Crown Note, as amended from time to time, allowed us to borrow up to $150.0 million and matured on June 30, 2019. Borrowings against the Strathspey Crown Note bear interest monthly at a rate per annum equal to the applicable federal rate published by the Internal Revenue Service, or the IRS, for such month for debt with semiannual compounding, compounded every six months.

As of January 1, 2019, the aggregate principal amount outstanding under the Strathspey Crown Note was $50.0 million with accrued interest of $2.0 million. During the second quarter of 2019, we paid $39.0 million of the outstanding principal amount of the Strathspey Crown Note, of which $14.0 million was paid in cash and $25.0 million was settled by us distributing to SCH 1,298,701 shares of Evolus common stock previously held by us. We recognized a gain of $6.6 million on this transaction, which was recorded as a component of non-operating income (loss) in our consolidated statements of operations and comprehensive income (loss).

On June 30, 2019, the Strathspey Crown Note was amended, which set forth the total remaining outstanding balance to be $15.0 million with an interest rate of 10% per annum from July 1, 2019 to December 31, 2019 and 20% per annum from January 1, 2020 until cancelled and exchanged in January 2020 (see discussion below). All unpaid outstanding principal balance and accrued and unpaid interest were due and payable on June 30, 2020. Prior to the amendment, the outstanding principal amount of the Strathspey Crown Note was $11.0 million plus accrued interest of $2.5 million.

We accounted for the amendment as a debt modification and accreted the incremental borrowing cost of $1.5 million using the effective interest method over the remaining term of the Strathspey Crown Note as interest expense recorded in our consolidated statements of operations and comprehensive (loss) income. The incremental borrowing cost represents the difference between the outstanding principal amount of $15.0 million upon the amendment and the outstanding principal amount of $11.0 million plus accrued interest of $2.5 million prior to the amendment. For the year ended December 31, 2019, we recognized $2.3 million of interest expense, including $1.0 million of accretion for the incremental borrowing cost. As of December 31, 2019, the principal amount outstanding under the Strathspey Crown Note was $15.0 million with accrued interest of $0.8 million. As of December 31, 2019, the unamortized borrowing cost was $0.5 million, which is presented as a deduction to the note balance.

Effective as of January 2, 2020, we and SCH cancelled all obligations under the Strathspey Crown Note and in exchange we issued the SCH Convertible Note with a principal amount of $17.5 million. We accounted for the debt exchange as an extinguishment of the Strathspey Crown Note and recognized a loss on debt extinguishment of $11.2 million, representing the difference between the fair value of the SCH Convertible Note of $26.5 million at January 2, 2020 and total obligations outstanding under the Strathspey Crown Note of $15.8 million less the unamortized borrowing cost of $0.5 million.

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Our payment and performance under the SCH Convertible Note are guaranteed by ABP Sub Inc., our wholly owned subsidiary. Pursuant to the terms of the SCH Convertible Note, we are required to repay 175% of the principal amount to SCH on the third anniversary of its issuance. In the event of an underwritten public offering of our common stock, the SCH Convertible Note will automatically convert into a number of shares of our common stock equal to 175% of the principal amount of the SCH Convertible Note, divided by the per share price at which shares are offered to the public in such offering.

Due to certain embedded features within the SCH Convertible Note, we elected to account for the SCH Convertible Note and all their embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the consolidated statements of operations and comprehensive (loss) income or other comprehensive (loss) income for changes to instrument-specific credit risk. During the six months ended June 30, 2020 and year ended December 31, 2020, we recognized $0.6 and $0.8 million of expense, respectively, related to the increase in the fair value of the SCH Convertible Note. As a result of electing the fair value option, any direct costs and fees related to the SCH Convertible Note were expensed as incurred. As of June 30, 2021, the principal amount outstanding under the SCH Convertible Note was $17.5 million with an estimated fair value of $27.7 million.

2019 Debt Financings.  In June 2019, we entered into a senior unsecured note purchase agreement with Dental Innovations, which we refer to as the Original 2019 Note Purchase Agreement, pursuant to which we issued Dental Innovations a promissory note, or the Original 2019 Note, with a principal amount of $5.0 million.Pursuant to the terms of the Original 2019 Note, we were required to repay a total of $8.75 million, representing all principal and interest owed, upon the earliest to occur of (i) June 19, 2022, (ii) Dental Innovations’ demand for repayment following our completion of an initial public offering and (iii) our election to repay the Original 2019 Note in full.

Under the Original 2019 Note Purchase Agreement, Dental Innovations committed to purchase from us an additional promissory note with a principal amount of $5.0 million, subject to us issuing and selling an additional promissory note with a principal amount of $5.0 million to a lender not affiliated with Dental Innovations. Any such additional promissory notes would have the same payment terms as the Original 2019 Notes.

In December 2019, we entered into an amendment to the Original 2019 Note Purchase Agreement that provided for the exchange of the Original 2019 Note for a convertible promissory note with a principal amount of $5.0 million. In addition, Dental Innovations was no longer committed to purchase from us the additional promissory note. In December 2019, we issued and sold five additional convertible promissory notes, each with a principal amount of $1.0 million, including one to SCH and one to a member of our board of directors. We refer to these convertible notes as the 2019 Convertible Notes.

Due to certain embedded features within the 2019 Convertible Notes, we elected to account for the 2019 Convertible Notes and all their embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the consolidated statements of operations and comprehensive (loss) income or other comprehensive (loss) income for changes to instrument-specific credit risk.

In January 2020, in connection with the distribution of the units of Alphaeon 1 LLC to our stockholders, each of the holders of our 2019 Convertible Notes were granted contingent warrants by Alphaeon 1 LLC to purchase shares of Evolus from Alphaeon 1 LLC. The contingent warrants are exercisable at the option of the holders only prior to our first underwritten public offering of common stock under the Securities Act, or upon an event of default under the 2019 Convertible Notes. The 2019 Convertible Notes were concurrently amended to provide the noteholders the option, prior to the notes’ conversion, to cancel a portion of the indebtedness represented by such noteholder’s 2019 Convertible Note and receive a number of shares of Evolus from Alphaeon 1 LLC having a market value equal to the value of such cancelled indebtedness, in lieu of automatic conversion of all of the noteholder’s 2019 Convertible Note into shares of our common stock. The amount of cancelled indebtedness that can be so applied in exercise of the contingent warrant is capped as the ratio that the value of Evolus shares held by Alphaeon 1 LLC bears to the combined value of (i) the Evolus shares held by Alphaeon 1 LLC and (ii) our value immediately prior to consummation of our first underwritten public offering of common stock under the Securities Act.

During the six months ended June 30, 2021 and the years ended December 31, 2019 and 2020, we recognized $0.1 million, $5.2 million and $0.5 million, respectively, of expense related to the increase in the fair value of the 2019 Convertible Notes. As a result of electing the fair value option, direct costs and fees related to the 2019 Convertible

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Notes were expensed as incurred. As of June30, 2021, the principal amount outstanding under the 2019 Convertible Notes was $10.0 million with an estimated fair value of $15.9 million.

Daewoong Convertible Notes. In August 2020, we entered into a convertible promissory note purchase agreement with Daewoong, or the Daewoong Purchase Agreement, pursuant to which we issued Daewoong two subordinated convertible promissory notes with an aggregate principal amount of $25.0 million, which we refer to as the Daewoong Convertible Notes. The Daewoong Convertible Notes are unsecured and subordinated to our 2019 Convertible Notes. Our payment and performance under the Daewoong Convertible Notes are guaranteed by ABP Sub Inc., our wholly owned subsidiary.

The Daewoong Convertible Notes bear interest daily at 3% per annum with semiannual compounding. Interest is paid in-kind by adding the accrued amount thereof to the principal amount on a semi-annual basis on June 30th and December 31st of each calendar year for so long as any principal amount remains outstanding (such paid in-kind interest, in the aggregate at any time, the PIK Principal). The Daewoong Convertible Notes mature on September 18, 2025.

In May 2021, the Daewoong Purchase Agreement was amended to provide for the issuance of an additional subordinated convertible promissory note by us to Daewoong at an initial principal amount of $5.0 million. The subordinated convertible promissory note was issued with terms similar to the two subordinated convertible promissory notes issued in 2020 and matures on May 12, 2026.

Pursuant to the terms of the amended Daewoong Purchase Agreement, Daewoong may elect to convert all of the then outstanding principal amount and all accrued and unpaid interest into our common stock at any time following the date that is twelve months after September 18, 2020, provided, that such election shall be made at the same time with respect to all Daewoong Convertible Notes. The number of shares of common stock issuable upon conversion is equal to (i) the outstanding principal amount (excluding PIK Principal) divided by $30.0 million and (ii) multiplied by 11.99% of the aggregate of all of our shares of common stock then outstanding, common stock issuable upon conversion or exercise of all of the outstanding convertible or exercisable securities, all outstanding vested or unvested options or warrants to purchase shares of our capital stock, but excluding all out-of-the-money options, and all shares of common stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time).

In addition, immediately prior to an initial public offering, all of the then outstanding principal amount and accrued and unpaid interest under the Daewoong Convertible Notes will automatically convert into shares of our common stock. The number of shares of common stock issuable upon conversion of the Daewoong Convertible Notes is equal to (i) the outstanding principal amount (excluding PIK Principal) divided by $30.0 million and (ii) multiplied by the greater of (A) 11.99% of our pre-IPO shares, and (B) that number of shares having an aggregate value of $24.0 million immediately prior to the IPO based upon a price per share of such common stock issued to the public in the IPO; provided, however, that in no event shall Daewoong’s ownership exceed 18% of our pre-IPO shares after taking into account conversion of the Daewoong Convertible Notes. Subject to certain conditions, in connection with an initial public offering, we may elect to pay the PIK Principal plus all accrued and unpaid interest either in cash or by the issuance of additional shares of our common stock at the price per share in the initial public offering.

Due to certain embedded features within the Daewoong Convertible Note, we elected to account for the Daewoong Convertible Note and the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in our consolidated statements of operations and comprehensive income (loss) or as a component of other comprehensive income (loss) for changes to instrument-specific credit risk. During the twelve months ended December 31, 2020 and the six months ended June 30, 2021, we recognized $4.2 million and $(20,000) of expense (income), respectively, related to the increase (decrease) in the fair value of the Daewoong Convertible Note. As a result of electing the fair value option, any direct costs and fees related to the Daewoong Convertible Note were expensed as incurred. As of December 31, 2020 and June 30, 2021, the principal amount outstanding (excluding the PIK Principal) under the Daewoong Convertible Note was $25.0 million and $30.0 million, respectively with an estimated fair value of $29.2 million and $35.7 million, respectively.

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Contribution of Evolus Shares

In January 2020, our board of directors approved the contribution of our interest in Evolus’ common stock to Alphaeon 1 LLC in exchange for member units. At the time of this contribution, we owned 8,662,346 shares of Evolus with a fair value of $105.8 million, representing approximately 26% of the outstanding shares of Evolus. We then distributed all of the units of Alphaeon 1 LLC to our current stockholders, with each of our stockholders receiving a number of common units or preferred units, as applicable, of Alphaeon 1 LLC for each share of our common stock or preferred stock, as applicable, that such stockholders held at such time. As a result of the distribution, we no longer hold any member interests in Alphaeon 1 LLC nor any equity investment in Evolus’ common stock. We accounted for the transaction as a dividend-in-kind to our stockholders and derecognized the equity investment of $105.8 million in the consolidated balance sheet with a corresponding decrease to equity during the six months ended June 30, 2020.

Contingent Obligations Related to the Acquisition of Evolus

In connection with the acquisition of Evolus in 2013, we and SCH entered into a stock purchase agreement with the Evolus Founders, pursuant to which we and SCH were obligated to make certain contingent payments to the Evolus Founders. In December 2017, we and SCH entered into an amended purchase agreement with the Evolus Founders, whereby Evolus also joined as a contractual party. Under the amended purchase agreement, the contingent payment obligations were assumed by Evolus upon the completion of its initial public offering and were revised to consist of (i) an approximately $9.2 million up-front payment upon obtaining FDA approval for DWP-450, Evolus’ product candidate, for the treatment of glabellar lines, (ii) quarterly royalty payments of a low single-digit percentage of net sales of DWP-450 within the United States, (iii) quarterly royalty payments of a low single-digit percentage of net sales of DWP-450 outside of the United States, and (iv) a $20.0 million promissory note that will mature on the two and one-half year anniversary of the first commercial sale of DWP-450 in the United States. The $9.2 million up-front payment was paid in full in February 2019 by Evolus.

Under the amended purchase agreement, Evolus paid one-time bonuses of $1.6 million to certain current and former employees upon FDA approval of Jeuveau in February 2019. The payment is included in R&D expenses in our statements of operations and comprehensive (loss) income for the year ended December 31, 2019.

During 2019, we recognized $5.6 million in operating expenses related to the change in the fair value of the contingent royalty obligation and $0.4 million in interest expense related to the contingent promissory note. Evolus is solely responsible for the contingent obligations related to the acquisition of Evolus.

Effective May 20, 2019, we deconsolidated the contingent royalty obligation payable to the Evolus Founders and the contingent promissory note payable to the Evolus Founders in our consolidated balance sheets.

Evolus Founders

Certain of the Evolus Founders from whom SCH purchased its equity interests include individuals who were previously employed by Evolus in operational roles, including Evolus’ former chief operating officer and consultant through December 31, 2018. In 2019, the Evolus Founders ceased to be related parties. Evolus is solely responsible for the contingent obligations to the Evolus Founders.

Clarion Unwind Fee

In 2014, we acquired all outstanding voting equity interests of Clarion pursuant to a shareholders’ agreement. The shareholders’ agreement provided the previous equity holders of Clarion the right to an unwind fee of approximately $9.6 million to unwind our acquisition of Clarion. In 2016, the previous equity holders of Clarion exercised their right and the unwind fee became a joint and several obligation of us and SCH.

Effective March 21, 2021, this obligation was settled resulting in the cancellation of the Clarion unwind fee previously recorded as a liability.

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Shared Services Agreements with Strathspey Crown Limited, LLC

In August 2019, we and Alphaeon Credit, our wholly owned subsidiary, entered into services agreements with Strathspey Crown Limited, an affiliate of SCH with an effective date of January 2019. Pursuant to the services agreements, Strathspey Crown Limited provides us and Alphaeon Credit certain administrative and development support services, including certain general management, communication, human resources, office, rent and information technology services. We and Alphaeon Credit pay Strathspey Crown Limited an allocable share of the actual cost incurred by Strathspey Crown Limited in providing such services, plus a 10% markup, as well as an allocable share of Strathspey Crown Limited’s overhead expenses, including office rent, depreciation, maintenance, utilities, and supplies. The services agreements have a one-year term and will renew for successive one-year terms unless sooner terminated by either party. We and Alphaeon Credit or Strathspey Crown Limited may terminate the services agreements upon sixty days’ notice to the other party. For the six months ended June 30, 2021 and 2020 and year ended December 31, 2019 and 2020, $0.0, $0.3 million, $0.3 million, and $0.5 million, respectively, of costs related to the shared services agreements were included in selling, general and administrative expenses in our consolidated statements of operations and comprehensive (loss) income.

Medytox Settlement and License Agreement

Effective June 21, 2021, we entered into a settlement and license agreement with Medytox, pursuant to which, among other things, Medytox agreed (a) to dismiss all claims against us in the Medytox Litigation, (b) to pursue dismissal of the appeals related to the December 2020 final determination of the United States International Trade Commission and agreed that as a result of such dismissal the final determination would be vacated, (c) to file appropriate documents in the Korean Litigation and related actions in support of the terms of the settlement, and (d) not to revive or otherwise pursue the Superior Court Litigation with respect to us.  In addition, Medytox granted us a non-exclusive, royalty bearing, irrevocable license to commercialize and manufacture ABP-450. In exchange for the settlement and license agreement, we issued Medytox 1,569,442 shares of our common stock, par value $0.0001 per share and valued at $29.0 million. We also agreed to pay Medytox single-digit royalties on the net sales of licensed products for 15 years, which will be recognized as related sales levels are obtained in the future as cost of sales. Moreover, in the event the shares of common stock we issued to Medytox represent less than 10% of our total outstanding shares immediately following the closing of our initial public offering, or the Target Ownership, we will issue additional shares of our common stock to Medytox sufficient to cause Medytox to achieve the Target Ownership.  We concluded that the obligation to potentially issue additional shares was not legally detachable and separately exercisable and was therefore embedded within the obligation to issue 1,569,442 shares of our common stock. On June 28, 2021, the claims against us in the Medytox Litigation were dismissed with prejudice.  For a further discussion of the Medytox Litigation, the Superior Court Litigation and the Korea Litigation, please see the section entitled “Risk Factors—Risks Related to Third Parties—A material breach by us of the terms of our license and settlement agreement with Medytox could have a material adverse effect on our business.”

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Contractual Obligations and Commitments

As a smaller reporting company, we are not required to disclose information under this section.

Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to disclose information under this section.

Critical Accounting Policies

Management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and related

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disclosure of contingent assets and liabilities, revenue and expenses at the date of the financial statements as well as the expenses incurred during the reporting period. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and such differences could be material to the financial position and results of operations. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience.

While our significant accounting policies are more fully described in the notes to our financial statements appearing elsewhere in this prospectus, we believe the following accounting policies to be most critical for fully understanding and evaluating our financial condition and results of operations, as these policies relate to the more significant areas involving management’s judgments and estimates.

The following critical accounting policies are applicable to our operations and accounting policies associated with the previous consolidation of Evolus prior to May 2019 have been omitted and can be found in Note 2 of the financial statements:

Fair Value of Convertible Promissory Notes

We elected to account for the 2019 Convertible Notes, SCH Convertible Note and Daewoong Convertible Note at fair value at inception and record changes in fair value in the consolidated statements of operations and comprehensive income (loss) or other comprehensive income (loss) for changes related to instrument-specific credit risk. We adjust the carrying value of our convertible promissory notes to their estimated fair value at each reporting date. All outstanding convertible promissory notes and related accrued interest will convert to shares of our common stock upon the closing of this offering.

The fair value of the convertible notes issued in December 2019, January 2020, August 2020 and May 2021 are estimated using a scenario-based analysis that estimates the fair value of the convertible notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholders, including various initial public offering, settlement, equity financing, corporate transaction and dissolution scenarios. There are significant judgments and estimates inherent in the determination of the fair value of these liabilities. If we had made different assumptions including, among others, those related to the timing and probability of various corporate scenarios, discount rates, volatilities and exit valuations, the carrying values of our convertible notes, and our net income (loss) and net income (loss) per common share could have been significantly different.

Stock-Based Compensation

We measure and recognize compensation expense for all options based on the estimated fair value of the award on the grant date. We use the Black-Scholes option-pricing model to estimate the fair value of option awards. The fair value is recognized as expense on a straight-line basis over the requisite service period.

The determination of the grant date fair value of options using an option pricing model is affected principally by our estimated fair value of shares of our common stock and requires management to make a number of other assumptions, including the expected life of the option, the volatility of the underlying shares, the risk-free interest rate and expected dividends. The assumptions used in our Black-Scholes option-pricing model represent management’s best estimates at the time of measurement. These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.

For valuations after the consummation of this offering, our board of directors will determine the fair value of each share of underlying common stock based on the closing price of our common stock on the date of grant. The intrinsic value of all total outstanding stock options as of June 30, 2021 was approximately $9.7 million and the intrinsic value of vested option was approximately $4.1 million based on an assumed public offering price of $15.00  per share, which is the midpoint of the price range set forth on the cover of this prospectus.

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Determination of Fair Value of Common Stock

As a privately held company, there has been no public market for shares of our common stock to date. We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations, which is the most subjective input into the Black-Scholes option pricing model. The fair value of the common stock underlying our stock-based awards was determined on each grant date by our board of directors or by a committee of our board of directors acting under delegated authority. All options to purchase shares of our common stock are intended to be granted with an exercise price per share no less than the fair value per share of our common stock underlying those options on the date of grant, based on the information known to us on the date of grant. Third-party valuations, or valuation reports, were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid.

We considered various objective and subjective factors to determine the fair value of our common stock, including:

• valuations of our common stock performed with the assistance of independent third-party valuation specialists;

• our stage of development and business strategy, including the status of research and development efforts of ABP-450, and the material risks related to our business and industry;

• our results of operations and financial position, including our levels of available capital resources;

• the valuation of publicly-traded companies in the life sciences and biotechnology sectors;

• the lack of marketability of our common stock as a private company;

• the likelihood of achieving a liquidity event for the holders of our common stock, such as an initial public offering or a sale of our company, given prevailing market conditions;

• trends and developments in our industry; and

• external market conditions affecting the life sciences and biotechnology industry sectors.

The shares of common stock issued to Medytox were valued at the date of the agreement, which was the issuance date, by management with input from an independent third-party valuation specialist, using a Monte Carlo simulation (MCS). The analysis considered a scenario analysis (probability-weighted expected return model, or PWRM), considering two IPO scenarios with a combined 83% weighting and a delayed exit scenario with 17% weighting. The MCS then simulated the future equity value within each scenario to estimate the payoff for each simulation path, given the potential requirement to issue additional shares depending on the dilution impact from the IPO or other future financings. Key inputs included (1) the equity value of the Company in each scenario, (2) the fair value of Divestiture Transactions, (3) the Company’s capital structure, (4) the weighting on each scenario, (5) the expected time to exit in each scenario, (6) the volatility in each scenario, (7) the risk-free interest rate over the period to exit in each scenario, and (8) the discount for lack of marketability of the common stock in each scenario. The equity value was estimated based on the total invested capital value less the fair value of the outstanding debt. The total invested capital value of the Company was estimated using a risk-adjusted and probability-adjusted discounted cash flow (DCF) method based upon future cash flow generation. Inputs for the DCF analysis included (1) forecasted financial projections for the next nine years developed by management, (2) a terminal value assigned using an exit multiple method, (3) a discount rate based on the weighted average cost of capital, and (4) the probability of success. We also considered the expected IPO pricing based on input from and discussions with underwriters.

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There are significant judgments and estimates inherent in the determination of the fair value of our common stock. These judgments and estimates include assumptions regarding our future operating performance, the time to complete an initial public offering or other liquidity event and the determination of the appropriate valuation methods. If we had made different assumptions, our net loss and net loss per common share and the fair value of our common stock and our stock-based compensation expense could have been materially different.

Following the completion of this offering, the fair value of our common stock will be based on the closing price as reported on the date of grant on the primary stock exchange on which our common stock is traded.

ABP Sub Inc. Merger

All of our options granted since September 30, 2020, were granted as options to purchase shares of common stock of our wholly-owned subsidiary, ABP. Immediately prior to the closing of this offering, ABP will merge with and into us so that we are the surviving corporation. Pursuant to the merger, all options of ABP that are outstanding immediately prior to the merger will be converted into substantially similar options to purchase shares of our common stock, with an adjustment to the number of shares issuable upon exercise and the exercise price to reflect the economic value of the new option within our capital structure. We determined the conversion ratio of the ABP options by dividing the number of shares of our common stock outstanding on an as-converted basis by the number of shares of common stock of ABP outstanding, and then dividing the quotient by 0.85 to account for the options representing 15% of ABP’s shares outstanding. This resulted in a conversion ratio of 83 to 1 shares.  As of the date of this prospectus, ABP had granted options to purchase an aggregate of 36,854 shares of its common stock which will convert into options to purchase 3,060,022 shares of our common stock.  We do not anticipate any additional stock-based compensation expense to result from the ABP merger and the conversion of the options.

The following table summarizes by grant date the number of shares of our common stock subject to stock options granted from September 2020 through the date of this prospectus assuming the conversion described in the preceding paragraph, as well as the associated per share exercise price and the per share estimated fair value of the underlying common stock:

Grant Date	# of Shares Underlying Option Grants	Exercise Price  per Share	Common Stock Value Per Share on Grant Date
2/26/2021	164,814	$12.15	$12.15
3/2/2021	152,699	$12.00	$12.00
8/23/2021	238,590	$12.58	$12.58
9/9/2021	464,235	$13.97	$13.97

Based on the foregoing, we do not anticipate a significant increase in stock-based compensation expense for the three months ended September 30, 2021 associated with the August and September 2021 option grants.

JOBS Act

We are an emerging growth company, as defined in the JOBS Act, and we may remain an emerging growth company for up to five years following the completion of this offering. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this prospectus, we have provided only two years of audited financial statements and unaudited financial statements and have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

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We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of this offering, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a “smaller reporting company,” as such term is defined in Rule 12b-2 of the Exchange Act, meaning that the market value of our common stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue is less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our common stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. 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.

Recently Issued and Adopted Accounting Pronouncements

We describe the recently issued accounting pronouncements that apply to us in Note 2, Summary of Significant Accounting Policies –“Recently Adopted Accounting Standards” and “New Accounting Standards Not Yet Adopted.”

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Business

Overview

We are a clinical stage biopharmaceutical company focused on developing our proprietary botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection, or ABP-450, for debilitating medical conditions, with an initial focus on the neurology and gastroenterology markets. We plan to develop ABP-450 to address the estimated $2.2 billion global therapeutic botulinum toxin market, which is projected to grow to $4.4 billion in 2027. ABP-450 is the same botulinum toxin complex that is currently approved and marketed for cosmetic indications by Evolus under the name Jeuveau. ABP-450 is manufactured by Daewoong in compliance with current Good Manufacturing Practice, or cGMP, in a facility that has been approved by FDA, Health Canada and EMA. We have exclusive development and distribution rights for therapeutic indications of ABP-450 in the United States, Canada, the European Union, the United Kingdom, and certain other international territories. We have built a highly experienced management team with specific experience in biopharmaceutical and botulinum toxin development and commercialization.  

Botulinum toxins have proven to be a highly versatile therapeutic biologic, with over 230 therapeutic uses documented in published scientific literature and 10 approved therapeutic indications in the United States. Our initial development programs for ABP-450 are directed at migraine, cervical dystonia and gastroparesis. We selected these initial indications based on a comprehensive and proprietary product assessment screen designed to identify indications where we believe ABP-450 can deliver significant value to patients, physicians and payors and where its clinical, regulatory and commercial characteristics suggest viability. We believe that ABP-450 has application in a broad range of indications and we plan to continue to explore additional indications that satisfy our product assessment screens.

Our IND application for ABP-450 as a preventative treatment of migraine was accepted by FDA, in the fourth quarter of 2020 and we initiated enrolling patients for our Phase 2 clinical study in the first quarter of 2021.  We plan to enroll 690 patients into our randomized, double-blind, placebo-controlled study across approximately 60 study sites in the United States, Canada and Australia.  This study will include migraine patients that experience six or more migraines per month, which is inclusive of chronic migraine patients that experience 15 or more migraines per month, as well as certain episodic migraine patients that experience six to 14 migraines per month.  Patients enrolled in the study will receive two injection cycles using our proprietary injection protocol at a low dose of 150 units, high dose of 195 units or placebo, with patients evenly split among the three arms.  We plan to announce topline data related to our migraine study in the second half of 2022.

Our IND application for ABP-450 as a treatment for cervical dystonia was accepted by FDA in the third quarter of 2020 and we initiated our Phase 2 clinical study in the first quarter of 2021.  We plan to enroll 60 patients in our randomized, double-blind, placebo-controlled study across approximately 30 study sites in the United States. Patients enrolled into the study will receive one injection cycle at a low dose of 150 units, mid-dose of 250 units, high dose of 350 units or placebo, with patients evenly split among the four arms.  We plan to announce topline data in early 2022.

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In December 2020, we initiated a preclinical gastroparesis study with 42 primates receiving multiple injections of ABP-450 across three dose ranges. The objective of this preclinical study is to characterize the safetyand toxicology prior to entering human studies. We expect to complete this preclinical study in the third quarter of 2021. Following the preclinical study, we expect to submit an IND to FDA in late 2021 to support the initiation of a Phase 2a clinical study in 2022.

Botulinum toxins are a standard treatment for a number of indications, including debilitating movement disorders, chronic migraine, urinary incontinence, excessive salivating and excessive sweating. Botulinum toxins are the first-line standard of care for the treatment of certain conditions, including cervical dystonia. According to Decision Resources Group, the global therapeutic market for botulinum toxins is expected to grow from $2.2 billion in 2019 to an estimated $4.4 billion in 2027, representing a 9.0% compound annual growth rate. This market growth is projected to be primarily driven by growth in the number of procedures which is expected to grow from 2.7 million in 2019 to an estimated 5.0 million in 2027, representing a 7.8% growth rate. The ASP for therapeutic botulinum toxins in the United States is anticipated to grow by 1.5% annually, moving from $548 in 2019 to an estimated $619 in 2027. The current market leader in this space is Botox, which is marketed by AbbVie Inc., or AbbVie, and holds approximately 95% of the global market share for therapeutic botulinum toxin treatments. The main approved competitors to Botox are Dysport, marketed by Ipsen Ltd., and Xeomin, marketed by Merz Pharmaceuticals, LLC, each holding approximately 2% of the global market share for therapeutic botulinum toxin treatments. The neurotoxin complex size of Dysport is approximately 400 kDa and the neurotoxin complex size of Xeomin is 150 kDa. These neurotoxin complex size discrepancies can result in a different duration of effect and require physicians to utilize different dilution ratios and injection techniques. ABP-450 has the same 900 kDa complex size as Botox. We believe physicians generally prefer the performance characteristics of the complete 900 kDa botulinum toxin complex for therapeutic uses and that this characteristic will provide ABP-450, if approved, a competitive advantage over other non-Botox therapeutic botulinum toxins currently on the market or in development. ABP-450, if approved, will be the only therapeutic botulinum toxin with significantly similar physiochemical properties as Botox.

We license ABP-450 from Daewoong, a South Korean pharmaceutical manufacturer, and have exclusive development and distribution rights for therapeutic indications in the United States, Canada, the European Union, the United Kingdom, and certain other international territories. Daewoong licenses the same 900 kDa botulinum toxin to Evolus, for cosmetic indications, which it markets and sells under the name Jeuveau in the United States and Nuceiva in Canada and the European Union. 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. 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. While none of these preclinical or clinical programs specifically contemplated any therapeutic use of ABP-450, given that the FDA’s regulatory requirements are generally the same for the cosmetic or therapeutic use of a toxin, we believe that the positive data derived from these preclinical and clinical studies will support the clinical development and anticipated future safety labeling of ABP-450 for migraine and cervical dystonia at all contemplated dose ranges.

We plan to pursue approval of an original Biologics License Application, or BLA, that exclusively contemplates therapeutic indications for ABP-450, which we believe could improve reimbursement amounts for ABP-450, if approved. 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 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 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 an original BLA for therapeutic indications of ABP-450, the ASP for ABP-450 would be calculated using only therapeutic sales, which we believe would facilitate consistent and favorable 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 traditional pricing model would be unique to us within the current therapeutic neurotoxin market.

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We believe ABP-450 could have therapeutic applications in a broad range of debilitating medical conditions and we intend to continue to leverage our product assessment screening process to identify additional indications for future development. Our management team possesses significant and relevant experience in the botulinum toxin industry in both drug development and commercialization, and we believe they are uniquely qualified to successfully develop and commercialize ABP-450 to enhance the lives of patients that suffer from debilitating medical conditions.

Background on the Therapeutic Botulinum Toxin Market

The use of botulinum toxins to treat debilitating medical conditions began with the U.S. Food and Drug Administration, or the FDA, approving Botox for the treatment of strabismus and blepharospasm, two eye muscle disorders, in adults, in 1989. Botox was the only FDA-approved type-A botulinum toxin until 2009 when the FDA initially approved Dysport for the treatment of cervical dystonia and glabellar lines in adults. In 2010, the FDA approved Xeomin for the treatment of cervical dystonia and blepharospasm in adults. According to Decision Resources Group, Botox, Dysport and Xeomin collectively made up over 98% of the U.S. therapeutic market for botulinum toxins in 2019, with a total of ten unique therapeutic indications that have been approved by the FDA, and in 2019, Botox accounted for 85% of the global therapeutic market share for botulinum toxins and 95% of the U.S. therapeutic market share for botulinum toxins. According to Decision Resources Group, the global therapeutic botulinum toxin market is forecast to grow from $2.2 billion in 2019 to an estimated $4.4 billion in 2027, driven primarily by growth in the number of procedures during the forecast period from 2.7 million procedures to an estimated 5.0 million procedures. This projected growth is driven by procedure growth in current indications, approval of future indications, modest price growth of 1.5% annually, and a favorable reimbursement environment. It is projected that the United States will continue to be the largest market for therapeutic botulinum toxin treatment throughout the forecast period, primarily due to the greater number of approved indications, higher average selling price, and greater patient and physician awareness of botulinum toxin usage.

Overview of ABP-450

The active biologic ingredient in ABP-450 is Clostridium botulinum toxin, type A with a complete molecular complex weight of 900 kDa. Botulinum toxin type A is an active toxin composed of a covalently bonded dimer of two complexes consisting of neurotoxin, non-toxic non-haemagglutinin protein, and haemagglutinin proteins. The active part of the botulinum toxin is the 150 kDa component, and the remaining 750 kDa of the complex is made up of accessory proteins that we believe help with the function of the active portion of the botulinum toxin. When injected at therapeutic levels, ABP-450 blocks peripheral acetylcholine release at presynaptic cholinergic nerve terminals by cleaving SNAP-25, a protein integral to the successful docking and release of acetylcholine from vesicles situated within the nerve endings leading to denervation and relaxation of the muscle.

ABP-450, if approved, will be the only therapeutic botulinum toxin with significantly similar physiochemical properties as Botox. In addition, ABP-450 will be the only therapeutic botulinum toxin that shares the same procedure and dilution ratios for the reconstitution of the botulinum toxin to an injectable liquid; these reconstitution procedures are not subject to intellectual property protection. We believe the similarity of the two products will facilitate physician adoption of ABP-450 more rapidly and sustainably than other botulinum toxins that compete with Botox.

Daewoong has recently constructed a facility in South Korea where it produces ABP-450 and Jeuveau, which is the same botulinum toxin complex as ABP-450. The manufacture of ABP-450 drug substance is based on the fermentation of Daewoong’s C. botulinum cell line, followed by isolation and purification of the drug substance. Daewoong has received a U.S. patent for the production process. The drug substance production facility was purpose built and is in compliance with FDA and European Medicines Agency, or EMA, current good manufacturing practices, or cGMP, requirements. We believe this facility will be sufficient to meet demand for ABP-450 for the foreseeable future.

Our Pipeline

Migraine

Migraine is a complex neurological condition characterized by recurrent episodes of headaches. Patients that suffer from migraine headaches experience symptoms including throbbing recurring pain, nausea, vomiting, dizziness and sensitivity to light, sound, touch and smell. Migraine attacks usually last between four and 72 hours. According to the

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World Health Organization, a day lived with migraine is rated as the second most disabling condition out of 400 different medical conditions.  The development and course of migraine differs from patient to patient, where a subset of patients experience an increase in frequency over a period of months or years and may gradually evolve from low-frequency episodic migraine to high-frequency episodic migraine and then to chronic migraine.

Industry sources and published research estimate that approximately 15.1% of U.S. adults experience migraine or severe headache.  Based on U.S. census data from 2018, this represents approximately 40 million people in the United States.  An estimated 1 billion people worldwide that suffer from migraines, making migraine the third most prevalent illness in the world.

Using prevalence rates from various published sources, we estimate that approximately 4.0 million and 9.4 million people in the United States suffer from chronic migraines, defined as migraine occurring on 15 or more days per month and headache lasting for four or more hours per day, or episodic migraines, defined as migraine occurring from six to 14 times per month, respectively.  In 2006, the American Migraine and Prevalence and Prevention Study determined that only approximately 56% of patients are diagnosed with migraine and an even smaller percentage actually receive prophylactic treatment. We believe our target market consists of the combined population of patients experiencing six or more migraines per month in the United States, which represents approximately 13.4 million patients.  Based on our proposed treatment protocol and anticipated pricing, we estimate our target market to represent a potential U.S. market opportunity of approximately $65 billion. While the current global therapeutic botulinum toxin market is estimated to be $2.2 billion and projected to grow to $4.4 billion in 2027, we believe these market estimates are constricted due to the significant number of untreated and undiagnosed patients, as well as a lack of approved indications for botulinum toxin.  Both acute and preventive treatments are used to treat migraine headaches. As patients evolve from treating lower to higher frequency episodic migraine and for those patients that develop chronic migraine, preventive treatments become a more important part of the overall approach.  We believe that the migraine prevention market will expand as patient and physician awareness and diagnosis rates for migraine increase due in part to market growth of injectable monoclonal antibody therapies that target calcitonin gene-related peptide inhibitors, or CGRPs, as well as the potential introduction of oral CGRP for migraine prevention into the market.

A key pathway for migraine and headache pain is the trigeminovascular input from the meningeal vessels. These nerves pass through the trigeminal ganglion and synapses on second-order neurons in the trigeminocervical complex, which then project through the quintothalamic tract and, after decussating in the brain stem, form synapses with neurons in the thalamus. Disrupting pain stimulus to the trigeminocervical complex is one means of mitigating migraine headaches and botulinum toxin has pharmacological activity that can disrupt peripherical neuronal pain stimulus to the complex.

We are developing ABP-450 for the preventative treatment of migraine, which is inclusive of both chronic migraine and episodic migraine. Migraine treatment is broadly divided into two strategies: acute and prophylactic treatment. The primary goal of acute treatment is to provide relief from the pain and associated symptoms after a migraine attack has started. The primary goal of prophylactic, or preventative, treatment is to preemptively decrease the frequency, severity and duration of future migraine attacks.

The use of botulinum toxins is generally a third-line therapy in the prophylactic treatment of migraine patients. Prophylactic treatments for migraine are designed to reduce the severity and frequency of migraines, minimize or prevent the use of acute treatments, and improve quality of life. First- and second-line treatments to prevent migraine generally include the use of orally administered anti-epileptic, beta-blocker and tricyclic antidepressant pharmaceuticals, or the use of neuromodulation devices to stimulate the vagus nerve. Migraine patients will typically progress to the third-line botulinum toxin therapy when first- and second-line therapies are not effective or not well-tolerated. As a third-line treatment, Botox is the only botulinum toxin approved by the FDA for prophylaxis of headaches in adult patients with chronic migraine and with a patented treatment protocol that designates a total dose of 155 units into 31 injection sites across seven areas of the head and neck. Frequently reported adverse reactions following treatment with Botox for migraine include eyelid ptosis, commonly known as “drooping eyelid,” neck pain and muscle weakness. Botox is only approved for chronic migraine and there is no botulinum toxin approved for prevention of episodic migraine. Sales of Botox for chronic migraine were estimated to be $691 million in 2019, and the use of Botox for chronic migraine has increased from 2018 through the first quarter of 2021, with quarterly claims ranging from between 118,000 and 147,000 during this period. Such claims increased despite the introduction and presence of multiple CGRP (calcitonin gene-related peptide)-targeting medications during this period. We believe that

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the majority of patients with chronic migraine switching brands choose Botox, with an estimated 76% of patients choosing Botox versus 24% choosing a CGRP. Another third-line treatment for migraine, referred to as CGRP-targeting medications, has recently been approved. CGRP is present in many organs in the body and when released around the nerves of the head, they can cause inflammation and result in migraines. CGRP-targeting medications seek to block the peptide itself in an effort to prevent the migraine. FDA-approved CGRPs include Aimovig, Emgality, Ajovy, and Vyepti (intravenous formulation). The use of CGRPs has increased from 2018 through the first quarter of 2021, with quarterly claims ranging from between 875 and 495,000 during this period. Such claims have stablized in the last year.

Our Phase 2 clinical study utilizes our patent-pending injection protocol that contemplates 22 injections in the head and neck, which would represent a decrease in the number of injections in the current Botox label by approximately 30%.  Similar to the Botox chronic migraine indication, which contemplates titration up to 195 units with up to 39 injections, we are evaluating the effect of administering up to 195 units with 26 injections. We believe that our injection protocol will show equivalent efficacy and durability to the currently approved paradigm by utilizing novel injection sites and techniques to effectively target sensory nerve pathways implicated in migraine to reduce stimuli to the trigeminal complex. Furthermore, by eliminating or changing some injection sites, it may decrease the risk of patients experiencing the most common side effects of muscle weakness in the neck and eyelid ptosis.  We believe that, if approved, our proprietary injection protocol would differentiate ABP-450 from Botox as a third-line therapy for the prevention of chronic migraine and establish a new treatment option for the prevention of episodic migraine. Our novel injection protocol is also designed to simplify the administration of ABP-450 and mitigate some of the risk of common adverse events associated with Botox’s approved injection regimen, which include eyelid ptosis, neck pain and muscle weakness. We believe our proposed treatment protocol, as combined with our exclusive focus on therapeutic indications and the same 900 kDa property as Botox, would create a compelling pharmacoeconomic opportunity to payors, while enhancing the physician and patient treatment experience.

FDA accepted an IND for our Phase 2 clinical study studying ABP-450 for the prevention of migraine in the fourth quarter of 2020 and we initiated enrolling patients in the first quarter of 2021, and began patient dosing in the second quarter of 2021. We plan to enroll 690 patients into the randomized, double-blind, placebo-controlled study across approximately 60 study sites in the United States, Canada and Australia. This study will include migraine patients that experience six or more migraines per month, which is inclusive of chronic migraine patients that experience 15 or more migraines per month, as well as certain episodic migraine patients that experience six to 14 migraines per month. Patients enrolled in the study will receive two injection cycles using our proprietary injection protocol at a low dose of 150 units utilizing 22 active injection sites and four placebo injection sites, high dose of 195 units utilizing 26 active injection sites, with patients evenly split among the three arms.

Upon enrollment into the clinical study, patients will enter into an initial screening and baseline period of approximately four weeks prior to receiving an initial treatment, a second treatment will be administered 12 weeks after the initial treatment, and the patient will be evaluated for 16 weeks after the second treatment.  All patients who remain in the clinical study may be eligible to enroll in the optional dose-blinded long-term safety study whereby patients will again be randomized in a 1:1 ratio to receive either the low dose or high dose protocol for an additional 52 week period.  

The primary endpoint for the clinical study is the reduction of mean monthly migraine days from the four-week baseline period as compared to weeks 20 to 24 of the treatment period.  The secondary endpoint is the percentage of patients achieving a reduction from baseline of at least 50% of monthly migraine days during weeks 20 to 24 of the treatment period.  We will also assess the overall mean change from baseline in the number of monthly migraine days requiring migraine-specific acute treatments and the overall mean change from baseline in moderate to severe headache hours, among other secondary efficacy assessments. The study will also evaluate health-related quality of life patient reported outcomes during the study period, including patient reported impression of severity, impression of change, disability assessment, and physical function impact.  We plan to announce topline data related to our migraine study the second half of 2022.

Cervical Dystonia

Cervical dystonia, also known as spasmodic torticollis, is a neurological condition characterized by involuntary muscle contractions of the neck which may present as spasms, contractions or abnormal posture. It is a chronic condition with

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no cure, causing significant pain and challenges to mobility due to abnormal postures, affecting quality of life and daily activities. Botulinum toxin is the standard of care for the treatment of cervical dystonia, helping to improve pain, posture, and disability.  

ABP-450 is a 2-chain polypeptide, a heavy chain joined by a bond to a light chain. The light chain is a protease enzyme that attacks fusion proteins at the neuromuscular junction, preventing the vesicles containing acetylcholine from anchoring to the membrane and inhibiting their release. ABP-450 interferes with nerve impulses by inhibiting the release of acetylcholine into the neuromuscular junction, causing a flaccid paralysis of muscles.  We believe that ABP-450’s mechanism of action will provide an effective treatment for patients suffering from cervical dystonia.

In 2019, approximately 40% of therapeutic toxin market sales were for various muscle movement disorders. We estimate based on U.S. census data and published clinical studies that there are approximately 50,000 addressable cervical dystonia patients in the United States, of which 30,000 are currently treated.  Based on our proposed treatment protocol and anticipated pricing, we estimate that the addressable cervical dystonia patients represent a potential U.S. market opportunity of approximately $360 million.  Botox, Dysport and Xeomin are currently approved by the FDA for the treatment of cervical dystonia in adult patients to reduce the severity of abnormal head and neck pain, and, in November 2019, Revance Therapeutics, Inc., or Revance, announced that it had completed enrollment of a Phase 3 clinical study for its 150 kDa botulinum toxin (daxibotulinumtoxinA) for the treatment of cervical dystonia. If approved, we believe that the same 900 kDa property of ABP-450 as Botox will promote greater physician conversion to ABP-450 than to other approved botulinum toxins that do not have this property. We believe that this physician conversion will be enhanced by reimbursement advantages we intend to offer to payors and physicians that will differentiate the economics of using ABP-450 instead of Botox.

FDA accepted an IND for our Phase 2 clinical study studying ABP-450 for the treatment of cervical dystonia in the third quarter of 2020 and we initiated enrolling patients and dosing in the first quarter of 2021. This clinical study will include 60 patients across approximately 40 sites in the United States. The clinical study patients will be randomized in a 1:1:1:1 ratio, receiving low dose 150 units of ABP-450, medium dose 250 units of ABP-450, high dose 350 units of ABP-450, or placebo. Due to the nature of the disease, dosing in initial sessions will be tailored to the individual patient based on the patient’s head and neck position, localization of pain, muscle hypertrophy, patient response, and adverse event history. The safety and efficacy of the three dose cohorts of ABP-450 or placebo will be evaluated over a maximum of 20 weeks. At the completion of the Phase 2 clinical study, all patients, irrespective of treatment group, will have the option to receive treatment with ABP-450 by rolling over into a 52 week open-label extension study.

The primary endpoint of the clinical study is to evaluate the safety of a single treatment of ABP-450. The secondary endpoint is the mean difference of change from baseline to week four of each dosing cohort, as measured by the Total Toronto Western Spasmodic Torticollis Rating Scale, or TWSTRS, the standard scale for measuring the severity of cervical dystonia. The clinical study will also evaluate the proportion of patients who would develop treatment-related serious adverse events during the first 20 weeks of a single treatment cycle at any of the administered doses of ABP-450.  We expect to report topline data from this clinical study in early 2022.  

We also expect that a Phase 3 clinical study would include a head-to-head comparison to Botox.

Gastroparesis

Gastroparesis is a gastrointestinal disorder characterized by the slowing or stoppage of movement of food and liquid from the stomach to the small intestine. The disease largely occurs due to neuropathy, which causes stomach muscles to stop functioning normally. The neuropathy can have various causes, including diabetes, surgery, viral infections and autoimmune disorders, though many patients suffer from idiopathic gastroparesis for which there is no known cause. Symptoms of gastroparesis include vomiting, nausea, bloating, early fullness while eating meals, heartburn, and epigastric pain. We estimate based on U.S. census data and published clinical studies that there are approximately 400,000 addressable gastroparesis patients in the United States, of which over 200,000 have moderate to severe symptoms and would be eligible for treatment with a botulinum toxin.  Based on our proposed treatment protocol and anticipated pricing, we estimate that the addressable gastroparesis patients represent a potential U.S. market opportunity of approximately $900 million.

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The first-line treatment for gastroparesis is the modification of a patient’s diet and, for diabetic gastroparesis patients, improved glycemic control. The currently available second-line therapies for gastroparesis are characterized by medications that provide short-term relief and limited efficacy and whose labeling including significant warnings. Metoclopramide is currently the only drug approved by the FDA for the treatment of gastroparesis with limited usage due to significant side effects, including extrapyramidal effects. Metoclopramide is a prokinetic agent, which can be administered orally or by nasal spray. Approved metoclopramide medications include a black box warning that the use of the medication can cause tardive dyskinesia, a serious movement disorder that is often irreversible. Other medications used for the treatment of gastroparesis can include macrolides, domperidone, erythromycin and anti-emetics. However, these medications are not approved in the United States for gastroparesis. In severe cases of gastroparesis, where patient symptoms are refractory to medical therapy and diet modification, there are more invasive options such as gastric peroral endoscopic myotomy, surgical implantation of a gastric electrical stimulation device on the stomach, pyloric sphincterotomy, complete or partial gastrectomy, pyloric sphincterotomy or jejunostomy. In some cases, Botox has been used on an off-label basis prior to surgery in patients that have failed diet and medications.

We believe that an unmet need for the treatment of gastroparesis exists and, if approved, ABP-450 could serve as an effective third-line treatment for patients that do not achieve effective results with first-line diet therapy and second-line medication or discontinue use of medication due to poor tolerability. In a research study report published in February 2017 by the International Foundation of Functional Gastrointestinal Disorders, 60% of gastroparesis patients are not satisfied with current treatments. There are no approved botulinum toxin therapies for the treatment of gastroparesis; however, data from several retrospective or open-label studies conducted in the United States and Europe evaluating the efficacy and safety of Botox for the treatment of gastroparesis have been published and reflect potentially promising results. Certain double-blind placebo-controlled clinical studies did not display statistically significant separation between the placebo and Botox groups. We believe that the design of these studies may have contributed to this result; notably, these studies included less than 35 patients, included both diabetic and idiopathic patients, followed patients for only four weeks post-treatment, and did not account for the potential therapeutic effect of injecting saline into the target site. Our future clinical studies will consider the design of these previous studies, which we believe will increase the likelihood that ABP-450 will show a statistically significant benefit when compared to placebo.

In December 2020, we initiated a preclinical study of ABP-450 related to the treatment of gastroparesis with 42 primates receiving multiple injections in and around the pyloric sphincter across four dose ranges. The total number of animals to be used in this study is considered to be the minimum required to properly characterize the effects of ABP-450 and has been designed such that it does not require an unnecessary number of animals to accomplish its objectives.  The objective of this preclinical study is to characterize the safety and toxicology prior to entering human studies. We expect to complete this preclinical study in the third quarter of 2021 and use the data to support an IND submission in late 2021.  If our IND is accepted, we expect to initiate a Phase 2a clinical study in 2022 to study the safety and efficacy of injecting a therapeutic dose of ABP-450 through a sclerotherapy needle into the pyloric sphincter.

Previous Development of our Botulinum Toxin

The same botulinum toxin as ABP-450 has been approved for the cosmetic treatment of moderate to severe glabellar lines in the United States, the European Union and Canada, and a form of the botulinum toxin has been approved as for the treatment of post-stroke upper limb spasticity in South Korea. Evolus markets and sells the same botulinum toxin as ABP-450 for the cosmetic treatment of moderate to severe glabellar lines under the brand name Jeuveau in the United States and under the brand name Nuceiva in the European Union and Canada, and Daewoong markets and sells its similar botulinum toxin under the brand name Nabota in South Korea. We believe that the Daewoong and Evolus studies related to the treatment of glabellar lines are relevant to the development of ABP-450 for therapeutic indications for several reasons, including that over 2,100 adults have been injected with a botulinum toxin that is identical or nearly identical to ABP-450 in the context of a clinical study program, generating significant safety, efficacy and non-inferiority data in the cosmetic setting.

Daewoong Preclinical Toxicology Program

In accordance with international guidelines and in consultation with the FDA, Daewoong conducted a broad preclinical development program for ABP-450, including the study of dose concentrations contemplated for multiple

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therapeutic uses. The program included preclinical efficacy, safety, reproductive toxicity and single and repeat dose toxicity studies of ABP-450.While this program did not specifically contemplate the use of ABP-450 for migraine, cervical dystonia, or gastroparesis, we believe that the positive data derived from these preclinical studies will support the clinical development and anticipated future safety labeling of ABP-450 for migraine and cervical dystonia at all contemplated dose ranges.We will have to conduct additional toxicology studies to support the gastroparesis clinical program because it is a new target organ.  

Daewoong South Korean Clinical Development for Glabellar Lines

In South Korea, Daewoong conducted two clinical studies of Nabota, a form of the same botulinum toxin as ABP-450, to support its BLA for the cosmetic treatment of moderate to severe glabellar lines to the Korean Ministry of Food and Drug Safety, or MFDS, including one Phase 1 clinical study and one Phase 3 clinical study. Both studies were double blind, randomized studies with an active control, Botox. Each study compared 20 units of Nabota with 20 units of Botox, injected into each of five target sites in the glabellar region of adult subjects with moderate to severe glabellar lines.

Nabota was approved by the Korean Ministry of Food and Drug Safety for marketing on November 29, 2013 for the treatment of glabellar lines. The Nabota formulation, which was used in the early South Korean studies and which was commercialized by Daewoong, is slightly different than the formulation used in the studies sponsored by Evolus. The original Daewoong product was lyophilized and used a different human serum albumin that had not been approved by the FDA or EMA. With the approval of the Evolus vacuum dried product, Jeuveau, Daewoong has harmonized its product to be the same as the Evolus product and the same as the product that will be used in the clinical studies sponsored by us.

Evolus Clinical Development for Glabellar Lines

In 2014, Evolus initiated a comprehensive five-study clinical development program for Jeuveau, which consists of the same botulinum toxin complex as ABP-450, in the United States, the European Union and Canada to meet the regulatory requirements for a BLA in the United States, a marketing authorization application, or MAA, in the European Union, and a new drug submission, or NDS, in Canada, for the cosmetic treatment of moderate to severe glabellar lines. The Evolus development program included three multicenter, randomized, double-blinded, controlled, single dose Phase 3 clinical studies and two open label, multiple dose, long-term Phase 2 clinical studies. In each of the studies related to Jeuveau for the treatment of glabellar lines, the Jeuveau treatment group showed superiority over the placebo group and, where Botox was included as an active control, the Jeuveau treatment group was determined to be non-inferior to Botox. Between September 2014 and August 2016, over 2,100 adult male and female subjects with moderate to severe glabellar lines at maximum frown participated in this program. Jeuveau was approved for the cosmetic treatment of moderate to severe glabellar lines by the FDA in February 2019, and the same botulinum toxin was approved under the brand name Nuceiva by Health Canada in August 2018 and by the European Commission in September 2019.

Daewoong South Korean Clinical Development for Post-Stroke Upper Limb Spasticity

Daewoong has conducted a post-stroke upper limb spasticity Phase 3 clinical study in South Korea. It was a randomized, double blind, multi-center, active drug controlled, Phase 3 clinical study to compare the safety and efficacy of up to 360 units of each of Nabota to Botox. Nabota was found to be non-inferior to Botox in this study. The result of this study was the basis for registration and approval of Nabota with the Ministry of Food and Drug Safety, MFDS, for the post-stroke upper limb spasticity indication in South Korea.

Patients diagnosed with a stroke at least six weeks prior to the start date of the study and found to be eligible based on the screening test result, were randomized to either Nabota or Botox. Treatment consisted of intramuscular injections of up to 360 units to the wrist flexor, elbow flexor, finger flexor or thumb-in-palm; the total dose depended on the existence and severity of spasticity. In order to assess efficacy and safety after the treatment, follow-up visits were performed at four, eight and 12 weeks.

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The primary endpoint compared the evaluations of the changes in muscle tension values as measured by the Modified Ashworth Scale, or MAS, scores of wrist flexors at four weeks after the injection compared to the scores before treatment. The changes in the wrist flexor MAS assessed by the investigator at four weeks after treatment compared to the baseline in the per protocol analysis group for the primary efficacy assessment were -1.44±0.72 points and -1.46±0.77 points in the Nabota and Botox group, respectively. Both groups demonstrated statistically significant decreases (p<0.0001) in muscle tension as measured on the MAS. The difference between the Nabota and Botox groups was 0.0129, with a 95% confidence interval (-0.2062, 0.2319). Since the upper limit of the 97.5% one-sided confidence interval of the difference in changes was 0.2319, Nabota was found to be non-inferior to Botox. As a secondary endpoint, the average change in muscle tension as measured on the MAS of both groups as compared to baseline, when measured at week 8 and week 12, remained statistically significant at all points in time.

After administration of the treatment, adverse events occurred in 19.6% of the subjects in the Nabota group and 19.4% of the subjects in the Botox group. Adverse drug reactions occurred in 3.1% of the subjects in the Nabota group and in 4.1% of the subjects in the Botox group. There was one serious adverse event, a radius fracture that occurred in the Nabota group, which was assessed as not study drug-related. Botulinum neutralizing antibody testing was conducted using mouse bio-assay, and there were no “positive” subjects found in either group. Nabota is now approved for post-stroke upper limb spasticity in South Korea. We will have to conduct additional toxicology studies to support the gastroparesis clinical program because it is a new target organ.

Daewoong South Korean Clinical Development for Blepharospasm

Daewoong has conducted a blepharospasm Phase 2/3 comparator study in South Korea. It was a randomized, double blind, multi-center, active drug controlled, Phase 3 clinical study to compare the safety and efficacy of Nabota to Botox. This study was the basis for registration and approval of Nabota with the MFDS for the blepharospasm indication in South Korea.

Patients diagnosed with facial spasms prior to the start date of the study and found to be eligible based on the screening test result, were randomized to either Nabota or Botox. Treatment consisted of intramuscular injections into the medial and lateral pretarsal orbicularis oculi of the upper lid and lateral pretarsal orbicularis oculi of the lower lid of up to 46.88± 9.46 units of Nabota or 46.86± 9.46 units of Botox; the total dose depended on the severity of the spasms. In order to assess efficacy and safety after the treatment, follow-up visits were performed at four, eight and 12 weeks.

Our Strategy

Our goal is to change patients’ lives by enhancing the therapeutic botulinum toxin treatment paradigm for patients suffering from debilitating conditions. To achieve this goal, we plan to:

• Develop and Seek Regulatory Approval for ABP-450 in Our Initial Indications. Our initial indications for the development of ABP-450 are migraine, cervical dystonia and gastroparesis. We have initiated enrollment and dosing in our Phase 2 clinical study evaluating ABP-450 for the preventative treatment of migraine and expect to report topline data from this clinical study in the second half of 2022. We have initiated enrollment and dosing in our Phase 2 clinical study evaluating ABP-450 for the treatment of cervical dystonia and expect to report topline data for this clinical study in early 2022.  We have also initiated a preclinical primate study evaluating ABP-450 for the treatment of gastroparesis and expect to submit an IND for our Phase 2a study in late 2021.

• Expand the Field of Therapeutic Applications for Botulinum Toxins. We believe ABP-450 can be developed to address a broad range of debilitating diseases where existing treatment options do not exist, have proven to be inadequate or are poorly tolerated. To identify target indications for development, we employ a rigorous portfolio screening process that evaluates strategic fit, potential commercial opportunity and clinical and regulatory development risks. We initially identified over 230 potential therapeutic uses for botulinum toxins and plan to continue to evaluate therapeutic use for chronic diseases where there is no approved botulinum toxin therapy.

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• Enhance the Economics of Botulinum Toxin Treatments to Drive Value for Payors and Physicians. We plan to pursue approval of an original BLA that exclusively contemplates therapeutic indications for ABP-450. If we obtain an original BLA for therapeutic indications of ABP-450, we would have the pricing flexibility to enhance the rebates to payors and/or providers to improve reimbursement coverage for therapeutic indications, which we believe will provide better access to botulinum toxin therapy to a broader population of patients. We would also be able to ensure physicians receive consistent, favorable reimbursement when they choose to use ABP-450 for their therapeutic botulinum toxin treatments.

• Participate in the Growing Therapeutic Botulinum Toxin Market by Optimizing Value of ABP-450. The global therapeutic botulinum toxin market was estimated to be $2.2 billion in 2019 and is projected to grow to $4.4 billion in 2027. Botox commands approximately 95% of that therapeutic market, driven primarily by historical investment into development programs such as chronic migraine and overactive bladder. We have exclusive development and distribution rights for therapeutic indications of ABP-450 in the United States, Canada, the European Union and certain other international territories. We plan to develop and pursue approval of ABP-450 for a variety of indications in major markets, beginning with the United States, where we intend to build a focused, specialized commercial organization to launch the product. Where appropriate outside the United States, we may use strategic collaborations and partnerships to accelerate the development and maximize the commercial potential of our programs.

Our Competitive Strengths

We believe the successful pursuit of our strategy will be driven by the following competitive strengths:

• Well-Established 900 kDa Botulinum Toxin Complex.  ABP-450 is the same botulinum toxin complex that has been approved by regulatory authorities in the United States, the European Union and Canada for a cosmetic indication.To receive these global approvals, Daewoong and Evolus have completed rigorous clinical development programs using Botox as an active comparator and consistently showed that ABP-450 was non-inferior to Botox at doses ranging from 20 units to 360 units. While we have not yet demonstrated non-inferiority of ABP-450 to Botox, we expect to design our studies, if successful, to demonstrate that one unit of ABP-450 will produce a substantially similar effect as one unit of Botox. We believe the similar 900 kDa molecular weighting of the two products will facilitate physician adoption of ABP-450 more rapidly and sustainably than other botulinum toxins that compete with therapeutic uses of Botox.

• ABP-450 Has Potential Application Across a Broad Range of Indications.ABP-450 is a single product candidate that we believe can produce a diverse product development platform spanning a broad spectrum of indications.We believe that our cervical dystonia program has an established regulatory pathway that, if successful, would allow us to participate in an established market. Our migraine program, if successful, represents an important expansion of treatments available in the $17.8 billion episodic migraine market, combined with a streamlined injection protocol for all indicated migraine patients.  Our gastroparesis program, if successful, would be a novel indication for botulinum toxins in a market characterized by high unmet need and low competitive intensity.  We have identified six additional, undisclosed therapeutic indications that we intend to pursue that offer similar market opportunities.  

• Differentiated Business Model Designed to Deliver Enhanced Value to Payors and Physicians. We believe our exclusive focus on developing ABP-450 for therapeutic indications provides us with a competitive advantage against current and known prospective botulinum toxin competitors.  We believe this focus will enable us to pursue an original BLA dedicated to therapeutic uses of ABP-450 that, if obtained, would allow physicians to receive consistent and favorable reimbursement from payors, while also providing us with the flexibility to provide economic incentives, including rebates, to payors and/or providers. Market competitors that receive marketing approval for their botulinum toxin products have traditionally obtained an original BLA for their initial indication, with follow-on supplemental BLAs as they expand their product labels to include cosmetic and therapeutic indications.  As a consequence of that structure, the ASPs for therapeutic reimbursement are negatively affected by promotional activity associated with cosmetic pricing.  If we receive an original BLA, we believe that we will not have a negative pricing influence from cosmetic

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indications, which should allow us to uniquely manage our ASP in a manner that enhances value to payors and physicians.

• Management Team with Significant and Relevant Experience and Expertise in the Therapeutic Use of Botulinum Toxins. Our management team has extensive experience in the botulinum toxin market, in multiple therapeutic areas, in the development, market launch and commercialization of major medical products, execution and integration of business development transactions and understanding of the regulatory environment of the healthcare markets.

Manufacturing

Daewoong is our sole supplier of ABP-450. Daewoong has over 70 years of experience manufacturing pharmaceutical products and is one of the largest pharmaceutical drug companies in South Korea. Daewoong has recently constructed a facility in South Korea for the purposes of producing ABP-450 drug product, which was purpose-built to comply with FDA and EMA regulations. We believe this facility will be sufficient to meet demand for ABP-450 for the foreseeable future. The FDA conducted a cGMP and pre-approval inspection of the facility from November 8 to November 17, 2017. The UK Medicines and Healthcare Products Regulatory Agency also completed an inspection of the manufacturing facility in February 2018 in connection with Evolus’ MAA for Jeuveau. Evolus’ FDA approval of Jeuveau in February 2019 included approval to manufacture Jeuveau at Daewoong’s facility. A separate pre-licensure inspection may be required for any BLA we submit for any of our product candidates and we believe that Daewoong’s manufacturing facility is, and will remain, compliant with FDA and EMA cGMP requirements.

While Jeuveau and ABP-450 are both manufactured by Daewoong, both we and Evolus retain separate, independent oversight rights related to Daewoong’s compliance with cGMP, standards specified by good manufacturing practice, and all other applicable regulatory guidelines and requirements. Evolus will retain independent oversight and responsibility for the quality and pharmacovigilance of Jeuveau under its BLA and related international approvals; similarly, we will retain independent oversight and responsibility for the quality and pharmacovigilance of ABP-450 under our original BLA, if approved.

Daewoong manufactures the ABP-450 drug substance in a separate facility on the same campus. The manufacture of ABP-450 drug substance is based on the fermentation of Daewoong’s C. botulinum cell line, followed by isolation and purification of the drug substance. Daewoong has received a U.S. patent for the production process. The ABP-450 drug substance production facility was purpose built to comply with FDA and EMA cGMP requirements.

Daewoong is a defendant in several lawsuits brought by Medytox, Inc., or Medytox, alleging, among other things, that Daewoong stole Medytox’s botulinum toxin bacterial strain and misappropriated trade secrets of Medytox, including those used by Daewoong to manufacture ABP-450. Daewoong is also a respondent to a complaint made by Medytox and Allergan to the U.S. International Trade Commission, or ITC, containing substantially similar allegations regarding the alleged theft of Medytox’s botulinum toxin bacterial strain and misappropriation of Medytox’s trade secrets, which is currently on appeal to the United States Court of Appeals for the Federal Circuit. We were also a defendant in the lawsuit brought by Medytox in the United States District Court for the Central District of California asserting allegations that are substantially similar to those in the South Korean litigation. In June 2021, we settled all outstanding claims with Medytox and entered into a non-exclusive, royalty-bearing, irrevocable license that permits us to commercialize and manufacture ABP-450. See “Risk Factors—Risks Related to Our Business Operations and Financial Position—Risks Related to Third Parties—A material breach by us of the terms of our license and settlement agreement with Medytox could have a material adverse effect on our business.”

Daewoong License and Supply Agreement

On September 30, 2013, Evolus entered into a license and supply agreement with Daewoong, pursuant to which Daewoong agreed to manufacture and supply Jeuveau and grant Evolus an exclusive license for cosmetic indications to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau in certain territories. In addition, Evolus paid $1.0 million to Daewoong as consideration for the option to expand the exclusive license to include therapeutic indications. In September 2018, we exercised the option to obtain the therapeutic rights for the territory and remitted the option exercise price of $7.5 million directly to Daewoong.

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On December 20, 2019, we entered into the Daewoong Agreement, pursuant to which Daewoong agreed to manufacture and supply ABP-450 and grant us an exclusive license for therapeutic indications to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit ABP-450 in the United States, the European Union, the United Kingdom, Canada, Australia, Russia, the Commonwealth of Independent States and South Africa, which we refer to collectively as the covered territories.

Daewoong has agreed to supply us with ABP-450 at an agreed-upon transfer price, with no milestone or royalty payments and no minimum purchase requirements. Daewoong is responsible for all costs related to the manufacturing of ABP-450, including costs related to the operation and upkeep of its manufacturing facility, and we are responsible for all costs related to obtaining regulatory approval, including clinical expenses, and commercialization of ABP-450. Our exclusivity is subject to our exercise of commercially reasonable efforts to: (i) achieve all regulatory approvals necessary for ABP-450 to be marketed in the territory for therapeutic indications and (ii) commercialize ABP-450 in the territory for therapeutic indications. During the term of the Daewoong Agreement, we cannot purchase, sell or distribute any competing products in a covered territory or sell ABP-450 outside a covered territory.

The initial term of the Daewoong Agreement is from December 20, 2019 to the later of (i) the fifth anniversary of approval from the relevant governmental authority necessary to market and sell ABP-450 or (ii) December 20, 2029, and automatically renews for unlimited additional three-year terms, provided the Daewoong Agreement is not earlier terminated. The Daewoong Agreement will terminate upon written notice by either us or Daewoong upon a continuing default that remains uncured within 90 days (or 30 days for a payment default) by the other party, or without notice upon the bankruptcy or insolvency of our company.

We will be the sole owner of any marketing authorization and clinical study results we pursue related to therapeutic indications of ABP-450 in a covered territory. This will include ownership of any BLA that we may submit to the FDA, MAA that we may submit to the EMA, NDS that we may submit to Health Canada, and any other approvals we receive in a covered territory. However, if we do not renew the Daewoong Agreement or upon termination of the Daewoong Agreement due to a breach by us, we are obligated to transfer our rights to Daewoong.

Pursuant to the Daewoong Agreement, a Joint Steering Committee, or the JSC, comprised of an equal number of development and commercial representatives from Daewoong and us, shall review and provide input on our commercialization plan for ABP-450, although we have final decision-making power regarding the marketing, promotion, sale and/or distribution of ABP-450. A disagreement among the JSC will be referred to senior management of Daewoong and us for resolution if the JSC is unable to reach a decision within 30 days.

The Daewoong Agreement also provides that Daewoong will indemnify us for any losses arising out of Daewoong’s willful misconduct or gross negligence in performing its obligations under the agreement, Daewoong’s breach of the agreement, or any allegation that ABP-450 or Daewoong’s trademark infringes or misappropriates the rights of a third party, except, in each case, as a result of our willful misconduct or gross negligence. We have agreed to indemnify Daewoong for any losses arising out of our willful misconduct or gross negligence in performing our obligations under the agreement, or our breach of the agreement, except, in each case, as a result of Daewoong’s willful misconduct or gross negligence.

Intellectual Property

Our success depends, in part, on our ability to obtain and maintain intellectual property protection related to our product candidate in our proposed therapeutic indications, novel methods of use, and other know-how. Our ability to operate without infringing on the proprietary or intellectual property rights of others and to prevent others from infringing our proprietary and intellectual property rights will be important to our performance. We protect, and will continue to protect, our proprietary technology and methods by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions, methods of use, and improvements that are important to the development and implementation of our business.

Under our licensing and supply agreement with Daewoong dated December 20, 2019, Daewoong agreed to manufacture and supply ABP-450 to us and grant us an exclusive license for therapeutic indications to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit ABP-450 in the United States, the European Union, the United Kingdom, Canada, Australia, Russia, the Commonwealth of Independent

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States and South Africa.  Daewoong has a U.S. patent on its proprietary botulinum toxin manufacturing process for ABP-450.  At this time, we own four pending PCT international patent applications and one pending U.S. nonprovisional patent application related to certain novel methods and protocols of injecting ABP-450 for therapeutic purposes that we have developed, including the treatment of migraine and gastroparesis.  If issued, these patents would expire in 2040. We also rely on know-how, copyright, trademarks and trade secret laws to protect our proprietary advancements and competitive advantage. Such protection is also maintained using confidential disclosure agreements.

It is possible that our current pending patents, or patents which we may later acquire or license, may be successfully challenged or invalidated in whole or in part. It is also possible that we may not obtain issued patents from our pending patent applications or other inventions we seek to protect. Due to uncertainties inherent in prosecuting patent applications, it is possible that our pending patent applications are rejected. It is also possible that we may develop proprietary products or technologies in the future that are not patentable or that the patents of others will limit or altogether preclude our ability to do business. In addition, any patent issued to us may provide us with little or no competitive advantage, in which case we may abandon such patent or license it to another entity. For more information, please see “Risk Factors—Risks Related to Intellectual Property.”

Competition

The pharmaceutical industry is highly competitive and requires an ongoing, extensive search for technological innovation. It also requires, among other things, the ability to effectively discover, develop, test and obtain regulatory approvals for novel products, as well as the ability to effectively commercialize, market and promote approved products, including communicating the effectiveness, safety and value of products to actual and prospective customers and medical professionals. Numerous companies are engaged in the development, manufacture and marketing of products competitive with those that we are developing. Many of our competitors have greater resources than we have. This enables them, among other things, to leverage their financial resources to make greater research and development, marketing and promotion investments that us. Our competitors may also have more experience and expertise in obtaining marketing approvals from the FDA and other regulatory authorities. Our technologies and products may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors. As more companies develop new intellectual property in our markets, the possibility of a competitor acquiring patent or other rights that may limit our products or potential products increases, which could lead to litigation. In addition to product development, testing, approval and promotion, other competitive factors in the pharmaceutical industry includes industry consolidation, product quality and price, product technology, reputation, customer service and access to technical information.

We are currently focusing our clinical efforts on the use of botulinum toxins to treat migraine, cervical dystonia and gastroparesis, and expect to pursue indications to treat other therapeutic conditions. We expect to compete directly with other injectable botulinum toxins and other pharmaceuticals that are currently utilized and being developed for each of these disease states.  

Injectable Botulinum Toxins

Our primary competitors for ABP-450 in the injectable botulinum toxin pharmaceutical market for therapeutic use are Botox, Dysport, Xeomin, Myobloc, a type-B botulinum toxin serotype marketed by U.S. WorldMeds, and, if approved, Revance’s botulinum toxin, DaxibotulinumtoxinA. Revance has entered into a collaboration and license agreement with Viatris Inc., to develop and commercialize a biosimilar to Botox. Each of Botox, Dysport, Xeomin and Myobloc are approved by the FDA for the treatment of cervical dystonia and Revance announced that it had completed enrollment of a Phase 3 clinical study for its botulinum toxin for the treatment of cervical dystonia. Botox is currently the only botulinum toxin approved for the treatment of chronic migraine. There are no approved botulinum toxins approved for the treatment of gastroparesis and, to our knowledge, there are no active clinical studies evaluating the potential of another botulinum toxin to treat gastroparesis.

We are aware of competing botulinum toxins currently being developed or commercialized in the United States, the European Union, Asia, South America and other markets. While some of these products may not meet U.S. regulatory standards, the companies operating in these markets may be able to produce products at a lower cost than U.S. and

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European manufacturers. In addition to the injectable botulinum toxin dose forms, we are aware that other companies are developing topical botulinum toxins for therapeutics indications.

Preventative Treatment of Migraine

Beta Blockers, Anti-Epileptics, and Triptans

Botox is approved for the preventative treatment of chronic migraine and certain other agents are used as first and second line treatments for the prevention of migraine, including triptans, beta blockers, and anti-epileptics.

Calcitonin Gene-Related Peptide (CGRP)

We will also face competition in our target therapeutic markets from companies that provide treatment options with other pharmaceutical or non-pharmaceutical products. For the preventative treatment of chronic migraine, we will face competition from CGRP agonists, including Aimovig (erenumab) marketed by Amgen Inc., Ajovy (fremenezumab) marketed by Teva Pharmaceutical Industries Ltd., and Emgality (galcenezumab) marketed by Eli Lilly and Company. Each of Aimovig, Ajovy and Emgality are self-administered by a monthly subcutaneous injection. Vyepti (eptinezumab) marketed by Lundbeck A/S has recently been approved for the prevention of migraine and is administered every 3 months by intravenous infusion. In addition, Biohaven Pharmaceutical Holding Company Ltd. and AbbVie have initiated Phase 3 studies to study their once-daily, orally administered products for the prevention of migraine—rimegepant and atogepant, respectively. Biohaven is also studying vazegepant to be used as an intranasal formulation for both the acute treatment and prevention of migraine. If approved, each of these therapies would be commercially available for the treatment of migraine prior to ABP-450. Notably, initial positive data has been published studying the reduction in migraine days when a botulinum toxin is used in combination with CGRP, suggesting that combination therapy could provide further reduction in monthly migraine days than either botulinum toxin or CGRPs alone.

Other Treatments

We will also face competition in our target therapeutic markets from companies that provide treatment options with other pharmaceutical or non-pharmaceutical products. For the treatment of cervical dystonia, in addition to other injectable botulinum toxins, we will face competition from orally administered anticholinergic, GABA receptor agonist, benzodiazepine, dopaminergic and anticonvulsant pharmaceuticals. For the treatment of gastroparesis, we will face competition from prokinetic agents, including REGLAN (metoclopramide), which is the only medication currently approved by FDA for the treatment of gastroparesis.

Government Regulation

We operate in a highly regulated industry that is subject to significant federal, state, local and foreign regulation. Our business has been, and will continue to be, subject to a variety of laws including the Federal Food, Drug and Cosmetic Act, or FFDCA, and the Public Health Service Act, or PHS Act, among others. Biological products or “biologics,” which are the focus of our business, are subject to regulation under the FFDCA and PHS Act. Our products, if approved, will be regulated as biologics. With this classification, commercial production of our products will need to occur in registered and licensed facilities in compliance with cGMP for biologics. Among other things, biologics require clinical studies to demonstrate product safety and efficacy, and the submission and approval of a BLA for marketing authorization. Also, various federal and state laws govern the research and development, testing, investigation, manufacture, storage, recordkeeping, regulatory approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of these products. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending license or marketing applications, warning letters and other enforcement actions, import alerts or detentions, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

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U.S. Biological Products Development Process

The process required by the FDA before a biological product may be marketed in the United States generally involves the following:

• completion of nonclinical laboratory tests and animal studies according to good laboratory practices, or GLPs, and applicable requirements for the humane use of laboratory animals or other applicable regulations;

• submission to the FDA of an IND, which must become effective before human clinical studies may begin;

• performance of adequate and well-controlled human clinical studies to establish the safety and efficacy of the proposed biological product for its intended use, according to the FDA’s regulations, commonly referred to as good clinical practices, or GCPs, and any additional requirements including those for the protection of human research subjects and their health and other personal information;

• preparation and submission to the FDA of a BLA for marketing approval which contains, among other things, data supporting the safety and effectiveness of the biologic, and data on the chemistry, manufacturing, and controls, or CMC, of the product that support the identity, strength quality, purity, and potency of the biologic that will be produced;

• satisfactory completion of an FDA pre-licensure inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality, purity, and potency;

• potential FDA audits of the nonclinical study and clinical study sites that generated the data in support of the BLA; and

• FDA review and approval of the BLA.

Nonclinical Studies

Biological product development in the United States typically involves nonclinical or “preclinical” (e.g., laboratory or animal) testing. Nonclinical tests often include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product. The conduct of the nonclinical tests must comply with applicable federal regulations and requirements including GLPs, among other requirements. The results of initial nonclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls, any relevant prior clinical experience, and a proposed clinical study protocol. Additional nonclinical testing, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted and generally must be included in the BLA.

Clinical Studies

Prior to beginning the first clinical study with a product candidate, a sponsor must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol or protocols for preclinical and clinical studies. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product, chemistry, manufacturing and controls information, and any available human data or literature to support the use of the investigational product. An IND must become effective before human clinical trials may begin. For clinical studies in the United States or otherwise regulated by the FDA, a 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has not raised questions or concerns relating to the IND and placed the IND on clinical hold within this 30-day period, the clinical study proposed in the IND may begin. If the FDA does place the IND on clinical hold, the IND sponsor must resolve any outstanding concerns to the FDA’s satisfaction before the clinical study can begin.

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Our clinical studies for our ABP-450 product candidate will involve the administration of the investigational biologic to subjects under the supervision of one or more qualified investigators. Clinical studies must be conducted pursuant to an IND and in compliance with state and federal regulations and GCPs, an international standard meant to protect the rights and health of subjects and to define the roles of clinical study sponsors, administrators, and monitors, as well as under protocols detailing the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. subjects and subsequent protocol amendments must be submitted to the FDA as part of the IND. The FDA may order the temporary or permanent discontinuation of a clinical study at any time or impose other requirements or sanctions if it believes that the clinical study is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical study subjects. The clinical study protocol, any protocol amendments, and informed consent information for subjects in clinical studies must also be submitted to an institutional review board, or IRB, for approval. An IRB may require the clinical study at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions before approving the study for initiation. The IRB also approves the form and content of the informed consent form that must be signed by each clinical study subject or his or her legal representative, and the IRB must monitor the clinical study until completed.

There are also requirements governing the reporting of ongoing preclinical and clinical studies and clinical study results to public registries. Sponsors of certain clinical trials of FDA-regulated products, including biologics, are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov.

Human clinical studies are typically conducted in three sequential phases that may overlap or be combined:

• Phase 1. The product candidate is initially introduced into a limited population of healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for some diseases, or when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients with the disease or condition for which the product candidate is intended to gain an early indication of its effectiveness.

• Phase 2. The product candidate is evaluated in a limited patient population, but larger than in Phase 1, to identify possible adverse events and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted indications and to assess dosage tolerance, optimal dosage and dosing schedule.

• Phase 3. Clinical studies are undertaken to further evaluate dosage and provide substantial evidence of clinical efficacy and data supporting safety in an expanded patient population, such as several hundred to several thousand subjects, at geographically dispersed clinical study sites. Phase 3 clinical studies are typically conducted when Phase 2 clinical studies demonstrate that a dose range of the product candidate is effective and has an acceptable safety profile. These studies typically have at least two groups of patients who, in a blinded fashion, receive either the product or a placebo. Phase 3 clinical studies are intended to establish the overall risk-benefit ratio of the product and provide an adequate basis for product labeling. Generally, two adequate and well-controlled Phase 3 clinical studies are required by the FDA for approval of a BLA.

• Phase 4. In some cases, the FDA may condition approval of a BLA for a product candidate on the sponsor’s agreement to conduct additional clinical studies after approval. In other cases, a sponsor may voluntarily conduct additional clinical studies after approval to gain more information about the product. These clinical studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up. Such post-approval studies are sometimes referred to as “Phase 4” clinical studies.

Concurrent with clinical studies, companies may complete additional nonclinical studies and develop additional information about the biological characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMPs and also CMC requirements that are approved as part of the BLA. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality, purity, and potency of the finished product. In addition, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug product candidate does not undergo unacceptable deterioration over its shelf life.

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BLA Submission and Marketing Approval

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, a BLA is prepared and submitted to the FDA. FDA approval of the BLA is required before marketing of the product may begin in the United States. The BLA must include the results of all nonclinical, clinical and other testing and a compilation of data relating to the product’s CMCs. The cost of preparing and submitting a BLA is substantial. The submission of most BLAs is additionally subject to a substantial application fee, and the sponsor of an approved BLA is also subject to annual program fees.

The FDA has 60 days from its receipt of a BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review, and such decision could result in a refusal to file by the FDA. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of BLAs. The FDA’s goal is to review standard applications within ten months after it accepts the application for filing, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing. Priority review designation will direct overall attention and resources to the evaluation of applications for products that, if approved, would be significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions compared to available therapies. The review process may be extended by the FDA for three additional months to consider certain late-submitted information, or information intended to clarify information already provided in the submission. The FDA reviews a BLA to determine, among other things, whether a product candidate is safe and effective for its intended use, and whether the facility in which it is manufactured, processed, packed and held meets regulatory standards designed to assure and preserve the product’s identity, safety, strength, quality and purity. The FDA may also refer applications for novel biologics products or biologics products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but often follows some or all of its recommendations.

In addition to the above, under the Pediatric Research Equity Act, or PREA, a BLA applicant, absent a deferment or waiver, must develop a pediatric development plan and, potentially, conduct pediatric studies prior to submission of the BLA.

Pre-licensure inspections are often conducted at one or more clinical study sites, and may be conducted at nonclinical testing sites as well. Additionally, the FDA will inspect the facility or the facilities at which the biological product is manufactured prior to approval. The FDA will not approve the BLA unless it determines that compliance with cGMP is satisfactory. Manufacturers of biologics also must comply with the FDA’s general biological product standards and approved CMC requirements.

After the FDA evaluates the BLA and information from any pre-licensure inspections or other data sources, it issues either an approval letter or a complete response letter. A complete response letter outlines the deficiencies in the submission and may require substantial additional testing, including additional large-scale clinical testing or information in order for the FDA to reconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to the goal of reviewing such resubmissions in two or six months depending on the type of information included.

An approval letter authorizes commercial marketing of the finished biological product within the United States with specific labeling (e.g., prescribing information) for specific indications. As a condition of BLA approval, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy and may impose other conditions, including labeling restrictions, which can materially affect the product’s potential market and profitability. For example, the FDA may approve the BLA with Risk Evaluation and Mitigation Strategies, or REMS, to ensure the benefits of the product continue to outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems or safety issues are identified following initial marketing. The

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FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies. Changes to some of the conditions established in an approved application, including changes in indications, labeling, ingredients or manufacturing processes or facilities, require submission and FDA approval of a new BLA or BLA supplement before the change can be implemented. A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing BLA supplements as it does in reviewing BLAs. In addition, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could impact the timeline for regulatory approval or otherwise impact ongoing development programs.

Expedited Development and Review Programs

Any marketing application for a biologic submitted to the FDA for approval may be eligible for FDA programs intended to expedite the FDA review and approval process, such as priority review, fast track designation, breakthrough therapy designation and accelerated approval.

A product is eligible for priority review, or review within a six-month timeframe from the date a complete BLA is accepted for filing, if it has the potential to provide a significant improvement in safety and effectiveness compared to available therapies. The FDA will attempt to direct additional resources to the evaluation of an application for a new drug or biological product designated for priority review in an effort to facilitate the review.

To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors. Fast track designation provides opportunities for frequent interactions with the FDA review team to expedite development and review of the product. The FDA may also review sections of the BLA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor and FDA agree on a schedule for the submission of the application sections, and the sponsor pays any required user fees upon submission of the first section of the BLA.

In addition, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug or biologic that is intended to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. If a product is so designated, the FDA will take certain actions, such as holding timely meetings and providing advice, intended to expedite the development and review of an application for approval of a breakthrough therapy.

Additionally, products that may fulfill an unmet medical need and are studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on an intermediate clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled Phase 4 post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review and approval will not be shortened. Furthermore, priority review, fast track designation, and breakthrough therapy designation do not change the standards for approval but may expedite the development or approval process.

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Post-Approval Requirements

Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual program fees for any marketed products. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

• restrictions on the marketing or manufacturing of the product, restrictions on import or export, complete withdrawal of the product from the market or product recalls;

• fines, warning letters or untitled letters, or holds on post-approval clinical studies;

• refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals;

• product seizure or detention, or refusal to permit the import or export of products;

• consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

• mandated modification of promotional materials and labeling and the issuance of corrective information;

• the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or

• injunctions or the imposition of civil or criminal penalties.

The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturers’ communications on the subject of off-label use of their products.

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In addition to the FDA’s post-approval requirements, various state laws governing manufacturing, marketing, and distribution often apply, and state licenses may need to be obtained and renewed on a periodic basis in order to continue operations in specific states.

Biosimilars and Exclusivity

The Affordable Care Act, signed into law in 2010, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or the BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alteration or switch.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until twelve years from the date on which the reference product was first licensed. A reference biological product is granted twelve years of data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product. “First licensure” typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency. During this twelve-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical studies to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law as no interchangeable biosimilars have been approved by the FDA to date.

A biologic can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study. In some instances, the same studies can satisfy both PREA and pediatric exclusivity requirements.

The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, government proposals have sought to reduce the twelve-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to uncertainty.

Government Regulation in Europe

In the European Economic Area, or EEA (which is composed of the 28 Member States of the European Union plus Norway, Iceland and Liechtenstein), medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA.

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There are two types of MAs:

• The Community MA, which is issued by the European Commission through the Centralized Procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the EMA and which is valid throughout the entire territory of the EEA. The Centralized Procedure is mandatory for certain types of products, such as biotechnology medicinal products, orphan medicinal products, and medicinal products indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases. The Centralized Procedure is optional for products containing a new active substance not yet authorized in the EEA, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union. Under the Centralized Procedure the maximum timeframe for the evaluation of a marketing authorization application is 210 days (excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP). Accelerated evaluation might be granted by the CHMP in exceptional cases, when the authorization of a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. Under the accelerated procedure the standard 210 days review period is reduced to 150 days.

• National MAs, which are issued by the competent authorities of the Member States of the EEA and only cover their respective territory, are available for products not falling within the mandatory scope of the Centralized Procedure. Where a product has already been authorized for marketing in a Member State of the EEA, this National MA can be recognized in other Member States through the Mutual Recognition Procedure. If the product has not received a National MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the Decentralized Procedure.

Under the above described procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

Data and marketing exclusivity. In the EEA, new products authorized for marketing, or reference products, qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and clinical study data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the European Union during a period of eight years from the date on which the reference product was first authorized in the European Union. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the European Union until 10 years have elapsed from the initial authorization of the reference product in the European Union. The 10 year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

Pediatric investigation plan. In the EEA, marketing authorization applications for new medicinal products not authorized have to include the results of studies conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the drug for which marketing authorization is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures of the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical study data can be waived by the PDCO when these data is not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the marketing authorization is obtained in all Member States of the European Union and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension.

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Clinical studies. Clinical studies of medicinal products in the European Union must be conducted in accordance with European Union and national regulations and the International Conference on Harmonization, or ICH, guidelines on GCPs. Additional GCP guidelines from the European Commission, focusing in particular on traceability, apply to clinical studies of advanced therapy medicinal products. If the sponsor of the clinical study is not established within the European Union, it must appoint an entity within the European Union to act as its legal representative. The sponsor must take out a clinical study insurance policy, and in most European Union countries, the sponsor is liable to provide ‘no fault’ compensation to any study subject injured in the clinical study.

Prior to commencing a clinical study, the sponsor must obtain a clinical trial authorization (CTA) from the competent authority, and a positive opinion from an independent ethics committee. The application for a clinical trial authorization must include, among other things, a copy of the study protocol and an investigational medicinal product dossier (IMPD) containing information about the manufacture and quality of the medicinal product under investigation. Currently, clinical trial authorization applications must be submitted to the competent authority in each European Union Member State in which the study will be conducted. Under the new Regulation on Clinical Trials, which is currently expected to take effect in 2022, there will be a centralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities have only a limited involvement. Any substantial changes to the study protocol or other information submitted with the clinical trial applications must be notified to or approved by the relevant competent authorities and ethics committees. Medicines used in clinical studies must be manufactured in accordance with cGMP.

The European Union requirements for research and investigation, approval, and post-market activities, may vary substantially from U.S. requirements. As such, approval in one jurisdiction is not predictive of potential for approval in the other jurisdiction.

Product Approval Process Outside the United States and Europe

In addition to regulations in the United States and European Union, we will be subject to a variety of regulations in other jurisdictions governing manufacturing, clinical studies, commercial sales and distribution of our future products. Whether or not we obtain FDA approval or MA approval for a product candidate, we must obtain approval of the product by the comparable regulatory authorities of foreign countries before commencing clinical studies or marketing in those countries. The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval or MA approval. The requirements governing the conduct of clinical studies, product licensing, pricing and reimbursement vary greatly from country to country.

U.S. Healthcare Laws and Compliance Requirements

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business that may constrain the financial arrangements and relationships through which we research, as well as sell, market and distribute any products for which we obtain marketing authorization. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and transparency laws and regulations related to drug pricing and payments and other transfers of value made to physicians and other healthcare providers. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and responsible individuals may be subject to imprisonment.

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Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval. Sales in the United States will depend, in part, on the availability of sufficient coverage and adequate reimbursement from third-party payors, which include government health programs such as Medicare, Medicaid, the 340B Drug Discount program, TRICARE and the Veterans Administration, as well as managed care organizations and private health insurers. Prices at which we or our customers seek reimbursement for our product candidates can be subject to challenge, reduction or denial by third-party payors. Factors payors consider in determining reimbursement are based on whether the product is:

• a covered benefit under its health plan;

• safe, effective and medically necessary;

• appropriate for the specific patient;

• cost-effective; and

• neither experimental nor investigational.

The process for determining whether a third-party payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product. A third-party payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be available. Additionally, in the United States there is no uniform policy among payors for coverage or reimbursement. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. If coverage and adequate reimbursement are not available, or are available only at limited levels, successful commercialization of, and obtaining a satisfactory financial return on, any product we develop may not be possible.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for marketing, we may need to conduct expensive studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would be in addition to the costs expended to obtain regulatory approvals. Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development.

Healthcare Reform

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively the Affordable Care Act, enacted in March 2010, has substantially changed healthcare financing and delivery by both governmental and private insurers. Among other things the Affordable Care Act included the following provisions:

• an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs;

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• an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

• a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts, which through subsequent legislative amendments, will be increased to 70%, starting in 2019, off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;

• extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

• expansion of eligibility criteria for Medicaid programs;

• expansion of the entities eligible for discounts under the 340B Drug Discount Program;

• a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

• a methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; and

• a licensure framework for follow-on biological products.

Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges and amendments to the Affordable Care Act in the future. Various portions of the Affordable Care Act are currently undergoing legal and constitutional challenges in the United States Supreme Court and members of Congress have introduced several pieces of legislation aimed at significantly revising or repealing the Affordable Care Act. The United States Supreme Court is expected to rule on a legal challenge to the constitutionality of the Affordable Care Act in early 2021. The implementation of the Affordable Care Act is ongoing, the law appears likely to continue the downward pressure on pharmaceutical pricing, especially under the Medicare program, and may also increase our regulatory burdens and operating costs. Litigation and legislation related to the Affordable Care Act are likely to continue, with unpredictable and uncertain results.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute will remain in effect through 2030 unless additional Congressional action is taken. These reductions have been suspended from May 1, 2020 through December 31, 2020 due to the COVID-19 pandemic. The Consolidated Appropriations Act of 2021, extended the suspension period to March 31, 2021. An Act to Prevent Across-the-Board Direct Spending Cuts, and for Other Purposes, signed into law on April 14, 2021, has extended the suspension period to December 31, 2021. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their commercial products, which has resulted in several Congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products. For example, at the federal level, the previous administration’s budget proposal for fiscal year 2021 included a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients and increase patient access to lower-cost generic and

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biosimilar drugs. On March 10, 2020, the previous administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses and place limits on pharmaceutical price increases. Further, the previous administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers. HHS has solicited feedback on some of these measures and has implemented others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy, a type of prior authorization, for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change, which was effective as of January 1, 2019. Although a number of these and other measures may require additional authorization to become effective, Congress and the Biden administration have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. In addition, individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, it is possible that additional governmental action is taken to address the COVID-19 pandemic. For example, on April 18, 2020, CMS announced that qualified health plan issuers under the ACA may suspend activities related to the collection and reporting of quality data that would have otherwise been reported between May and June 2020 given the challenges healthcare providers are facing responding to the ongoing COVID-19 pandemic.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Additionally, on May 30, 2018, the Right to Try Act was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical study and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical studies and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

Data Privacy and Security Laws and Regulations

We are also subject to data privacy and security regulation by the federal government, states and non-U.S. jurisdictions in which we conduct our business. For example, HIPAA, as amended by the Health Information Technology and Clinical Health Act, or HITECH, and its implementing regulations, imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” those independent contractors or agents of covered entities that create, receive, maintain, transmit or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state and non-U.S. laws govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities now and in the future could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines, imprisonment, exclusion of products from reimbursement under government

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programs and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

Employees

As of June 7, 2021, we had six employees. All of our employees are located in Newport Beach, California. None of our employees are represented by a labor union or covered under a collective bargaining agreement, and we believe our relations with our employees are good.

Facilities

We currently occupy approximately 2,000 square feet of office space we sublease from Strathspey Crown Limited, an affiliate of SCH, in Newport Beach, California pursuant to a services agreement with Strathspey Crown Limited. The services agreement has a one-year term and will renew for successive one year terms unless sooner terminated by either party. We may exercise our renewal option or look for additional or alternate space for our operations, and we believe that suitable additional or alternative space will be available in the future on commercially reasonable terms.

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Management

Executive Officers and Directors

The following table provides information regarding our executive officers and directors as of September 10, 2021:  

Name	Age	Position(s)
Marc Forth (5)	51	Chief Executive Officer and Director Nominee
Chris Carr	51	Chief Financial Officer
Chad Oh, M.D.	64	Chief Medical Officer
Simone Blank (4)	58	Director
Eric Carter, M.D., Ph.D. (3)(5)	69	Director Nominee
Jost Fischer (2)	67	Director
Robert E. Grant (4)	52	Director
Hans Keirstead, Ph.D. (1)(2)(3)(5)	54	Director Nominee
Vikram Malik (4)	59	Director
Darren O'Brien (1)	45	Director
Richard H. Taketa (1)(2)(3)	49	Director

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

(3) Member of the Nominating and Governance Committee.

(4) Ms. Blank, Mr. Grant and Mr. Malik will resign from our board of directors effective immediately upon the closing of this offering.

(5) Mr. Forth, our Chief Executive Officer, and Drs. Carter and Keirstead will join our board of directors effective upon completion of this offering.

Executive Officers

Marc Forth, 51, will be joining our board of directors effective upon the completion of this offering. Mr. Forth has served as our Chief Executive Officer since December 2019 and as Chief Executive Officer of ABP Sub Inc., our wholly owned subsidiary, since May 2019. Prior to that time, Mr. Forth was the Senior Vice President of Allergan PLC and Division Head for the U.S. Neurosciences, Urology and Medical Dermatology Division. Mr. Forth was responsible for all aspects of the commercialization of both current and future products within Neurosciences, Urology and Medical Dermatology, most notably Botox for all therapeutic uses from February 2014 to May 2019. Mr. Forth has held various leadership roles within Allergan since June 2003, including Vice President, Sales and Marketing Urology from February 2011 to February 2014 and Vice President, Specialty Therapeutics from July 2008 to February 2011. From June 2003 to July 2008, Mr. Forth also worked in various roles of increasing responsibility most notably focused on U.S. Aesthetics (Botox Cosmetic) and Global Strategic Marketing (Botox Therapeutic). Prior to Allergan, Mr. Forth held various Sales and Marketing roles of increasing responsibility at TAP Pharmaceutical Inc., a specialty company focused on Urology, Oncology, Gynecology and Gastroenterology. Mr. Forth received a B.S. in Business Administration from California State University, Fresno and a Graduate Marketing Certification from Southern Methodist University. We believe that Mr. Forth is qualified to serve on our board of directors based on his extensive business and leadership experience.

Chris Carr, 51, has served as our Chief Financial Officer since December 2019 and as Chief Financial Officer of ABP Sub Inc. since September 2019. From June 2017 to September 2019, Mr. Carr served on the board of directors and as Chief Financial Officer and Executive Vice President of Finance and Information Technology of Dendreon Pharmaceuticals LLC. From 2004 to September 2016, Mr. Carr was at Abbott Laboratories, Inc., where he served as Controller and Senior Director of Greater China Nutrition from 2014 to September 2016, as Controller and Director of Global Commercial Finance from 2009 to 2014, as Vice President of the Finance Refractive Division from 2006 to 2009, and as Director of Finance R&D and Business Development from 2004 to 2006. Prior to 2004, Mr. Carr served in escalating senior finance roles with PerkinElmer, Inc. and Genzyme Corporation. Mr. Carr received a B.S. in Finance and Economics from Boston College.

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Chad Oh, MD, 64, has served as our Chief Medical Officer since June 2021. Most recently, he served as the Vice President for the Propharma Group from August 2018 to June 2021. From January 2017 to January 2018, Dr. Oh served as Vice President of Clinical Development for Revance Therapeutics. Prior to that, Dr. Oh served in various roles, including as Medical Director and as Vice President, for a number of biotechnology and pharmaceutical companies with a specific concentration in clinical development of certain therapeutic areas, including autoimmune diseases, respiratory diseases, CNS, oncology, and rare orphan diseases from 2008 to 2017.  Dr. Oh is board-certified in Allergy and Immunology and Pediatrics and served as the Chief of Allergy & Immunology at the UCLA-Harbor Medical Center from 1995 to 2008.  He completed a research fellowship in neurology at Northwestern University, School of Medicine in Chicago, residency in pediatrics at Rush-Presbyterian-St Luke’s Medical Center in Chicago, and a clinical fellowship in allergy and immunology at the National Institutes of Allergy and Infectious Diseases, Bethesda, Maryland. Dr. Oh graduated from Kyung-Hee University in the School of Medicine in Seoul, South Korea. He has published multiple scientific papers, book, book chapters, and abstracts, including 38 peer-reviewed original scientific papers.

Non-Employee Directors

Simone Blank, 58, has served as a member and the chair of our board of directors since July 2016 and serves on our board of directors as a representative of Dental Innovations BVBA. Ms. Blank is an owner of Dental Innovations BVBA. Since January 2018, Ms. Blank has served as a member of the board of directors of Evolus. From May 2006 to October 2013, Ms. Blank served as a member of the board of directors of Sirona Dental Systems Inc., or Sirona, a dental technology manufacturer previously listed on Nasdaq. Previously, Ms. Blank served as Executive Vice President and Chief Financial Officer of Sirona from July 1999 to October 2013. Prior to joining Sirona, Ms. Blank was an engagement manager in the merger and acquisition transaction group of PricewaterhouseCoopers LLP after having gained global financial experience as a certified public accountant and tax advisor. In addition, Ms. Blank serves on the board of directors of a number of private companies. Ms. Blank received a M.Sc. in Economics from the University of Duisburg, Germany. We believe that Ms. Blank is qualified to serve on our board of directors based on her extensive business, finance and leadership experience, as well as her experience as a director of public and private companies.

Dr. Eric Carter, 69, will be joining our board of directors effective upon the completion of this offering. From September 2017 to May 2021, Dr. Carter served as a member of the board of directors of Adverum Biotechnologies, Inc. Dr. Carter served as Interim Chief Medical Officer of Alder BioPharmaceuticals, Inc. from April 2018 to January 2019. Dr. Carter served as senior vice president, chief medical officer, and global head of clinical and non-clinical development of Allergan, Inc. from 2011 through a period of significant growth until its acquisition by Actavis, plc in 2015. Prior to Allergan, Dr. Carter served as chief scientific officer, head of research and development, and chief medical officer of King Pharmaceuticals from 2007 until the company was acquired by Pfizer, Inc. in 2011. From 2001 to 2007, he worked for GlaxoSmithKline plc in positions of increasing responsibility within the global clinical development and medical affairs areas. After serving in academia at the University of North Carolina School of Medicine, the UCLA Fielding School of Public Health, and the University of California, Berkeley, Dr. Carter began his pharmaceutical career at Pharmacia Corporation, a pharmaceutical company, in 1993. He received a B.Sc. in Biochemistry from the University of London, a Ph.D. in Biochemistry from the University of Cambridge, and an M.D. from the University of Miami School of Medicine. Dr. Carter currently serves as the chair of the scientific advisory board at Bioniz Therapeutics. We believe that Dr. Carter is qualified to serve on our board of directors based on his extensive industry and leadership experience.

Jost Fischer, 67, has served as a member of our board of directors since February 2017 and serves on our board of directors as a representative of Dental Innovations BVBA. Mr. Fischer is an owner of Dental Innovations Investment BVBA. Mr. Fischer served as a member and the chairman of the board of directors and as Chief Executive Officer of Sirona from June 2006 to February 2013, as Chief Executive Officer from April 2002 to February 2013, and as President from April 2002 to September 2010. Prior to joining Sirona, Mr. Fischer served as President and Chief Executive Officer of The Hoermann Group, an international conglomerate in the telecommunication and automotive industry, and held senior management positions with PWA Group, a European paper group, including President and Chief Executive Officer of PWA’s printing division and President and Chief Executive Officer of PWA Dekor GmbH. In addition, Mr. Fischer serves on the board of directors of a number of private companies. Mr. Fischer received a Masters Degree in Economics from the University of Saarbruecken, Germany. We believe that Mr. Fischer is qualified to serve on our board of directors based on his extensive business and leadership experience, as well as his experience as a director of public and private companies.

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Robert E. Grant, 52, has served as a member of our board of directors since February 2012 and serves on our board of directors as a representative of Strathspey Crown Holdings Group, LLC. Mr. Grant previously served as our Founder and Chief Executive Officer from February 2012 to August 2016, as our Chief Financial Officer and Secretary from February 2012 to December 2013, and as our President from 2012 to 2014. Since 2012, Mr. Grant has served as Chairman and Managing Partner of Strathspey Crown, LLC, a growth equity firm focused on the self-pay sector of healthcare technology, and has served as Managing Partner of its subsidiary, Strathspey Crown Holdings Group, LLC, since 2014. From April 2017 to July 2018, Mr. Grant served as Chief Executive Officer of Concierge Key Health LLC. Previously, Mr. Grant served as Chief Executive Officer and President of Bausch and Lomb Surgical Incorporated from July 2010 to January 2012, and President of Allergan Medical, a subsidiary of Allergan, Inc. from May 2006 to July 2010. In addition, Mr. Grant serves on the board of directors of a number of private companies. Mr. Grant received a B.A. from Brigham Young University and an M.B.A. with Honors from Thunderbird School of Global Management. We believe that Mr. Grant is qualified to serve on our board of directors based on his extensive industry and leadership experience, along with his role in our founding.

Hans Keirstead, Ph.D., 54, will be joining our board of directors effective upon the completion of this offering. Dr. Keirstead has served as Chairman and CEO of AIVITA Biomedical, Inc., a privately held immuno-oncology company since May 2016. Previously, Dr. Keirstead founded and served as the Chief Executive Officer of California Stem Cell, Inc. from January 2006, until it was acquired by Caladrius Biosciences in May 2014. Dr. Keirstead then served as Chief Science Officer of Caladrius Biosciences until December 2016. Previously, he founded and served as the Chief Executive Officer of Ability Biomedical Corporation, which developed technology later sold to Bristol Myers Squibb. Dr. Keirstead was a Professor at the University of California, Irvine for 15 years, during which time he was awarded the Distinguished Award for Research and the UCI Innovation Award. He received his Ph.D. in neuroscience from the University of British Columbia, Canada for which he received the Cameron Award for the outstanding Ph.D. thesis in the country and conducted Post-Doctoral studies at the University of Cambridge. We believe that Dr. Keirstead is qualified to serve on our board of directors based on his extensive industry and leadership experience.

Vikram Malik, 59, has served as a member of our board of directors since December 2013 and serves on our board of directors as a representative of Strathspey Crown Holdings Group, LLC. From 2018 to September 2020, Mr. Malik served as our Acting President. Since December 2020, Mr. Malik has served as the president and a director of Priveterra Acquisition Corp. Since January 2018, Mr. Malik has served as the chairman of the board of directors of Evolus. Since May 2013, Mr. Malik has served as a Managing Partner of Strathspey Crown Holdings Group, LLC. Previously, Mr. Malik served as Vice Chairman, Investment Banking for Deutsche Bank Securities, Inc. from August 2011 to May 2013, as a Managing Director in the Healthcare Corporate and Investment Banking Group of Merrill Lynch, Pierce, Fenner & Smith Incorporated from November 2010 to August 2011, and as the Managing Director of Banc of America Securities, LLC from June 2000 to November 2010. Mr. Malik received a B.A. in Economics from Delhi University and an M.B.A. from Boston University Graduate School of Management. We believe that Mr. Malik is qualified to serve on our board of directors based on his extensive industry, financial and leadership experience.

Darren O’Brien, 45, has served as a member of our board of directors since June 2019 as a representative of Alpha International Investment Ltd. Since March 2013, Mr. O’Brien has served in various roles at Sailing Capital Advisors (Hong Kong) currently as Partner and Managing Director. From 2007 to 2012, Mr. O’Brien served in various roles at Credit Suisse (Asia-Pacific), lastly as the Head of Power, Utilities and Infrastructure investment banking. Since May 2019, Mr. O’Brien has served on the board of directors and as a member of the compensation and nominating committees of Cellular Biomedicine Group, Inc. From November 2014 to November 2019, Mr. O’Brien served on the board of directors and member of the audit committee of Soneva Holdings Pte. Ltd. From February 2016 to September 2017, Mr. O’Brien served on the board of directors of Brookstone Holdings. Mr. O’Brien received a Bachelor of Science in Foreign Service from Georgetown University. Mr. O’Brien is a Chartered Financial Analyst. We believe that Mr. O’Brien is qualified to serve on our board of directors based on his extensive experience in the venture capital, private equity and investment banking industries.

Richard H. Taketa, 49, has served on our board of directors since April 2018. Mr. Taketa serves as President of Taketa Capital Corporation, where he has worked since September 2018. Previously, Mr. Taketa served as Chief Executive Officer and President of York Risk Services Group, Inc., from January 2014 through September 2018, previously holding the positions of Chief Operating Officer, Chief Strategy Officer, and President at numerous York divisions and subsidiaries since 2006. Prior to joining York, Mr. Taketa served as the Chief Executive Officer of Southern California Risk Management Associates and an attorney at DLA Piper LLP. Since March 2019, Mr. Taketa has served

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on the board of directors of Palomar Holdings, Inc. and on the board of directors of its insurance subsidiaries since October 2018. Since May 2019, Mr. Taketa has served on the board of directors of Veritone, Inc., a provider of artificial intelligence computing solutions. In addition, Mr. Taketa serves on the board of directors of a number of private companies. Mr. Taketa earned his B.A. in Economics from Colgate University and his J.D. from Stanford Law School. We believe that Mr. Taketa is qualified to serve on our board of directors based on his extensive operating and financing experience, as well as his experience as a director of public and private companies.

Election of Officers

Our executive officers are appointed by, and serve at the discretion of, our board of directors. There are no family relationships among any of our directors or executive officers.

Board Composition

Our board of directors currently consists of six members, and immediately after completion of this offering will consist of six members. Five of the individuals who will serve as members of our board of directors after this offering will be independent within the meaning of the independent director guidelines of Nasdaq.

The current members of our board of directors were elected in compliance with the provisions of our amended and restated certificate of incorporation and the investors’ rights agreement, or the Investors’ Rights Agreement, among certain of our stockholders. The provisions of our current certificate of incorporation that govern the election and designation of our directors will terminate upon the conversion of our outstanding shares of convertible preferred stock in connection with this offering. The provisions of our Investors’ Rights Agreement that govern the election and designation of our directors will terminate upon completion of this offering. Notwithstanding the foregoing, for a period of three years following the closing of this offering, for so long as each of Longitude Venture Partners II, L.P., or Longitude, and Alpha International Investment Ltd., or Alpha, continue to hold 2.0 million or more shares of registrable securities (as defined in the Investors’ Rights Agreement), we have agreed to include in our slate of directors for each election a nominee designated by Longitude and a nominee designated by Alpha, respectively, and the investors party to the Investors’ Rights Agreement have agreed to vote to appoint or elect the designated nominees. See “Certain Relationships and Related Party Transactions—Investors’ Rights Agreement—Voting Agreement and Board Observer Rights” for additional information. Each of our current directors will continue to serve until the election and qualification of his or her successor, or until his or her earlier death, resignation or removal.

Classified Board of Directors

Upon the completion of this offering, our board of directors will be divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be subject to reelection for a three-year term. As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Our directors will be divided among the three classes as follows:

• the Class I directors will be Marc Forth and Darren O’Brien, and their terms will expire at the first annual meeting of stockholders held following the completion of the offering;

• the Class II directors will be Richard Taketa and Hans Keirstead, and their terms will expire at the second annual meeting of stockholders held following the completion of the offering; and

• the Class III directors will be Jost Fischer and Eric Carter, and their terms will expire at the third annual meeting of stockholders held following the completion of the offering.

Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company. See the section titled “Description of Capital Stock—Anti-Takeover Provisions—Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions.”

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Director Independence

In connection with this offering, we have applied to have our common stock approved for listing on Nasdaq. Under the rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors within a specified period following the completion of this offering. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his capacity as a member of the audit committee, the board of directors or any other board committee: (i) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (ii) be an affiliated person of the listed company or any of its subsidiaries. We intend to satisfy the audit committee independence requirements of Rule 10A-3 as of the completion of this offering. Additionally, compensation committee members must not have a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a compensation committee member.

Our board of directors has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his ability to exercise independent judgment in carrying out his responsibilities. As a result of this review, our board of directors determined that each of the directors other than Marc Forth is an “independent director” as defined under the applicable rules and regulations of Nasdaq. In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management, including the beneficial ownership of our capital stock by each non-employee director and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”

Committees of the Board of Directors

In connection with this offering, our board of directors has established an audit committee, a compensation committee and a nominating and governance committee, each of which will have the composition and responsibilities described below as of the completion of this offering. Each of the below committees has a written charter approved by our board of directors. Upon completion of this offering, copies of each charter will be posted on the investor relations section of our website. Members serve on these committees will serve until their resignation or until otherwise determined by our board of directors.

Audit Committee

Our audit committee is comprised of Darren O’Brien, Hans Keirstead and Richard Taketa, with Darren O’Brien as the chairman of our audit committee. The composition of our audit committee meets the requirements for independence under the current Nasdaq and SEC rules and regulations. Each member of our audit committee is financially literate. In addition, our board of directors has determined that each of Darren O’Brien, Hans Keirstead and Richard Taketa is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K. Our audit committee is directly responsible for, among other things:

▪ appointing, approving the compensation of and assessing the independence of our independent registered public accounting firm;

▪ overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

▪ reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

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▪ monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;

▪ discussing our risk management policies;

▪ reviewing and approving or ratifying any related person transactions; and

▪ preparing the audit committee report required by SEC rules.

Compensation Committee

Our compensation committee is comprised of Jost Fischer, Richard Taketa and Hans Keirstead, with Jost Fischer as the chairman of our compensation committee. Each member of our compensation committee is a non-employee director, as defined by Rule 16b-3 promulgated under the Exchange Act and meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. Our compensation committee is responsible for, among other things:

▪ reviewing and approving, or recommending that our board of directors approve, the compensation of our chief executive officer and our other executive officers;

▪ reviewing and recommending to our board of directors the compensation of our directors;

▪ selecting independent compensation consultants and advisers and assessing whether there are any conflicts of interest with any of the committees compensation advisers; and

▪ reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans.

Nominating and Governance Committee

Our nominating and governance committee is comprised of Hans Keirstead, Richard Taketa and Eric Carter, with Richard Taketa as the chairman of our nominating and governance committee. Each member of our nominating and governance committee meets the requirements for independence under the current Nasdaq listing standards. Our nominating and governance committee is responsible for, among other things:

▪ identifying, considering and recommending candidates for membership on our board of directors;

▪ overseeing the process of evaluating the performance of our board of directors; and

▪ advising our board of directors on other corporate governance matters.

Compensation Committee Interlocks and Insider Participation

None of the current members of our compensation committee has at any time been one of our officers or employees. None of our executive officers has served as a member of the board of directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our board of directors or compensation committee during the year ended December 31, 2020. Prior to establishing the compensation committee, our full board of directors made decisions relating to the compensation of our officers.

Code of Business Conduct and Ethics

Prior to the completion of this offering, our board of directors will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including our chief executive officer and other executive and senior officers. The full text of our code of business conduct and ethics will be posted on the investor relations section of our website. The reference to our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus. We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of these provisions, on our website or in public filings to the extent required by the applicable rules.

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EXECUTIVE AND DIRECTOR COMPENSATION

Executive Compensation

This section discusses the material components of the executive compensation program for our executive officers who are named in the “2020 Summary Compensation Table” below. In 2020, our “named executive officers” and their positions were as follows:

• Marc Forth, Chief Executive Officer;

• Chris Carr, Chief Financial Officer; and

• Scott Akamine, former General Counsel and Secretary.

This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt following the completion of this offering may differ materially from the currently planned programs summarized in this discussion.

We are an “emerging growth company,” as that term is used in the JOBS Act, and have elected to comply with the reduced compensation disclosure requirements available to emerging growth companies under the JOBS Act.

2020 Summary Compensation Table

The following table sets forth information concerning the compensation of our named executive officers for the year ended December 31, 2020.

Name and Principal Position	Salary ($)		Bonus ($) (1)		Option Awards ($)(2)		Total ($)
Marc Forth (3)		523,769		550,000		1,984,303		3,058,072
Chief Executive Officer
Chris Carr		340,000		136,000		599,143		1,075,143
Chief Financial Officer
Scott Akamine (4)		340,000		136,000		599,143		1,075,143
Former General Counsel and Secretary

(1) Amounts reflect annual bonuses paid in 2021 with respect to 2020 performance, as determined by the Board in its discretion.

(2) Amounts reflect the full grant-date fair value of stock options granted in 2020, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all option awards made to named executive officers in Note 13, Share-based Compensation of our financial statements.

(3) Mr. Forth’s annual salary for 2020 was $550,000; amount represents a 20% salary reduction voluntarily taken by Mr. Forth between April 6, 2020 and June 30, 2020.

(4) Mr. Akamine separated from the Company on May 14, 2021.

Narrative to Summary Compensation Table

2020 Salaries

The named executive officers receive base salaries to compensate them for services rendered to our company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities.

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The annual base salaries for Messrs. Forth, Carr and Akamine in 2020 were $550,000, $340,000 and $340,000, respectively.Mr. Forth voluntarily reduced his salary by 20% between April 6, 2020 and June 30, 2020.  

Additionally, in connection with this offering, the base salary for Mr. Carr was increased to $400,000 to reflect comparable market compensation levels.

2020 Bonuses

In 2020, each named executive officer participated in our annual discretionary incentive plan under which cash incentive payments were awarded based on the achievement of key performance indicators determined by our board of directors. For 2020, Mr. Forth was eligible to receive a target bonus of up to 100% of his base salary and Messrs. Carr and Akamine were eligible to receive a target bonus of up to 40% of their respective base salaries, in each case, pursuant to the terms of his employment agreement described below under “—Executive Compensation Arrangements.”

Annual bonuses for our named executive officers will be awarded at the discretion of our board of directors, with consideration to the following factors: (i) achievement of corporate development milestones; (ii) achievement of corporate operational milestones; (iii) achievement of milestones related to an initial public offering; (iv) achievement of key financial budget metrics for 2020; and (v) achievement of product development milestones. Messrs. Forth, Carr and Akamine each received target bonuses for 2020, i.e., $550,000, $136,000 and $136,000, respectively.

Equity Compensation

We historically have used stock options as the primary incentive for long-term compensation to our named executive officers because they are able to profit from stock options only if our stock price increases relative to the stock option’s exercise price, which generally is set at the fair market value of our common stock as of the applicable grant date. Generally, stock options vest as to 25% of the total number of shares underlying the option on each anniversary of the vesting commencement date over a four-year period, subject to the employee’s continued service with us on the applicable vesting date.

The following table sets forth the stock options granted to our named executive officers in 2020. We did not grant any other equity-based awards to our named executive officers in 2020. Awards granted to our named executive officers were granted by ABP Sub Inc. under its 2019 Incentive Award Plan, or the ABP 2019 Plan, and the stock options in the table below reflect the number of shares of common stock of ABP Sub Inc. In connection with this offering and the Merger, the outstanding equity awards granted by ABP Sub Inc. will be converted into equity awards covering our common stock with a conversion ratio of 83 to 1 shares.

Named Executive Officer	2020 Stock Options Granted
Marc Forth		346,308
Chris Carr		104,565
Scott Akamine		104,565

In connection with this offering, our board of directors approved the grant of stock options pursuant to the 2021 Plan to Messrs. Forth and Carr. These stock option grants will become effective immediately following the determination of our initial public offering price per share of our common stock.

Each of Messrs. Forth and Carr will receive stock options with an aggregate value (determined using a Black-Scholes option value) as set forth in the table below. The number of shares of common stock subject to these stock options will be determined based on the initial public offering price per share of our common stock in this offering.

Named Executive Officer	Value of Options Granted
Marc Forth	$1,250,000
Chris Carr	$250,000

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The stock options will vest and become exercisable in substatially equal installments on the first, second, third and fourth anniversaries of the date of grant, subject to continued service through the applicable vesting date.

Equity Compensation Plans

2013 Stock Incentive Plan

We currently maintain the Amended and Restated 2013 Stock Incentive Plan, referred to in this prospectus as the 2013 Plan, in order to provide additional incentives for our employees, directors and consultants, and to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to our success.

For additional information about the 2013 Plan, please see the section titled “2013 Stock Incentive Plan” below. As mentioned below, in connection with the completion of this offering, no further awards will be granted under the 2013 Plan.

2021 Incentive Award Plan

In connection with this offering, we intend to adopt the 2021 Incentive Award Plan, referred to in this prospectus as the 2021 Plan, in order to facilitate the grant of cash and equity incentives to directors, employees (including our named executive officers) and consultants of our company and certain of our subsidiaries and to enable our company and certain of our subsidiaries to obtain and retain services of these individuals, which is essential to our long-term success. Upon the effectiveness of the 2021 Plan, no further grants will be made under the 2013 Plan. However, the 2013 Plan will continue to govern the terms and conditions of the outstanding awards granted under the plan. For additional information about the 2021 Plan, please see the section titled “—Equity Incentive Award Plans—2021 Incentive Award Plan” below.

ABP Sub Inc. 2019 Incentive Award Plan

Prior to the completion of this offering, ABP Sub Inc. maintained the 2019 Incentive Award Plan, referred to in this prospectus as the ABP 2019 Plan. Certain of our executives and directors hold stock options and restricted stock units granted pursuant to the ABP 2019 Plan. In connection with this offering and the Merger, the outstanding equity awards granted by ABP Sub Inc. will be converted into equity awards covering our common stock (although any underwater options will be canceled) with a conversion ratio of 83 to 1 shares, and the ABP 2019 Plan will be terminated as of the effective date of the Merger. As of the date of this prospectus, ABP Sub Inc. had granted options to purchase an aggregate of 36,854 shares of its common stock under the ABP 2019 Plan which will convert into options to purchase 3,058,439 shares of our common stock.

Other Elements of Compensation

Retirement Plans

401(k) Plan

We currently maintain a 401(k) retirement savings plan for our employees, including our named executive officers, who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the 401(k) plan on the same terms as other full-time employees. The Code allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance with our compensation policies. We do not make matching contributions under our 401(k) plan.

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Employee Benefits and Perquisites

Health/Welfare Plans. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans, including:

• medical, dental and vision benefits;

• short-term and long-term disability insurance; and

• life insurance.

We believe the perquisites described above are necessary and appropriate to provide a competitive compensation package to our named executive officers.

No Tax Gross-Ups

We do not make gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by our company.

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Outstanding Equity Awards at Fiscal Year-End

The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2020. Each stock option listed in the following table covers common stock of ABP Sub Inc. and was granted pursuant to the ABP 2019 Plan. In connection with this offering and the Merger, the outstanding equity awards granted by ABP Sub Inc. will be converted into equity awards covering our common stock (although any underwater options will be canceled) with a conversion ratio of 83 to 1 shares, and the ABP 2019 Plan will be terminated as of the effective date of the Merger

			Option Awards
Name	Grant Date	Vesting Commencement Date	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)(1)		Option Expiration Date
Marc Forth	11/20/19	6/11/19		518,673		1,037,346	(2)(3)(4)	$	11.59	11/20/29
	8/5/20	7/1/20		—		346,308	(2)	$	10.40	8/5/30
Chris Carr	11/20/19	9/23/19		34,233		136,930	(2)(4)(5)	$	11.59	11/20/29
	8/5/20	7/1/20		—		104,565	(2)	$	10.40	8/5/30
Scott Akamine	11/20/19	8/26/19		20,747		82,988	(2)(4)(5)	$	11.59	11/20/29
	8/5/20	7/1/20		—		104,565	(2)	$	10.40	8/5/30

(1) The exercise price per share is equal to the fair market value of ABP Sub Inc.’s common stock on the applicable grant date.

(2) The stock option vests as to 25% of the shares underlying the option on each anniversary of the vesting commencement date, subject to the executive’s continued service through the applicable vesting date.

(3) In the event Mr. Forth is terminated by us without cause, resigns for good reason, or is terminated due to death or disability, the portion of the stock option that would have vested during the one-year period following the date of termination (for the portion of the option scheduled to vest upon the first anniversary of the vesting commencement date, as determined based on monthly, rather than annual vesting), will accelerate and vest in full. Additionally, the stock option will accelerate and vest in full upon such termination occurring in connection with an acquisition of ABP Sub Inc.  

(4) In the event that an acquisition occurs, the portion of the stock option that would have vested during the two-year period following the effective date of the consummation of the acquisition (for the portion of the option scheduled to vest after the first anniversary of the vesting commencement date, as determined based on monthly, rather than annual vesting), will accelerate and vest in full.  

(5) If either of Messrs. Carr or Akamine is terminated without cause or resigns for good reason within 12 months after an acquisition, the executive’s stock option will accelerate and vest in full.   Mr. Akamine’s stock options did not accelerate in connection with his separation from the Company in May 2021.

Executive Compensation Arrangements

Chief Executive Officer – Marc Forth

On May 7, 2019, Marc Forth entered into an employment agreement with us to serve as our Chief Executive Officer, which will be amended and restated in connection with this offering (but none of the material terms described below will be revised).  

Pursuant to his employment agreement, Mr. Forth is entitled to receive a base salary of $550,000 per year and he is eligible to participate in our annual discretionary incentive plan with the opportunity to earn an annual cash bonus targeted at an amount equal to 100% of Mr. Forth’s annual base salary, determined based on the achievement of applicable corporate and individual performance goals. Mr. Forth also received a signing bonus equal to $75,000, which was paid in cash on the payroll date immediately following Mr. Forth’s start date.  

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In connection with the commencement of Mr. Forth’s employment, he was granted a stock option to purchase 1,037,346 shares of ABP Sub, Inc. common stock. This stock option will vest as to 25% of the shares underlying the option on each anniversary of the vesting commencement date, subject to Mr. Forth’s continued service through the applicable vesting date. In the event Mr. Forth is terminated by us without cause, he resigns for good reason, or he is terminated due to death or “disability” (as defined in the employment agreement), then, subject to his timely execution and non-revocation of a general release of claims, the portion of the stock option that would have vested during the one-year period following the date of termination (for the portion of the option scheduled to vest upon the first anniversary of the vesting commencement date, as determined based on monthly, rather than annual vesting), will accelerate and vest in full. Additionally, the stock option will accelerate and vest in full upon such termination occurring in connection with an “acquisition” of ABP Sub Inc. (as defined in the award agreement). Further, in the event that an acquisition occurs, the portion of the stock option that would have vested during the two-year period following the effective date of the consummation of the acquisition (for the portion of the option scheduled to vest upon the first anniversary of the vesting commencement date, as determined based on monthly, rather than annual vesting), will accelerate and vest in full.

Under his employment agreement, if Mr. Forth is terminated without cause or resigns for good reason, then, subject to his timely execution and non-revocation of a general release of claims and his continued compliance with restrictive covenants, he will be eligible to receive (i) 12 months of continued payment of base salary, (ii) a pro-rated annual bonus for the calendar year in which Mr. Forth’s employment is terminated based on the target level of achievement of any applicable performance goals or objectives and (iii) 12 months of company-paid continued coverage under our group health plans.

Mr. Forth’s employment agreement includes a “best pay” provision under Section 280G of the Code, pursuant to which any “parachute payments” that become payable to him either will be paid in full or reduced so that such payments are not subject to the excise tax under Section 4999 of the Code, whichever results in the better after-tax treatment to Mr. Forth. The employment agreement is also contingent upon the execution of our standard employee proprietary information and inventions agreement, which includes a two-year post-termination non-solicitation provision and customary confidentiality provisions.

Other Named Executive Officers Employment Agreements – Chris Carr and Scott Akamine

On August 26, 2019, we entered into an employment agreement with Scott Akamine to serve as our General Counsel and on September 23, 2019, we entered into an agreement with Chris Carr to serve as our Chief Financial Officer.   As noted above, Mr. Akamine separated from the Company in May 2021; the following describes the terms of his employment agreement as in effect in 2020. We expect to amend and restate Mr. Carr’s employment agreement in connection with this offering.

The employment agreements for Messrs. Carr and Akamine each provide or provided for an annual base salary of $340,000 per year (which, with respect to Mr. Carr, will be increased to $400,000 under his amended and restated employment agreement), and an annual cash bonus opportunity under our annual discretionary incentive plan targeted at an amount equal to 40% of the named executive officer’s annual base salary, determined based on the achievement of applicable corporate and individual performance goals.

In connection with the commencement of their employment, Messrs. Carr and Akamine were granted stock options to purchase 136,930 and 82,988 shares of ABP Sub Inc. common stock, respectively. Each stock option vests as to 25% of the shares underlying the option on each anniversary of the effective date of the executive’s agreement, subject to the executives continued service through the applicable vesting date. In the event that an acquisition of ABP Sub, Inc. occurs, the portion of the stock option that would have vested during the two-year period following the effective date of the consummation of the acquisition (for the portion of the option scheduled to vest after the first anniversary of the vesting commencement date, as determined based on monthly, rather than annual vesting), will accelerate and vest in full. Further, if either of Messrs. Carr or Akamine is terminated without “cause” or resigns for “good reason” (each, as defined in his employment agreement) within 12 months after an acquisition, the stock option shall accelerate and vest in full. Mr. Akamine’s stock option did not accelerate in connection with his separation from the Company in May 2021.

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Under the employment agreements, if either of Messrs. Carr’s or Akamine’s employment is terminates without cause, for good reason, or due to death or “disability” (as defined in his employment agreement) within two months prior to or within 12 months after an acquisition, then, subject to his timely execution and non-revocation of a general release of claims and his continued compliance with restrictive covenants, he will be eligible to receive 12 months of his annual base salary, payable in a lump sum, and 100% of the target annual bonus he would have received in the calendar year in which such termination occurs. If any such termination occurs at any other time outside of the acquisition context, Messrs. Carr and Akamine will be eligible to receive six months of continued payment of base salary. Additionally, under Mr. Carr’s amended and restated employment agreement, he will be eligible to receive company-paid continued coverage under our group health plans for the duration of the severance period. Mr. Akamine was not eligible to receive severance in connection with his separation from the Company in May 2021.

The employment agreements also include or included a “best pay” provision under Section 280G of the Code, pursuant to which any “parachute payments” that become payable to the executive will either be paid in full or reduced so that such payments are not subject to the excise tax under Section 4999 of the Code, whichever results in the better after-tax treatment to the executive. In connection with entering into the employment agreements, Messrs. Carr and Akamine executed our standard employee proprietary information and inventions agreement, which includes a two-year post-termination non-solicitation provision and customary confidentiality provisions.

Director Compensation

The following table sets forth information for the year ended December 31, 2020 regarding the compensation awarded to, earned by or paid to our directors who served on our board of directors during 2020. Each stock option granted in 2020 was granted pursuant to the ABP 2019 Plan.

Name	Fees Earned or Paid in Cash ($)			Option Awards ($)(1)		Total ($)
Simone Blank		—			269,496		269,496
Jost Fischer		—			125,295		125,295
Robert E. Grant		—			125,295		125,295
Vikram Malik		48,438	(2)		348,170		396,608
Darren O’Brien (3)		—			—		—
Richard H. Taketa		50,000			125,295		175,295

(1) Amounts reflect the full grant-date fair value of stock options granted during 2020 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all option awards made to our directors in Note 13, Share-based Compensation of our financial statements. Amounts include options granted to each of Ms. Blank and Messrs. Fischer, Grant, Malik and Taketa covering 283 shares of ABP Sub Inc. that vest and become exercisable in substantially equal monthly installments beginning on the vesting commencement date (March 4, 2020).  In addition, with respect to Ms. Blank and Mr. Malik, amounts include options covering 250 and 500 shares of ABP Sub Inc. that vest and become exercisable with respect to one-third of the shares covered by the option on each of the first three anniversaries of the November 1, 2019 vesting commencement date (and will vest and become exercisable in full upon a qualifying initial public offering).

(2) Amount paid to Mr. Malik reflects payments for his services as Acting President.

(3) Mr. O’Brien is affiliated with Sailing Capital Advisors (Hong Kong).

As of December 31, 2020, the following outstanding option awards were held by members of our board:

Name	2013 Plan		ABP 2019 Plan
Simone Blank		28,800		76,973
Jost Fischer		28,805		44,673
Robert E. Grant		365,733		44,673
Vikram Malik		76,336		86,190
Darren O’Brien		—		—
Richard H. Taketa		20,706		44,673

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Equity Compensation

Prior to this offering, ABP Sub Inc. granted restricted stock units to the following directors: Simone Blank, Robert Grant, Vikram Malik, Jost Fischer, and Richard Taketa, each with a value of approximately $172,744, $1,506,612, $386,275, $172,547 and $125,165, respectively. Each restricted stock unit award was vested in full upon the grant date, and will be settled on April 22, 2022.  In connection with this offering and the Merger, the outstanding equity awards granted by ABP Sub Inc. will be converted into equity awards covering our common stock (although any underwater options will be canceled) with a conversion ratio of 83 to 1 shares, and the ABP 2019 Plan will be terminated as of the effective date of the Merger.  In addition, each outstanding stock option held by the directors will become vested in full and exercisable for the maximum term of the option.

Director IPO Grants

In connection with this offering, our board of directors approved the grant of stock options pursuant to the 2021 Plan to certain of our non-employee directors. These stock option grants will become effective immediately following the determination of our initial public offering price per share of our common stock.

Each of Messrs. Carter, Fischer, Keirstead, O’Brien and Taketa will receive stock options with an aggregate value (determined using a Black-Scholes option value) as set forth in the table below. The number of shares of common stock subject to these stock options will be determined based on the initial public offering price per share of our common stock in this offering.

Name	Value of Options Granted
Eric Carter	$175,000
Jost Fischer	$175,000
Hans Keirstead	$175,000
Darren O’Brien	$175,000
Richard Taketa	$175,000

These stock options will have a per share exercise price equal to the initial public offering price, and will vest in substatially equal installments on the first, second and third anniversaries of the date on which this offering is consummated, subject to continued service through the applicable vesting date. In addition, each grant will vest in full upon a change in control (as defined in the 2021 Plan) of the Company.

Post-IPO Director Compensation Program

In connection with this offering, our board of directors adopted and our stockholders approved a nonemployee director compensation program, or the Director Compensation Program, which will become effective in connection with the completion of this offering. The Director Compensation Program will provide for annual retainer fees and long-term equity awards for our non-employee directors, who we refer to as eligible directors. The material terms of the Director Compensation Program are summarized below.

The Director Compensation Program consists of the following components:

Cash Compensation

• Annual Retainer: $42,000

• Annual Chairman Retainer:  $25,000

• Annual Committee Chair Retainer:

^○ Audit: $20,000

^○ Compensation: $15,000

^○ Nominating and Governance: $10,000

• Annual Committee Member (Non-Chair) Retainer:

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^○ Audit: $10,000

^○ Compensation: $7,500

^○ Nominating and Governance: $5,000

Annual cash retainers will be paid in quarterly installments in arrears and will be pro-rated for any partial calendar quarter of service.

Equity Compensation

• Initial Grant: Each eligible director who is initially elected or appointed to serve on the Board after the effective date of this offering automatically will be granted, on the date on which such eligible director is appointed or elected to serve on the Board, a stock option with a grant-date fair value of approximately $175,000. These initial grants will vest in substantially equal installments on each of the first three anniversaries of the grant date, subject to the director’s continued service through the applicable vesting date.

• Annual Grant: An eligible director who is serving on our board of directors as of the date of the annual meeting of the Company’s stockholders each calendar year (beginning with calendar year 2022) will be granted, on such annual meeting date, a stock option with a grant-date fair value of approximately $125,000. Each annual grant will vest in full on the earlier to occur of (A) the first anniversary of the applicable grant date and (B) the date of the next annual meeting following the grant date, subject to such eligible director’s continued service through the applicable vesting date.

In addition, each Initial Grant and Annual Grant will vest in full upon a change in control of the Company (as defined in the 2021 Plan).

Compensation under our Director Compensation Program will be subject to the annual limits on non-employee director compensation set forth in the 2021 Plan, as described below.

Equity Incentive Award Plans

The following summarizes the material terms of the 2013 Plan, under which we have previously made periodic grants of equity and equity-based awards to our directors and other key employees, and the 2021 Plan.

2013 Stock Incentive Plan

On May 7, 2013, our board of directors and our stockholders approved the adoption of the 2013 Stock Incentive Plan, as may be amended from time to time, or the 2013 Plan.

A total of 40,274,338 shares of common stock are available for issuance under the 2013 Plan. After the effective date of the 2021 Plan, no additional awards will be granted under the 2013 Plan. However, the 2013 Plan will continue to govern the terms and conditions of the outstanding awards granted under it.

Administration.     Our board of directors administers the 2013 Plan, unless it delegates authority for administration of the plan. Subject to the terms and conditions of the 2013 Plan, the administrator has the authority to select the persons to whom awards are to be made, the time or times at which awards will be granted, determine the number of shares to be subject to such awards, type or types of awards to be granted to each person, the terms and conditions of such awards, accelerate the vesting of awards and make all other determinations necessary or advisable for the administration of the 2013 Plan. The plan administrator is also authorized to amend outstanding awards, correct any defect or supply any omission or reconcile any inconsistency in the 2013 Plan or any award agreement, or create, amend or rescind rules and regulations relating to administration of the 2013 Plan, in each case, subject to certain restrictions.

Eligibility.     Awards under the 2013 Plan may be granted to individuals who are then our, or our affiliates’, employees, consultants and members of our board of directors. Only employees may be granted incentive stock options, or ISOs.

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Awards.  The 2013 Plan provides that our administrator may grant or issue stock options (including non-qualified stock options, or NSOs, and ISOs), restricted stock and stock appreciation rights, or SARs.The administrator considers each award grant subjectively, considering factors such as the individual performance of the recipient and the anticipated contribution of the recipient to the attainment of our long-term goals.Each award is set forth in a separate agreement with the person receiving the award and indicates the type, terms and conditions of the award. A brief description of each award type follows.

• Stock Options and SARs.    Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, in contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a stock option or SAR may not be less than 100% of the fair market value of the underlying share on the grant date (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute awards granted in connection with a corporate transaction. The term of a stock option or SAR may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders).

• Restricted Stock.     Restricted stock is an award of nontransferable shares of our common stock that are subject to certain vesting conditions and other restrictions.  

Corporate Transactions.In the event of a change in control of our company, to the extent that the surviving entity declines to assume or replace outstanding awards, then all such awards will become fully vested and exercisable in connection with the transaction. Additionally, individual award agreements may provide that any awards that are assumed or replaced by a surviving entity will accelerate and vest upon a qualifying termination of the participant in connection with such change in control. For any stock options or SARs accelerated in connection with a change in control, including in connection with any qualifying termination, the administrator may provide for a cash payment in an amount equal to, for each share subject to the stock option or SAR, the value of the share in such transaction less the exercise price of such award.

Plan Amendment and Termination.     Our board of directors may, from time to time, alter, amend, suspend or terminate the 2013 Plan, provided that any alteration, amendment, suspension or termination will not substantially affect or impair the rights of any participant under an outstanding award without such participant’s consent. If not terminated earlier by the board of directors, the 2013 Plan will terminate on May 29, 2024. As described above, the 2013 Plan will terminate as of the effective date of the 2021 Plan.

2021Incentive Award Plan

We intend to adopt the 2021 Incentive Award Plan, or the 2021 Plan, subject to approval by our stockholders, under which we may grant cash and equity incentive awards to eligible service providers in order to attract, motivate and retain the talent for which we compete. The material terms of the 2021 Plan, as it is currently contemplated, are summarized below. Our board of directors is still in the process of developing, approving and implementing the 2021 Plan and, accordingly, this summary is subject to change.

Eligibility and Administration.    Our employees, consultants and directors, and employees, consultants and directors of our subsidiaries will be eligible to receive awards under the 2021 Plan. Following the completion of this offering, the 2021 Plan will be administered by our board of directors with respect to awards to non-employee directors and by our compensation committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of our directors and/or officers (referred to collectively as the plan administrator below), subject to certain limitations that may be imposed under Section 16 of the Exchange Act, and/or stock exchange rules, as applicable. The plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2021 Plan, subject to its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the 2021 Plan, including any vesting and vesting acceleration conditions.

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Shares Available.    An aggregate of 2,639,532 shares of our common stock will be available for issuance under awards granted pursuant to the 2021 Plan, which shares may be authorized but unissued shares, treasury shares or shares purchased in the open market, provided, that, on the closing of this offering, the initial share limit shall be adjusted upwards or downwards to a number of shares of common stock such that, if each share is issued under the 2021 Plan immediately following the closing and becomes an outstanding share, that number of shares would equal 12% of the then-outstanding shares of common stock, excluding any shares that may be issued by the company upon exercise of the underwriters’ over-allotment option. Notwithstanding anything to the contrary in the 2021 Plan, no more than 50,000,000 shares of our common stock may be issued pursuant to the exercise of incentive stock options, or ISOs, under the 2021 Plan.

The number of shares available for issuance pursuant to the 2021 Plan will be increased by an annual increase on the first day of each calendar year beginning January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (A) 4% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by our board of directors.

If an award under the 2021 Plan expires, lapses or is terminated, exchanged for or settled for cash, surrendered, repurchased, cancelled without having been fully exercised or forfeited any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2021 Plan. Further, shares delivered to us to satisfy the applicable exercise or purchase price of an award under the 2021 Plan and/or to satisfy any applicable tax withholding obligations (including shares retained by us from the award under the 2021 Plan being exercised or purchased and/or creating the tax obligation) will become or again be available for award grants under the 2021 Plan. The payment of dividend equivalents in cash in conjunction with any awards under the 2021 Plan will not reduce the shares available for grant under the 2021 Plan. However, the following shares may not be used again for grant under the 2021 Plan: (i) shares subject to stock appreciation rights, or SARs, that are not issued in connection with the stock settlement of the SAR on exercise, and (ii) shares purchased on the open market with the cash proceeds from the exercise of options.

Awards granted under the 2021 Plan upon the assumption of, or in substitution for, awards authorized or outstanding under a qualifying equity plan maintained by an entity with which we enter into a merger or similar corporate transaction will not reduce the shares available for grant under the 2021 Plan but will count against the maximum number of shares that may be issued upon the exercise of ISOs.

The 2021 Plan provides that the sum of any cash compensation and the aggregate grant date fair value (determined as of the date of the grant under ASC Topic 718, or any successor thereto) of all awards granted to a non-employee director as compensation for services as a non-employee director during any calendar year may not exceed $600,000.

Awards.    The 2021 Plan provides for the grant of stock options, including ISOs and NSOs, SARs, restricted stock, dividend equivalents, restricted stock units, or RSUs, and other stock or cash based awards. Certain awards under the 2021 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the 2021 Plan will be evidenced by award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards other than cash awards generally will be settled in shares of our common stock, but the plan administrator may provide for cash settlement of any award. A brief description of each award type follows.

• Stock Options and SARs.    Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, in contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The exercise price of a stock option or SAR may not be less than 100% of the fair market value of the underlying share on the grant date (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute awards granted in connection with a corporate transaction. The term of a stock option or SAR may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders).

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• Restricted Stock.    Restricted stock is an award of nontransferable shares of our common stock that are subject to certain vesting conditions and other restrictions.

• RSUs.    RSUs are contractual promises to deliver shares of our common stock in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on shares of common stock prior to the delivery of the underlying shares (i.e., dividend equivalent rights). The plan administrator may provide that the delivery of the shares underlying RSUs will be deferred on a mandatory basis or at the election of the participant. The terms and conditions applicable to RSUs will be determined by the plan administrator, subject to the conditions and limitations contained in the 2021 Plan.

• Other Stock or Cash Based Awards.    Other stock or cash based awards are awards of cash, fully vested shares of our common stock and other awards valued wholly or partially by referring to, or otherwise based on, shares of our common stock. Other stock or cash based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of compensation to which a participant is otherwise entitled.

• Dividend Equivalents.    Dividend equivalents represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents are credited as of the dividend record dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the plan administrator.

Certain Transactions.    The plan administrator has broad discretion to take action under the 2021 Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting our common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our stockholders known as “equity restructurings,” the plan administrator will make equitable adjustments to the 2021 Plan and outstanding awards. In the event of a change in control of our company (as defined in the 2021 Plan), to the extent that the surviving entity declines to continue, convert, assume or replace outstanding awards, then all such awards will become fully vested and exercisable in connection with the transaction.

Foreign Participants, Claw-Back Provisions, Transferability, and Participant Payments.    The plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States. All awards will be subject to the provisions of any claw-back policy implemented by our company to the extent set forth in such claw-back policy and/or in the applicable award agreement. Awards under the 2021 Plan are generally non-transferrable, except by will or the laws of descent and distribution, or, subject to the plan administrator’s consent, pursuant to a domestic relations order, and are generally exercisable only by the participant.  With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2021 Plan, the plan administrator may, in its discretion, accept cash or check, shares of our common stock that meet specified conditions, a “market sell order” or such other consideration as it deems suitable.

Plan Amendment and Termination.    Our board of directors may amend or terminate the 2021 Plan at any time; however, no amendment, other than an amendment that increases the number of shares available under the 2021 Plan, may materially and adversely affect an award outstanding under the 2021 Plan without the consent of the affected participant, and stockholder approval will be obtained for any amendment to the extent necessary to comply with applicable laws. The plan administrator will have the authority, without the approval of our stockholders, to “reprice” any stock option or SAR, or cancel any stock option or SAR in exchange for cash or another award when the option or SAR price per share exceeds the fair market value of the underlying shares. The 2021 Plan will remain in effect until the tenth anniversary of effective date of the 2021 Plan, unless earlier terminated.

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2021Employee Stock Purchase Plan

In connection with the offering, we intend to adopt the 2021 Employee Stock Purchase Plan, or the ESPP, which will become effective on the day the ESPP is adopted by our board of directors. The material terms of the ESPP, as it is currently contemplated, are summarized below. Our board of directors is still in the process of developing, approving and implementing the ESPP and, accordingly, this summary is subject to change.

Shares Available; Administration.    We expect a total of 219,661 shares of our common stock equalto 1% of the then-outstanding shares of common stock as of the closing of this offering, excluding any shares that may be issued by the company upon exercise of the underwriters’ over-allotment option to be initially reserved for issuance under our ESPP. In addition, we expect that the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2022 and ending in 2031, by an amount equal to the lesser of: (i) 1% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our board of directors. In no event will more than 25,000,000 shares of our common stock be available for issuance under the ESPP.

Our board of directors or a committee designated by our board of directors will have authority to interpret the terms of the ESPP and determine eligibility of participants. The compensation committee will be the administrator of the ESPP.

Eligibility.    The plan administrator may designate certain of our subsidiaries as participating “designated subsidiaries” in the ESPP and may change these designations from time to time. Employees of our company and our designated subsidiaries are eligible to participate in the ESPP if they meet the eligibility requirements under the ESPP established from time to time by the plan administrator. However, an employee may not be granted rights to purchase stock under the ESPP if such employee, immediately after the grant, would own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of our common or other class of stock.

If the grant of a purchase right under the ESPP to any eligible employee who is a citizen or resident of a foreign jurisdiction would be prohibited under the laws of such foreign jurisdiction or the grant of a purchase right to such employee in compliance with the laws of such foreign jurisdiction would cause the ESPP to violate the requirements of Section 423 of the Code, as determined by the plan administrator in its sole discretion, such employee will not be permitted to participate in the ESPP.

Eligible employees become participants in the ESPP by enrolling and authorizing payroll deductions by the deadline established by the plan administrator prior to the relevant offering date. Directors who are not employees, as well as consultants, are not eligible to participate. Employees who choose to not participate, or are not eligible to participate at the start of an offering period but who become eligible thereafter, may enroll in any subsequent offering period.

Participation in an Offering.    We intend for the ESPP to qualify under Section 423 of the Code and stock will be offered under the ESPP during offering periods. The length of offering periods under the ESPP will be determined by the plan administrator and may be up to 27 months long. Employee payroll deductions will be used to purchase shares on each purchase date during an offering period. The number of purchase periods within, and purchase dates during, each offering period will be established by the plan administrator. Offering periods under the ESPP will commence when determined by the plan administrator. The plan administrator may, in its discretion, modify the terms of future offering periods.

The ESPP will permit participants to purchase our common stock through payroll deductions of up to 15% of their eligible compensation, unless otherwise determined by the plan administrator, which will include a participant’s gross base compensation for services to us, including overtime payments and excluding sales commissions, incentive compensation, bonuses, expense reimbursements, fringe benefits and other special payments. The plan administrator will establish a maximum number of shares that may be purchased by a participant during any offering period or purchase period, which, in the absence of a contrary designation, will be 30,000 shares for an offering period and/or a purchase period. In addition, no employee will be permitted to accrue the right to purchase stock under the ESPP at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of our common stock as of the first day of the offering period).

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On the first trading day of each offering period, each participant automatically will be granted an option to purchase shares of our common stock. The option will be exercised on the applicable purchase date(s) during the offering period, to the extent of the payroll deductions accumulated during the applicable purchase period. The purchase price of the shares, in the absence of a contrary determination by the plan administrator, will be 85% of the lower of the fair market value of our common stock on the first trading day of the offering period or on the applicable purchase date, which will be the final trading day of the applicable purchase period.

Participants may voluntarily end their participation in the ESPP at any time at least one week prior to the end of the applicable offering period (or such longer or shorter period specified by the plan administrator), and will be paid their accrued payroll deductions that have not yet been used to purchase shares of common stock. Participation ends automatically upon a participant’s termination of employment.

Transferability.    A participant may not transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided in the ESPP.

Certain Transactions.    In the event of certain transactions or events affecting our common stock, such as any stock dividend or other distribution, change in control, reorganization, merger, consolidation or other corporate transaction, the plan administrator will make equitable adjustments to the ESPP and outstanding rights. In addition, in the event of the foregoing transactions or events or certain significant transactions, including a change in control, the plan administrator may provide for (i) either the replacement of outstanding rights with other rights or property or termination of outstanding rights in exchange for cash, (ii) the assumption or substitution of outstanding rights by the successor or survivor corporation or parent or subsidiary thereof, (iii) the adjustment in the number and type of shares of stock subject to outstanding rights, (iv) the use of participants’ accumulated payroll deductions to purchase stock on a new purchase date prior to the next scheduled purchase date and termination of any rights under ongoing offering periods or (v) the termination of all outstanding rights. Under the ESPP, a change in control has the same definition as given to such term in the 2021 Plan.

Plan Amendment; Termination.    The plan administrator may amend, suspend or terminate the ESPP at any time. However, stockholder approval of any amendment to the ESPP must be obtained for any amendment which increases the aggregate number or changes the type of shares that may be sold pursuant to rights under the ESPP, changes the ESPP in any manner that would be considered the adoption of a new plan within the meaning of Treasury regulation Section 1.423-2(c)(4), or changes the ESPP in any manner that would cause the ESPP to no longer be an employee stock purchase plan within the meaning of Section 423(b) of the Code.

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Certain Relationships and Related Party Transactions

In addition to the compensation arrangements, including employment arrangements, with our directors and executive officers, including those discussed in the section titled “Executive and Director Compensation,” the following is a description of each transaction since January 1, 2018 and each currently proposed transaction in which:

▪ we have been or are to be a participant;

▪ the amounts involved exceeded or will exceed the lesser of $120,000 and 1% of our total assets; and

▪ any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member of the foregoing persons, had or will have a direct or indirect material interest.

Other than as described below, there have not been, nor are there any currently proposed, transactions or series of similar transactions to which we have been or will be a party other than compensation arrangements, which are described where required under the section titled “Executive and Director Compensation.”

Relationship with Strathspey Crown Holdings Group, LLC

Borrowings from SCH

From December 2013 to January 2020, we were party to an intercompany credit line promissory note, or the Strathspey Crown Note, pursuant to which Strathspey Crown Holdings Group, LLC, or SCH, advanced borrowings to us. Since January 1, 2018, the largest aggregate amount of principal outstanding under the Strathspey Crown Note was $53.0 million.  SCH is a holder of more than 5% of our capital stock, and Robert E. Grant and Vikram Malik are managers of SCH and serve on our board of directors.

From January 1, 2018 to June 30, 2019, the Strathspey Crown Note accrued interest monthly on the outstanding principal at a rate equal to the Applicable Federal Rate published by the IRS for such month, compared to 10% per annum for the period from July 1, 2019 to December 31, 2019, and 20% per annum from January 1, 2020 to its maturity on March 31, 2020, respectively. In the year ended December 31, 2018, we did not make any payments in principal or interest. In the year ended December 31, 2019, we paid $39.0 million in principal, of which $14.0 million was paid in cash and $25.0 million was settled by us distributing to SCH 1,298,701 shares of Evolus common stock previously owned by us, and did not make any payments in interest.

In December 2019, we issued and sold to SCH a convertible promissory note with a principal amount of $1.0 million, which is further described below under “—2019 Convertible Note Financing.”

Effective as of January 2, 2020, we issued a convertible promissory note with a principal amount of $17.5 million, or the SCH Convertible Note, in exchange for the cancellation of all obligations under the Strathspey Crown Note. Our payment and performance under the SCH Convertible Note are guaranteed by ABP Sub Inc., our wholly owned subsidiary. Pursuant to the terms of the SCH Convertible Note, we are required to repay 175% of the principal amount to SCH on the third anniversary of its issuance. In the event of an underwritten public offering of our common stock, the SCH Convertible Note will automatically convert into a number of shares of our common stock equal to 175% of the principal amount of the SCH Convertible Note, divided by the per share price at which shares are offered to the public in such offering.

Shared Services Agreements with Strathspey Crown Limited

In August 2019, we and Alphaeon Credit, which was then our wholly owned subsidiary, each entered into services agreements, with Strathspey Crown Limited, an affiliate of SCH, or Strathspey Crown Limited, with an effective date of January 2019. The services agreement with us sets forth certain agreements between Strathspey Crown Limited and us that will continue to govern the respective responsibilities and obligations between Strathspey Crown Limited and us following this offering. In September 2020, we divested all businesses and equity interests in Alphaeon Credit as part of the Divestiture Transactions.

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Pursuant to the services agreements, Strathspey Crown Limited provides uscertain administrative and development support services, including certain general management, communication, human resources, office, rent and information technology services. We and Alphaeon Credit agreed to pay Strathspey Crown Limited an allocable share of the actual cost incurred by Strathspey Crown Limited in providing such services, plus a 10% markup, as well as an allocable share of Strathspey Crown Limited’s overhead expenses, including office rent, depreciation, maintenance, utilities and supplies. The services agreements have a one-year term and will renew for successive one year terms unless sooner terminated by either party. We and Alphaeon Credit or Strathspey Crown Limited may terminate the services agreements upon sixty days’ notice to the other party.

In each of 2019 and 2020, we paid $0.4 million and $0.6 million, respectively, in connection with the services agreement. For the six months ended June 30, 2021, we paid approximately $42,000 in connection with the services agreement.

SCH and Our Historical Relationship with Evolus

Prior to Evolus’ initial public offering in February 2018, Evolus was wholly owned by us. In connection with our acquisition of Evolus in 2013, we were a party to a stock purchase agreement and related tax indemnity agreement with SCH and Evolus, pursuant to which we were obligated to make certain contingent payments to the former stockholders of Evolus, or the Evolus Founders, and we issued a $20.0 million promissory note to the Evolus Founders. Since January 1, 2018, we did not make any payments to the Evolus Founders pursuant to the stock purchase agreement and promissory note, and all of our obligations under the stock purchase agreement, tax indemnity agreement and promissory note were assumed by Evolus upon completion of its initial public offering in February 2018.

In 2014, we acquired Clarion, pursuant to a shareholders’ agreement. In 2016, the previous equity holders of Clarion exercised their option to unwind our acquisition of Clarion. As a result, we and SCH jointly and severally owe the previous equity holders of Clarion an unwind fee, or the Unwind Fee, of approximately $9.55 million. In November 2017, we entered into a side letter and guarantee agreement with SCH and Clarion, pursuant to which we agreed to cause Evolus to enter into an exclusive distribution agreement with Clarion and reaffirmed our obligation to pay the Unwind Fee. Pursuant to Evolus’ exclusive distribution agreement with Clarion, Clarion has agreed that certain payments made from Evolus directly to the previous equity holders of Clarion will be applied towards reducing the amount of Unwind Fee due by us and SCH. We and SCH are required to pay any unpaid amount of the Unwind Fee remaining on December 31, 2022, or earlier, if accelerated pursuant to certain acceleration events, including but not limited to a material default of obligations by Evolus under the distribution agreement, the termination of the distribution agreement, our or Evolus’s bankruptcy and the termination of the license and supply agreement between Evolus and Daewoong. On March 23, 2021, Evolus, Clarion, and Daewoong entered into an agreement to provide for Clarion to purchase Jeuveau directly from Daewoong.  Our obligation to pay the Unwind Fee to the previous equity holders of Clarion was therefore cancelled.

In addition, we were a party to a stockholder agreement with Evolus, Dental Innovations BVBA, or Dental Innovations, solely in its capacity as collateral agent of the Note Facility and Longitude Venture Partners II, L.P., or Longitude, solely in its capacity as a holder of the Bridge Note, that provided us with certain demand and piggyback registration rights with regards to our shares of Evolus. Pursuant to our distribution of shares of Evolus in exchange for settlement of the convertible and bridge note financing, which is further described below under “—Convertible and Bridge Note Financing,” and in exchange for settlement of a portion of the Strathspey Crown Note, each of Dental Innovations, Alpha International Investment Ltd., or Alpha, and SCH were joined as stockholders to the stockholder agreement and were granted registration rights. In January 2020, in connection with the contribution of Evolus shares, which is further described below under “—Restructuring and Contribution of Evolus Shares,” Alphaeon 1 LLC was joined as a stockholder under the stockholder agreement and granted registration rights, and we ceased to be a party under the agreement.

2019 Convertible Notes

In June 2019, we entered into a senior unsecured note purchase agreement, or the Note Purchase Agreement, with Dental Innovations, pursuant to which we issued and sold to Dental Innovations a promissory note, or the Original 2019 Note, with a principal amount of $5.0 million. Pursuant to the Note Purchase Agreement, Dental Innovations is

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entitled to two board seat positions on our board of directors. Simone Blank and Jost Fischer are shareholders of Dental Innovations and serve on our board of directors.

In December 2019, we entered into an amendment to the Note Purchase Agreement that provided for the exchange of the Original 2019 Note for a convertible promissory note with a principal amount of $5.0 million. We also issued and sold five additional convertible promissory notes, each with a principal amount of $1.0 million, including one to SCH and one to Vikram Malik, a member of our board of directors. We refer to these convertible promissory notes collectively as the 2019 Convertible Notes.

In January 2020, in connection with the distribution of the units of Alphaeon 1 LLC to our stockholders, which is further described below under “—Restructuring and Divestiture Transactions,” each of the holders of our 2019 Convertible Notes were granted contingent warrants by Alphaeon 1 LLC to purchase shares of Evolus from Alphaeon 1 LLC. The contingent warrants are exercisable at the option of the holder prior to our first underwritten public offering of common stock under the Securities Act or upon an event of default under the 2019 Convertible Notes. The 2019 Convertible Notes were concurrently amended to provide the noteholders the option, prior to the notes’ conversion, to cancel a portion of the indebtedness represented by such noteholder’s 2019 Convertible Note and receive a number of shares of Evolus from Alphaeon 1 LLC having a market value equal to the value of such cancelled indebtedness, in lieu of automatic conversion of all of the noteholder’s 2019 Convertible Note into shares of the our common stock. The amount of cancelled indebtedness that can be so applied in exercise of the contingent warrant is capped as the ratio that the value of Evolus shares held by Alphaeon 1 LLC bears to the combined value of (i) the Evolus shares held by Alphaeon 1 LLC and (ii) our Company immediately prior to consummation of our first underwritten public offering of common stock under the Securities Act.  

Further, in September 2020, in connection with the distributions of the units of Alphaeon Credit HoldCo LLC and Zelegent HoldCo LLC to our stockholders, each of the holders of our 2019 Convertible Notes were granted contingent warrants by Alphaeon Credit HoldCo LLC to purchase shares of Alphaeon Credit from Alphaeon Credit HoldCo LLC and by Zelegent HoldCo LLC to purchase shares of Zelegent, Inc. The contingent warrants are exercisable at the option of the holder prior to our first underwritten public offering of common stock under the Securities Act, or upon an event of default under the 2019 Convertible Notes.  The 2019 Convertible Notes were concurrently amended to provide the noteholders the option, prior to the notes’ conversion, to cancel a portion of the indebtedness represented by such noteholder’s 2019 Convertible Note and receive a number of shares of Alphaeon Credit and/or Zelegent from Alphaeon Credit HoldCo LLC and by Zelegent HoldCo LLC having a market value equal to the value of such cancelled indebtedness, in lieu of automatic conversion of all of the noteholder’s 2019 Convertible Note into shares of our common stock. The amount of cancelled indebtedness that can be so applied in exercise of the contingent warrant is capped as the ratio of aggregate indebtedness held by the convertible note holder as a proportion of the value of Alphaeon Credit or Zelegent to the value of our Company.

We have not paid any amount in principal or in interest in respect of the 2019 Convertible Notes, and an aggregate principal amount of $10.0 million of the 2019 Convertible Notes remains outstanding. Our payment and performance under the 2019 Convertible Notes are guaranteed by ABP Sub Inc., our wholly owned subsidiary. Upon completion of this offering, the 2019 Convertible Notes will automatically convert into a number of shares of our common stock equal to 175% of the principal amount of the 2019 Convertible Notes, divided by the per share price at which shares are offered to the public in this offering.

Convertible and Bridge Note Financing

In 2016, we entered into two related financing agreements: (i) a secured convertible bridge note and warrant agreement with Longitude, or the Bridge Note, and (ii) a secured convertible note purchase agreement with Dental Innovations as collateral agent, or the Note Facility.

We issued an aggregate of $56.3 million in convertible promissory notes to investors pursuant to the Bridge Note and the Note Facility. The purchasers of these convertible promissory notes and the bridge note included the following entities affiliated with certain of our directors: Dental Innovations purchased convertible promissory notes with an aggregate principal amount of approximately $23.2 million; Alpha purchased convertible promissory notes with an aggregate principal amount of approximately $10.7 million; and Longitude purchased convertible promissory notes and a convertible bridge note with an aggregate principal amount of approximately $8.2 million.

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The terms of the promissory notes and the convertible bridge note each contemplated a 150% premium to the principal borrowed and accrued interest at a rate of 10.0% per annum. Since January 1, 2016, the largest aggregate amount of principal outstanding under the convertible promissory notes was $56.3 million.

In 2018, we settled the total outstanding principal amount of $56.3 million, of which $48.3 million was paid in cash and $8.0 million was settled by us distributing to the holders of the notes a total of 573,888 shares of Evolus common stock previously owned by us. In 2019, we settled all of our outstanding note obligations of $84.4 million plus accrued interest of $3.5 million, of which $62.7 million was paid in cash and $25.2 million was settled by us distributing to the holders of the notes a total of 1,307,940 shares of Evolus common stock previously owned by us. In connection with our distribution of shares of Evolus, each of Dental Innovations and Alpha were joined as stockholders to the stockholder agreement with Evolus granting piggyback and demand registration rights for such shares.

Convertible Preferred Stock

Each of Dental Innovations, SCH, Alpha and Longitude currently hold shares of our convertible preferred stock. Holders of our convertible preferred stock are entitled to certain rights, including voting rights and the election of directors. For additional information on the rights of holders of our convertible preferred stock, see Note 11, Convertible Preferred Stock to our financial statements.

Our convertible preferred stock will automatically convert into shares of common stock upon completion of this offering, and such holders will receive shares of our common stock in exchange for their shares of convertible preferred stock.

Investors’ Rights Agreement

We are a party to an amended and restated investors’ rights agreement, or the Investors’ Rights Agreement, with SCH, other entities affiliated with certain of our directors, and certain of our directors. The Investors’ Rights Agreement grants rights to certain holders and also imposes certain affirmative obligations on us, including with respect to the furnishing of financial statements and information to the holders. As a result of this offering, most of the covenants and restrictions set forth in the Investors’ Rights Agreement that apply to us will terminate and we will remain obligated to comply with reporting requirements under the Exchange Act.

Registration Rights

Under the Investors’ Rights Agreement, SCH, other entities affiliated with certain of our directors, and certain of our directors have certain registration rights with respect to the registrable securities held by them. See “Description of Capital Stock—Registration Rights” for additional information.  

Voting Agreement and Board Observer Rights

Pursuant to the Investors’ Rights Agreement, each of Longitude and Alpha has the right to designate one member of our board of directors and one board observer without voting rights to our board of directors, and each of Dental Innovations and SCH has the right to designate two members of our board of directors. Alpha has designated Darren O’Brien to our board of directors. Longitude has not designated a representative to serve on our board of directors. SCH has designated Robert E. Grant and Vikram Malik to our board of directors. Dental Innovations has designated Simone Blank and Jost Fischer to our board of directors.

SCH’s right to designate directors for our board of directors will terminate upon completion of this offering, and Dental Innovation’s right to designate two board members will terminate upon the conversion of the convertible notes held by Dental Innovations into shares of our common stock upon the completion of this offering. For a period of three years following the closing of this offering, for so long as each of Longitude and Alpha continue to hold 2.0 million or more shares of registrable securities (as defined in the Investors’ Rights Agreement), we have agreed to include in our slate of directors for each election a nominee designated by Longitude and a nominee designated by Alpha, respectively, and the investors party to the Investors’ Rights Agreement have agreed to vote to appoint or elect the designated nominees. Longitude and Alpha’s rights to appoint a board observer will terminate upon completion of this offering.

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Right of First Refusal and Co-Sale

Under the Investors’ Rights Agreement, certain holders of our capital stock, including SCH, certain entities affiliated with certain of our directors and certain of our directors, have a right of first refusal and co-sale, in respect of certain sales of securities by us or certain transfers of securities by SCH or certain of our employees. The right of first refusal and co-sale will terminate in connection with the completion of this offering.

Restructuring and Divestiture Transactions

In January 2020, our board of directors approved the contribution of our interest in Evolus common stock to Alphaeon 1 LLC in exchange for membership units. At the time of this approval, we owned 8,662,346 shares of Evolus, representing approximately 26% of the outstanding shares of Evolus. We then distributed all of the units of Alphaeon 1 LLC to our current stockholders on a one common unit or one preferred unit for one share of our common stock or preferred stock, as applicable, basis. As a result of the distribution, we no longer hold any membership interests in Alphaeon 1 LLC and no longer hold any equity interest in Evolus.  

In September 2020, we contributed our interest in Alphaeon Credit to Alphaeon Credit HoldCo LLC in exchange for all the interests in AC HoldCo.  We then distributed all of the units of Alphaeon Credit HoldCo LLC to our current stockholders on a one common unit or one preferred unit for one share of our common stock or preferred stock, as applicable, basis. As a result of the distribution, we no longer hold any membership interests in Alphaeon Credit HoldCo LLC and no longer hold any equity interest in Alphaeon Credit.  

In September 2020, we contributed our interest in Zelegent, Inc. to Zelegent HoldCo LLC in exchange for all the interests in Zelegent HoldCo LLC. We then distributed all of the units of Zelegent HoldCo LLC to our current stockholders on a one common unit or one preferred unit for one share of our common stock or preferred stock, as applicable, basis. As a result of the distribution, we no longer hold any membership interests in Zelegent HoldCo LLC and no longer hold any equity interest in Zelegent, Inc.  

Equity Grants to Executive Officers and Directors

We have granted stock options to our executive officers and certain directors, as more fully described in the section titled “Executive and Director Compensation.”

Director and Executive Officer Compensation

Please see the sections titled “Executive and Director Compensation” for information regarding the compensation of our directors and executive officers.

Employment Agreements

We have entered into employment agreements with our executive officers. For more information regarding these agreements, see the section titled “Executive and Director Compensation—Executive Compensation Arrangements.”

Limitation of Liability and Indemnification

Our amended and restated certificate of incorporation and our amended and restated bylaws, each of which will be effective upon the completion of this offering, will provide that we will indemnify our directors and officers to the fullest extent permitted under Delaware law, which prohibits our amended and restated certificate of incorporation from limiting the liability of our directors for the following:

▪ any breach of the director’s duty of loyalty to us or our stockholders;

▪ acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

▪ unlawful payments of dividends or unlawful stock repurchases or redemptions; or

▪ any transaction from which the director derived an improper personal benefit.

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Our amended and restated certificate of incorporation and our amended and restated bylaws will also provide that if Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. This limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.

Our amended and restated certificate of incorporation and our amended and restated bylaws will also provide that we shall have the power to indemnify our employees and agents to the fullest extent permitted by law. Our amended and restated bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in this capacity, regardless of whether we would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. We have obtained directors’ and officers’ liability insurance.

In connection with this offering, we intend to enter into separate indemnification agreements with our directors and executive officers, in addition to indemnification provided for in our amended and restated certificate of incorporation and amended and restated bylaws. These agreements, among other things, provide for indemnification of our directors and executive officers for expenses, judgments, fines and settlement amounts incurred by this person in any action or proceeding arising out of this person’s services as a director or executive officer or at our request. We believe that these provisions in our amended and restated certificate of incorporation and amended and restated bylaws and indemnification agreements are necessary to attract and retain qualified persons as directors and executive officers.

The above description of the indemnification provisions of our amended and restated certificate of incorporation, our amended and restated bylaws and our indemnification agreements is not complete and is qualified in its entirety by reference to these documents, each of which is filed as an exhibit to this registration statement to which this prospectus forms a part.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

Policies and Procedures for Related Party Transactions

We have a written related party transactions policy in place, which was in effect at the time of the transactions described above. Under our existing related party transactions policy, the independent members of the board of directors (including the director designated by Alpha), are tasked with approving or ratifying related party transactions.

In connection with this offering, we intend to adopt an updated written related person transactions policy, setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy will cover, with certain exceptions set forth in Item 404 of Regulation S-K, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 in any fiscal year and a related person had, has or will have a direct or indirect material interest, including without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our audit committee will be tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction.

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Principal Stockholders

The following table and accompanying footnotes set forth certain information with respect to the beneficial ownership of our common stock at June 30, 2021, and as adjusted to reflect the shares of common stock to be issued and sold in this offering, for:

▪ each of our directors;

▪ each of our named executive officers;

▪ all of our current directors and executive officers as a group; and

▪ each person, or group of affiliated persons, who beneficially owned more than 5% of our outstanding shares of common stock.

We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission, and the information is not necessarily indicative of beneficial ownership for any other purpose. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options or warrants that are either immediately exercisable or exercisable within 60 days after June 30, 2021. These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of common stock that they beneficially owned, subject to applicable community property laws.

Beneficial ownership prior to this offering is based on 16,996,103 shares of common stock outstanding as of June 30, 2021, assuming (i) the Preferred Stock Conversion, (ii) the Note Conversions, (iii) the Daewoong PIK Issuance, and (iv) the conversion of our outstanding convertible preferred stock warrant into a warrant to purchase our common stock. Beneficial ownership after this offering is based on 21,996,103 shares of common stock outstanding immediately after the completion of this offering, assuming no exercise by the underwriters of their option to purchase additional shares of common stock from us and assuming none of the holders listed therein have purchased shares in the offering.

The number of shares of common stock issuable upon conversion of our convertible notes, and the number of additional shares we may issue to Medytox upon the closing of this offering, are subject to adjustment as described in “Prospectus summary—The offering.”

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Except as otherwise noted below, the address for each person or entity listed in the table is c/o AEON Biopharma, Inc., 4040 MacArthur Blvd., Suite 260, Newport Beach, California 92660.

	Total Shares Beneficially Owned		Percentage of Shares Beneficially Owned
Name of Beneficial Owner			Before the Offering			After the Offering
Directors, Director Nominees and Named Executive Officers:
Simone Blank(1)		108,724		0.6	%		0.5	%
Jost Fischer(2)		80,365		0.5	%		0.4	%
Robert E. Grant(3)(8)		413,090		2.4	%		1.9	%
Vikram Malik(4)(8)		282,144		1.7	%		1.3	%
Darren O’Brien		—		—			—
Dr. Chad Oh		155,688		0.9	%		0.7	%
Richard H. Taketa(5)		65,379		0.4	%		0.3	%
Marc Forth(6)		1,405,587		8.3	%		6.4	%
Chris Carr(7)		335,621		2.0	%		1.5	%
Eric Carter		—		—			—
Hans S. Keirstead		8,499		0.0	%		0.0	%
All executive officers and directors as a group    (11 persons)		2,855,097		16.8	%		13.0	%
5% or Greater Stockholders:
Strathspey Crown Holdings Group, LLC(8)		8,242,877		48.5	%		37.5	%
Medytox, Inc.(9)		2,199,611		12.9	%		10.0	%
Daewoong Pharmaceuticals Co., Ltd.(10)		2,088,759		12.3	%		9.5	%

* Represents beneficial ownership of less than one percent.

(1) Includes options to purchase 105,773 shares of common stock exercisable within 60 days of June 30, 2021.

(2) Includes options to purchase 73,478 shares of common stock exercisable within 60 days of June 30, 2021.

(3) Includes options to purchase 410,406 shares of common stock exercisable within 60 days of June 30, 2021.

(4) Includes options to purchase 162,526 shares of common stock exercisable within 60 days of June 30, 2021.

(5) Includes options to purchase 65,379 shares of common stock exercisable within 60 days of June 30, 2021.

(6) Includes options to purchase 605,645 shares of common stock exercisable within 60 days of June 30, 2021.

(7) Includes options to purchase 34,233 shares of common stock exercisable within 60 days of June 30, 2021.

(8) Strathspey Crown Holdings Group, LLC, or SCH, is a wholly owned subsidiary of Strathspey Crown LLC. The managing partners of Strathspey Crown LLC are Robert E. Grant and Vikram Malik, each of whom is currently a member of our board of directors and has the ability to control voting and investment decisions of our shares held by SCH. Each of Mr. Grant and Mr. Malik disclaims beneficial ownership over our shares held by SCH except to the extent of any pecuniary interest therein. Reflects the transfer of 141,177 shares to Longitude Venture Partners II, L.P in October 2021. The address for SCH is 4040 MacArthur Boulevard, Suite 310, Newport Beach, CA 92660.

(9) Medytox, Inc. has sole voting and investment power of the shares. The address of Medytox, Inc. is 78 Gangni 1-gil Ochang-eup, Cheongwon-gu Cheongju-si, Chungcheongbuk-do 28126, Republic of Korea.

(10) Daewoong has sole voting and investment power of the shares. The address of Daewoong is 35-14, Jeyakgongdan 4-gil, Hyangnam-eup, Hwaseong-si, Gyeonggi-do, Republic of Korea.

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Description of Capital Stock

The following description summarizes the most important terms of our capital stock, as they will be in effect following this offering. Because it is only a summary, it does not contain all the information that may be important to you. We expect to adopt an amended and restated certificate of incorporation and amended and restated bylaws that will become effective upon the completion of this offering, and this description summarizes provisions that are expected to be included in these documents. For a complete description, you should refer to our amended and restated certificate of incorporation and amended and restated bylaws, which are included as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of Delaware law.

General

Upon the completion of this offering, our authorized capital stock will consist of 150,000,000 shares of common stock, $0.0001 par value per share, and 10,000,000 shares of undesignated preferred stock, $0.0001 par value per share.

Common Stock

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. An election of directors by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights or any series of preferred stock that we may designate and issue in the future.

Pursuant to the terms of the amended and restated investors’ rights agreement, or the Investors’ Rights Agreement, between us and certain of our current investors, for a period of three years following the closing of this offering, for so long as each of Longitude and Alpha continue to hold 2.0 million or more shares of registrable securities (as defined in the Investors’ Rights Agreement), we have agreed to include in our slate of directors for each election a nominee designated by Longitude and a nominee designated by Alpha, respectively, and the investors party to the Investors’ Rights Agreement have agreed to vote to appoint or elect the designated nominees.

Preferred Stock

As of June 30, 2021, there were 21,257,708 shares of our convertible preferred stock outstanding. Immediately prior to the completion of this offering, all outstanding shares of our convertible preferred stock will automatically convert into 21,257,708 shares of our common stock.

Under the terms of our amended and restated certificate of incorporation that will become effective upon the completion of this offering, our board of directors is authorized to direct us to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from seeking to acquire, a majority of our outstanding voting stock. Upon the completion of this offering, there will be no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

Options

As of June 30, 2021, options to purchase 1,760,997 shares of our common stock were outstanding under our equity compensation plans, all of which were exercisable of that date. For information regarding the terms of our equity compensation plans, see “Executive and Director Compensation—Equity Incentive Award Plans.”

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Warrants

As of  June 30, 2021, we had outstanding a warrant to purchase an aggregate of up to 29,787 shares of our Series B convertible preferred stock with an exercise price of $124.26 per share. Unless earlier exercised, this warrant will expire on May 31, 2023. Upon the closing of this offering, this warrant will be converted into a warrant to purchase 29,787 shares of our common stock.

Registration Rights

Our Investors’ Rights Agreement grants the parties thereto certain registration rights in respect of the “registrable securities” held by them, which securities include: (i) shares of our common stock issued or issuable upon conversion or exercise of any other of our securities, including shares issued upon conversion of our convertible preferred stock or convertible notes outstanding prior to the completion of this offering, (ii) shares of our common stock acquired from any of our affiliates after April 19, 2017 and (iii) shares of our common stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to the shares described in the foregoing clauses. The registration of shares of our common stock pursuant to the exercise of these registration rights would enable the holders thereof to sell such shares without restriction under the Securities Act when the applicable registration statement is declared effective. Under the Investors’ Rights Agreement, we will pay all expenses relating to such registrations, including the reasonable fees and disbursements of one counsel for the participating holders, and the holders will pay all underwriting discounts and selling commissions relating to the sale of their shares. The Investors’ Rights Agreement also includes customary indemnification and procedural terms.

Assuming the conversion of our outstanding preferred stock and outstanding convertible notes into shares of our common stock immediately prior to closing of this offering, holders of approximately 2,426,795 shares of our common stock are entitled to such registration rights pursuant to the Investors’ Rights Agreement. These registration rights will expire on the earlier of the date that is three years after the consummation of a Qualified Public Offering (as defined in the Investors’ Rights Agreement) or, with respect to each stockholder, except as to Alpha, at such time as all of such stockholder’s registrable securities can be sold in any three month period without registration pursuant to Rule 144 or another similar exemption under the Securities Act.

Additionally, a holder of approximately 1,569,442 shares of our common stock is entitled to registration rights pursuant to a deferred stock payment agreement. The stockholder is entitled to certain piggyback registration rights allowing them to participate in an initial public offering, follow-on offering and certain other transactions on a pro-rata basis along with other stockholders entitled to participate. Once we are eligible to use a registration statement on Form S-3, the stockholder party to the deferred stock payment agreement may cause us to register their shares.

Demand Registration Rights under the Investors’ Rights Agreement

At any time beginning 180 days after the effective date of this registration statement, certain holders of a majority of the registrable securities then outstanding may, on not more than three occasions, request that we prepare, file and maintain a registration statement to register at least one third of the registrable securities then outstanding. Once we are eligible to use a registration statement on Form S-3, any of our holders of the registrable securities then outstanding may request that we prepare, file and maintain a registration statement on Form S-3 covering the sale of their registrable securities, but only if the anticipated offering price would exceed $2,500,000 and we have not already effected three registrations on Form S-3 for the holders within the preceding 12 months.

Piggyback Registration Rights under the Investors’ Rights Agreement

In the event that we propose to register any of our securities under the Securities Act, either for our own account or for the account of other security holders, the stockholders party to the Investors’ Rights Agreement will be entitled to certain “piggyback” registration rights allowing them to include their registrable securities in such registration, subject to certain customary marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act other than with respect to a demand registration or a registration statement on Form S-4 of S-8, these holders will be entitled to notice of the registration and will have the right to include their registrable securities in the registration statement subject to certain limitations.

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Medytox Registration Rights

We are party to a registration rights agreement with Medytox, Inc., or Medytox, pursuant to which we granted Medytox demand and piggy back registration rights with respect 1,569,442 shares of our common stock, plus any additional shares that we may issue to Medytox pursuant to the share issuance agreement.

Demand Registration Rights for Medytox

The Medytox registration rights agreement provides that, at any time beginning on the one year anniversary of this offering, Medytox may request that we prepare, file and maintain a registration statement to register their registrable securities. Medytox is limited to three demand registrations; however, this limit will increase to three demand registration statements per year once we become eligible to use a registration statement on Form S-3.

Piggyback Registration Rights for Medytox

Each time after the one year anniversary of this offering that we propose to register any of our securities under the Securities Act, either for our own account or for the account of other security holders, Medytox will be entitled to certain “piggyback” registration rights allowing them to include their registrable securities in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act other than with respect to (1) a registration statement on Form S-8, (2) a registration statement on Form S-4, (3) a registration statement that relates to a transaction subject to Rule 145 under the Securities Act, (4) a registration statement initiated under the existing stockholders agreement or (5) a registration statement in connection with any dividend or distribution reinvestment or similar plan, Medytox will be entitled to notice of the registration and will have the right to include their registrable securities in the registration subject to certain limitations.

Anti-Takeover Provisions

Delaware Law

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

▪ before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

▪ upon closing of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (1) persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

▪ on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

In general, Section 203 defines business combination to include the following:

▪ any merger or consolidation involving the corporation and the interested stockholder;

▪ any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

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▪ subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

▪ any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

▪ the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits by or through the corporation.

In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaw Provisions

Because our stockholders do not have cumulative voting rights, our stockholders holding a majority of the voting power of our shares of common stock outstanding will be able to elect all of our directors. Our amended and restated certificate of incorporation and amended and restated bylaws to be effective upon the completion of this offering will provide that all stockholder actions must be effected at a duly called meeting of stockholders and not by consent in writing. A special meeting of stockholders may be called only by a majority of our board of directors, the chair of our board of directors or our chief executive officer.

Our amended and restated certificate of incorporation will further provide that, immediately after this offering, the affirmative vote of holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of voting stock, voting as a single class, will be required to amend certain provisions of our certificate of incorporation, including provisions relating to the size of the board, removal of directors, special meetings, actions by written consent and cumulative voting. The affirmative vote of holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of voting stock, voting as a single class, will be required to amend or repeal our bylaws, although our bylaws may be amended by a simple majority vote of our board of directors.

Our amended and restated certificate of incorporation will further provide that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered terms.

Finally, our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees or agents to us or our stockholders; (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws; or (iv) any action asserting a claim against us governed by the internal affairs doctrine; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or to any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware. Our amended and restated certificate of incorporation will also provide that the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action against us or any of our directors, officers, employees or agents and arising under the Securities Act.

Our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

The enforceability of similar federal court choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find this type of provision to be

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inapplicable or unenforceable. If a court were to find either of the choice of forum provisions contained in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the company or its directors, officers or other employees, which may discourage such lawsuits against the company and its directors, officers and other employees and result in increased costs for investors to bring a claim.

The foregoing provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of our Company by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change the control of our Company.

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of our Company. These provisions are also designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. However, these provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of deterring hostile takeovers or delaying changes in control of our Company or our management. As a consequence, these provisions also may inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts.

Limitations on Liability and Indemnification

See the section of this prospectus titled “Certain Relationships and Related Party Transactions—Limitation on Liability and Indemnification.”

Transfer Agent and Registrar

Upon the completion of this offering, the transfer agent and registrar for our common stock will be Computershare Trust Company, N.A. The transfer agent and registrar’s address is 50 Royall Street, Canton, Massachusetts 02021.

Listing

We have applied to have our common stock approved for listing on Nasdaq under the symbol “AEON.”

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Shares Eligible for Future Sale

Prior to this offering, there has been no public market for our common stock, and we cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Nevertheless, sales of substantial amounts of our common stock, including shares issued upon exercise of outstanding options and warrants, in the public market following this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities.

Based on shares outstanding as of June 30, 2021, we will have a total of 21,996,103 shares of our common stock outstanding, assuming (i) the Preferred Stock Conversion, (ii) the Note Conversions, (iii) the Daewoong PIK Issuance, and (iv) the issuance of 5,000,000 shares of common stock in this offering. Of these outstanding shares, all of the shares of common stock sold in this offering will be freely tradable, except that any shares purchased in this offering by our affiliates, as that term is defined in Rule 144 under the Securities Act can only be sold in compliance with the Rule 144 limitations described below or in compliance with the lock-up agreements. The number of shares of common stock issuable upon conversion of our convertible notes, and the number of additional shares we may issue to Medytox upon the closing of this offering, are subject to adjustment as described in “Prospectus summary—The offering.”

The remaining outstanding shares of our common stock will be deemed “restricted securities” as defined in Rule 144. Restricted securities may be sold in the public market only if they are registered under the Securities Act or if they qualify for an exemption from registration, including under Rule 144 or Rule 701 promulgated under the Securities Act, which rules are summarized below. In addition, substantially all of our security holders have entered into lock-up agreements with the underwriters, pursuant to which they have agreed, subject to specific exceptions, not to sell any of our stock for at least 180 days following the date of this prospectus, as described below.

Lock-Up Agreements

All of our directors and officers and substantially all of our security holders are subject to lock-up agreements or market standoff provisions that prohibit them from offering for sale, selling, contracting to sell, granting any option for the sale of, transferring or otherwise disposing of any shares of our common stock, options or warrants to acquire shares of our common stock or any security or instrument related to our common stock, or entering into any swap, hedge or other arrangement that transfers any of the economic consequences of ownership of our common stock, for a period of 180 days following the date of this prospectus without the prior written consent of Wells Fargo Securities, LLC and Cantor Fitzgerald & Co., subject to certain customary and limited exceptions. Wells Fargo Securities, LLC and Cantor Fitzgerald & Co. may, in their sole discretion and at any time or from time to time before the termination of the 180-day period, release all or any portion of the securities subject to lock-up agreements. See the section of this prospectus titled “Underwriting.”

Rule 144

Affiliate Resales of Restricted Securities

In general, beginning 90 days after the effective date of the registration statement of which this prospectus is a part, a person who is an affiliate of ours, or who was an affiliate at any time during the 90 days before a sale, who has beneficially owned shares of our common stock for at least six months would be entitled to sell in a “broker’s transaction” or certain a “riskless principal transaction” or to market makers, a number of shares within any three-month period that does not exceed the greater of:

• 1% of the number of shares of our common stock then outstanding, which will equal approximately 219,661 shares of our common stock immediately after this offering; or

• the average weekly trading volume in shares of our common stock on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

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Affiliate resales under Rule 144 are also subject to the availability of current public information about us. In addition, if the number of shares being sold under Rule 144 by an affiliate during any three-month period exceeds 5,000 shares or has an aggregate sale price in excess of $50,000, the seller must file a notice on Form 144 with the SEC and Nasdaq concurrently with either the placing of a sale order with the broker or the execution directly with a market maker.

Non-affiliate Resales of Restricted Securities

In general, beginning 90 days after the effective date of the registration statement of which this prospectus is a part, a person who is not an affiliate of ours at the time of sale, and has not been an affiliate at any time during the three months preceding a sale, and who has beneficially owned shares of our common stock for at least six months but less than a year, is entitled to sell such shares subject only to the availability of current public information about us. If such person has held our shares for at least one year, such person can resell under Rule 144(b)(1) without regard to any Rule 144 restrictions, including the 90-day public company requirement and the current public information requirement.

Non-affiliate resales are not subject to the manner of sale, volume limitation or notice filing provisions of Rule 144.

Rule 701

In general, under Rule 701, any of an issuer’s employees, directors, officers, consultants or advisors who purchases shares from the issuer in connection with a compensatory stock or option plan or other written agreement before the effective date of a registration statement under the Securities Act is entitled to sell such shares 90 days after such effective date in reliance on Rule 144. An affiliate of the issuer can resell shares in reliance on Rule 144 without having to comply with the holding period requirement, and non-affiliates of the issuer can resell shares in reliance on Rule 144 without having to comply with the current public information and holding period requirements.

Form S-8 Registration Statement

In connection with this offering, we intend to file a registration statement on Form S-8 under the Securities Act covering all of the shares of our common stock subject to outstanding options and the shares of our common stock reserved for issuance under our stock plans. We expect to file the registration statement covering shares offered pursuant to the 2013 Plan, 2021 Plan and ESPP shortly after the date of this prospectus, permitting the resale of such shares by non-affiliates in the public market without restriction under the Securities Act and the sale by affiliates in the public market, subject to compliance with the resale provisions of Rule 144 and expiration or release from the terms of the lock-up agreements described above.

Registration Rights

Upon the completion of this offering, the holders of approximately 3,996,237 shares of our common stock, or their permitted transferees, will be entitled to various rights with respect to the registration of these shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming fully tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. For a further description of these rights, see the section titled “Description of Capital Stock—Registration Rights” and “—Medytox Registration Rights” for additional information.

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Material U.S. Federal Income Tax Consequences to Non-U.S. Holders

The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S. Holders (as defined below) of the purchase, ownership and disposition of our common stock issued pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the Code, Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the IRS, in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the purchase, ownership and disposition of our common stock.

This discussion is limited to Non-U.S. Holders that hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income and the alternative minimum tax. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:

• U.S. expatriates and former citizens or long-term residents of the United States;

• persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

• banks, insurance companies, and other financial institutions;

• brokers, dealers or traders in securities;

• “controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

• partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);

• tax-exempt organizations or governmental organizations;

• persons deemed to sell our common stock under the constructive sale provisions of the Code;

• persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;

• tax-qualified retirement plans; and

• “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds.

If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

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THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT TAX OR LEGAL ADVICE.INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

Definition of a Non-U.S. Holder

For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is neither a “U.S. person” nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

• an individual who is a citizen or resident of the United States;

• a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

• a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Distributions

As described in the section titled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “—Sale or Other Taxable Disposition.”

Subject to the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). If a Non-U.S. Holder holds the stock through a financial institution or other intermediary, the Non-U.S. Holder will be required to provide appropriate documentation to the intermediary, which then will be required to provide certification to the applicable withholding agent, either directly or through other intermediaries. A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.

Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or

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such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items.Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.

Sale or Other Taxable Disposition

A Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of our common stock unless:

• the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);

• the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or

• our common stock constitutes a U.S. real property interest, or USRPI, by reason of our status as a U.S. real property holding corporation, or USRPHC, for U.S. federal income tax purposes.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on gain realized upon the sale or other taxable disposition of our common stock, which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our common stock by a Non-U.S. Holder will not be subject to U.S. federal income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market and such Non-U.S. Holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.

Non-U.S. Holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.

Information Reporting and Backup Withholding

Payments of dividends on our common stock will not be subject to backup withholding, provided the applicable withholding agent does not have actual knowledge or reason to know the holder is a United States person and the holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with the IRS in connection with any distributions on our common stock paid to the Non-U.S. Holder, regardless of whether such distributions constitute dividends or whether any tax was actually withheld. In addition, proceeds of the sale or other taxable disposition of our common stock within the United States or conducted through certain U.S.-related brokers generally will not be subject to backup withholding or information reporting if the applicable withholding agent receives the certification described above and does not have actual knowledge or reason to know that such holder is a United States person, or the holder otherwise establishes an exemption. Proceeds of a disposition of our common stock conducted through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting.

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Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Tax on Payments Made to Foreign Accounts

Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross proceeds from the sale or other disposition of, our common stock paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.

Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our common stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of stock on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

Prospective investors should consult their tax advisors regarding the potential application of withholding under FATCA to their investment in our common stock.

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Underwriting

Wells Fargo Securities, LLC and Cantor Fitzgerald & Co. are acting as representatives of each of the underwriters named below and as joint bookrunning managers for this offering. Subject to the terms and conditions set forth in the underwriting agreement among us and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of shares of common stock set forth opposite its name below.

	Number of
Underwriter	Shares
Wells Fargo Securities, LLC
Cantor Fitzgerald & Co.
Mizuho Securities USA LLC
H.C. Wainwright & Co., LLC
Total		5,000,000

Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of the shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and subject to other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officers’ certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Discounts and Commissions

The representatives have advised us that the underwriters propose initially to offer the shares to the public at the initial public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $         per share. After the initial offering of the shares, the public offering price, concession or any other term of this offering may be changed by the representatives.

The following table shows the initial public offering price, underwriting discounts and commissions and proceeds, before expenses, to us. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.

		Total
	Per Share	Without Option	With Option
Initial public offering price	$	$	$
Underwriting discounts and commissions	$	$	$
Proceeds, before expenses, to us	$	$	$

We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $2.0 million. We also have agreed to reimburse the underwriters for up to $30,000 for their FINRA counsel fee. In accordance with FINRA Rule 5110, this reimbursed fee is deemed underwriting compensation for this offering.

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Over-Allotment Option

We have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to 750,000 additional shares at the initial public offering price, less underwriting discounts and commissions. If the underwriters exercise this option, each underwriter will be obligated, subject to the conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter’s initial amount reflected in the above table. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered by this prospectus.

No Sales of Similar Securities

We, our executive officers and directors and substantially all of our other existing security holders have agreed not to sell or transfer any common stock or securities convertible into or exchangeable or exercisable for common stock, for 180 days after the date of this prospectus without first obtaining the written consent of Wells Fargo Securities, LLC and Cantor Fitzgerald & Co. on behalf of the underwriters. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

• offer, pledge, sell or contract to sell any common stock;

• sell any option or contract to purchase any common stock;

• purchase any option or contract to sell any common stock;

• grant any option, right or warrant for the sale of any common stock;

• otherwise dispose of or transfer any common stock;

• request or demand that we file a registration statement related to the common stock; or

• enter into any swap or other agreement or any transaction that transfers, in whole or in part, the economic consequence of ownership of any common stock, whether any such swap, agreement or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

The lock-up provisions apply to common stock and to securities convertible into or exchangeable or exercisable for common stock. They also apply to common stock owned now or acquired later by the person executing the lock-up agreement or for which the person executing the lock-up agreement later acquires the power of disposition.

Nasdaq Global Market Listing

We have applied to list our common stock on the Nasdaq Global Market, subject to notice of issuance, under the symbol “AEON.”

Determination of Offering Price

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations between us and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:

• the valuation multiples of publicly traded companies that the representatives believe to be comparable to us;

• our financial information;

• the history of, and the prospects for, our company and the industry in which we compete;

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• an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues;

• the present state of our development; and

• the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also possible that after this offering, our common stock will not trade in the public market at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

In connection with this offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ over-allotment option described above. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option granted to them under the underwriting agreement described above. “Naked” short sales are sales in excess of such over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in this offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriters in the open market prior to the closing of this offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the Nasdaq Global Market, in the over-the-counter market or otherwise.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

The underwriters may also engage in passive market making transactions in our common stock on the Nasdaq Global Market in accordance with Rule 103 of Regulation M during a period before the commencement of offers or sales of shares of our common stock in this offering and extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits are exceeded.

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Electronic Distribution

In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.

Other Relationships

The underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Some of the underwriters and certain of their affiliates may in the future engage in investment banking and other commercial dealings in the ordinary course of business with us and our affiliates, for which they may in the future receive customary fees, commissions and expenses.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Selling Restrictions

Notice to Prospective Investors in the European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, no offer of shares may be made to the public in that Relevant Member State other than:

A. to any legal entity which is a qualified investor as defined in the Prospectus Directive;

B. to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives; or

C. in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of shares shall require the Company or the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

Each person in a Relevant Member State who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive. In the case of any shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

We, the representatives and each of our and the representatives’ affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This prospectus has been prepared on the basis that any offer of shares in any Relevant Member State will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of shares. Accordingly, any person making or intending to make an offer in that Relevant Member State of shares which

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are the subject of the offering contemplated in this prospectus may only do so in circumstances in which no obligation arises for the company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of shares in circumstances in which an obligation arises for the company or the underwriters to publish a prospectus for such offer.

For the purpose of the above provisions, the expression “an offer to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

MiFID II Product Governance

Any person offering, selling or recommending the shares (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the shares (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.

Notice to Prospective Investors in the United Kingdom

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”) or otherwise in circumstances which have not resulted and will not result in an offer to the public of the shares in the United Kingdom within the meaning of the Financial Services and Markets Act 2000.

Any person in the United Kingdom that is not a relevant person should not act or rely on the information included in this document or use it as basis for taking any action. In the United Kingdom, any investment or investment activity that this document relates to may be made or taken exclusively by relevant persons.

Notice to Prospective Investors in Canada

The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

154

Legal Matters

The validity of the shares of common stock offered by this prospectus will be passed upon for us by Latham & Watkins LLP. Certain legal matters relating to the offering will be passed upon for the underwriters by Goodwin Procter LLP.

Experts

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements at December 31, 2019 and 2020, and for each of the two years in the period ended December 31, 2020, as set forth in their report (which contains an explanatory paragraph describing conditions that raise substantial doubt about AEON Biopharma, Inc.’s ability to continue as a going concern as described in Note 1 to the consolidated financial statements). We've included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP's report, given on their authority as experts in accounting and auditing.

Additional Information

We have filed with the Securities and Exchange Commission, or SEC, a registration statement on Form S-1 under the Securities Act of 1933, as amended, with respect to the shares of common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed therewith. For further information about us and the common stock offered hereby, reference is made to the registration statement and the exhibits filed therewith. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete, please see the copy of the contract or document that has been filed for the complete contents of that contract or document. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The exhibits to the registration statement should be reviewed for the complete contents of these contracts and documents.

We currently do not file periodic reports with the SEC. Upon the completion of this offering, we will be required to file periodic reports, proxy statements and other information with the SEC pursuant to the Securities Exchange Act of 1934, as amended. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov.

We also maintain a website at www.aeonbipoharma.com. Upon completion of this offering, you may access these materials at our website free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained in, or that can be accessed through, our website is not a part of, and is not incorporated into, this prospectus.

155

AEON Biopharma, Inc.

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Financial Statements:
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Comprehensive Income (Loss)	F-4
Consolidated Statements of Convertible Preferred Stock and Deficit	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

The Stockholders and Board of Directors of AEON Biopharma, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AEON Biopharma, Inc. (the Company) as of December 31, 2019 and 2020, the related consolidated statements of operations and comprehensive income (loss), convertible preferred stock and deficit and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2020, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows since inception, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2019.

Irvine, California

June 7, 2021

Except for the third paragraph of Note 14, as to which the date is

October 4, 2021

F-2

AEON BIOPHARMA, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	December 31,						June 30,
	2019			2020			2021
							(Unaudited)
ASSETS
Current assets:
Cash	$	6,324		$	20,168		$	10,605
Equity investment at fair value		105,421			—			—
Accounts receivables		267			—			—
Withholding tax receivable		—			—			5,443
Prepaid expenses and other current assets		133			208			1,407
Total current assets		112,145			20,376			17,455
Equity-method investment		1,429			—			—
Other assets		778			838			1,341
Total assets	$	114,352		$	21,214		$	18,796
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND DEFICIT
Current liabilities:
Accounts payable	$	1,025		$	2,031		$	2,323
Related party payable		21			5			16
Accrued compensation		809			1,247			684
Other accrued expenses		94			914			373
Withholding tax payable		—			—			5,443
Related party borrowings		14,490			—			—
Accrued interest on related party borrowings		756			—			—
Note payable		300			—			—
Total current liabilities		17,495			4,197			8,839
Convertible notes at fair value (including related party amount of    $10,620, $38,275 and $38,834 at December 31, 2019 and 2020    and June 30, 2021 (unaudited), respectively)		15,161			72,160			79,342
Other liabilities		9,616			10,142			324
Total liabilities		42,272			86,499			88,505
Commitments and contingencies
Convertible preferred stock issuable in series, $0.0001 par value; 44,666,035    shares authorized; 21,257,708 shares issued and outstanding at December 31,    2019 and 2020 and June 30, 2021 (unaudited); liquidation preference of    $141,920 at December 31, 2019 and 2020 and June 30, 2021 (unaudited)		137,949			137,949			137,949
Stockholders’ Deficit:
AEON Biopharma, Inc. stockholders’ deficit:
Common stock, $0.0001 par value; 207,450,050 shares authorized;    6,598,098 shares issued at December 31, 2019 and 2020 and    8,167,540 shares issued at June 30, 2021 (unaudited); 6,596,756    shares outstanding at December 31, 2019 and 2020 and    8,166,174 shares outstanding at June 30, 2021 (unaudited)		11			11			14
Additional paid-in capital		266,595			158,385			187,348
Accumulated deficit		(333,733	)		(366,646	)		(403,099	)
Treasury stock, at cost, 1,342 shares at December 31, 2019 and 2020    and June 30, 2021 (unaudited)		(23	)		(23	)		(23	)
Total AEON Biopharma, Inc. stockholders’ deficit		(67,150	)		(208,273	)		(215,760	)
Non-controlling interest		1,281			5,039			8,102
Total deficit		(65,869	)		(203,234	)		(207,658	)
Total liabilities, convertible preferred stock and deficit	$	114,352		$	21,214		$	18,796

See accompanying notes to consolidated financial statements.

F-3

AEON BIOPHARMA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share data)

	Year Ended December 31,						Six Months Ended June 30,
	2019			2020			2020			2021
							(Unaudited)
Revenue:
Services	$	3,342		$	2,518		$	1,391		$	—
Other revenue		15			—			—			—
Total revenue		3,357			2,518			1,391			—
Operating costs and expenses:
Cost of revenue		1			—			—			—
Selling, general and administrative		46,037			11,587			5,474			4,552
Research and development		4,814			7,319			1,558			10,203
Litigation settlement and license expense		—			—			—			28,966
Change in fair value of contingent royalty obligation to Evolus    Founders		5,596			—			—			—
Depreciation and amortization		875			—			—			—
Total operating costs and expenses		57,323			18,906			7,032			43,721
Loss from operations		(53,966	)		(16,388	)		(5,641	)		(43,721	)
Other income (loss):
Interest income		720			—			—			—
Interest expense		(5,177	)		(1	)		—			—
Interest expense on related party borrowings		(2,293	)		(14	)		(14	)		—
Gain on deconsolidation of Evolus, Inc.		254,106			—			—			—
Gain on transfer of equity investment at fair value		6,597			—			—			—
Change in fair value of equity investment		(49,299	)		346			346			—
Change in fair value of convertible notes		(5,161	)		(5,498	)		680			(2,182	)
Loss on extinguishment of related party borrowings		—			(11,241	)		(11,241	)		—
Gain on cancellation of unwind fee		—			—			—			9,550
Gain on PPP loan forgiveness		—			139			—			—
Gain (loss) on equity-method investment		136			(140	)		(107	)		—
Other income (loss), net		7			(116	)		18			(100	)
Total other income (loss)		199,636			(16,525	)		(10,318	)		7,268
Income (loss) before taxes		145,670			(32,913	)		(15,959	)		(36,453	)
Income tax benefit		(14,645	)		—			—			—
Net income (loss) and comprehensive income (loss)		160,315			(32,913	)		(15,959	)		(36,453	)
Net loss and comprehensive loss attributable to noncontrolling interest		(12,605	)		—			—			—
Net income (loss) and comprehensive income (loss) attributable to    AEON Biopharma, Inc. common stockholders	$	172,920		$	(32,913	)	$	(15,959	)	$	(36,453	)
Basic net income (loss) per share attributable to AEON Biopharma, Inc.    common stockholders	$	20.74		$	(7.65	)	$	(4.93	)	$	(5.44	)
Diluted net income (loss) per share attributable to AEON Biopharma, Inc.    common stockholders	$	20.57		$	(7.65	)	$	(4.93	)	$	(5.44	)
Weighted average shares of common stock outstanding used to compute    basic net income (loss) per share attributable to AEON Biopharma, Inc.    common stockholders		6,597,642			6,596,756			6,596,756			6,674,794
Weighted average shares of common stock outstanding used to compute    diluted net income (loss) per share attributable to AEON Biopharma,    Inc. common stockholders		6,645,673			6,596,756			6,596,756			6,674,794

See accompanying notes to consolidated financial statements.

F-4

AEON BIOPHARMA, INC.

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND DEFICIT

(in thousands, except share data)

	Convertible Preferred Stock						Common Stock				Additional Paid-in			Accumulated			Treasury Stock						Non- controlling			Total
	Shares			Amount			Shares		Amount		Capital			Deficit			Shares			Amount			Interest			Deficit
Balance as of January 1, 2019		21,298,783		$	137,990			6,598,098	$	11	$	265,946		$	(506,653	)		—		$	—		$	43,836		$	(196,860	)
Stock-based compensation expense		—			—			—		—		649			—			—			—			4,635			5,284
Deconsolidation of Evolus, Inc.		—			—			—		—		—			—			—			—			(35,380	)		(35,380	)
Purchase of stock in connection with    legal settlement		(41,075	)		(41	)		—		—		—			—			(1,342	)		(23	)		—			(23	)
Issuance of Evolus, Inc. common stock    in connection with the incentive    equity plan		—			—			—		—		—			—			—			—			795			795
Net income (loss)		—			—			—		—		—			172,920			—			—			(12,605	)		160,315
Balance as of December 31, 2019		21,257,708			137,949			6,598,098		11		266,595			(333,733	)		(1,342	)		(23	)		1,281			(65,869	)
Stock-based compensation expense		—			—			—		—		98			—			—			—			3,758			3,856
Dividend-in-kind to stockholders		—			—			—		—		(108,308	)		—			—			—			—			(108,308	)
Net loss		—			—			—		—		—			(32,913	)		—			—			—			(32,913	)
Balance as of December 31, 2020		21,257,708			137,949			6,598,098		11		158,385			(366,646	)		(1,342	)		(23	)		5,039			(203,234	)
Stock-based compensation expense (unaudited)		—			—			—		—		—			—			—			—			3,063			3,063
Issuance of common stock in connection with    litigation settlement and license expense    (unaudited)		—			—			1,569,442		3		28,963			—			—			—			—			28,966
Net loss (unaudited)		—			—			—		—		—			(36,453	)		—			—			—			(36,453	)
Balance as of June 30, 2021 (unaudited)		21,257,708		$	137,949			8,167,540	$	14	$	187,348		$	(403,099	)		(1,342	)	$	(23	)	$	8,102		$	(207,658	)
Balance as of December 31, 2019		21,257,708		$	137,949			6,598,098	$	11	$	266,595		$	(333,733	)		(1,342	)	$	(23	)	$	1,281		$	(65,869	)
Stock-based compensation expense (unaudited)		—			—			—		—		99			—			—			—			1,028			1,127
Dividend-in-kind to stockholders (unaudited)		—			—			—		—		(105,767	)		—			—			—			—			(105,767	)
Net loss (unaudited)		—			—			—		—		—			(15,959	)		—			—			—			(15,959	)
Balance as of June 30, 2020 (unaudited)		21,257,708		$	137,949			6,598,098	$	11	$	160,927		$	(349,692	)		(1,342	)	$	(23	)	$	2,309		$	(186,468	)

See accompanying notes to consolidated financial statements.

F-5

AEON BIOPHARMA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,						Six Months Ended June 30,
	2019			2020			2020			2021
							(Unaudited)
Cash flows from operating activities:
Net income (loss)	$	160,315		$	(32,913	)	$	(15,959	)	$	(36,453	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		875			—			—			—
Non-cash interest expense on convertible notes		994			—			—			—
Amortization of debt discount and issuance costs		608			—			—			—
Non-cash interest expense on related party borrowings		2,293			14			14			—
Loss on extinguishment of related party borrowings		—			11,241			11,241			—
Gain on cancellation of unwind fee		—			—			—			(9,550	)
Gain on PPP loan forgiveness		—			(139	)		—			—
Write-off of deferred offering costs		—			828			—			—
Stock-based compensation expense		5,252			4,793			1,127			2,277
Gain on deconsolidation of Evolus, Inc.		(254,106	)		—			—			—
Gain on transfer of equity investment at fair value		(6,597	)		—			—			—
Change in fair value of equity investment		49,299			(346	)		(346	)		—
Change in fair value of convertible notes		5,161			5,498			(680	)		2,182
Change in fair value of contingent royalty obligation to Evolus Founders		5,596			—			—			—
Deferred income taxes		(14,645	)		—			—			—
Amortization of discount on short-term investments		(371	)		—			—			—
(Gain) loss on equity-method investment		(136	)		140			107			—
Amortization of operating lease right-of-use assets		383			—			—			—
Litigation settlement and license expense		—			—			—			28,966
Other		304			(29	)		(19	)		(23	)
Changes in operating assets and liabilities:
Accounts receivables		(24	)		(148	)		(85	)		—
Prepaid expenses and other current assets		(1,855	)		(40	)		(178	)		(1,200	)
Related party receivables		54			—			—			—
Inventory		(7,393	)		—			—			—
Accounts payable		3,924			667			32			(39	)
Related party payable		21			(16	)		237			11
Accrued expenses and other liabilities		5,646			989			573			(603	)
Operating lease liabilities		(323	)		—			—			—
Net cash used in operating activities		(44,725	)		(9,461	)		(3,936	)		(14,432	)
Cash flows from investing activities:
Purchases of short-term investments		(89,068	)		—			—			—
Additions to capitalized software		(1,694	)		—			—			—
Deconsolidation of Evolus, Inc. cash		(36,499	)		—			—			—
Deconsolidation of Alphaeon Credit cash		—			(1,265	)		—			—
Purchase of equity-method investment		(30	)		—			—			—
Proceeds from maturities of short-term investments		10,000			—			—			—
Net cash used in investing activities		(117,291	)		(1,265	)		—			—
Cash flows from financing activities:
Proceeds from sale of Evolus, Inc. common stock		77,000			—			—			—
Proceeds from issuance of convertible notes		10,000			25,000			—			5,000
Proceeds from PPP loan		—			411			411			—
Proceeds from issuance of long-term debt, net of discounts		73,906			—			—			—
Payments for debt issuance costs		(2,205	)		—			—			—
Payment of contingent royalty obligation to Evolus Founders		(9,213	)		—			—			—
Milestone payment for intangible assets		(2,000	)		—			—			—
Repayments of convertible notes		(60,228	)		—			—			—
Repayment of related party borrowings		(14,000	)		—			—			—
Purchase of stock in connection with legal settlement		(64	)		—			—			—
Payment of note payable		—			(300	)		(300	)		—
Payments for offering costs		(778	)		(541	)		(193	)		(131	)
Issuance of common stock in connection with incentive equity plan		795			—			—			—
Net cash provided by (used in) financing activities		73,213			24,570			(82	)		4,869
Net (decrease) increase in cash		(88,803	)		13,844			(4,018	)		(9,563	)
Cash at beginning of period		95,127			6,324			6,324			20,168
Cash at end of period	$	6,324		$	20,168		$	2,306		$	10,605

See accompanying notes to consolidated financial statements.

F-6

AEON BIOPHARMA, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(in thousands)

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest paid	$	3,462	$	—	$	—	$	—
Cash paid for amounts included in the measurement of operating    lease liabilities	$	362	$	—	$	—	$	—
Non-cash financing activities:
Issuance of common stock in connection with litigation settlement and license expense	$	—	$	—	$	—	$	28,966
Repayments of convertible notes in exchange for shares of Evolus, Inc.    common stock	$	24,184	$	—	$	—	$	—
Payments of interest on convertible notes in exchange for shares of    Evolus, Inc. common stock	$	994	$	—	$	—	$	—
Exchange of accrued interest for related party borrowings	$	2,562	$	—	$	—	$	—
Extinguishment of related party borrowings and related accrued interest    in exchange for convertible note	$	—	$	15,764	$	15,764	$	—
Dividend-in-kind to stockholders	$	—	$	108,308	$	105,767	$	—
Unpaid deferred offering costs	$	—	$	347	$	719	$	719
Issuance of promissory note in connection with legal settlement	$	300	$	—	$	—	$	—

See accompanying notes to consolidated financial statements.

F-7

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 30, 2020 and 2021 are unaudited)

Note 1.    Organization

Description of Business

AEON Biopharma, Inc. (“AEON” or the “Company”) is a biopharmaceutical company focused on developing its proprietary botulinum toxin complex, ABP-450 (prabotulinumtoxinA) injection (“ABP-450”), for debilitating medical conditions. The Company was incorporated in Delaware in February 2012 under the name Alphaeon Corporation as a wholly owned subsidiary of Strathspey Crown Holdings Group, LLC (“SCH”). On December 18, 2019, the Company changed its name to “AEON Biopharma, Inc.” The Company is headquartered in Newport Beach, California.

Liquidity and Going Concern

The accompanying consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern. The Company has incurred operating losses and negative cash flows from operations since its inception. As of December 31, 2020, the Company reported cash of $20.2 million and an accumulated deficit of $366.6 million. As of June 30, 2021, the Company reported cash of $10.6 million and an accumulated deficit of $403.1 million. The Company expects to incur losses for the foreseeable future. As a result of these conditions, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that these consolidated financial statements are issued.

The Company expects to seek additional funding in the form of equity financings or debt, however, there can be no assurance that such efforts will be successful or that, in the event that they are successful, the terms and conditions of such financing will be favorable. If the Company is unable to secure additional funding when desired, the Company may need to delay the development, commercialization and marketing of its products and scale back its business and operations.

The preparation of these consolidated financial statements does not include any adjustments that may result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The audit report covering these accompanying consolidated financial statements includes an explanatory paragraph that describes conditions that raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s future operations are highly dependent on a combination of factors, including (1) the success of its research and development programs; (2) the timely and successful completion of any additional financing; (3) the development of competitive therapies by other biotechnology and pharmaceutical companies; (4) the Company’s ability to manage growth of the organization; (5) the Company’s ability to protect its technology and products; and, ultimately (6) regulatory approval and successful commercialization and market acceptance of its product candidates.

Note 2.    Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. Prior to May 20, 2019, the Company’s consolidated

F-8

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

results included the results of the Company’s majority-owned affiliate, Evolus, Inc. (“Evolus”), which was a wholly owned subsidiary of the Company prior to Evolus’ completion of an initial public offering (“IPO”) in February 2018. Upon Evolus’ IPO, the Company owned approximately 79% of Evolus’ outstanding common stock.

On May 20, 2019, the Company’s ownership percentage of Evolus’ common stock was reduced to approximately 36% and the Company determined that it no longer held a controlling financial interest in Evolus. The Company derecognized the assets and liabilities of Evolus in the accompanying consolidated financial statements effective May 20, 2019. See Note 3, “Deconsolidation of Evolus” for more information.

Prior to September 30, 2020, the Company’s consolidated results included the results of the Company’s wholly-owned affiliate, Alphaeon Credit. See Note 4, “Contribution and Distribution of Evolus, Alphaeon Credit and Zelegent” for more information.

All intercompany transactions and balances have been eliminated from the consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes. The Company’s most significant estimates relate to the valuation of common stock and related stock-based compensation, the fair values of financial instruments and convertible notes, among others. Although the Company bases these estimates on historical experience, knowledge of current events and actions it may undertake in the future, and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments over the carrying values of assets and liabilities, this process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements.

In December 2019, a novel strain of coronavirus, which causes COVID-19, was identified. Due to the rapid and global spread of the virus, on March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. To slow the proliferation of COVID-19, governments implemented extraordinary measures, which included the mandatory closure of businesses, restrictions on travel and gatherings, and quarantine and physical distancing requirements. Due to the COVID-19 pandemic and variants, there has been uncertainty and disruption in the global economy and financial markets. There were no significant estimates contained in the preparation of the Company’s consolidated financial statements or impacts to the Company’s consolidated financial statements for the year ended December 31, 2020 and the six months ended June 30, 2021 that were a result of the COVID-19 pandemic.

Risk and Uncertainties

The Company is subject to risks common to early-stage companies in the pharmaceutical industry including, but not limited to, dependency on the clinical and commercial success of its current and any future product candidates, ability to obtain regulatory approval of its current and any future product candidates, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients and significant competition.

The Company relies on Daewoong Pharmaceuticals Co., Ltd. (“Daewoong”), a South Korean pharmaceutical manufacturer, as an exclusive and sole supplier to manufacture the Company’s sole product candidate. Any termination or loss of significant rights, including exclusivity, under the Company’s license and supply agreement with Daewoong (the “Daewoong Agreement”) would materially and adversely affect the Company’s commercialization of its products. See Note 9, “Commitments and Contingencies” for a discussion of the Daewoong Agreement.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including clinical trials delays and costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international markets.

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AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Unaudited Interim Financial Information

The accompanying interim consolidated balance sheet as of June 30, 2021, the consolidated statements of operations and comprehensive income (loss), convertible preferred stock and deficit and cash flows for the six months ended June 30, 2020 and 2021 and the related footnote disclosures are unaudited. These unaudited interim financial statements have been prepared in accordance with U.S. GAAP and, in management’s opinion, on a basis consistent with the audited financial statements and reflect all adjustments, which only include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2021 and its results of operations and comprehensive income (loss) and cash flows for the six months ended June 30, 2020 and 2021. The results for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or any other interim period.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company provides segment financial information and results for its segments based on the segregation of revenues and expenses that its chief operating decision makers review for purposes of allocating resources and evaluating its financial performance.

Prior to the deconsolidation of Evolus on May 20, 2019, the Company was organized into three operating and reportable segments — AEON Biopharma Core, Alphaeon Credit and Evolus. As of December 31, 2019, the Company was organized into two operating and reportable segments — AEON Biopharma Core and Alphaeon Credit. As of December 31, 2020 and June 30, 2021, the Company operates and manages its business as one operating and reportable segment. See Note 5, “Segment Information” for more information.

Deferred Initial Public Offering Costs

Specific incremental legal fees, accounting fees and other fees directly attributable to a proposed or actual offering of securities are deferred and charged against the gross proceeds of the offering. In the event the planned offering does not occur, the deferred offering costs would be expensed. As of December 31, 2019, $0.8 million of deferred offering costs were capitalized and included in “Other assets” in the accompanying consolidated balance sheet. During 2020, the Company incurred an additional $0.8 million of offering costs and wrote off $0.8 million of capitalized offering costs representing costs that no longer provided a future benefit, which were recorded in selling, general and administrative expenses. During the six months ended June 30, 2021, the Company incurred an additional $0.5 million of offering costs. As of December 31, 2020 and June 30, 2021, $0.8 million and $1.3 million, respectively, of deferred offering costs primarily consisting of legal and accounting fees were capitalized and included in “Other assets” in the accompanying consolidated balance sheets.

Debt Issuance Costs and Debt Discount

Debt issuance costs include the costs of debt financings undertaken by the Company, including legal fees, accounting fees, redemption premiums and other direct costs of the financing. Debt issuance costs related to a recognized debt liability are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts, and are amortized to interest expense over the term of the related debt using the effective interest method. Further, debt discounts recognized as a result of the allocation of proceeds received from a debt issuance to warrants issued in conjunction with the debt issuance are amortized to interest expense under the effective interest method over the life of the recognized debt liability.

Fair Value Option

Subsequent to the deconsolidation of Evolus on May 20, 2019, the Company elected to account for its retained equity investment in Evolus’ common stock at fair value. Subsequent changes in fair value were recorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss).

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AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The Company also elected to account for its convertible promissory notes issued during 2019 and 2020 and the six months ended June 30, 2021,which met the required criteria, at fair value at inception. Subsequent changes in fair value wererecorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income(loss) or as a component of other comprehensive income (loss) for changes related to instrument-specific credit risk.As a result of electing the fair value option, direct costs and fees related to the convertible promissory notes were expensed as incurred.

Investments

The Company’s equity investments, with the exception of the previously retained equity investment in Evolus’ common stock that was accounted for at fair value, are accounted for under the equity method of accounting when the Company can exert significant influence and the Company’s ownership interest does not exceed 50%. The Company initially records equity method investments at cost and adjusts for the appropriate share of investee net earnings or losses.

Convertible Preferred Stock

The Company records convertible preferred stock at their respective issuance price, less issuance costs on the dates of issuance. The convertible preferred stock is classified outside of permanent equity as temporary equity in the accompanying consolidated balance sheets. Although the convertible preferred stock is not redeemable, upon certain change in control events that are outside of the Company’s control, including liquidation, sale or transfer of control of the Company, holders of the convertible preferred stock may have the right to receive their liquidation preference to any distribution of the proceeds under the terms of the Company’s amended and restated certificate of incorporation. The Company has not adjusted the carrying values of the convertible preferred stock to the liquidation preferences of such shares since it is uncertain whether or when a redemption event will occur. Subsequent adjustments to increase the carrying values to the redemption values will be made only when it becomes probable that such redemption will occur.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair value measurements are based on a three-tiered valuation hierarchy, which is classified and disclosed by the Company in one of the three categories as follows:

• Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, or can be corroborated by observable market data for substantially the full term of the asset or liability; and

• Level 3—Prices or valuation techniques that require unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

F-11

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Leases

The Company determines whether a contract is, or contains, a lease at inception. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. The Company determines the lease term as the noncancellable period of the lease, and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the balance sheets.

Revenue Recognition

Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company generated revenue from offering financing solutions to patients to pay for elective medical procedures within dentistry, dermatology, ophthalmology and plastic surgery through arrangements with financial institutions. The Company receives rebates from financial institutions for the financial solutions the Company offers to medical providers and patients and generally recognizes revenue at a point in time when patients obtain such financing solutions.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs associated with clinical studies including clinical trial design, clinical site reimbursement, data management, travel expenses and the cost of products used for clinical trials and internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs. Additionally, research and development expenses include employee compensation, including stock-based compensation, supplies, consulting, prototyping, testing, materials, travel expenses and an allocation of facility overhead expenses. Costs incurred in obtaining technology licenses are charged to research and development expense as acquired in-process research and development if the technology licensed has not reached technological feasibility and has no alternative future use.

The Company accrues the expenses for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company determines these estimates through discussion with internal personnel and outside service providers as to progress or stage of completion of trials or services pursuant to contracts with clinical research organizations and other service providers and the agreed-upon fee to be paid for such services. Payments made to outside service providers in advance of the performance of the related services are recorded as prepaid expenses and other current assets until the services are rendered. As of June 30, 2021, $1.3 million of prepayments made to outside service providers were included in “Prepaid expenses and other current assets” in the accompanying unaudited consolidated balance sheet. Prepaid research and development was de minimis as of December 31, 2020 and zero as of December 31, 2019. There have been no material adjustments to the Company’s accrued estimates for clinical trial activities through December 31, 2020 and June 30, 2021.

Stock-Based Compensation

The Company recognizes compensation expense for all share-based awards. The Company accounts for stock-based compensation as measured at grant date, based on the fair value of the award. The Company measures the fair value of awards granted using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the estimated fair value of common stock, the expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected life. The Company also evaluates the impact of modifications made to the original terms of equity awards when they occur.

The fair value of equity awards that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the consolidated balance sheets and in selling, general and administrative or research and

F-12

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

development expenses in the consolidated statements of operations and comprehensive income (loss). All stock-based compensation costs are recorded in the statements of operations and comprehensive income (loss) based upon the underlying employee’s role within the Company.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax basis of the Company’s assets and liabilities and their financial statement reported amounts. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards and are measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized.

The Company records uncertain tax positions on the basis of a two-step process whereby (i) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying statements of operations and comprehensive income (loss). Any accrued interest and penalties related to uncertain tax positions will be reflected as a liability in the balance sheet.

Net Income (Loss) Per Share Attributable to Common Stockholders

The Company calculates basic and diluted net income (loss) per share to common stockholders in conformity with the two-class method required for companies with participating securities. The Company considers all series of convertible preferred stock to be participating securities as they participate in any dividends declared by the Company. Under the two-class method, undistributed earnings allocated to these participating securities are subtracted from net income in determining net income attributable to common stockholders. Net loss attributable to common stockholders is not allocated to convertible preferred stock as the holders of convertible preferred stock do not have a contractual obligation to share in losses.

During the six months ended June 30, 2020 and the year ended December 31, 2020, the Company distributed in-kind dividends to its stockholders. The Company adjusted net income (loss) by the amount of the in-kind dividends to calculate net income (loss) available to AEON common stockholders. There were no distributions in-kind during the year ended December 31, 2019 and the six months ended June 30, 2021.

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potentially dilutive shares of common stock. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and potentially dilutive securities outstanding for the period using the “treasury stock”, “if converted” or “two-class” method if their inclusion would have been anti-dilutive. For purposes of the diluted net income (loss) per share calculation, convertible preferred stock, warrants, convertible notes and common stock options are considered as potentially dilutive securities.

For the year ended December 31, 2019, the calculation of net income attributable to AEON common stockholders considered the net income for AEON on a stand-alone basis plus the Company’s share of Evolus’ net loss during the period when Evolus was consolidated by the Company. To calculate the portion of Evolus’ net loss attributable to the Company’s ownership in Evolus for the year ended December 31, 2019, the Company multiplied Evolus’ loss per share by the weighted average shares the Company owned in Evolus during the period when Evolus was consolidated by the Company. As a result, net income available to AEON common stockholders used for the calculation of net income per share is different from net income attributable to AEON common stockholders in the consolidated statement of operations and comprehensive income for the year ended December 31, 2019.

F-13

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Basic and diluted net income per share for 2019 was calculated as follows (in thousands, except per share amount):

	Weighted Average Shares Owned in Evolus		Evolus Net Loss per Share			AEON’s Portion of Evolus’ Net Loss
Year Ended December 31, 2019
Evolus’ net loss attributable to AEON’s ownership		15,269	$	(1.17	)	$	(17,852	)
AEON’s stand-alone net income							192,271
Undeclared dividend to convertible preferred stock    stockholders							(11,353	)
Undistributed earnings allocated to convertible preferred stock    stockholders							(25,985	)
Net income available to AEON common stockholders						$	137,081
Weighted average shares of common stock outstanding - basic							6,598
Effect of dilutive shares issuable upon exercise of stock options							48
Weighted average shares of common stock outstanding - diluted							6,646
Earnings per share attributable to AEON Biopharma, Inc.    common stockholders:
Basic						$	20.74
Diluted						$	20.57

Since the Company was in a loss position for the six months ended June 30, 2020 and 2021 and the year ended December 31, 2020, basic net loss per share is the same as diluted net loss per share as the inclusion of all potentially dilutive common shares was anti-dilutive.

Basic and diluted net loss per share for the year ended December 31, 2020 was calculated as follows (in thousands, except per share amount):

Year Ended December 31, 2020
Net loss	$	(32,913	)
Dividend-in-kind to convertible preferred stock stockholders		(17,259	)
Net loss available to AEON common stockholders	$	(50,172	)
Weighted average common shares outstanding,    basic and diluted		6,597
Net loss per share attributable to AEON common    stockholders, basic and diluted	$	(7.65	)

Basic and diluted net loss per share for the six months ended June 30, 2020 was calculated as follows (in thousands, except per share amount):

Six Months Ended June 30, 2020
Net loss	$	(15,959	)
Dividend-in-kind to convertible preferred stock stockholders		(16,854	)
Net loss available to AEON common stockholders	$	(32,813	)
Weighted average common shares outstanding,    basic and diluted		6,597
Net loss per share attributable to AEON common    stockholders, basic and diluted	$	(4.93	)

F-14

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Basic and diluted net loss per share for the six months ended June 30, 2021 was calculated as follows (in thousands, except per share amount):

Six Months Ended June 30, 2021
Net loss available to AEON common stockholders	$	(36,453	)
Weighted average common shares outstanding, basic and diluted		6,675
Net loss per share attributable to AEON common stockholders,   basic and diluted	$	(5.44	)

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an anti-dilutive impact.

	December 31,				June 30,
	2019		2020		2020		2021
Convertible preferred stock outstanding		1,250,454		1,250,454		1,250,454		1,250,454
Convertible preferred stock warrants outstanding		29,787		29,787		29,787		29,787
Common stock options		207,176		618,620		953,242		618,620
		1,487,426		1,898,870		2,233,492		1,898,870

In addition, for the year ended December 31, 2019, shares of common stock issuable upon conversion of the Company’s outstanding convertible notes have been excluded from the computation of diluted weighted shares outstanding as the number of shares issuable is not determinable at this time.

Noncontrolling Interest

As of December 31, 2018, the Company owned approximately 56% of Evolus’ outstanding common stock. On May 20, 2019, the Company sold 4,000,000 shares of Evolus common stock for proceeds of $77.0 million, and repaid a portion of its outstanding convertible notes and accrued interests by distributing to holders of the convertible notes 1,307,940 shares of Evolus’ common stock, which reduced the Company’s ownership percentage of Evolus’ common stock to approximately 36%. As a result, the Company no longer had a controlling financial interest in Evolus. The Company derecognized the assets and liabilities of Evolus in the accompanying consolidated financial statements effective May 20, 2019.

The shares in Evolus owned by third parties represented an interest in Evolus’ equity that is not controlled by the Company. However, as the Company continued to maintain overall control of Evolus through its voting interest, the Company reflected the assets, liabilities and results of operations of Evolus in the accompanying consolidated financial statements until May 20, 2019, the date of Evolus deconsolidation. Noncontrolling interest attributable to other owners of Evolus’ common stock was recorded as a separate line on the accompanying consolidated statements of operations and comprehensive income (loss) and a separate line within equity (deficit) on the accompanying consolidated balance sheets. In addition, the Company accounted for stock-based compensation expense Evolus had recognized as an increase in noncontrolling interest and a decrease in additional paid-in-capital, as share-based payment awards Evolus grants, if exercised, would result in a decrease in the Company’s ownership interest in Evolus and an increase in noncontrolling interest.

In addition, ABP Sub Inc., the Company’s wholly owned subsidiary, grants stock options to certain employees and nonemployee consultants of ABP Sub Inc. The Company accounts for stock-based compensation expense recognized by ABP Sub Inc. as an increase in noncontrolling interest in the accompanying consolidated financial statements. See Note 13, “Share-based Compensation” for more information.

Contingencies

The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. The Company accrues for all contingencies at the earliest date at

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AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible.

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update that simplified various aspects of the income tax accounting guidance related to intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplified aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarified the accounting for transactions that result in a step-up in the tax basis of goodwill, among other clarifications. The guidance became effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted.The Company adopted the provisions of the guidance on January 1, 2021. The adoption did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued an accounting standards update that aligned the requirements for capitalizing implementation costs incurred in a cloud computing arrangement service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. The guidance became effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the provisions of the guidance prospectively on January 1, 2020. The adoption did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued an accounting standards update that amended the disclosure requirements on fair value measurement by adding, removing or modifying certain disclosures. This guidance became effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted the provisions of the guidance on January 1, 2020. The adoption did not have a material impact on the Company’s consolidated financial statements.

New Accounting Standards Not Yet Adopted

In August 2020, the FASB issued an accounting standards update that simplified the accounting for certain financial instruments with characteristics of liabilities and equity by reducing the number of accounting models for convertible debt and convertible preferred stock instruments. It also amended the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modified how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The guidance will be effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2020 but only if the adoption is as of the beginning of a fiscal year. The Company is currently evaluating the potential impact of adopting this guidance on the Company’s consolidated financial statements.

In June 2016, the FASB issued an accounting standards update that amended the guidance on the measurement of credit losses on financial instruments. The guidance amended the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain financial instruments. In November 2019, the FASB issued an update to the guidance to defer the effective date for all entities except SEC filers that are not smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those years. The Company does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements.

F-16

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not, or are not believed by management to, have a material impact on the Company’s financial position, results of operations or cash flows.

Note 3.    Deconsolidation of Evolus

Prior to May 20, 2019, the Company owned approximately 56% of Evolus’ outstanding common stock and the Company’s consolidated financial statements included the consolidated results of Evolus’ operations. On May 20, 2019, the Company sold 4,000,000 shares of Evolus common stock for cash proceeds of $77.0 million and repaid a portion of its outstanding convertible notes and accrued interests by distributing to holders of the convertible notes 1,307,940 shares of Evolus’ common stock, reducing the Company’s ownership percentage of Evolus’ common stock to approximately 36%. The Company determined it no longer had a controlling financial interest in Evolus. Therefore, the Company derecognized the assets and liabilities in the accompanying consolidated financial statements effective May 20, 2019 and recognized a pretax gain of $254.1 million, which was recorded as a component of non-operating income (loss) in the accompanying consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2019.

The following table summarizes the calculation of the gain on deconsolidation of Evolus on May 20, 2019 (in thousands):

	Amount
Cash proceeds	$	77,000
Repayments of convertible notes and accrued interests		25,178
Fair value of retained equity investment in Evolus		173,123
Carrying amount of noncontrolling interest in Evolus		35,380
		310,681
Carrying amount of Evolus' net assets		(56,575	)
Gain on deconsolidation of Evolus	$	254,106

The results of operations of Evolus from January 1, 2019 to May 20, 2019, the date of Evolus deconsolidation, are included in the accompanying consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2019. See Note 5, “Segment Information” for more information.

The Company elected to account for its retained equity investment in Evolus’ common stock subsequent to the deconsolidation of Evolus on May 20, 2019 at fair value. Subsequent changes in fair value were recorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss). During the years ended December 31, 2019 and 2020, the Company recognized a (loss) gain of $(49.3) million and $0.3 million, respectively, related to the change in fair value of its retained equity investment in Evolus. During the six months ended June 30, 2020, the Company recognized a gain of $0.3 million related to the change in fair value of its retained equity investment in Evolus.

As of December 31, 2020, the Company no longer held any equity investment in Evolus’ common stock. As of December 31, 2019, the Company owned approximately 26% of Evolus’ outstanding common stock and the fair value of the equity investment was $105.4 million. The Company classified the equity investment as current in the accompanying consolidated balance sheet as of December 31, 2019, reflecting the timing of a subsequent contribution of the asset to Alphaeon 1 LLC in January 2020. See Note 4, “Contribution and Distribution of Evolus, Alphaeon Credit and Zelegent” for more information.

F-17

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The following table provides summarized financial information of Evolus, the Company’s equity investment investee at December 31, 2019 (in thousands):

Financial Position
	As of December 31,
	2019
Assets:
Cash and cash equivalents	$	109,892
Short-term investments		19,911
Intangible assets, net		59,638
Goodwill		21,208
Other assets		29,793
Total assets	$	240,442
Liabilities and stockholders' equity:
Current liabilities	$	24,439
Long-term debt, net of discounts and issuance costs		73,508
Other liabilities		63,038
Stockholders’ equity		79,457
Total liabilities and stockholders' equity	$	240,442
Results of Operations
	Year Ended December 31,
	2019
Net revenues	$	34,925
Product cost of sales (excludes amortization of intangible assets)		8,014
Operating expenses		125,858
Other expense		6,114
Loss before income taxes		(105,061	)
Income tax benefit		(15,271	)
Net loss	$	(90,034	)

On March 15, 2019, Evolus entered into a credit facility of up to $100.0 million with Oxford Finance. Pursuant to the terms of the credit facility the lender extended term loans to Evolus that were available in two advances. The first tranche of $75.0 million was funded on the closing date. The credit facility bears an annual interest rate equal to the greater of 9.5%, or the 30-day U.S. Dollar LIBOR rate plus 7.0%. At the closing date, Evolus incurred $1.1 million and $2.2 million in debt discounts and issuance costs related to the term loans, respectively. Debt discounts and issuance costs allocated to the first tranche of $75.0 million were amortized as interest expense using the effective interest method. Effective May 20, 2019, the Company derecognized the debt under the credit facility in the accompanying consolidated balance sheet.

Note 4.     Contribution and Distribution of Evolus, Alphaeon Credit and Zelegent  

In January 2020, the Company formed a wholly owned subsidiary, named Alphaeon 1 LLC (A1). The Company’s Board of Directors approved the contribution of its interest in Evolus’ common stock to A1. At the time of this contribution, the Company owned 8,662,346 shares of Evolus, representing approximately 26% of the outstanding shares of Evolus. The Company then distributed all of the units of A1 to its current stockholders on a one common unit or one preferred unit for one share of its common stock or preferred stock, as applicable, basis. In connection with the distribution of the units of A1 to the Company’s stockholders, each of the holders of the Company’s 2019 Convertible Notes were granted contingent warrants by A1 to purchase shares of Evolus from A1. See Note 6, “Related Party Transactions” for further discussion.

As a result of the distribution, the Company no longer holds any membership interests in A1 nor any equity interest in Evolus. The Company derecognized the equity investment in Evolus from its balance sheet in January 2020 at the carrying value, which was the fair value. Upon the concurrent distribution to its current stockholders, the Company recorded an in-kind dividend of $105.8 million for the value equal to the fair value of the equity investment in Evolus.

F-18

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

In September 2020, the Company formed Alphaeon Credit HoldCo LLC (AC HoldCo) and contributed all of its stock in Alphaeon Credit to AC HoldCo in exchange for all the interests in AC HoldCo, which the Company then distributed to its stockholders, pro-rata. At the time of this contribution, the Company owned 100% of the outstanding stock of Alphaeon Credit. In connection with the contribution and distribution, AC HoldCo issued to the holders of the 2019 Convertible Notes a contingent warrant to purchase, upon a qualifying listing (defined as the Company’s first underwritten  public offering) or an event of default, the common stock of Alphaeon Credit. See Note 6, “Related Party Transactions” for further discussion. As a result, the Company no longer holds any interest in Alphaeon Credit or AC HoldCo.

In September 2020, the Company formed Zelegent HoldCo LLC (Z HoldCo) and contributed all of its equity investment in Zelegent, Inc. (Zelegent), a privately held clinical trial stage medical device manufacturer focusing on creating tools to treat disorders, to Z HoldCo in exchange for all the interests in Z HoldCo, which the Company then distributed to its shareholders, pro-rata. At the time of this contribution, the Company had approximately a 35% ownership interest in Zelegent. In connection with the contribution and distribution, Z HoldCo issued to the holders of the 2019 Convertible Notes a contingent warrant to purchase, upon a qualifying listing (defined as the Company’s first underwritten public offering ) or event of default, the common stock of Zelegent. See Note 6, “Related Party Transactions” for further discussion. As a result, the Company no longer holds any equity interest in Zelegent or Z HoldCo.

The Company derecognized the assets and liabilities of Alphaeon Credit and the equity investment in Zelegent from its consolidated balance sheet effective September 30, 2020 at the carrying value.Upon the concurrent distribution to its current stockholders of its interests in AC HoldCo and Z HoldCo, the Company recorded an in-kind dividend of $2.5 million for the value equal to the carrying amount of its investments in Alphaeon Credit and Zelegent.

Note 5.     Segment Information

Prior to the deconsolidation of Evolus on May 20, 2019, the Company was organized into three operating and reportable segments — AEON Biopharma Core, Alphaeon Credit and Evolus. AEON Biopharma Core segment is focused on the development of the Company’s proprietary botulinum toxin complex for debilitating medical conditions. The Alphaeon Credit segment offers financing solutions to patients to pay for elective medical procedures within dentistry, dermatology, ophthalmology and plastic surgery. Evolus is a performance beauty company with a focus on breakthrough products in the self-pay aesthetic market. As of December 31, 2019, the Company was organized into two operating and reportable segments — AEON Biopharma Core and Alphaeon Credit.

As discussed in Note 4, in September 2020, the Company contributed its equity investment in Zelegent and all its stock in Alphaeon Credit to Z HoldCo and AC HoldCo, respectively. The Company accounted for the transaction as a dividend-in-kind to its stockholders and derecognized the equity investment in Zelegent and the assets and liabilities of Alphaeon Credit in its consolidated balance sheet with a corresponding decrease to equity as of September 30, 2020. As of December 31, 2020 and June 30, 2021, the Company operates and manages its business as one operating and reportable segment.

The Company accounted for the equity investment in Zelegent under the equity method of accounting, which was included in the AEON Biopharma Core segment until September 30, 2020. As of December 31, 2019, the Company recorded an investment in Zelegent of $1.4 million. There had been no related party transactions between the Company and Zelegent. Upon the deconsolidation of Evolus, the retained equity investment in Evolus was included in the AEON Biopharma Core segment until the contribution of the asset to A1 in January 2020. See Note 4, “Contribution and Distribution of Evolus, Alphaeon Credit and Zelegent” for more information.

F-19

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The following table provides income (loss) before income taxes by segment for the year ended December 31, 2019 (in thousands):

	AEON Biopharma Core			Alphaeon Credit		Evolus			AEON Total
Revenue:
Services	$	—		$	3,342	$	—		$	3,342
Other revenue		—			15		—			15
Total revenue		—			3,357		—			3,357
Operating costs and expenses:
Cost of revenue		—			1		—			1
Selling, general and administrative		7,621			2,109		36,307			46,037
Research and development		2,187			—		2,627			4,814
Change in fair value of contingent royalty    obligation to Evolus Founders		—			—		5,596			5,596
Depreciation and amortization		—			—		875			875
Total operating costs and expenses		9,808			2,110		45,405			57,323
(Loss) income from operations		(9,808	)		1,247		(45,405	)		(53,966	)
Other income (loss):
Interest income		—			—		720			720
Interest expense		(5,553	)		—		(1,917	)		(7,470	)
Gain on deconsolidation of Evolus		254,106			—		—			254,106
Gain on transfer of equity investment at fair value		6,597			—		—			6,597
Change in fair value of equity investment		(49,299	)		—		—			(49,299	)
Change in fair value of convertible notes		(5,161	)		—		—			(5,161	)
Gain on equity-method investment		136			—		—			136
Other income, net		7			—		—			7
Total other income (loss)		200,833			—		(1,197	)		199,636
Income (loss) before taxes	$	191,025		$	1,247	$	(46,602	)	$	145,670

The Evolus segment included the results of operations of Evolus from January 1, 2019 to May 20, 2019, the date of Evolus’ deconsolidation.

F-20

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The following table provides income (loss) before income taxes by segment for the year ended December 31, 2020 (in thousands):

	AEON Biopharma Core			Alphaeon Credit		AEON Total
Services revenue	$	—		$	2,518	$	2,518
Operating costs and expenses:
Selling, general and administrative		9,993			1,594		11,587
Research and development		7,319			—		7,319
Total operating costs and expenses		17,312			1,594		18,906
(Loss) income from operations		(17,312	)		924		(16,388	)
Other income (loss):
Interest expense		(15	)		—		(15	)
Change in fair value of equity investment		346			—		346
Change in fair value of convertible notes		(5,498	)		—		(5,498	)
Loss on extinguishment of related party borrowings		(11,241	)		—		(11,241	)
Gain on PPP loan forgiveness		139			—		139
Loss on equity-method investment		(140	)		—		(140	)
Other (loss) income, net		(141	)		25		(116	)
Total other (loss) income		(16,550	)		25		(16,525	)
(Loss) income before taxes	$	(33,862	)	$	949	$	(32,913	)

The Alphaeon Credit segment included the results of operations of Alphaeon Credit from January 1, 2020 to September 30, 2020, the date of the deconsolidation of Alphaeon Credit.

The following table provides income (loss) before income taxes by segment for the six months ended June 30, 2020 (in thousands):

	AEON Biopharma Core			Alphaeon Credit		AEON Total
Services revenue	$	—		$	1,391	$	1,391
Operating costs and expenses:
Selling, general and administrative		4,441			1,033		5,474
Research and development		1,558			—		1,558
Total operating costs and expenses		5,999			1,033		7,032
(Loss) income from operations		(5,999	)		358		(5,641	)
Other income (loss):
Interest expense		(14	)		—		(14	)
Change in fair value of equity investment		346			—		346
Change in fair value of convertible notes		680			—		680
Loss on extinguishment of related party borrowings		(11,241	)		—		(11,241	)
Loss on equity-method investment		(107	)		—		(107	)
Other income, net		4			14		18
Total other (loss) income		(10,332	)		14		(10,318	)
(Loss) income before taxes	$	(16,331	)	$	372	$	(15,959	)

Revenue within the Alphaeon Credit segment was generated in the United States, with revenue to one customer, Comenity Capital Bank, representing approximately 97.8%, 99.3% and 99.1%, respectively, of the Company’s revenue for the years ended December 31, 2019 and 2020 and the six months ended June 30, 2020.

F-21

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The following table provides assets and liabilities by segment as of December 31, 2019 (in thousands):

	AEON Biopharma Core		Alphaeon Credit		AEON Total
ASSETS:
Current assets:
Cash	$	6,205	$	119	$	6,324
Equity investment at fair value		105,421		—		105,421
Accounts receivables		—		267		267
Prepaid expenses and other current assets		92		41		133
Total current assets		111,718		427		112,145
Equity-method investment		1,429		—		1,429
Other assets		778		—		778
Total assets	$	113,925	$	427	$	114,352
LIABILITIES:
Current liabilities:
Accounts payable	$	1,015	$	10	$	1,025
Related party payable		21		—		21
Accrued expenses		789		114		903
Related party borrowings		14,490		—		14,490
Accrued interest on related party borrowings		756		—		756
Note payable		300		—		300
Total current liabilities		17,371		124		17,495
Convertible notes at fair value		15,161		—		15,161
Other liabilities		9,616		—		9,616
Total liabilities	$	42,148	$	124	$	42,272

Note 6.   Related Party Transactions

Convertible Notes

In 2016, the Company entered into two separate debt transactions: (i) a Secured Convertible Bridge Note and Warrant Agreement (the “Bridge Note”) with one of its stockholders, Longitude Venture Partners II, L.P. (“Longitude”), with a principal amount of $2.5 million and (ii) a Secured Convertible Note Purchase Agreement (Purchase Agreement) with one of its stockholders, Dental Innovations BVBA (“Dental Innovations”), as collateral agent, pursuant to which the Company could issue up to an aggregate of $55.0 million (the “Note Facility” and together with the Bridge Note, the “Notes”). In April 2017, the Purchase Agreement was amended and restated to, among other things, set forth the terms for the issuance of up to $30.0 million in principal amount of Notes contemplated but not yet issued under the Note Facility.

The Notes, as amended from time to time, have substantially similar terms and pay interest monthly in arrears at a rate of ten percent (10%) per annum, subject to adjustment pursuant to the terms of the Notes. The Notes could be paid at a redemption price equal to 2.5 times the face amount of the Notes less any prepayment of principal and any principal amount of the Notes that could convert into shares of the Company on (i) maturity on December 23, 2018 or, if an extension event occurs, on June 23, 2019, (ii) a required prepayment event, or (iii) prepayment at any time at the Company’s election. Upon the occurrence of certain corporate events at the Company, at the election of the holder, the Notes would convert into a variable number of shares of the Company with an aggregate fair value equaling the principal value of the Notes or such Notes will continue to maturity as unsecured promissory notes with a reduced interest rate. The Company’s obligations under the Notes were secured by a first priority lien and security interest in substantially all of the Company’s assets.

F-22

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

In addition, pursuant to the terms of the Bridge Note, in 2016 the Company issued Longitude warrants to purchase 29,787 shares of the Company’s Series B convertible preferred stock at an exercise price of $124.26 per share. The warrants are exercisable, in whole or in part, from the date of issuance and expire on May 31, 2023. The Company accounts for the warrants as a liability, which were initially recorded at their fair value of $0.8 million on the date of issuance and are subject to remeasurement at each subsequent balance sheet date. Any change in fair value of the warrants as a result of the remeasurement is recognized as a component of “Other income (loss), net” in the accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2019 and 2020 and June 30, 2021, the estimated fair value of the warrants was $66,000, $37,000 and $14,000, respectively, which was included in “Other liabilities” in the accompanying consolidated balance sheets. During the years ended December 31, 2019 and 2020 and the six months ended June 30, 2020 and 2021, the Company recognized $(4,000), $29,000, $19,000 and $23,000 of (expense) income, respectively, related to the change in the estimated fair value of the warrants.

During 2018, the Company settled the total outstanding principal amount of $56.3 million, of which $48.3 million was paid in cash and $8.0 million was settled by the Company distributing to the holders of the Notes 573,888 shares of Evolus common stock previously held by the Company. As of January 1, 2019, total remaining note obligations outstanding were $84.4 million, representing the redemption premium of the Notes (1.5 times the total outstanding principal amount of $56.3 million). In the second quarter of 2019, the Company settled the remaining outstanding note obligations of $84.4 million plus accrued interest of $3.5 million, of which $62.7 million was paid in cash and $25.2 million was settled by the Company distributing to the holders of the Notes 1,307,940 shares of Evolus common stock previously held by the Company.

The redemption premium, representing 1.5 times the principal amount of the Notes, was accreted using the effective interest method over the term of the Notes and was recognized as interest expense. During 2019, the Company recorded $3.3 million as interest expense associated with the Notes.

Strathspey Crown Note

Since December 2013, the Company had been party to an intercompany credit line promissory note (the “Strathspey Crown Note”), pursuant to which SCH, the Company’s majority stockholder, had advanced borrowings to the Company to fund its capital requirements. The Strathspey Crown Note, as amended from time to time, allowed the Company to borrow up to $150.0 million and matured on June 30, 2019. Borrowings against the Strathspey Crown Note bear interest monthly at a rate per annum equal to the Applicable Federal Rate published by the Internal Revenue Service for such month for debt with semiannual compounding, compounded every six months.

As of January 1, 2019, the aggregate principal amount outstanding under the Strathspey Crown Note was $50.0 million with accrued interest of $2.0 million. During the second quarter of 2019, the Company paid $39.0 million of the outstanding principal amount of the Strathspey Crown Note, of which $14.0 million was paid in cash and $25.0 million was settled by the Company distributing to SCH 1,298,701 shares of Evolus common stock previously held by the Company. The Company recognized a gain of $6.6 million on this transaction, which was recorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss).

On June 30, 2019, the Strathspey Crown Note was amended, which set forth the total remaining outstanding balance to be $15.0 million with an interest rate of 10% per annum from July 1, 2019 to December 31, 2019 and 20% per annum from January 1, 2020 to March 31, 2020. All unpaid outstanding principal balance and accrued and unpaid interest were due and payable on March 31, 2020. Prior to the amendment, the outstanding principal amount of the Strathspey Crown Note was $11.0 million plus accrued interest of $2.5 million.

The Company accounted for the amendment as a debt modification and accreted the incremental borrowing cost of $1.5 million using the effective interest method over the remaining term of the Strathspey Crown Note as interest expense recorded in the accompanying consolidated statements of operations and comprehensive (loss) income. The incremental borrowing cost represents the difference between the outstanding principal amount of $15.0 million upon the amendment and the outstanding principal amount of $11.0 million plus accrued interest of $2.5 million prior to the amendment. For the year ended December 31, 2019, the Company recognized $2.3 million of interest expense,

F-23

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

including $1.0 million of accretion for the incremental borrowing cost. As of December 31, 2019, the principal amount outstanding under the Strathspey Crown Note was $15.0 million with accrued interest of $0.8 million. As of December 31, 2019, the unamortized borrowing cost was $0.5 million, which is presented as a deduction to the note balance.

Effective as of January 2, 2020, the Company and SCH cancelled all obligations under the Strathspey Crown Note and in exchange the Company issued a convertible promissory note to SCH (the “SCH Convertible Note”) with a principal amount of $17.5 million. The Company accounted for the debt exchange as an extinguishment of the Strathspey Crown Note and recognized a loss on debt extinguishment of $11.2 million, representing the difference between the fair value of the SCH Convertible Note of $26.5 million at January 2, 2020 and total obligations outstanding under the Strathspey Crown Note of $15.8 million less the unamortized borrowing cost of $0.5 million. See below for additional discussion of the SCH Convertible Note.

2019 Debt Financings

In June 2019, the Company entered into a senior unsecured note purchase agreement (the “Original 2019 Note Purchase Agreement”), with Dental Innovations, pursuant to which the Company issued Dental Innovations a promissory note (the “Original 2019 Note”) with a principal amount of $5.0 million.Pursuant to the terms of the Original 2019 Note, the Company was required to repay a total of $8.75 million, representing all principal and interest owed, upon the earliest to occur of (i) June 19, 2022, (ii) Dental Innovations’ demand for repayment following the Company’s completion of an initial public offering and (iii) the Company’s election to repay the Original 2019 Note in full.

Under the Original 2019 Note Purchase Agreement, Dental Innovations committed to purchase from the Company an additional promissory note with a principal amount of $5.0 million, subject to the Company issuing and selling an additional promissory note with a principal amount of $5.0 million to a lender not affiliated with Dental Innovations. Any such additional promissory notes would have the same payment terms as the Original 2019 Notes.

In December 2019, the Company entered into an amendment to the Original 2019 Note Purchase Agreement that provided for the exchange of the Original 2019 Note for a convertible promissory note with a principal amount of $5.0 million. In addition, Dental Innovations was no longer committed to purchase from the Company an additional promissory note with a principal amount of $5.0 million subject to the Company issuing and selling an additional promissory note with a principal amount of $5.0 million to a lender not affiliated with Dental Innovations. In December 2019, the Company issued and sold five additional convertible promissory notes, each with a principal amount of $1.0 million, including one to SCH and one to a member of the Company’s board of directors (all such convertible promissory notes, the “2019 Convertible Notes”).

The Company’s payment and performance under the 2019 Convertible Notes are guaranteed by ABP Sub Inc., its wholly owned subsidiary. Pursuant to the terms of the 2019 Convertible Notes, the Company is required to repay 175% of the principal amount to the holders on the third anniversary of their issuance. In the event of an underwritten public offering of the Company’s common stock, the 2019 Convertible Notes will automatically convert into a number of shares of the Company’s common stock equal to 175% of the principal amount of the 2019 Convertible Notes, divided by the per share price at which shares are offered to the public in such offering.

Due to certain embedded features within the 2019 Convertible Notes, the Company elected to account for the 2019 Convertible Notes and all their embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss) or as a component of other comprehensive income (loss) for changes to instrument-specific credit risk.

In January 2020, in connection with the distribution of the units of A1 to the Company’s stockholders, each of the holders of the Company’s 2019 Convertible Notes were granted contingent warrants by A1 to purchase shares of Evolus from A1. The contingent warrants are exercisable at the option of the holders only prior to the Company’s first underwritten public offering of common stock under the Securities Act of 1933, as amended (the “Securities Act”), or upon an event of default under the 2019 Convertible Notes. The 2019 Convertible Notes were concurrently amended to provide the noteholders the option, prior to the notes’ conversion, to cancel a portion of the indebtedness represented

F-24

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

by such noteholder’s 2019 Convertible Note and receive a number of shares of Evolus from A1 having a market value equal to the value of such cancelled indebtedness, in lieu of automatic conversion of all of the noteholder’s 2019 Convertible Note into shares of the Company’s common stock. The amount of cancelled indebtedness that can be so applied in exercise of the contingent warrant is capped as the ratio that the value of Evolus shares held by A1 bears to the combined value of (i) the Evolus shares held by A1 and (ii) the Company immediately prior to consummation of the Company’s first underwritten public offering of common stock under the Securities Act.

In September 2020, in connection with the distribution of the units of AC HoldCo and Z HoldCo to the Company’s stockholders, each of the holders of the Company’s 2019 Convertible Notes were granted contingent warrants by AC HoldCo and Z HoldCo to purchase shares of Alphaeon Credit and Zelegent from AC HoldCo and Z HoldCo. The contingent warrants are exercisable at the option of the holders only prior to the Company’s first underwritten public offering of common stock under the Securities Act, or upon an event of default under the 2019 Convertible Notes. The 2019 Convertible Notes were concurrently amended to provide the noteholders the option, prior to the notes’ conversion, to cancel a portion of the indebtedness represented by such noteholder’s 2019 Convertible Note and receive a number of shares of Alphaeon Credit and/or Zelegent from AC HoldCo and Z HoldCo having a market value equal to the value of such cancelled indebtedness, in lieu of automatic conversion of all of the noteholder’s 2019 Convertible Note into shares of the Company’s common stock. The amount of cancelled indebtedness that can be so applied in exercise of the contingent warrant is capped as the ratio of aggregate indebtedness held by the convertible note holder as a proportion of the value of Alphaeon Credit or Zelegent to the value of the Company.

As of December 31, 2020 and June 30, 2021, no contingent warrants were exercised by the Company’s stockholders to reduce the Company’s convertible note obligations. During the twelve months ended December 31, 2019 and 2020 and the six months ended June 30, 2020 and 2021, the Company recognized $5.2 million, $0.5 million, $(0.1) million and $0.2 million, respectively, of expense (income) related to the increase (decrease) in the fair value of the 2019 Convertible Notes. As a result of electing the fair value option, direct costs and fees related to the 2019 Convertible Notes were expensed as incurred. As of December 31, 2019 and 2020 and June 30, 2021, the principal amount outstanding under the 2019 Convertible Notes was $10.0 million with an estimated fair value of $15.2 million, $15.7 million and $15.9 million, respectively.

SCH Convertible Note

Effective as of January 2, 2020, the Company issued the SCH Convertible Note with a principal amount of $17.5 million in exchange for the cancellation of all obligations under the Strathspey Crown Note. The Company’s payment and performance under the SCH Convertible Note are guaranteed by ABP Sub Inc. Pursuant to the terms of the SCH Convertible Note, the Company is required to repay 175% of the principal amount to SCH on the third anniversary of its issuance. In the event of an underwritten public offering of the Company’s common stock, the SCH Convertible Note will automatically convert into a number of shares of the Company’s common stock equal to 175% of the principal amount of the SCH Convertible Note, divided by the per share price at which shares are offered to the public in such offering.

Due to certain embedded features within the SCH Convertible Note, the Company elected to account for the SCH Convertible Note and the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss) or as a component of other comprehensive income (loss) for changes to instrument-specific credit risk. During the twelve months ended December 31, 2020 and the six months ended June 30, 2020 and 2021, the Company recognized $0.8 million, $(0.6) million and $0.4 million, respectively, of expense (income) related to the increase (decrease) in the fair value of the SCH Convertible Note. As a result of electing the fair value option, any direct costs and fees related to the SCH Convertible Note were expensed as incurred. The estimated fair value of the SCH Convertible Note was $26.5 million as of January 2, 2020. As of December 31, 2020 and June 30, 2021, the principal amount outstanding under the SCH Convertible Note was $17.5 million with an estimated fair value of $27.3 million and $27.7 million, respectively.

F-25

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Contingent Obligations Related to the Acquisition of Evolus

In connection with its acquisition of Evolus in 2013, SCH and the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with the Evolus Founders, pursuant to which SCH and the Company were obligated to make certain contingent payments to the Evolus Founders. In December 2017, SCH and the Company entered into an amended purchase agreement with the Evolus Founders, whereby Evolus also joined as a contractual party. Under the amended purchase agreement, the contingent payment obligations were assumed by Evolus upon the completion of its IPO and were revised to consist of (i) an approximately $9.2 million up-front payment upon obtaining U.S. Food and Drug Administration (“FDA”) approval for DWP-450, Evolus’ product candidate, for the treatment of glabellar lines, (ii) quarterly royalty payments of a low single-digit percentage of net sales of DWP-450 within the United States, (iii) quarterly royalty payments of a low single-digit percentage of net sales of DWP-450 outside of the United States, and (iv) a $20.0 million promissory note that will mature on the 2.5 years anniversary of the first commercial sale of DWP-450 in the United States. The $9.2 million up-front payment was paid in full in February 2019 by Evolus.

Under the amended purchase agreement, Evolus also paid one-time bonuses of $1.6 million to certain current and former employees upon FDA approval of Jeuveau in February 2019. The payment is included in research and development expenses in the accompanying statements of operations and comprehensive income (loss) for the year ended December 31, 2019.

During the twelve months ended December 31, 2019, the Company recognized $5.6 million in operating expenses related to the change in the fair value of the contingent royalty obligation and $0.4 million interest expense related to the contingent promissory note. Evolus is solely responsible for the contingent obligations related to the acquisition of Evolus. Effective May 20, 2019, the Company derecognized the contingent royalty obligation payable to the Evolus Founders and the contingent promissory note payable to the Evolus Founders in the accompanying consolidated balance sheets.

Clarion Unwind Fee

In 2014, the Company acquired all outstanding voting equity interests of Clarion Medical Technologies Inc. (“Clarion”) pursuant to a shareholders’ agreement (the “Shareholders’ Agreement”). The Shareholders’ Agreement provided the previous equity holders of Clarion the right (the “Unwind Right”) to an unwind fee of approximately $9.55 million (the “Unwind Fee”) to unwind the Company’s acquisition of Clarion. In 2016, the previous equity holders of Clarion exercised the Unwind Right and the Unwind Fee became a joint and several obligation of the Company and SCH, its majority stockholder.

In November 2017, the Company and SCH entered into a side letter and guarantee agreement (“Side Letter”) with Clarion and the previous equity holders of Clarion in which the Company agreed to cause Evolus to enter into an exclusive distribution and supply agreement, dated as of November 30, 2017 (the “Distribution Agreement”) with Clarion. The Distribution Agreement provided terms pursuant to which Evolus would exclusively supply DWP-450 to Clarion in Canada, if Evolus obtained the necessary regulatory approval from Health Canada. Evolus received approval from Health Canada in August 2018 for the temporary improvement in the appearance of moderate to severe glabellar lines in adult patients under 65 years of age. The Distribution Agreement also sets forth that a portion of the proceeds received by Evolus from each unit of DWP-450 purchased by Clarion shall be paid directly to the previous equity holders of Clarion, and will reduce, on a dollar-for-dollar basis, the amount of the Unwind Fee owed by the Company until paid in full.

Pursuant to the Side Letter, the Company and SCH are obligated to pay the Unwind Fee upon an acceleration event within 30 days of such event. For purposes of the Side Letter, each of the following events constitutes an acceleration event (each, an Acceleration Event): (i) the Unwind Fee is not paid in full by December 31, 2022, (ii) there is a material default of obligations by Evolus under the Distribution Agreement, (iii) a claim or interruption of more than 60 days occurs under the Distribution Agreement that impairs Clarion’s ability to sell DWP-450 in Canada as the sole distributor, (iv) an initial public offering or any change in control involving the Company or Evolus that results in either company receiving net proceeds of $700 million, (v) the bankruptcy or assignment for the benefit of creditors of the Company or Evolus, or (vi) the termination of the License and Supply Agreement, dated as of September 30, 2013, as amended (the “Evolus Supply Agreement”), by and between Evolus and Daewoong.

F-26

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

In addition, pursuant to the Side Letter, the Company and SCH re-affirmed to the previous equity holders of Clarion the obligation of the Company and SCH to pay the Unwind Fee should Evolus fail to supply DWP-450 to Clarion or cause the Distribution Agreement to terminate. The Company and SCH further agreed to pay the unpaid amount of the Unwind Fee on December 31, 2022, if demanded by the previous equity holders of Clarion.

As of December 31, 2020, no amounts had been paid towards the Unwind Fee, which was included in “Other liabilities” in the accompanying consolidated balance sheets.

On March 23, 2021, Evolus, Clarion, and Daewoong entered into an addendum to the Distribution Agreement to provide for Clarion to purchase Jeuveau directly from Daewoong. As a result, the Company’s obligation under the Distribution Agreement to pay the Unwind Fee to the previous equity holders of Clarion was cancelled. The Company recognized a gain on cancellation of the Unwind Fee of $9.55 million during the six months ended June 30, 2021 with a corresponding decrease in other liabilities in the accompanying consolidated financial statements.  

Shared Services Agreements with Strathspey Crown Limited, LLC

In August 2019, the Company entered into services agreements with Strathspey Crown Limited, LLC, an affiliate of SCH with an effective date of January 2019. Pursuant to the services agreements, Strathspey Crown Limited, LLC provides the Company certain administrative and development support services, including certain general management, communication, human resources, office, rent and information technology services. The Company pays Strathspey Crown Limited, LLC an allocable share of the actual cost incurred by Strathspey Crown Limited, LLC in providing such services, plus a 10% markup, as well as an allocable share of Strathspey Crown Limited, LLC’s overhead expenses, including office rent, depreciation, maintenance, utilities and supplies. The services agreements have a one-year term and will renew for successive one-year terms unless sooner terminated by either party. The Company or Strathspey Crown Limited, LLC may terminate the services agreements upon sixty days’ notice to the other party. For the years ended December 31, 2019 and 2020 and the six months ended June 30, 2020 and 2021, $0.4 million, $0.6 million, $0.3 million and $0.1 million, respectively, of costs related to the shared services agreements were included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income (loss).

Note 7.    Daewoong Convertible Notes

In August 2020, the Company entered into a Convertible Promissory Note Purchase Agreement with Daewoong (the “Daewoong Purchase Agreement”), pursuant to which the Company issued Daewoong two subordinated convertible promissory notes (collectively, the “2020 Daewoong Convertible Notes”) with an aggregate principal amount of $25.0 million. The 2020 Daewoong Convertible Notes have similar terms, of which one was issued on August 27, 2020 with a principal amount of $10.0 million and the other was issued on September 18, 2020 with a principal amount of $15.0 million. The 2020 Daewoong Convertible Notes are unsecured and subordinated to the Company’s 2019 Convertible Notes. The Company’s payment and performance under the 2020 Daewoong Convertible Notes are guaranteed by ABP Sub Inc., its wholly owned subsidiary.

The 2020 Daewoong Convertible Notes bear interest daily at 3% per annum with semiannual compounding. Interest is paid in-kind by adding the accrued amount thereof to the principal amount on a semi-annual basis on June 30th and December 31st of each calendar year for so long as any principal amount remains outstanding (such paid in-kind interest, in the aggregate at any time, the “PIK Principal”). The 2020 Daewoong Convertible Notes mature on September 18, 2025.

Pursuant to its terms, Daewoong may elect to convert all of the then outstanding principal amount and all accrued and unpaid interest into the Company’s common stock at any time following the date that is 12 months after September 18, 2020, provided, that such election shall be made at the same time with respect to all notes issued to Daewoong. The number of shares issuable upon any conversion shall be equal to (i) the outstanding principal amount (excluding PIK Principal) divided by $25.0 million and (ii) multiplied by 9.99% of the aggregate of all of the shares of the Company’s common stock then outstanding, the Company’s common stock issuable upon conversion or exercise of all of the outstanding convertible or exercisable securities, all outstanding vested or unvested options or warrants to purchase the Company’s capital stock, but excluding all out-of-the-money options, and all shares of common stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time).

F-27

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Immediately prior to an initial public offering, all of the then outstanding principal amount and accrued and unpaid interest under the 2020 Daewoong Convertible Notes will automatically convert into shares of the Company’s common stock. The number of shares of common stock issuable upon conversion of the 2020 Daewoong Convertible Notes is equal to (i) the outstanding principal amount (excluding PIK Principal) divided by $25.0 million and (ii) multiplied by the greater of (A) 9.99% of the pre-IPO shares of the Company, and (B) that number of shares having an aggregate value of $20.0 million immediately prior to the IPO based upon a price per share of such common stock issued to the public in the IPO; provided, however, that in no event shall Daewoong’s ownership exceed 15% of the pre-IPO shares of the Company after taking into account conversion of the 2020 Daewoong Convertible Notes. In the event, and only in the event, that shares of the Company are sold in the IPO whereby the pre-money valuation of the Company is $200.0 million or greater, within five business days of the conversion of the 2020 Daewoong Convertible Notes, the Company shall pay to Daewoong the PIK Principal plus all accrued and unpaid interest either in cash or by the issuance of additional shares of common stock at the price per share in the IPO, which payment method shall be at the Company’s sole election.

In May 2021, the Daewoong Purchase Agreement was amended to provide for the issuance of an additional subordinated convertible promissory note by the Company to Daewoong at an initial principal amount of $5.0 million. The subordinated convertible promissory note was issued with terms similar to the two subordinated convertible promissory notes issued in 2020 and matures on May 12, 2026 (all such convertible promissory notes, the “Daewoong Convertible Notes”).

Pursuant to the terms of the amended Daewoong Purchase Agreement, Daewoong may elect to convert all of the then outstanding principal amount and all accrued and unpaid interest into the Company’s common stock at any time following the date that is 12 months after September 18, 2020, provided, that such election shall be made at the same time with respect to all notes issued to Daewoong. The number of shares of common stock issuable upon conversion is equal to (i) the outstanding principal amount (excluding PIK Principal) divided by $30.0 million and (ii) multiplied by 11.99% of the aggregate of all of the shares of the Company’s common stock then outstanding, the Company’s common stock issuable upon conversion or exercise of all of the outstanding convertible or exercisable securities, all outstanding vested or unvested options or warrants to purchase the Company’s capital stock, but excluding all out-of-the-money options, and all shares of common stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time).

In addition, immediately prior to an initial public offering, all of the then outstanding principal amount and accrued and unpaid interest under the convertible notes will automatically convert into shares of the Company’s common stock. The number of shares of common stock issuable upon conversion of the convertible notes is equal to (i) the outstanding principal amount (excluding PIK Principal) divided by $30.0 million and (ii) multiplied by the greater of (A) 11.99% of the pre-IPO shares of the Company, and (B) that number of shares having an aggregate value of $24.0 million immediately prior to the IPO based upon a price per share of such common stock issued to the public in the IPO; provided, however, that in no event shall Daewoong’s ownership exceed 18% of the pre-IPO shares of the Company after taking into account conversion of the Daewoong Convertible Notes.

Due to certain embedded features within the Daewoong Convertible Notes, the Company elected to account for the Daewoong Convertible Notes, including the paid-in-kind principal and interest, and the embedded features at fair value at inception. Subsequent changes in fair value are recorded as a component of non-operating income (loss) in the accompanying consolidated statements of operations and comprehensive income (loss) or as a component of other comprehensive income (loss) for changes to instrument-specific credit risk. During the twelve months ended December 31, 2020 and the six months ended June 30, 2021, the Company recognized $4.2 million and $1.6 million of expense, respectively, related to the increase in the fair value of the Daewoong Convertible Notes. As a result of electing the fair value option, any direct costs and fees related to the Daewoong Convertible Notes were expensed as incurred.As of December 31, 2020 and June 30, 2021, the principal amount outstanding (excluding the PIK Principal) under the Daewoong Convertible Notes was $25.0 million and $30.0 million, respectively, with an estimated fair value of $29.2 million and $35.7 million, respectively.

F-28

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Note 8.    Fair Value Measurements

The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The carrying value of cash, accounts receivables, accounts payable, accrued liabilities, related party borrowings and notes payable approximate fair value because of the short-term nature of those instruments. The fair value of the Company’s equity-method investment in Zelegent was estimated to be $1.4 million as of December 31, 2019 based on information provided by the equity-method investee, which was based on level 2 inputs within the fair value hierarchy. The following are other financial assets and liabilities that are measured at fair value on a recurring basis.

Equity Investment at Fair Value

The equity investment in Evolus was valued using its quoted stock price from the National Association of Securities Dealers Automated Quotation System at the reporting date and was classified within level 1 of the fair value hierarchy. The following table provides a reconciliation of the change in the equity investment at fair value in Evolus’ common stock (in thousands):

Balance at January 1, 2019	$	—
Equity investment at fair value upon deconsolidation of Evolus		173,123
Sale of equity investment at fair value		(18,403	)
Change in fair value of equity investment		(49,299	)
Balance at December 31, 2019		105,421
Change in fair value of equity investment		346
Distribution of equity investment to stockholders		(105,767	)
Balance at December 31, 2020	$	—

Convertible Notes at Fair Value

During the years ended December 31, 2019 and 2020 and the six months ended June 30, 2020 and 2021, the Company recognized $5.2 million, $0.5 million, $(0.1) million and $0.2 million, respectively, of expense (income) related to the increase (decrease) in the fair value of the 2019 Convertible Notes. As of December 31, 2019 and 2020 and June 30, 2021, the principal amount outstanding under the 2019 Convertible Notes was $10.0 million with an estimated fair value of $15.2 million, $15.7 million and $15.9 million, respectively.

During the year ended December 31, 2020 and the six months ended June 30, 2020 and 2021, the Company recognized $0.8 million, $(0.6) million and $0.4 million, respectively, of expense (income) related to the increase (decrease) in the fair value of the SCH Convertible Note. As of December 31, 2020 and June 30, 2021, the principal amount outstanding under the SCH Convertible Note was $17.5 million with an estimated fair value of $27.3 million and $27.7 million, respectively.

During the year ended December 31, 2020 and the six months ended June 30, 2021, the Company recognized $4.2 million and $1.6 million of expense, respectively, related to the increase in the fair value of the Daewoong Convertible Notes. As of December 31, 2020 and June 30, 2021, the principal amount outstanding under the Daewoong Convertible Notes (excluding the PIK Principal) was $25.0 million and $30.0 million, respectively, with an estimated fair value of $29.2 million and $35.7 million, respectively.

The fair value of the convertible notes is determined based on Level 3 inputs using a scenario-based analysis that estimates the fair value of the convertible notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholders, including various initial public offering, settlement, equity financing, corporate transaction and dissolution scenarios. The significant unobservable input assumptions that can significantly change the fair value include (i) the weighted average cost of capital, (ii) the timing of payments, (iii) the discount for lack of marketability, (iv) the probability of certain corporate scenarios, and (v) the long-term pretax operating margin. During the years ended December 31, 2019 and 2020 and

F-29

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

the six months ended June 30, 2020 and 2021, the Company utilized discount rates ranging from 15% to 20%, 15% to 23%, 15% to 20% and 15% to 23%,respectively, reflecting changes in the Company’s risk profile and time-to-maturity probability of the convertible notes.

Preferred Stock Warrant Liability

In 2016, the Company issued Longitude warrants to purchase 29,787 shares of the Company’s Series B convertible preferred stock at an exercise price of $124.26 per share. The Company accounts for the warrants as a liability, which were initially recorded at their fair value of $0.8 million on the date of issuance and are subject to remeasurement at each subsequent balance sheet date. Any change in fair value of the warrants as a result of the remeasurement is recognized as a component of “Other income (loss), net” in the accompanying consolidated statements of operations and comprehensive income (loss).

The fair value of the warrant liability is determined based on Level 3 inputs using the Black-Scholes option-pricing model, which includes expected volatility, risk-free interest rate, expected life and expected dividend yield. The following table provides a reconciliation of the change in the warrant liability (in thousands):

Balance at January 1, 2019	$	62
Change in the estimated fair value of the warrant liability		4
Balance at December 31, 2019		66
Change in the estimated fair value of the warrant liability		(29	)
Balance at December 31, 2020		37
Change in the estimated fair value of the warrant liability		(23	)
Balance at June 30, 2021	$	14

Contingent Royalty Obligation Payable to Evolus Founders

The fair value of the contingent royalty obligation payable to Evolus Founders is determined based on Level 3 inputs using a discounted cash flow method. Changes in the fair value of the contingent royalty obligation are determined each period end and recorded in operating expenses in the accompanying consolidated statements of operations and comprehensive (loss) income and in non-current liabilities in the accompanying consolidated balance sheets. The significant unobservable input assumptions that can significantly change the fair value include (i) timing of the FDA approval of Evolus’ product, (ii) projected and timing of net revenues during the payment period, which will terminate for the quarter following the 10 year anniversary of the first commercial sale of Evolus’ product in the United States, (iii) the discount rate, and (iv) the timing of payments. During the period from January 1, 2019 to May 20, 2019, Evolus utilized discount rates ranging from 16% to 25%, reflecting changes in Evolus’ risk profile. Net revenue projections were also updated to reflect changes in the timing of expected regulatory approval and commercialization.

The following table provides a reconciliation of the change in the contingent royalty obligation payable to Evolus Founders for the period from January 1, 2019 to May 20, 2019 (in thousands):

Balance at January 1, 2019	$	50,200
Change in the estimated fair value of the contingent royalty obligation		5,596
Deconsolidation of Evolus		(55,796	)
Balance at December 31, 2019	$	—

At January 1, 2019, Evolus had a $20.0 million contingent promissory note payable under the Amended Purchase Agreement to the Evolus Founders, which matures 2.5 years after the anniversary date of the first commercial sale of Evolus’ product in the United States. Evolus measures the fair value of this contingent promissory note at present value based on Level 2 inputs, using a discount rate for similar rated debt securities and an estimated date that Evolus believes the contingent promissory note will mature. Accretion related to the contingent promissory note was recorded as interest expense. During the twelve months ended December 31, 2019, the Company recognized $0.4 million as interest expense. Effective May 20, 2019, the Company derecognized the contingent promissory note payable in the accompanying consolidated balance sheets.

F-30

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Note 9.    Commitments and Contingencies

Operating Leases

The Company subleases office space from SCH pursuant to shared services agreements entered into in August 2019 with Strathspey Crown Limited, LLC, an affiliate of SCH, with an effective date of January 2019. The services agreements have a one-year term and will renew for successive one-year terms unless sooner terminated by either party upon sixty days’ notice to the other party. The Company accounted for the office lease as a short-term lease and incurred operating lease costs of $0.1 million and $0.2 million, respectively, for the years ended December 31, 2019 and 2020, and $83,000 and $52,000, respectively, for the six months ended June 30, 2020 and 2021.

Included in selling, general and administrative expenses for the year ended December 31, 2019 was $0.4 million of operating lease costs related to Evolus’ office leases from January 1, 2019 to May 20, 2019.

Daewoong License and Supply Agreement

On December 20, 2019, the Company entered the Daewoong Agreement, pursuant to which Daewoong agreed to manufacture and supply ABP-450 and grant the Company an exclusive license for therapeutic indications to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit ABP-450 in the United States, the European Union, the United Kingdom, Canada, Australia, Russia, the Commonwealth of Independent States and South Africa (collectively the “covered territories”).

Daewoong has agreed to supply the Company with ABP-450 at an agreed-upon transfer price, with no milestone or royalty payments and no minimum purchase requirements. Daewoong is responsible for all costs related to the manufacturing of ABP-450, including costs related to the operation and upkeep of its manufacturing facility, and the Company is responsible for all costs related to obtaining regulatory approval, including clinical expenses, and commercialization of ABP-450. The Company’s exclusivity is subject to its exercise of commercially reasonable efforts to: (i) achieve all regulatory approvals necessary for ABP-450 to be marketed in the territory for therapeutic indications and (ii) commercialize ABP-450 in the territory for therapeutic indications. During the term of the Daewoong Agreement, the Company cannot purchase, sell or distribute any competing products in a covered territory or sell ABP-450 outside a covered territory.

The initial term of the Daewoong Agreement is from December 20, 2019 to the later of (i) the fifth anniversary of approval from the relevant governmental authority necessary to market and sell ABP-450 or (ii) December 20, 2029, and automatically renews for unlimited additional three-year terms, provided the Daewoong Agreement is not earlier terminated. The Daewoong Agreement will terminate upon written notice by either the Company or Daewoong upon a continuing default that remains uncured within 90 days (or 30 days for a payment default) by the other party, or without notice upon the bankruptcy or insolvency of the Company.

Legal Proceedings

The Company, from time to time, is involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation. Other than as described below, the Company is not subject to any currently pending legal matters or claims that would have a material adverse effect on its accompanying financial position, results of operations or cash flows.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. No amounts were accrued as of December 31, 2020 and June 30, 2021.

F-31

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Superior Court Medytox Litigation

Evolus, the Company, SCH and Daewoong are defendants to a lawsuit brought by Medytox, Inc. (“Medytox”) alleging, among other things, that Daewoong stole Medytox’s botulinum toxin bacterial strain and that Daewoong misappropriated certain trade secrets of Medytox, including the process used to manufacture ABP-450 (the “Superior Court Medytox Litigation”). The lawsuit was stayed pending resolution of a civil lawsuit against Daewoong brought by Medytox in South Korea (the “Korea Litigation”). Effective February 18, 2021, Evolus, Medytox and Allergan entered into a settlement agreement pursuant to which Medytox agreed to dismiss the Superior Court Medytox Litigation. On February 23, 2021, the Superior Court Medytox Litigation was dismissed.

Medytox Litigation

The Company and Daewoong were named as defendants in a lawsuit brought by Medytox in the United States District Court for the Central District of California in May 2021 (the “Medytox Litigation”), alleging, among other things, that Daewoong stole Medytox’s botulinum toxin bacterial strain (the “BTX strain”), and misappropriated certain trade secrets of Medytox, including the process used to manufacture ABP-450 using the BTX strain, and that the Company’s and Daewoong’s activities conducted in the United States give rise to liability for misappropriation of trade secrets. Medytox was seeking, among other things, (i) actual, consequential and punitive damages, (ii) a reasonable royalty, as appropriate, (iii) disgorgement of any proceeds or profits, (iv) injunctive relief prohibiting the Company from using Medytox’s trade secrets to manufacture, offer to sell, or sell therapeutic BTX products, including ABP-450, and (v) attorneys’ fees and costs.

Effective June 21, 2021, the Company and Medytox entered into a settlement and license agreement pursuant to which, among other things, Medytox agreed (a) to dismiss all claims against the Company in the Medytox Litigation, (b) to pursue dismissal of the appeals related to the December 2020 final determination of the United States International Trade Commission and agreed that as a result of such dismissal the final determination would be vacated, (c) to file appropriate documents in the Korea Litigation and related actions in support of the terms of the settlement, and (d) not to revive or otherwise pursue the Superior Court Medytox Litigation with respect to the Company; the Company and Medytox agreed to enter into a share issuance agreement pursuant to which the Company issued 1,569,442 shares of the Company’s common stock, par value $0.0001 per share, to Medytox; and the Company agreed to pay Medytox single-digit royalties on the net sales of licensed products for 15 years. In the event the shares of common stock the Company issued to Medytox represent less than 10% of the Company’s total outstanding shares immediately following the closing of its initial public offering (the “Target Ownership”), the Company will issue additional shares of common stock to Medytox sufficient to cause Medytox to achieve the Target Ownership.  On June 28, 2021, the claims against the Company in the Medytox Litigation were dismissed with prejudice. In connection with the issuance of 1,569,442 shares of its common stock to Medytox, the Company recognized $29.0 million as litigation settlement and license expense in the six months ended June 30, 2021. The Company will recognize royalties on the related net sales obtained in the future as cost of sales. The Company evaluated that the obligation to potentially issue additional shares was not legally detachable and separately exercisable and was therefore embedded within the obligation to issue 1,569,442 shares of its common stock. The withholding tax associated with the issuance of common stock is recorded as a receivable with an offsetting payable on the accompanying consolidated balance sheets.

The shares of common stock issued to Medytox were valued at the date of the agreement, which was the issuance date, by management with input from an independent third-party valuation specialist, using a Monte Carlo simulation (MCS). The analysis considered a scenario analysis (probability-weighted expected return model, or PWRM), considering two IPO scenarios with a combined 83% weighting and a delayed exit scenario with 17% weighting. The MCS then simulated the future equity value within each scenario to estimate the payoff for each simulation path, given the potential requirement to issue additional shares depending on the dilution impact from the IPO or other future financings. Key inputs included (1) the equity value of the Company in each scenario, (2) the fair value of Divestiture Transactions, (3) the Company’s capital structure, (4) the weighting on each scenario, (5) the expected time to exit in each scenario, (6) the volatility in each scenario, (7) the risk-free interest rate over the period to exit in each scenario, and (8) the discount for lack of marketability of the common stock in each scenario. The equity value was estimated based on the total invested capital value less the fair value of the outstanding debt. The total invested capital value of the Company was estimated using a risk-adjusted and probability-adjusted discounted cash flow (DCF) method based upon future cash flow generation. Inputs for the DCF analysis included (1) forecasted financial projections for the next nine years developed by management, (2) a terminal value assigned using an exit multiple method, (3) a discount rate based on the weighted average cost of capital, and (4) the probability of success. The Company also considered the expected IPO pricing based on input from and discussions with underwriters.

F-32

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Note 10.    Income Taxes

The Company’s income (loss) before income taxes was entirely generated from its U.S. operations. The (benefit) provision for income taxes for the years ended December 31, 2019 and 2020 was as follows (in thousands):

	Year Ended December 31,
	2019			2020
Current:
Federal	$	—		$	—
State		—			—
Total current		—			—
Deferred:
Federal		(10,019	)		—
State		(4,626	)		—
Total deferred		(14,645	)		—
Total income tax benefit	$	(14,645	)	$	—

As of December 31, 2019, the Company had federal net operating loss (“NOL”) carryforwards of $109.2 million. As of December 31, 2020, the Company had gross federal NOL carryforwards of $50.4 million, of which $1.5 million will carryforward indefinitely and $48.9 million will begin to expire in 2036 if not utilized. The Company had state NOLs of $30.3 million and zero as of December 31, 2019 and 2020, respectively. The federal and state NOL carryforwards in the income tax returns filed include uncertain tax benefits. The deferred tax assets recognized for those NOLs are presented net of these uncertain tax benefits.

As of December 31, 2019 and 2020, the Company had federal research and development (“R&D”) credit carryforwards of $0.1 million and $0.4 million, respectively, which will begin to expire in 2039. As of December 31, 2019 and 2020, the Company also had California R&D credit carryforwards of $0.1 million and $0.4 million, respectively, which have an indefinite carryforward period. The deferred tax assets recognized for these R&D credits are presented net of uncertain tax benefits.

In general, if the Company experiences a greater than 50 percentage point aggregate change in ownership of certain significant stockholders over a three-year period (a “Section 382 ownership change”), utilization of its pre-change NOL carryforwards and the R&D credit carryforwards is subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state laws. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change, subject to certain adjustments, by the applicable long-term tax-exempt rate. Such limitations may result in expiration of a portion of the NOL carryforwards and R&D credit carryforwards before utilization and may be material. As of December 31, 2020, the Company has not determined to what extent a potential ownership change will impact the annual limitation that may be placed on the Company’s utilization of its NOL carryovers and R&D credit carryforwards.

F-33

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The components of deferred tax assets and liabilities were as follows (in thousands):

	December 31,
	2019			2020
Deferred tax assets:
Accrued compensation	$	127		$	348
Other accrued expenses		—			26
Stock compensation		1,456			2,661
Start-up costs and other intangibles		4,864			5,917
Net operating losses		24,701			6,404
Other		23			15
		31,171			15,371
Less: valuation allowance		(14,893	)		(15,371	)
Total deferred tax assets		16,278			—
Deferred tax liabilities:
Subsidiary outside basis		(16,278	)		—
Total deferred tax liabilities		(16,278	)		—
Net deferred income taxes	$	—		$	—

A reconciliation of the difference between the (benefit) provision for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows:

	December 31,
	2019			2020
Income tax at statutory rate		21.0	%		21.0	%
State income taxes, net of federal benefit		(2.5	)%		(—	)%
Change in contingent consideration		0.8	%		(—	)%
Convertible notes		1.2	%		(3.5	)%
Extinguishment of debt		(—	)%		(7.2	)%
Distribution of AC HoldCo interests		(—	)%		(12.7	)%
Gain on PPP loan forgiveness		(—	)%		0.1	%
Stock compensation		0.4	%		(0.5	)%
Outside basis		(2.8	)%		(—	)%
Change in valuation allowance		(28.3	)%		3.6	%
Other		0.1	%		(0.8	)%
Effective tax rate		(10.1	)%		(—	)%

A reconciliation of unrecognized tax benefits at the beginning and end of 2019 and 2020 is as follows (in thousands):

	December 31,
	2019			2020
Balance, beginning of year	$	2,435		$	226
Increases due to current year tax positions		226			4,763
Decreases due to prior year tax positions		(2,435	)		—
Balance, end of year	$	226		$	4,989

The Company has considered the amounts and probabilities of the outcomes that can be realized upon ultimate settlement with the tax authorities and determined unrecognized tax benefits primarily related to credits should be established as noted in the summary rollforward above. The Company’s effective income tax rate would not be impacted if the unrecognized tax benefits are recognized. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

F-34

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2020. The Company’s tax returns for all years since inception are open for audit.

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) into law. The CARES Act includes several significant provisions for corporations, including the usage of net operating losses, interest deductions and payroll benefits. On December 27, 2020, the President of the United States signed into the law the Consolidated Appropriations Act, 2021, which includes certain business tax provisions. The enactment of the CARES Act and the Consolidated Appropriations Act, 2021 did not have a material impact on the Company’s financial statements.

Note 11.    Convertible Preferred Stock

As of December 31, 2020 and June 30, 2021, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 44,666,035 shares of preferred stock at a par value of $0.0001 per share. The Company has the following convertible preferred stock issued and outstanding at December 31, 2019 and 2020 and June 30, 2021:

	Shares Authorized		Shares Issued and Outstanding		Per Share Preference		Preferential Liquidation Value (in thousands)		Carrying Value, Net of Issuance Costs (in thousands)
Series
Series A		7,393,333		2,505,508	$	5.4779	$	13,725	$	13,819
Series A-1		4,107,414		—	$	5.4779		—		—
Series A-2		4,846,750		4,846,750	$	5.4779		26,550		26,379
Series B		20,520,678		6,244,395	$	7.3097		45,645		43,896
Series B-1		136,805		—	$	7.3097		—		—
Series B-2		7,661,055		7,661,055	$	7.3097		56,000		53,855
		44,666,035		21,257,708			$	141,920	$	137,949

As of December 31, 2019 and 2020 and June 30, 2021, the convertible preferred stock is convertible into 1,250,454 shares of common stock.

The holders of the convertible preferred stock have various rights and preferences as follows:

Voting Rights

The holders of each share of convertible preferred stock have the right to one vote for each share of common stock into which such preferred stock could be converted, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of common stock. Each holder of convertible preferred stock is entitled to vote, together with holders of common stock, with respect to any question upon which holders of common stock have the right to vote.

Election of Directors

The holders of Series A and Series A-2 convertible preferred stock, voting together as a single class are entitled to elect one director of the Company. The holders of Series B and Series B-2 convertible preferred stock, voting together as a single class, are entitled to together elect one director of the Company. The holders of the convertible preferred stock and common stock (voting together as a single class and not as separate series, and with the preferred stock

F-35

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

voting on an as-converted basis using then-effective conversion prices) are entitled to elect any remaining directors of the Company.

Dividends

The holders of shares of Series B, Series B-1 and Series B-2 convertible preferred stock are entitled to non-cumulative dividends, out of any assets legally available therefor, on a pari passu basis and prior and in preference to any declaration or payment of any dividend on the Series A, Series A-1 and Series A-2 convertible preferred stock, or common stock of the Company, at the rate of $0.5847768 per calendar year for each share of Series B, Series B-1 and Series B-2 convertible preferred stock, payable when, as and if declared by the Board of Directors.  

The holders of shares of Series A, Series A-1 and Series A-2 convertible preferred stock are entitled to non-cumulative dividends, out of any assets legally available therefor, on a pari passu basis and prior and in preference to any declaration or payment of any dividend on the common stock of the Company, at the rate of $0.4382 per calendar year for each share of Series A, Series A-1 and Series A-2 preferred stock, payable when, as and if declared by the Board of Directors.  

Declared but unpaid dividends with respect to a share of preferred stock shall, upon conversion of such share to common stock, be paid to the extent assets are legally available therefor in cash. As of June 30, 2021, no cash dividends have been declared to date. During 2020, the Company distributed in-kind dividends to its stockholders. See Note 4, “Contribution and Distribution of Evolus, Alphaeon Credit and Zelegent” for more information on the distribution of in-kind dividends.

Liquidation

In the event of any liquidation event, the holders of Series B-2 convertible preferred stock would be entitled to receive, on a pari passu basis and prior and in preference to any distribution of the proceeds of such liquidation event (“Proceeds”) to the holders of Series A-2 convertible preferred stock, Series B convertible preferred stock, Series B-1 convertible preferred stock, Series A convertible preferred stock, Series A-1 convertible preferred stock and common stock, an amount per share equal to the Series B original issue price of $124.26 per share, plus declared but unpaid dividends on each such share (the “Series B-2 Liquidation Preference”).  

Subject to the payments set forth above, in the event of any liquidation event, the holders of Series A-2 convertible preferred stock would be entitled to receive, on a pari passu basis and prior and in preference to any distribution of the Proceeds of such liquidation event to the holders of Series B convertible preferred stock, Series B-1 convertible preferred stock, Series A convertible preferred stock, Series A-1 convertible preferred stock and common stock, an amount per share equal to the Series A original issue price of $93.12 per share, plus declared but unpaid dividends on each such share (the “Series A-2 Liquidation Preference”).

Subject to the payments set forth above, in the event of any liquidation event, the holders of Series B convertible preferred stock and Series B-1 convertible preferred stock would be entitled to receive, on a pari passu basis and prior and in preference to any distribution of the Proceeds of such liquidation event to the holders of Series A convertible preferred stock, Series A-1 convertible preferred stock and common stock, an amount per share equal to the Series B original issue price of $124.26 per share, plus declared but unpaid dividends on each such share (the “Series B Liquidation Preference”).

Subject to the payments set forth above, the holders of Series A convertible preferred stock and Series A-1 convertible preferred stock would be entitled to receive, on a pari passu basis and prior and in preference to any distribution of the Proceeds of such Liquidation Event to the holders of common stock, an amount per share equal to the Series A issue price of $93.12, plus declared but unpaid dividends on each such share (the “Series A Liquidation Preference”).  

Upon the completion of the distributions above, the remaining Proceeds available for distribution to stockholders, if any, would be distributed ratably among the holders of convertible preferred stock and common stock in proportion to the number of shares of common stock that would be held by each such holder if all shares of convertible preferred stock were converted into common stock at the then effective conversion price.    

F-36

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Conversion

Each share of convertible preferred stock can be converted, at the option of the holder thereof, at any time after the date of issuance of such share into such number of fully paid and non-assessable shares of common stock. The conversion rate is 17:1 initially.

Each share of convertible preferred stock would automatically convert into shares of common stock based on the applicable conversion rate at the time in effect upon the earlier of (A) immediately prior to the closing, and conditioned upon such closing, of the sale of the Company’s common stock in an underwritten public offering at a public offering price per share of not less than (w) $7.3097 minus the sum of (x) the fair market value of the per unit membership interest of A1, as determined by the Board of Directors of this Corporation in good faith (the “A-1 Per Unit Price”) plus (y) the fair market value of the per unit membership interest of AC HoldCo, as determined by the Board of Directors of this Corporation in good faith (the “AC Per Unit Price”) plus (z) the fair market value of the per unit membership interest of Z HoldCo, as determined by the Board of Directors of this Corporation in good faith (together with the A-1 Per Unit Price and the AC Per Unit Price, the “Aggregate Spin-Out Value”), and yielding net proceeds (after discounts and commissions) to the Corporation of at least $50 million, or (B) on the date specified by affirmative vote at a meeting or by written consent from the holders of at least two-thirds of the convertible preferred stock then outstanding, voting as a single class on an as-converted-to-common stock basis (the “Preferred Supermajority”).

In the event that the Preferred Supermajority enacts a conversion of the Series A Preferred Stock in conjunction with the consummation of an initial public offering of the common stock in which the public offering price per share of the common stock (the “IPO Per Share Price”) is less than 71.4286% of the then effective per share Series A-2 Liquidation Preference (the “Adjusted Series A-2 Preference Amount”), then the number of shares of common stock issuable with respect to each share of Series A convertible preferred stock, each share of Series A-1 convertible Preferred Stock and each share of Series A-2 convertible preferred stock will be equal to the greater of (A) the quotient obtained by dividing (x) the Adjusted Series A-2 Preference Amount by (y) the IPO Per Share Price, or (B) the quotient obtained by dividing the Series A original issue price of $5.4779 per share by the applicable conversion price for such series of the Series A Preferred Stock, each as in effect on the date of effective conversion.

In the event of an automatic conversion in conjunction with the consummation of an initial public offering of the common stock in which the IPO Per Share Price is less than the Series B original issue price of $7.3097 per share, then the applicable conversion price for the Series B convertible preferred stock, the Series B-1 convertible preferred stock and the Series B-2 convertible preferred stock for purposes of the approved conversion shall be the IPO Per Share Price, rounded to the nearest whole cent with one-half cent rounded up.

Redemption

The convertible preferred stock is not redeemable. The Company has classified the convertible preferred stock as temporary equity on the accompanying consolidated balance sheets as these shares could be redeemed upon the occurrence of certain change in control events that are outside of the Company’s control.

Convertible Preferred Stock Warrants

Pursuant to the terms of the Company’s Bridge Note, in 2016 the Company issued Longitude warrants to purchase 342,011 shares of the Company’s Series B convertible preferred stock at an exercise price of $7.3097 per share. The warrants are exercisable, in whole or in part, from the date of issuance and expire on May 31, 2023. See Note 6, “Related Party Transactions” for a discussion of the preferred stock warrants. Upon the completion of the IPO, the warrant would automatically convert into a warrant to purchase shares of common stock.

Note 12.    Common Stock

As of December 31, 2019 and 2020 and June 30, 2021, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue up to 207,450,050 shares of common stock at a par value of $0.0001 per share. As of December 31, 2019 and 2020, 6,598,098 shares were issued and 6,596,756 were outstanding. As of June 30, 2021, 8,167,540 shares were issued and 8,166,174 shares were outstanding. The holders of common stock are

F-37

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

entitled to receive dividends whenever funds are legally available, when and if declared by the Company’s Board of Directors, subject to the prior rights of the holders of the Company’s convertible preferred stock. As of June 30, 2021, no cash dividend has been declared to date. During 2020, the Company distributed in-kind dividends to its stockholders. See Note 4, “Contribution and Distribution of Evolus, Alphaeon Credit and Zelegent” for more information on the distribution of in-kind dividends. Each share of common stock is entitled to one vote.

The number of authorized shares of common stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of preferred stock and common stock, voting together as a single class.

As of December 31, 2019 and 2020 and June 30, 2021, the Company had reserved common stock for future issuance as follows:

	December 31,				June 30,
	2019		2020		2021
Conversion of convertible preferred stock		1,250,454		1,250,454		1,250,454
Stock options issued and outstanding		953,242		618,620		618,620
Shares available for future issuance under the stock incentive plan		1,305,614		1,640,236		1,640,236
Convertible preferred stock warrants outstanding		29,787		29,787		29,787
Total common stock reserved		3,539,106		3,539,106		3,539,106

The total common stock reserved does not include shares of common stock issuable upon conversion of the outstanding convertible notes, which amount is not determinable at this time.

Note 13.    Share-based Compensation

Stock Incentive Plans

AEON 2013 Stock Incentive Plan

In 2013, the Company established its 2013 Stock Incentive Plan (the “2013 Stock Incentive Plan”) that, as amended from time to time, provides for the granting of nonqualified stock options, restricted stock and stock appreciation rights to employees, Board of Directors and non-employee consultants. As of December 31, 2020 and June 30, 2021, the aggregate number of shares available for future grant under the 2013 Stock Incentive Plan was 1,640,236 shares.

The 2013 Stock Incentive Plan provides for stock options to be granted with exercise prices not less than the estimated fair value of the Company’s common stock, and incentive options to be granted to individuals owning more than 10% of the total combined voting power of all classes of stock of the Company with exercise prices not less than 110% of the estimated fair value of the Company’s common stock on the date of grant. Stock options granted generally expire ten years after their original date of grant and generally vest between three years to four years with 25% vesting on the first anniversary of the date of grant and then monthly vesting after that. Stock options granted to a 10% stockholder are exercisable up to five years from the date of grant. Restricted stock awards granted generally become fully vested between one to three years.

ABP Sub Inc. 2019 Incentive Award Plan

In June 2019, ABP Sub Inc., the Company’s wholly owned subsidiary, established its 2019 Incentive Award Plan (the “2019 Incentive Award Plan”) that provides for the granting of incentive and nonqualified stock options, restricted stock and stock appreciation rights to its employees, Board of Directors and non-employee consultants. As of December 31, 2020 and June 30, 2021, the aggregate number of shares available for future grant under the 2019 Incentive Award Plan was 9,945 shares and 8,629 shares, respectively. ABP Sub Inc. 2019 Incentive Award Plan has similar grant terms as the Company’s 2013 Stock Incentive Plan.

F-38

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Share-based Award Activity

AEON 2013 Stock Incentive Plan

The following table summarizes stock option activity under the Company’s 2013 Stock Incentive Plan:

	December 31,										June 30,
	2019					2020					2021
	Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding, beginning of period		929,759		$	25.33		953,242		$	24.48		618,620	$	25.67
Options granted		82,897			17.00		—			—		—		—
Options cancelled		(59,414	)		26.86		(334,623	)		22.27		—		—
Outstanding, end of period		953,242			24.48		618,620			25.67		618,620		25.67
Exercisable, end of period		937,344			24.65		618,620			25.67		618,620		25.67

The weighted average fair value of options granted during 2019 was $8.50 per share. The Company did not grant any options during 2020 and the six months ended June 30, 2021. As of December 31, 2020 and June 30, 2021, the weighted average remaining contractual life of options outstanding and options exercisable were 4.6 years and 4.1 years, respectively. The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2020 and June 30, 2021 were $2.5 million and $1.2 million, respectively. The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying options and the estimated fair value of the Company’s common stock at December 31, 2020 and June 30, 2021.

During 2019 and 2020 and the six months ended June 30, 2020, the Company recognized $0.7 million, $0.1 million and $0.1 million, respectively, of share-based compensation expense related to stock options granted under the 2013 Stock Incentive Plan. As of December 31, 2020 and June 30, 2021, there was no unrecognized compensation expense related to non-vested stock options.

ABP Sub Inc. 2019 Incentive Award Plan

The following table summarizes stock option activity under ABP Sub Inc.’s 2019 Incentive Award Plan:

	December 31,								June 30,
	2019				2020				2021
	Number of Shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price
Outstanding, beginning of period		—	$	—		15,150	$	962.00		27,555		$	929.08
Options granted		15,150		962.00		12,405		888.88		3,326			1,008.00
Options cancelled		—		—		—		—		(2,010	)		899.89
Outstanding, end of period		15,150		962.00		27,555		929.08		28,871			940.21
Exercisable, end of period		—		—		5,821		942.99		10,455			949.36

The weighted average fair value of options granted during 2019, 2020 and the six months ended June 30, 2021 was $601.85, $465.15 and $518.84 per share, respectively. The Company did not grant any options during the six months ended June 30, 2020. As of December 31, 2020, the weighted average remaining contractual life of options outstanding and options exercisable was 9.2 years and 9.1 years, respectively. As of June 30, 2021, the weighted average remaining contractual life of options outstanding and options exercisable was 8.7 years and 8.4 years, respectively. The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2020 was $2.2 million and $0.4 million, respectively. The aggregate intrinsic value of options outstanding and options exercisable at June 30, 2021 was $3.0 million and $1.0 million, respectively. The aggregate intrinsic value was calculated as the difference between the

F-39

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

exercise price of the underlying options and the estimated fair value of the ABP Sub Inc.’s common stock at December 31, 2020 and June 30, 2021.

During 2019 and 2020 and the six months ended June 30, 2020 and 2021, the Company recognized $1.3 million, $3.8 million, $1.0 million and $2.3 million, respectively, of share-based compensation expense related to stock options granted with a corresponding increase in noncontrolling interest. As of December 31, 2020 and June 30, 2021, total unrecognized compensation expense related to non-vested stock options was $9.8 million and $7.5 million, respectively, which is expected to be recognized over the weighted-average remaining requisite service period of 33 months and 26 months, respectively.

During 2020, the Company also recognized $0.9 million of share-based compensation expense related to stock options for services completed by nonemployee consultants prior to the award grant date, with a corresponding increase of $0.8 million in “Other accrued expenses” and $0.1 million in “Other liabilities” in the accompanying consolidated balance sheets. The Company recognized the compensation expense based on the fair value of the award as of December 31, 2020. During the six months ended June 30, 2021, upon granting stock options to the nonemployee consultants, the Company reclassed $0.8 million from “Other accrued expenses” to “Non-controlling interest” in the accompanying consolidated balance sheets.

Share-based Compensation Expense and Valuation Information

The Company accounts for the measurement and recognition of compensation expense for all share-based awards based on the estimated fair value of the awards. The fair value of share-based awards that are expected to vest is amortized on a straight-line basis over the requisite service period. The Company records share‑based compensation expense net of actual forfeitures.

During 2019, the Company recognized share-based compensation expense of $5.3 million, consisting of $4.9 million in selling, general and administrative expenses and $0.4 million in research and development expenses. Included in the total expense recognized in 2019 is $3.3 million related to Evolus employees for the period from January 1, 2019 to May 20, 2019. During 2020, the Company recognized share-based compensation expense of $4.8 million, consisting of $3.5 million in selling, general and administrative expenses and $1.3 million in research and development expenses. During the six months ended June 30, 2020, the Company recognized share-based compensation expense of $1.1 million in selling, general and administrative expenses. During the six months ended June 30, 2021, the Company recognized share-based compensation expense of $2.3 million, consisting of $1.9 million in selling, general and administrative expenses and $0.4 million in research and development expenses.

The fair value of stock options granted under the 2013 Stock Incentive Plan during 2019 was estimated using the following assumptions:

	2019
Expected volatility		55.00	%
Risk-free interest rate		1.92	%
Expected life (in years)		5.30
Expected dividend yield		—

The fair value of stock options under the 2019 Stock Incentive Award Plan was estimated using the following assumptions:

	2019		2020		June 30, 2021
Expected volatility	70.00%		56.00% - 60.00%		56.00%
Risk-free interest rate	1.66%		0.22% - 0.51%		0.79% - 0.95%
Expected life (in years)		6.25	5.30 - 6.25		5.30 - 6.25
Expected dividend yield		—		—		—

F-40

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Fair Value of the Underlying Common Stock.   Since the Company’s common stock is not traded in a public stock market exchange, the Board of Directors considers numerous factors including new business and economic developments affecting the Company and independent appraisals, when appropriate, to determine the fair value of the Company’s common stock. Independent appraisal reports were prepared using valuation techniques, such as discounted cash flow analyses, from which a discount factor for lack of marketability was applied. This determination of the fair value of the common stock was performed on a contemporaneous basis. The Board of Directors determined the Company’s common stock fair value on an as needed basis.

Expected Life.    The expected life is calculated using the simplified method as the Company does not have sufficient historical information to provide a basis for the estimate. The simplified method is based on the average of the vesting tranches and the contractual life of each grant.

Expected Volatility.    The expected volatility is estimated based on a study of selected publicly traded peer companies as the Company does not have any trading history for its common stock. The Company selected the peer group based on similarities in industry, stage of development, size and financial leverage with the Company’s principal business operations. For each grant, the Company measured historical volatility over a period equivalent to the expected life.

Risk-free Interest Rate.    The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues whose term is similar in duration to the expected life of the respective stock option.

Expected Dividend Yield.    The Company has not paid and does not anticipate paying any dividends on its common stock in the foreseeable future. Accordingly, the Company has estimated the dividend yield to be zero.

In addition to the Company’s stock incentive plan, Evolus has its own stock incentive plan under which it derives its stock-based compensation expense. The following assumptions were used by Evolus to estimate the fair value of the stock options Evolus granted from January 1, 2019 to May 20, 2019:

Expected volatility	59.30	%
Risk-free interest rate	2.57	%
Expected life (in years)	6.18
Expected dividend yield	—

The following summarizes the Black-Scholes input methodology used for Evolus stock options that differs from the methodology the Company used for its options.

Fair Value of the Underlying Common Stock.    The fair value for Evolus’ underlying common stock is determined using the fair value of the grant date price as reported on the Nasdaq Global Select Market.

Expected Life.    Evolus estimates the expected life of options with consideration of vesting date, contractual term, and historical experience for exercise and post-vesting employment or contractual termination behavior after its common stock has been publicly traded. The expected life of “plain vanilla” options is estimated based on the midpoint between the vesting date and the end of the contractual term under the simplified method.

Note 14.    Subsequent Events

The Company has evaluated subsequent events for the financial statements as of and for the year ended December 31, 2020, through June 7, 2021, the date the financial statements were issued.

The Company has further evaluated subsequent events for recognition and remeasurement purposes as of and for the six months ended June 30, 2021, through September 13, 2021 and, for disclosure purposes, through September 17, 2021. After review and evaluation, management has concluded that there were no material subsequent events as of the date that the financial statements were available to be issued, other than as disclosed within the accompanying notes to the consolidated financial statements.

F-41

AEON BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information and amounts as of June 30, 2021 and for the six months ended June 31, 2020 and 2021 are unaudited)

Reverse Stock Split

On October 3, 2021, the Company’s Board of Directors approved an amendment to the Company’s Articles of Incorporation to effect a reverse split of shares of the Company’s common stock on a 1-for-17 basis (the “Reverse Stock Split”). The par values of the common stock were not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, share data, per share data and related information contained in the consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The Reverse Stock Split was effected on October 4, 2021.

ABP Merger

The Company’s Board of Directors approved on September 14, 2021, that ABP will merge with and into the Company so that the Company is the surviving corporation, or the Merger. Pursuant to the merger, all options of ABP that are outstanding immediately prior to the merger will be converted into substantially similar options to purchase shares of our common stock, with an adjustment to the number of shares issuable upon exercise and the exercise price to reflect the economic value of the new option within our capital structure. The Board of Directors of the Company determined the conversion ratio of the ABP options by dividing the number of shares of our common stock outstanding on an as-converted basis by the number of shares of common stock of ABP outstanding, and then dividing the quotient by 0.85 to account for the options representing 15% of ABP’s shares outstanding. This resulted in a conversion ratio of 83 to 1 shares.  As of October 4, 2021, ABP had granted options to purchase an aggregate of 36,854 shares of its common stock which will convert into options to purchase 3,058,439 shares of the Company’s common stock.

Stock Options (unaudited)

The Company’s 2021 Incentive Award Plan (the “2021 Plan”) was approved by the Company’s board of directors and becomes effective immediately prior to the Company’s initial public offering. The 2021 Plan allows the Company to make equity-based based awards to its officers, employees, directors and other key persons (including consultants). The Company initially reserved up to 3,000,000 shares of common stock for issuance under the 2021 Plan, although the number of shares of common stock reserved under the 2021 Plan shall be adjusted following this offering to equal 12% of the then-outstanding shares of common stock. The 2021 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 31, 2032, by 4.0% of the outstanding number of shares of common stock on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s board of directors.

2021 Employee Share Purchase Plan (unaudited)

The 2021 Employee Share Purchase Plan (the “ESPP”) was approved by the Company’s board of directors and became effective on September 14, 2021. The ESPP initially reserved and authorized the issuance to participating employees a number of shares equal to 1% of the shares of common stock outstanding immediately following this offering. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 31, 2032, by 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or such lesser number of shares as determined by the Company’s board of directors.

F-42

Shares

Common Stock

PRELIMINARY PROSPECTUS

Wells Fargo Securities	Cantor
Mizuho Securities
H.C. Wainwright & Co.

, 2021

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth all costs and expenses, other than underwriting discounts and commissions, paid or payable by the registrant in connection with the sale of common stock being registered. All amounts shown are estimates except for the U.S. Securities and Exchange Commission, or SEC, registration fee, the Financial Industry Regulatory Approval, or FINRA, filing fee and the Nasdaq listing fee:

	Amount Paid or To Be Paid
SEC registration fee	$	10,000
FINRA filing fee		11,750
Nasdaq listing fee		80,000
Printing and engraving expenses		150,000
Legal fees and expenses		1,000,000
Accounting fees and expenses		400,000
Transfer agent and registrar fees and expenses		10,000
Miscellaneous expenses		336,250
Total	$	2,000,000

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102 of the Delaware General Corporation Law, or DGCL, permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our amended and restated certificate of incorporation to be effective in connection with the completion of this offering provides that none of our directors shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.

Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he or she was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Our amended and restated bylaws to be effective in connection with the completion of this offering provide that we will indemnify, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any of our directors or officers who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding by reason of the fact that he or she, or a person for whom he or she is our legal representative, is or was one of our directors or officers or, while serving as one of our directors or officers, is or was serving at our request as a director, officer, employee or agent of another entity, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such action, suit or proceeding. We will be required to indemnify a

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person in connection with any suchaction, claim or proceeding initiated by such person only if action, claim or proceeding was authorized in the specific case by our board of directors. We will similarly have the power toindemnify any of our employees or agents who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was our employee or agent or is or was serving at our request as a director, officer, employee or agent of another entity. To the fullest extent not prohibited by applicable law, our amended and restated bylaws will also require that we pay the expenses (including attorneys’ fees) incurred by any of our officers or directors, and permit us to pay the expenses incurred by any of our other employees or agents, in defending any such action, claim or proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition will be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under our amended and restated bylaws or otherwise.

Prior to the completion of this offering, we intend to enter into indemnification agreements with each of our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as one of our directors or officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.

We maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out of claims based on acts or omissions in their capacities as directors or officers.

In any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriters will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning of the Securities Act of 1933, as amended, or the Securities Act, against certain liabilities.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. Please read “Item 17. Undertakings” for more information on the SEC’s position regarding such indemnification provisions.

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ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since January 1, 2018, we have made sales of the following unregistered securities:

(a) Issuances of Capital Stock

In 2018, we settled the total outstanding principal amount of previously issued convertible promissory notes, or a total of $56.3 million in principal amount, of which $48.3 million was paid in cash and $8.0 million was settled by us distributing to the holders of the notes a total of 573,888 shares of Evolus, Inc. common stock previously owned by us. In 2019, we settled all of our outstanding convertible promissory note obligations of $84.4 million plus accrued interest of $3.5 million, of which $62.7 million was paid in cash and $25.2 million was settled by us distributing to the holders of the notes a total of 1,307,940 shares of Evolus, Inc. common stock previously owned by us.

In December 2019, we issued an aggregate of $10.0 million in principal amount of convertible promissory notes to certain of our investors.

In January 2020, we settled outstanding indebtedness and, in exchange, issued an aggregate of $17.5 million in principal amount of convertible promissory notes to one of our investors.

In August 2020, September 2020 and May 2021, we issued an aggregate of $30.0 million in principal amount of convertible promissory notes to one of our investors.

In June 2021, we issued 1,569,442 shares of the Company’s common stock, par value $0.0001 per share, and valued at $29.0 million, to Medytox, Inc. in a Settlement and License Agreement to settle litigation.

No underwriters were involved in the foregoing issuances of securities. The securities described in the paragraph above were issued to accredited investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(a)(2) under the Securities Act, relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required.

(b) Grants of Stock Options and Restricted Stock

Since January 1, 2018, we have granted stock options to certain of our employees, consultants and directors in connection with services provided to us by such persons:

• In January 2018, we granted stock options to purchase an aggregate of 26,471 shares of our common stock at a weighted average exercise price of $17.00, of which 8,824 subsequently terminated by their terms.

• In April 2018, we granted stock options to purchase an aggregate of 17,648 shares of our common stock at a weighted average exercise price of $17.00.

• In June 2019, we granted stock options to purchase an aggregate of 82,897 shares of our common stock at a weighted average exercise price of $17.00.

• In November 2019, we granted stock options to purchase an aggregate of 1,257,264 shares of our common stock at a weighted average exercise price of $11.59.

• In August 2020, we granted stock options to purchase an aggregate of 987,975, shares of our common stock at a weighted average exercise price of $10.67.

• In February 2021, we granted stock options to purchase an aggregate of 164,814 shares of our common stock at a weighted average exercise price of $12.15.

• In March 2021, we granted stock options to purchase an aggregate of 152,699 shares of our common stock at a weighted average exercise price of $12.00.

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• In August 2021, we granted stock options to purchase an aggregate of 238,590 shares of our common stock at a weighted average exercise price of $12.58.

• In September 2021, we granted stock options to purchase an aggregate of 464,235 shares of our common stock at a weighted average exercise price of $13.97.   

The issuances of stock options and the restricted shares of common stock described in this paragraph (b) were issued pursuant to written compensatory plans or arrangements with our employees, directors and consultants, in reliance on the exemption provided by Rule 701 promulgated under the Securities Act, or pursuant to Section 4(a)(2) under the Securities Act, relative to transactions by an issuer not involving any public offering, to the extent an exemption from such registration was required.

All of the foregoing securities are deemed restricted securities for purposes of the Securities Act. All certificates representing the issued shares of capital stock described in this Item 15 included appropriate legends setting forth that the securities have not been registered and the applicable restrictions on transfer.

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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

Exhibit Number	Description of Document
1.1*	Form of Underwriting Agreement
3.1*	Fourth Amended and Restated Certificate of Incorporation of the Registrant, currently in effect
3.1(a)*	Certificate of Amendment No. 1 to Fourth Amended and Restated Certificate of Incorporation of the Registrant, dated December 18, 2019
3.1(b)*	Certificate of Amendment No. 2 to Fourth Amended and Restated Certificate of Incorporation of the Registrant, dated January 8, 2020
3.1(c)*	Certificate of Amendment No. 3 to Fourth Amended and Restated Certificate of Incorporation of the Registrant, dated September 30, 2020V
3.1(d)	Certificate of Amendment No. 4 to Fourth Amended and Restated Certificate of Incorporation of the Registrant
3.2	Form of Amended and Restated Certificate of Incorporation, to become effective upon closing of this offering
3.3*	Amended and Restated Bylaws of the Registrant, as currently in effect
3.3(a)*	Amendment No. 1 to Amended and Restated Bylaws of the Registrant, dated July 26, 2016
3.4	Form of Amended and Restated Bylaws of the Registrant, to become effective upon closing of this offering
4.1*	Warrant to Purchase Series B Preferred Stock
4.2*	Amended and Restated 2019 Promissory Note, effective as of June 19, 2019, issued to Dental Innovations BVBA
4.3*	Form of 2019 Promissory Note
4.3(a)*	Form of Amendment No. 1 to Form of 2019 Promissory Note, dated September 30, 2020
4.4*	Form of Letter Agreement, dated January 8, 2020, amending 2019 Promissory Note
4.5*	Promissory Note, dated as of January 2, 2020, issued to Strathspey Crown Holdings Group, LLC
4.5(a)*	Amendment No. 1 to Promissory Note, dated as of September 30, 2020, issued to Strathspey Crown Holdings Group, LLC
4.6	Form of Promissory Note issued to Daewoong Pharmaceutical Co., Ltd.
4.6(a)	Amendment to Promissory Note issued to Daewoong Pharmaceutical Co., Ltd., dated May 10, 2021
4.7*	Third Amended and Restated Investors’ Rights Agreement, dated April 19, 2017, by and among the Registrant and the investors listed therein
4.7(a)	Amendment No. 1 to Third Amended and Restated Investors’ Rights Agreement
5.1	Opinion of Latham & Watkins LLP
10.1*+	Amended and Restated 2013 Stock Incentive Plan
10.1(a)*+	First Amendment to Amended and Restated 2013 Stock Incentive Plan
10.2*+	Form of Stock Option Agreement under the Registrant’s Amended and Restated 2013 Stock Incentive Plan

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Exhibit Number	Description of Document
10.3	Form of Indemnification Agreement between the Registrant and its directors and officers
10.4+	Form of the Registrant’s 2021 Equity Incentive Plan
10.5+	Form of Stock Option Agreement under the Registrant’s 2021 Equity Incentive Plan
10.6+	Form of Restricted Stock Unit Award Agreement under the Registrant’s 2021 Equity Incentive Plan
10.7+	Form of the Registrant’s 2021 Employee Stock Purchase Plan
10.8+	Form of Amended and Restated Employment Agreement, by and between the Registrant and Marc Forth
10.9+	Form of Amended and Restated Employment Agreement, by and between the Registrant and Chris Carr
10.10+	Form of the Registrant’s Non-Employee Director Compensation Program
10.11§	License and Supply Agreement, dated as of December 20, 2019, by and between Daewoong Pharmaceutical Co., Ltd. and the Registrant
10.12*+~	Master Intercompany Shared Services Agreement, dated as of August 19, 2019, by and between the Registrant and Strathspey Crown Limited, LLC
10.13§	Settlement and License Agreement dated June 21, 2021 by and between the Registrant and Medytox, Inc.
10.14*	Registration Rights Agreement dated June 21, 2021 by and between the Registrant and Medytox, Inc.
21.1*	List of Subsidiaries of Registrant
23.1	Consent of Independent Registered Public Accounting Firm
23.2	Consent of Latham & Watkins, LLP (included in Exhibit 5.1)
24.1*	Power of Attorney (included in the signature page to this registration statement)
99.1*	Consent of Eric Carter to be Named as a Director Nominee
99.2*	Consent of Hans Keirstead to be Named as a Director Nominee

* Previously filed.

§ Certain portions of this exhibit (indicated by “***”) have been omitted pursuant to confidential treatment pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC because they are both not material and the type of information that the Registrant treats as private or confidential. The Registrant hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.

+ Indicates a management contract or compensatory plan.

~ Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.

(b) Financial Statement Schedules.

No financial statement schedules are provided because the information called for is not required or is shown either in the financial statements or notes.

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ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the underwriters at the completion specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Irvine, California, on October 4, 2021.

AEON Biopharma, Inc.
By:	/s/ Marc Forth
	Marc Forth Chief Executive Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.

Signature		Title		Date
/s/ Marc Forth Marc Forth	Chief Executive Officer (Principal Executive Officer)		October 4, 2021
/s/ Chris Carr Chris Carr	Chief Financial Officer (Principal Accounting and Financial Officer)		October 4, 2021
* Simone Blank	Director		October 4, 2021
* Jost Fischer	Director		October 4, 2021
* Robert E. Grant	Director		October 4, 2021
* Vikram Malik	Director		October 4, 2021
* Darren O’Brien	Director		October 4, 2021
* Richard H. Taketa	Director		October 4, 2021

* Pursuant to power of attorney

By: __/s/ Chris Carr__________

Chris Carr

As Attorney-in-Fact

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EX-3.1(D)

Exhibit 3.1(d)

FOURTH CERTIFICATE OF AMENDMENT OF

FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF

AEON BIOPHARMA, INC.,

a Delaware corporation

AEON Biopharma,Inc., a Delaware corporation(the “Corporation”), organizedandexisting under and by virtue of the General Corporation Law of the State of Delaware (the“DGCL”),doesherebycertify:

FIRST:The Board of Directors of the Corporation duly adopted resolutions proposinganddeclaring advisable the following amendment to the Fourth Amended and Restated Certificate ofIncorporation of the Corporation filed with the Delaware Secretary of State of the State on April19,2017,asamendedDecember18,2019,January8,2020 and November 12, 2020 (the“CertificateofIncorporation”),directingthatsaidamendment (the “Amendment”)besubmittedtothestockholdersoftheCorporationforconsideration.Theresolutionsettingforththeproposed amendmentisasfollows:

RESOLVED,thatArticleIV(A)oftheCertificatebeamendedandrestatedinitsentiretytoreadasfollows:

"Effective upon the filing of this Amendment with the Office of the Secretary of State of the State of Delaware (the “Effective Time”), each share of Common Stock (as defined below) outstanding and held of record by each stockholder of the Corporation (including treasury shares) immediately prior to the Effective Time shall be automatically reclassified and reconstituted (without any further act) into a smaller number of shares such that each twelve (12) to one hundred (100) shares of Common Stock issued and outstanding or held by the Company as treasury stock immediately prior to the Effective Time is reclassified into one validly issued, fully-paid and nonassessable share of Common Stock of the Corporation, the exact ratio within such range to be determined by the Board of Directors of the Corporation prior to the Effective Time and notice of which will be provided by the Corporation to its stockholders (such reclassification and reconstitution of shares, the “Reverse Stock Split”). The par value of the Common Stock and the Preferred Stock (as defined below) following the Reverse Stock Split shall remain at $0.0001 per share. No fractional shares of Common Stock shall be issued as a result of the Reverse Stock Split and, in lieu thereof, upon surrender after the Effective Time of a certificate which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, any person who would otherwise be entitled to a fractional share of Common Stock as a result of the Reverse Stock Split, following the Effective Time, shall be entitled to receive a cash payment equal to the fraction of which such holder would otherwise be entitled multiplied by the fair value per share as determined by the Board of Directors.

Each stock certificate that, immediately prior to the Effective Time, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Common Stock after the Effective Time into which the shares formerly represented by such certificate have been reclassified (as well as the right to receive cash in lieu of fractional shares of Common Stock after the Effective Time); provided, however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate evidencing and representing the number

of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been reclassified; and provided further, however, that whether or not fractional shares would be issuable as a result of the Reverse Stock Split shall be determined on the basis of (i) the total number of shares of Common Stock that were issued and outstanding immediately prior to the Effective Time formerly represented by certificates that the holder is at the time surrendering for a new certificate evidencing and representing the number of whole shares of Common Stock after the Effective Time and (ii) the aggregate number of shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificates shall have been reclassified. For the foregoing purposes, all shares of Common Stock held by a holder shall be aggregated (thus resulting in no more than one fractional share per holder).

This Corporation is authorized to issue two classes of stock to be designated, respectively, Common Stock, par value $0.0001 per share (the “Common Stock”), and Preferred Stock, par value $0.0001 per share (the “Preferred Stock”). Prior to the consummation of the Reverse Stock Split and the conversion of all then-outstanding Preferred Stock into Common Stock, the total number of shares which the Corporation is authorized to issue is Two Hundred Fifty Two Million One Hundred Sixteen Thousand Eighty Five (252,116,085) shares, of which Two Hundred Seven Million Four Hundred Fifty Thousand Fifty (207,450,050) shares shall be Common Stock, and Forty Four Million Six Hundred Sixty Six Thousand Thirty Five (44,666,035) shares shall be Preferred Stock, of which Seven Million Three Hundred Ninety Three Thousand Three Hundred Thirty Three (7,393,333) shares are hereby designated “Series A Preferred Stock” (the “Original Series A Preferred Stock”), Four Million One Hundred Seven Thousand Four Hundred Fourteen (4,107,414) shares are hereby designated “Series A-1 Preferred Stock” (the “Series A-1 Preferred Stock”), Four Million Eight Hundred Forty Six Thousand Seven Hundred Fifty (4,846,750) shares are hereby designated “Series A-2 Preferred Stock” (the “Series A-2 Preferred Stock”), Twenty Million Five Hundred Twenty Thousand Six Hundred Seventy Eight (20,520,678) shares are hereby designated “Series B Preferred Stock” (the “Original Series B Preferred Stock”), One Hundred Thirty Six Thousand Eight Hundred Five (136,805) shares are hereby designated “Series B-1 Preferred Stock” (the “Series B-1 Preferred Stock”), and Seven Million Six Hundred Sixty One Thousand Fifty Five (7,661,055) shares are hereby designated “Series B-2 Preferred Stock” (the “Series B-2 Preferred Stock”). As used herein, “Series A Preferred Stock” shall mean shares of the Original Series A Preferred Stock, the Series A-1 Preferred Stock and the Series A-2 Preferred Stock and “Series B Preferred Stock” shall mean the Original Series B Preferred Stock, the Series B-1 Preferred Stock and the Series B-2 Preferred Stock. Following the Reverse Stock Split and concurrent with the conversion of all then-outstanding Preferred Stock into Common Stock, the total number of shares of capital stock which the Corporation shall have authority to issue is One Hundred Sixty Million (160,000,000), of which One Hundred Fifty Million (150,000,000) shall be Common Stock and Ten Million (10,000,000) shall be Preferred Stock.”

RESOLVED FURTHER, that Section B.4(b)(i) of Article IV of the Certificate be amended and restated in its entirety to read as follows:

“(b)Automatic Conversion.

(i)Each share of Preferred Stock shall automatically be converted into shares of Common Stock based on the applicable Conversion Price at the time in effect (except as set forth in Section B.4(b)(ii) below) upon the earlier of (A) immediately prior to the Corporation's closing, and conditioned upon such closing, of the sale of Common Stock in an underwritten public offering pursuant to a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Securities Act”),yielding net proceeds (after discounts and commissions) to the Corporation of at least $50 million (a “Qualified Public Offering”), or (B) on the date specified by affirmative vote at a meeting or by written consent, as provided by law, from the Preferred Supermajority.”

RESOLVED FURTHER, that as of the date of this Amendment, the definition of each of the following terms is hereby amended in its entirety to read as set forth below.  For the avoidance of doubt, the Preferred Stock Conversion Price for each series of Preferred Stock set forth below shall not be subject to further adjustment under Section B.4(d) of Article IV for any event that occurred prior to the date of this Amendment, but shall be adjusted to reflect the Reverse Stock Split.  The defined terms are as follows:

“Series A Original Issue Price” means $3.9128 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Original Series A Preferred Stock Conversion Price” means $2.6427479 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Series A-1 Preferred Stock Conversion Price” means $2.6427479 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Series A-2 Preferred Stock Conversion Price” means $2.6427479 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Series B Original Issue Price” means $7.3097 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Original Series B Preferred Stock Conversion Price” means $2.6427479 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Series B-1 Preferred Stock Conversion Price” means $2.6427479 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

“Series B-2 Preferred Stock Conversion Price” means $2.6427479 (as adjusted for any subsequent stock splits, stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such shares).

RESOLVED FURTHER, that Section B.4(d)(iv)(D) is hereby amended and restated in its entirety to read follows:

“(D) Common Stock issued or issuable pursuant to the conversion or exercise of convertible or exercisable securities, including options, warrants, notes, or other similar rights, outstanding on the date of this Amendment or issued or issuable pursuant to contractual arrangements approved by the Board of Directors on or prior to the date of this Amendment;”

RESOLVED FURTHER, that Section B.4(d)(iv) is hereby amended to include additional subsections (I) and (J), which read as follows:

“(I) Common Stock issued or issuable pursuant to the terms of that certain Settlement and License Agreement, dated June 21, 2021, by and between this Corporation and Medytox, Inc. and that certain Share Issuance Agreement, dated June 21, 2021, by and between this Corporation and Medytox, Inc.; and

(J) Common Stock issued in an underwritten public offering pursuant to a registration statement on Form S-1 under the Securities Act, provided such public offering is approved by affirmative vote at a meeting or by written consent of the Preferred Supermajority.”

RESOLVED FURTHER, that Article IV of the Certificate be hereby amended and restated to delete, in its entirety, Sections B.4(b)(ii) and B.4(b)(iii) of the Certificate.

RESOLVED FURTHER, that in the event a registration statement on Form S-1 has not been declared effective by the SEC on or prior to October 31, 2021, this Amendment shall become null and void and all the rights, privileges and preferences of the stockholders of the Corporation shall be as set forth in the Fourth Amended and Restated Certificate of Incorporation, as otherwise amended at that date.

SECOND: That thereafter, the holders of the necessary number of shares of capital stock ofthe Corporation gave their written consent in favor of the foregoing amendment in accordancewiththeprovisionsofSection228oftheDGCL.

THIRD: That said amendment was duly adopted in accordance with the provisions ofSection242oftheDGCL.

INWITNESSWHEREOF,AEONBiopharma,Inc.hascausedthis Fourth CertificateofAmendmenttobesigned this 3rd dayof October2021.

/s/ Marc Forth

Marc Forth

Chief Executive Officer

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

AEON BIOPHARMA, INC.

FIRST:The name of the Corporation is AEON Biopharma, Inc. (the “Corporation”).

SECOND:The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware, 19801, and the name of its registered agent at such address is The Corporation Trust Company.

THIRD:The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”), as it now exists or may hereafter be amended and supplemented.

FOURTH:The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.”  The total number of shares of capital stock which the Corporation shall have authority to issue is 160,000,000.  The total number of shares of Common Stock that the Corporation is authorized to issue is 150,000,000, having a par value of $0.0001 per share, and the total number of shares of Preferred Stock that the corporation is authorized to issue is 10,000,000, having a par value of $0.0001 per share.

FIFTH:The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation are as follows:

A. COMMON STOCK.

1.General. The voting, dividend, liquidation, conversion and stock split rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors of the Corporation (the “Board of Directors”) upon any issuance of the Preferred Stock of any series.

2.Voting. Each holder of Common Stock shall be entitled to one (1) vote for each share of Common Stock held by such holder.  Each holder of Common Stock shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation (as in effect at the time in question) (the “Bylaws”) and applicable law on all matters put to a vote of the stockholders of the Corporation.

The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

3.Dividends. Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, the holders of Common Stock shall be entitled to the payment of dividends when and as declared by the Board

of Directors in accordance with applicable law and to receive other distributions from the Corporation.  Any dividends declared by the Board of Directors to the holders of the then outstanding Common Stock shall be paid to the holders thereof prorata in accordance with the number of shares of Common Stock held by each such holder as of the record date of such dividend.

4.Liquidation. Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the funds and assets of the Corporation that may be legally distributed to the Corporation’s stockholders shall be distributed among the holders of the then outstanding Common Stock pro rata in accordance with the number of shares of Common Stock held by each such holder.

B. PREFERRED STOCK

Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors as hereinafter provided.

Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designations relating thereto in accordance with the DGCL, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the fullest extent now or hereafter permitted by the DGCL.  Without limiting the generality of the foregoing, the resolution or resolutions providing for the issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law.

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

SIXTH: Stockholders of the Corporation may not take any action by written consent in lieu of a meeting. Notwithstanding any other provisions of law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article SIXTH.

SEVENTH: Special meetings of stockholders for any purpose or purposes may be called at any time only by the Board of Directors, the Chairperson of the Board of Directors,

the Chief Executive Officer or the President (in the absence of a Chief Executive Officer), and may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice of meeting. Notwithstanding any other provisions of law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article SEVENTH.

EIGHTH:The personal liability of the directors of the Corporation, to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as director, is hereby eliminated to the fullest extent permitted by the DGCL, as the same may be amended and supplemented.  Any amendment, repeal or modification of this Article EIGHTH, or the adoption of any provision of the Amended and Restated Certificate of Incorporation inconsistent with this Article EIGHTH, shall not adversely affect any right or protection of a director of the Corporation existing immediately prior to such amendment, repeal or modification.  If the DGCL is amended after approval by the stockholders of this Article EIGHTH to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

NINTH:The Corporation shall, through the Bylaws or otherwise, to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended and supplemented, indemnify, advance expenses and hold harmless any person who was or is a director or officer of the Corporation or its subsidiaries.  The Corporation may, by action of the Board of Directors, provide rights to indemnification and to advancement of expenses to such other employees or agents of the Corporation or its subsidiaries to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the DGCL.  Any amendment, repeal or modification of this Article NINTH shall not adversely affect any rights or protection existing hereunder immediately prior to such repeal or modification.  

TENTH:Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL or this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation or (d) any action asserting a claim against the Corporation governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided that, the provisions of this Article TENTH will not apply to suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts of the United States have exclusive jurisdiction; and providedfurther that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State

of Delaware. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action against the Corporation or any director, officer, employee or agent of the Corporation and arising under the Securities Act of 1933, as amended. To the fullest extent permitted by applicable law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article TENTH. Notwithstanding any other provisions of law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article TENTH.  If any provision or provisions of this Article TENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article TENTH (including, without limitation, each portion of any sentence of this Article TENTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

ELEVENTH:In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by the DGCL or other statutes or laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws, without any action on the part of the stockholders. The stockholders may not adopt, amend, alter or repeal the Bylaws of the Corporation, or adopt any provision inconsistent therewith, unless such action is approved, in addition to any other vote required by this Amended and Restated Certificate of Incorporation, by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon.  Notwithstanding any other provisions of law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article ELEVENTH.

TWELFTH: This Article TWELFTH is inserted for the management of the business and for the conduct of the affairs of the Corporation.

1.  General Powers.  The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

2.  Number of Directors; Election of Directors.  Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of directors of the Corporation shall be established from time to time by the Board of Directors.  Election of directors need not be by written ballot, except as and to the extent provided in the Bylaws of the Corporation.

3.  Classes of Directors.  Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors shall be and is divided into three classes, designated as Class I, Class II and Class III.  Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors.  The Board of Directors is authorized to assign members of the Board of Directors to Class I, Class II or Class III.  

4.  Terms of Office.  Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class I shall serve for a term expiring at the Corporation’s first annual meeting of stockholders held after the effectiveness of this Amended and Restated Certificate of Incorporation; each director initially assigned to Class II shall serve for a term expiring at the Corporation’s second annual meeting of stockholders held after the effectiveness of this Amended and Restated Certificate of Incorporation; and each director initially assigned to Class III shall serve for a term expiring at the Corporation’s third annual meeting of stockholders held after the effectiveness of this Amended and Restated Certificate of Incorporation; provided further, that the term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, resignation or removal.

5.  Quorum.  The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors fixed pursuant to Section 2 of this Article TWELFTH shall constitute a quorum of the Board of Directors.  If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

6.  Action at Meeting.  Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by this Amended and Restated Certificate of Incorporation.

7.  Removal.  Subject to the rights of holders of any series of Preferred Stock, directors of the Corporation may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon.

8.  Vacancies.  Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly created directorship in the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders, unless the Board of Directors determines by resolution that any such vacancy or newly created directorship shall be filled by the stockholders.  A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal.

9.  Stockholder Nominations and Introduction of Business, Etc.  Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws of the Corporation.

10.  Amendments to Article.  Notwithstanding any other provisions of law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article TWELFTH.

[Signature Page to Follow.]

IN WITNESS WHEREOF, the Corporation has executed this Amended and Restated Certificate of Incorporation on this [  ] day of [   ], 2020.  

Name: Marc Forth

Title: Chief Executive Officer

[Signature Page to AEON Biopharma, Inc. Certificate of Incorporation]

EX-3.4

Exhibit 3.4

AMENDED AND RESTATED BYLAWS OF

AEON BIOPHARMA, INC.

(a Delaware Corporation)

Table of Contents

		Page
Article I - Corporate Offices		1
1.1	Registered Office	1
1.2	Other Offices	1
Article II - Meetings of Stockholders		1
2.1	Place of Meetings	1
2.2	Annual Meeting	1
2.3	Special Meeting	1
2.4	Advance Notice Procedures for Business Brought before a Meeting	2
2.5	Advance Notice Procedures for Nominations of Directors	5
2.6	Notice of Stockholders’ Meetings	7
2.7	Manner of Giving Notice; Affidavit of Notice	7
2.8	Quorum	8
2.9	Adjourned Meeting; Notice	8
2.10	Conduct of Business	8
2.11	Voting	9
2.12	Record Date for Stockholder Meetings and Other Purposes	9
2.13	Proxies	10
2.14	List of Stockholders Entitled to Vote	10
2.15	Inspectors of Election	10
2.16	Postponement and Cancellation of Meeting	11
Article III - Directors		11
3.1	Powers	11
3.2	Number of Directors	11
3.3	Election, Qualification and Term of Office of Directors	11
3.4	Resignation and Vacancies	12
3.5	Place of Meetings; Meetings by Telephone	12
3.6	Regular Meetings	12
3.7	Special Meetings; Notice	12
3.8	Quorum	13
3.9	Board Action by Written Consent without a Meeting	13
3.10	Fees and Compensation of Directors	13
Article IV - Committees		14
4.1	Committees of Directors	14
4.2	Committee Minutes	14
4.3	Meetings and Actions of Committees	14
Article V - Officers		15
5.1	Officers	15
5.2	Appointment of Officers	15
5.3	Subordinate Officers	15

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TABLE OF CONTENTS

(continued)

Page

5.4	Removal and Resignation of Officers	15
5.5	Vacancies in Offices	15
5.6	Representation of Shares of Other Corporations	15
5.7	Authority and Duties of Officers	16
Article VI - Records		16
Article VII - General Matters		16
7.1	Execution of Corporate Contracts and Instruments	16
7.2	Stock Certificates	16
7.3	Lost Certificates	17
7.4	Shares Without Certificates	17
7.5	Construction; Definitions	17
7.6	Dividends	17
7.7	Fiscal Year	17
7.8	Seal	17
7.9	Transfer of Stock	18
7.10	Stock Transfer Agreements	18
7.11	Registered Stockholders	18
7.12	Waiver of Notice	18
Article VIII - Notice by Electronic Transmission		19
8.1	Notice by Electronic Transmission	19
8.2	Definition of Electronic Transmission	19
Article IX - Indemnification		20
9.1	Indemnification of Directors and Officers	20
9.2	Indemnification of Others	20
9.3	Prepayment of Expenses	20
9.4	Determination; Claim	21
9.5	Non-Exclusivity of Rights	21
9.6	Insurance	21
9.7	Other Indemnification	21
9.8	Continuation of Indemnification	21
9.9	Amendment or Repeal; Interpretation	22
Article X - Amendments		22

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AMENDED AND RESTATED BYLAWS OF

AEON BIOPHARMA, INC.

Article I - Corporate Offices

1.1Registered Office. 

The address of the registered office of AEON Biopharma, Inc. (the “Corporation”) in the State of Delaware, and the name of its registered agent at such address, shall be as set forth in the Corporation’s certificate of incorporation, as the same may be amended and/or restated from time to time (the “Certificate of Incorporation”).

1.2Other Offices. 

The Corporation may have additional offices at any place or places, within or outside the State of Delaware, as the Corporation’s board of directors (the “Board”) may from time to time establish or as the business of the Corporation may require.

Article II - Meetings of Stockholders

2.1Place of Meetings. 

Meetings of stockholders shall be held at such place, if any, within or outside the State of Delaware, designated by the Board.  The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General Corporation Law of the State of Delaware (the “DGCL”).  In the absence of any such designation or determination, stockholders’ meetings shall be held at the Corporation’s principal executive office.

2.2Annual Meeting. 

The Board shall designate the date and time of the annual meeting.  At the annual meeting, directors shall be elected and other proper business properly brought before the meeting in accordance with Section 2.4 may be transacted.

2.3Special Meeting. 

Special meetings of the stockholders may be called only by such persons and only in such manner as set forth in the Certificate of Incorporation.

No business may be transacted at any special meeting of stockholders other than the business specified in the notice of such meeting.

2.4Advance Notice Procedures for Business Brought before a Meeting. 

(i)At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in a notice of meeting given by or at the direction of the Board, (b) if not specified in a notice of meeting, otherwise brought before the meeting by the Board or the chairperson of the meeting, or (c) otherwise properly brought before the meeting by a stockholder present in person who (A)(1) was a stockholder of the Corporation both at the time of giving the notice provided for in this Section 2.4 and at the time of the meeting, (2) is entitled to vote at the meeting and (3) has complied with this Section 2.4 or (B) properly made such proposal in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “Exchange Act”), which proposal has been included in the proxy statement for the annual meeting. The foregoing clause (c) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders.  The only matters that may be brought before a special meeting are the matters specified in the Corporation’s notice of meeting given by or at the direction of the person calling the meeting pursuant to the Certificate of Incorporation and Section 2.3 of these bylaws.  For purposes of this Section 2.4 and Section 2.5 of these bylaws, “present in person” shall mean that the stockholder proposing that the business be brought before the annual or special meeting of the Corporation, or, if the proposing stockholder is not an individual, a qualified representative of such proposing stockholder, appear at such annual meeting, and a “qualified representative” of such proposing stockholder shall be, if such proposing stockholder is (x) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (y) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (z) a trust, any trustee of such trust.  This Section 2.4 shall apply to any business that may be brought before an annual or special meeting of stockholders other than nominations for election to the Board at an annual meeting, which shall be governed by Section 2.5 of these bylaws.  Stockholders seeking to nominate persons for election to the Board must comply with Section 2.5 of these bylaws, and this Section 2.4 shall not be applicable to nominations for election to the Board except as expressly provided in Section 2.5 of these bylaws.

(ii)Without qualification, for business to be properly brought before an annual meeting by a stockholder, the stockholder must (a) provide Timely Notice (as defined below) thereof in writing and in proper form to the secretary of the Corporation and (b) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.4. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (A) if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date or (B) with respect to the first annual meeting held after the Corporation’s initial public offering of its common stock pursuant to a registration statement on Form S-1, notice by the stockholder to be timely must be so delivered, or mailed and received, not earlier than the one hundred twentieth (120^th) day prior to such annual meeting and not later than the ninetieth (90^th) day prior to such annual meeting or, if later, the tenth (10^th) day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, “Timely Notice”).  In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.

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(iii)To be in proper form for purposes of this Section 2.4, a stockholder’s notice to the secretary shall set forth:

(a)As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation’s books and records); and (B) the number of shares of each class or series of stock of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of stock of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as “Stockholder Information”);

(b)As to each Proposing Person, (A) the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) (“Synthetic Equity Position”) and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of stock of the Corporation; provided that, for the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Person's business as a derivatives dealer, (B) any rights to dividends on the shares of any class or series of stock of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (C) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (D) any other material relationship between such Proposing Person, on the one hand, and the Corporation or any affiliate of the Corporation, on the other hand, (E) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation or any affiliate of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (F) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (F) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the

3

ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner; and

(c)As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration), (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other person or entity (including their names) in connection with the proposal of such business by such stockholder and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; provided, however, that the disclosures required by this Section 2.4(iii) shall not include any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner.

(iv)For purposes of this Section 2.4, the term “Proposing Person”shall mean (a) the stockholder providing the notice of business proposed to be brought before an annual meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, (c) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation or (d) any associate (within the meaning of Rule 12b-2 under the Exchange Act for the purposes of these bylaws) of such stockholder, beneficial owner or any other participant.

(v)A Proposing Person shall update and supplement its notice to the Corporation of  its intent to propose business at an annual meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.4 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

(vi)Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the meeting in accordance with this Section 2.4.  The presiding officer of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 2.4, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

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(vii)In addition to the requirements of this Section 2.4 with respect to any business proposed to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 2.4 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(viii)For purposes of these bylaws, “public disclosure” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

2.5Advance Notice Procedures for Nominations of Directors.

(i)Nominations of any person for election to the Board at an annual meeting may be made at such meeting only (a) by or at the direction of the Board, including by any committee or persons authorized to do so by the Board or these bylaws, or (b) by a stockholder present in person (as defined in Section 2.4) (1) who was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.5 and at the time of the meeting, (2) is entitled to vote at the meeting and (3) has complied with this Section 2.5 as to such notice and nomination.  The foregoing clause (b) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board at any annual meeting of stockholders.

(ii)Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting, the stockholder must (a) provide Timely Notice (as defined in Section 2.4(ii) of these bylaws) thereof in writing and in proper form to the secretary of the Corporation, (b) provide the information, agreements and questionnaires with respect to such stockholder and its candidate for nomination as required to be set forth by this Section 2.5, and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5.  In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.

(iii)To be in proper form for purposes of this Section 2.5, a stockholder’s notice to the secretary shall set forth:

(a)As to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 2.4(iii)(a) of these bylaws) except that for purposes of this Section 2.5, the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.4(iii)(a);

(b)As to each Nominating Person, any Disclosable Interests (as defined in Section 2.4(iii)(b), except that for purposes of this Section 2.5 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 2.4(iii)(b) and the disclosure with respect to the business to be brought before the meeting in Section 2.4(iii)(c) shall be made with respect to nomination of each person for election as a director at the meeting); and

(c)As to each candidate whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such candidate for nomination that would be required to be set forth in a stockholder’s notice pursuant to this Section 2.5 if such

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candidate for nomination were a Nominating Person, (B) all information relating to such candidate for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such candidate’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (C) a description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person, on the one hand, and each candidate for nomination or his or her respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the “registrant” for purposes of such rule and the candidate for nomination were a director or executive officer of such registrant (the disclosures to be made pursuant to the foregoing clauses (A) through (C) are referred to as “Nominee Information”), and (D) a completed and signed questionnaire, representation and agreement as provided in Section 2.5(vi).  

(iv)For purposes of this Section 2.5, the term “Nominating Person”shall mean (a) the stockholder providing the notice of the nomination proposed to be made at the meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made, (c) any other participant in such solicitation and (d) any associate (within the meaning of Rule 12b-2 under the Exchange Act for the purposes of these bylaws) of such stockholder or beneficial owner or any other participant in such solicitation.

(v)A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.5 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

(vi)To be eligible to be a candidate for election as a director of the Corporation at an annual meeting, a candidate must be nominated in the manner prescribed in this Section 2.5 and the candidate for nomination, whether nominated by the Board or by a stockholder of record, must have previously delivered (in accordance with the time period prescribed for delivery in a notice to such candidate given by or on behalf of the Board), to the secretary at the principal executive offices of the Corporation, (a) a completed written questionnaire (in the form provided by the Corporation) with respect to the background, qualifications, stock ownership and independence of such candidate for nomination and (b) a written representation and agreement (in the form provided by the secretary of the Corporation upon written request) that such candidate for nomination (A) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation or reimbursement for service as a director of the Corporation that has not been disclosed therein and (B) if elected as a director of the Corporation, will comply with all applicable corporate governance, conflict of interest, confidentiality, stock ownership and trading and other policies and guidelines of the Corporation applicable to all directors and in

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effect during such person’s term in office as a director (and, if requested by any candidate for nomination, the secretary of the Corporation shall provide to such candidate for nomination all such policies and guidelines then in effect).

(vii)The Board may also require any proposed candidate for nomination as a Director to furnish such other information as may reasonably be requested by the Board in writing prior to the meeting of stockholders at which such candidate’s nomination is to be acted upon in order for the Board to determine the eligibility of such candidate for nomination to be an independent director of the Corporation in accordance with the Corporation’s Corporate Governance Guidelines.

(viii)In addition to the requirements of this Section 2.5 with respect to any nomination proposed to be made at a meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

(ix)No candidate shall be eligible for nomination as a director of the Corporation unless such candidate for nomination and the Nominating Person seeking to place such candidate’s name in nomination has complied with this Section 2.5, as applicable.  The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was not properly made in accordance with this Section 2.5, and if he or she should so determine, he or she shall so declare such determination to the meeting, the defective nomination shall be disregarded and any ballots cast for the candidate in question (but in the case of any form of ballot listing other qualified nominees, only the ballots case for the nominee in question) shall be void and of no force or effect.

(x)Notwithstanding anything in these Bylaws to the contrary, no candidate for nomination shall be eligible to be seated as a director of the Corporation unless nominated and elected in accordance with this Section 2.5.

2.6Notice of Stockholders’ Meetings.

Unless otherwise provided by law, the Certificate of Incorporation or these bylaws, the notice of any meeting of stockholders shall be sent or otherwise given in accordance with either Section 2.7 or Section 8.1 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting.  The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

2.7Manner of Giving Notice; Affidavit of Notice. 

Notice of any meeting of stockholders shall be deemed given:

(i)if mailed, when deposited in the U.S. mail, postage prepaid, directed to the stockholder at his or her address as it appears on the Corporation’s records; or

(ii)if electronically transmitted as provided in Section 8.1 of these bylaws.

An affidavit of the secretary or an assistant secretary of the Corporation or of the transfer agent or any other agent of the Corporation that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

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2.8Quorum. 

Unless otherwise provided by law, the Certificate of Incorporation or these bylaws, the holders of a majority in voting power of the stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders.  A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.  If, however, a quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting or (ii) a majority in voting power of the stockholders entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, shall have power to adjourn the meeting from time to time in the manner provided in Section 2.9 of these bylaws until a quorum is present or represented.  At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

2.9Adjourned Meeting; Notice. 

When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken.  At any adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.  If the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.  If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

2.10Conduct of Business. 

The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting.  The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate.  Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairperson of any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting.  Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairperson of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the chairperson of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

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2.11Voting. 

Except as may be otherwise provided in the Certificate of Incorporation, these bylaws or the DGCL, each stockholder shall be entitled to one (1) vote for each share of capital stock held by such stockholder.

Except as otherwise provided by the Certificate of Incorporation, at all duly called or convened meetings of stockholders at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director.  Except as otherwise provided by the Certificate of Incorporation, these bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, each other matter presented to the stockholders at a duly called or convened meeting at which a quorum is present shall be decided by the affirmative vote of the holders of a majority of the votes cast (excluding abstentions and broker non-votes) on such matter.  

2.12Record Date for Stockholder Meetings and Other Purposes. 

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting.  If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is first given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting; and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of capital stock, or for the purposes of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action.  If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

2.13Proxies. 

Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but, no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.  The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.  A proxy may be in the form of a telegram, cablegram or other means of electronic transmission which

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sets forth or is submitted with information from which it can be determined that the telegram, cablegram or other means of electronic transmission was authorized by the stockholder.

2.14List of Stockholders Entitled to Vote. 

The Corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, that if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Corporation’s principal executive office.  In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.  If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.  Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.  Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 2.14 or to vote in person or by proxy at any meeting of stockholders.

2.15Inspectors of Election.

Before any meeting of stockholders, the Corporation shall appoint an inspector or inspectors of election to act at the meeting or its adjournment and make a written report thereof.  The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act.  If any person appointed as inspector or any alternate fails to appear or fails or refuses to act, then the chairperson of the meeting shall appoint a person to fill that vacancy.

Such inspectors shall:

(i)determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting and the validity of any proxies and ballots;

(ii)count all votes or ballots;

(iii)count and tabulate all votes;

(iv)determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspector(s); and

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(v)certify its or their determination of the number of shares represented at the meeting and its or their count of all votes and ballots.

Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspection with strict impartiality and according to the best of such inspector’s ability.  Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.  The inspectors of election may appoint such persons to assist them in performing their duties as they determine.

2.16Postponement and Cancellation of Meeting

Any previously scheduled annual or special meeting of the stockholders may be postponed, and any previously scheduled annual or special meeting of the stockholders may be canceled, by resolution of the Board upon public notice given prior to the time previously scheduled for such meeting.

Article III - Directors

3.1Powers. 

Except as otherwise provided by the certificate of incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.

3.2Number of Directors. 

Subject to the Certificate of Incorporation, the total number of directors constituting the Board shall be determined from time to time by resolution of the Board.  No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

3.3Election, Qualification and Term of Office of Directors. 

Except as provided in Section 3.4 of these bylaws, each director, including a director elected to fill a vacancy or newly created directorship, shall hold office until the expiration of the term of the class, if any, for which elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.  Directors need not be stockholders.  The Certificate of Incorporation or these bylaws may prescribe qualifications for directors.

If so provided in the Certificate of Incorporation, the directors of the Corporation shall be divided into three (3) classes.

3.4Resignation and Vacancies. 

Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation.  The resignation shall take effect at the time specified therein or upon the happening of an event specified therein, and if no time or event is specified, at the time of its receipt. When one or more directors so resigns and the resignation is effective at a future date or upon the happening of an event to occur on a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become

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effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

Unless otherwise provided in the Certificate of Incorporation or these bylaws, vacancies and newly created directorships resulting from any increase in the authorized number of directors shall be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.  Any director appointed in accordance with the preceding sentence shall hold office for the remainder of the term of the class, if any, to which the director is appointed and until such director’s successor shall have been elected and qualified. A vacancy in the Board shall be deemed to exist under these bylaws in the case of the death, removal or resignation of any director.

3.5Place of Meetings; Meetings by Telephone. 

The Board may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the Certificate of Incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting pursuant to this bylaw shall constitute presence in person at the meeting.

3.6Regular Meetings. 

Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.

3.7Special Meetings; Notice. 

Special meetings of the Board for any purpose or purposes may be called at any time by the chairperson of the Board, the chief executive officer, the president, the secretary or a majority of the total number of directors constituting the Board.

Notice of the time and place of special meetings shall be:

(i)delivered personally by hand, by courier or by telephone;

(ii)sent by United States first-class mail, postage prepaid;

(iii)sent by facsimile or electronic mail; or

(iv)sent by other means of electronic transmission,

directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, or other address for electronic transmission, as the case may be, as shown on the Corporation’s records.  

If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or electronic mail, or (iii) sent by other means of electronic transmission, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting.  If the notice is sent by U.S. mail, it shall be deposited in the U.S. mail at least four (4) days before the time of the holding of the meeting.  The notice

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need not specify the place of the meeting (if the meeting is to be held at the Corporation’s principal executive office) nor the purpose of the meeting.

3.8Quorum. 

At all meetings of the Board, a majority of the total number of directors shall constitute a quorum for the transaction of business.  The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the Certificate of Incorporation or these bylaws.  If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

3.9Board Action by Written Consent without a Meeting. 

Unless otherwise restricted by the Certificate of Incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee.  Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

3.10Fees and Compensation of Directors. 

Unless otherwise restricted by the Certificate of Incorporation or these bylaws, the Board shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.

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Article IV - Committees

4.1Committees of Directors. 

The Board may designate one (1) or more committees, each committee to consist, of one (1) or more of the directors of the Corporation.  The Board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.  Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Corporation.

4.2Committee Minutes. 

Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

4.3Meetings and Actions of Committees. 

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:

(i)Section 3.5 (place of meetings and meetings by telephone);

(ii)Section 3.6 (regular meetings);

(iii)Section 3.7 (special meetings and notice);

(iv)Section 3.9 (action without a meeting); and

(v)Section 7.12 (waiver of notice),

with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members.  However:

(i)the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;

(ii)special meetings of committees may also be called by resolution of the Board or the chairperson of the applicable committee; and

(iii)the Board may adopt rules for the governance of any committee to override the provisions that would otherwise apply to the committee pursuant to this Section 4.3, provided that such rules do not violate the provisions of the Certificate of Incorporation or applicable law.

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Article V - Officers

5.1Officers. 

The officers of the Corporation shall include a president and a secretary.  The Corporation may also have, at the discretion of the Board, a chairperson of the Board, a vice chairperson of the Board, a chief executive officer, a chief financial officer, a treasurer, one (1) or more vice presidents, one (1) or more assistant vice presidents, one (1) or more assistant treasurers, one (1) or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws.  Any number of offices may be held by the same person.

5.2Appointment of Officers. 

The Board shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws.

5.3Subordinate Officers. 

The Board may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to appoint, such other officers and agents as the business of the Corporation may require.  Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.

5.4Removal and Resignation of Officers. 

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.

Any officer may resign at any time by giving written notice to the Corporation.  Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice.  Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.

5.5Vacancies in Offices. 

Any vacancy occurring in any office of the Corporation shall be filled by the Board or as provided in Section 5.2.

5.6Representation of Shares of Other Corporations. 

The chairperson of the Board, the chief executive officer, the president, any vice president, the treasurer, the secretary or assistant secretary of this Corporation, or any other person authorized by the Board, the chief executive officer, the president or a vice president, is authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation.  The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

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5.7Authority and Duties of Officers. 

All officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be provided herein or designated from time to time by the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.

Article VI - Records

A stock ledger consisting of one or more records in which the names of all of the Corporation’s stockholders of record, the address and number of shares registered in the name of each such stockholder, and all issuances and transfers of stock of the corporation are recorded in accordance with Section 224 of the DGCL shall be administered by or on behalf of the Corporation.  Any records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, or method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases), provided that the records so kept can be converted into clearly legible paper form within a reasonable time and, with respect to the stock ledger, that the records so kept (i) can be used to prepare the list of stockholders specified in Sections 219 and 220 of the DGCL, (ii) record the information specified in Sections 156, 159, 217(a) and  218 of the DGCL, and (iii) record transfers of stock as governed by Article 8 of the Uniform Commercial Code.

Article VII - General Matters

7.1Execution of Corporate Contracts and Instruments. 

The Board, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances.  Unless so authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

7.2Stock Certificates. 

The shares of the Corporation shall be represented by certificates, provided that the Board by resolution may provide that some or all of the shares of any class or series of stock of the Corporation shall be uncertificated.  Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law.  Every holder of stock represented by a certificate shall be entitled to have a certificate signed by, or in the name of the Corporation by, any two officers authorized to sign stock certificates representing the number of shares registered in certificate form.  The chairperson or vice chairperson of the Board, the president, vice president, the treasurer, any assistant treasurer, the secretary or any assistant secretary of the Corporation shall be specifically authorized to sign stock certificates.  Any or all of the signatures on the certificate may be a facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

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7.3Lost Certificates. 

The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

7.4Shares Without Certificates

The Corporation may adopt a system of issuance, recordation and transfer of its shares of stock by electronic or other means not involving the issuance of certificates, provided the use of such system by the Corporation is permitted in accordance with applicable law.

7.5Construction; Definitions. 

Unless the context requires otherwise, the general provisions, rules of construction and definitions in the DGCL shall govern the construction of these bylaws.  Without limiting the generality of this provision, the singular number includes the plural and the plural number includes the singular, and the term “person” means any individual, general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity..

7.6Dividends. 

The Board, subject to any restrictions contained in either (i) the DGCL or (ii) the Certificate of Incorporation, may declare and pay dividends upon the shares of its capital stock.  Dividends may be paid in cash, in property or in shares of the Corporation’s capital stock.

The Board may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.

7.7Fiscal Year. 

The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.

7.8Seal. 

The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board.  The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

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7.9Transfer of Stock. 

Shares of the Corporation shall be transferable in the manner prescribed by law and in these bylaws.  Shares of stock of the Corporation shall be transferred on the books of the Corporation only by the holder of record thereof or by such holder’s attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates representing such shares endorsed by the appropriate person or persons (or by delivery of duly executed instructions with respect to uncertificated shares), with such evidence of the authenticity of such endorsement or execution, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps.  No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing the names of the persons from and to whom it was transferred.

7.10Stock Transfer Agreements. 

The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

7.11Registered Stockholders. 

The Corporation:

(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner; and

(ii)shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

7.12Waiver of Notice. 

Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice.  Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these bylaws.

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Article VIII - Notice by Electronic Transmission

8.1Notice by Electronic Transmission. 

Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the Certificate of Incorporation or these bylaws, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given.  Any such consent shall be revocable by the stockholder by written notice to the Corporation.  Any such consent shall be deemed revoked if:

(i)the Corporation is unable to deliver by electronic transmission two (2) consecutive notices given by the Corporation in accordance with such consent; and

(ii)such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice.  

However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

Any notice given pursuant to the preceding paragraph shall be deemed given:  

(i)if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;

(ii)if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;

(iii)if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and

(iv)if by any other form of electronic transmission, when directed to the stockholder.  

An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

8.2Definition of Electronic Transmission.

An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

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Article IX - Indemnification

9.1Indemnification of Directors and Officers.

The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any director or officer of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred by such person in connection with any such Proceeding.  Notwithstanding the preceding sentence, except as otherwise provided in Section 9.4, the Corporation shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized in the specific case by the Board.

9.2Indemnification of Others.

The Corporation shall have the power to indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.

9.3Prepayment of Expenses.

The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by any officer or director of the Corporation, and may pay the expenses incurred by any employee or agent of the Corporation, in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article IX or otherwise.

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9.4Determination; Claim.

If a claim for indemnification (following the final disposition of such Proceeding) under this Article IX is not paid in full within sixty (60) days, or a claim for advancement of expenses under this Article IX is not paid in full within thirty (30) days, after a written claim therefor has been received by the Corporation the claimant may thereafter (but not before) file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law.  In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

9.5Non-Exclusivity of Rights.

The rights conferred on any person by this Article IX shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

9.6Insurance.

The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the DGCL.

9.7Other Indemnification.

The Corporation’s obligation, if any, to indemnify or advance expenses to any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

9.8Continuation of Indemnification.

The rights to indemnification and to prepayment of expenses provided by, or granted pursuant to, this Article IX shall continue notwithstanding that the person has ceased to be a director or officer of the Corporation and shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributees of such person.  

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9.9Amendment or Repeal; Interpretation.

The provisions of this Article IX shall constitute a contract between the Corporation, on the one hand, and, on the other hand, each individual who serves or has served as a director or officer of the Corporation (whether before or after the adoption of these bylaws), in consideration of such person’s performance of such services, and pursuant to this Article IX the Corporation intends to be legally bound to each such current or former director or officer of the Corporation.  With respect to current and former directors and officers of the Corporation, the rights conferred under this Article IX are present contractual rights and such rights are fully vested, and shall be deemed to have vested fully, immediately upon adoption of theses bylaws.  With respect to any directors or officers of the Corporation who commence service following adoption of these bylaws, the rights conferred under this provision shall be present contractual rights and such rights shall fully vest, and be deemed to have vested fully, immediately upon such director or officer commencing service as a director or officer of the Corporation.  Any repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection (i) hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification or (ii) under any agreement providing for indemnification or advancement of expenses to an officer or director of the Corporation in effect prior to the time of such repeal or modification.

Any reference to an officer of the Corporation in this Article IX shall be deemed to refer exclusively to the chairperson of the Board, a vice chairperson of the Board, a chief executive officer, a chief financial officer, a treasurer appointed pursuant to Article V of these bylaws, and to any vice president, assistant secretary, assistant treasurer, or other officer of the Corporation appointed by (x) the Board pursuant to Article V of these Bylaws or (y) an officer to whom the Board has delegated the power to appoint officers pursuant to Article V of these bylaws, and any reference to an officer of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be deemed to refer exclusively to an officer appointed by the board of directors (or equivalent governing body) of such other entity pursuant to the Certificate of Incorporation and bylaws (or equivalent organizational documents) of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.  The fact that any person who is or was an employee of the Corporation or an employee of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise has been given or has used the title of “vice president” or any other title that could be construed to suggest or imply that such person is or may be an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall not result in such person being constituted as, or being deemed to be, an officer of the Corporation or of such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise for purposes of this Article IX.

Article X - Amendments

The Board is expressly empowered to adopt, amend or repeal the bylaws of the Corporation. The stockholders also shall have power to adopt, amend or repeal the bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least two-thirds (2/3) in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon.

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AEON Biopharma, Inc.

Certificate of Amendment and Restatement of Bylaws

The undersigned hereby certifies that he is the duly elected, qualified, and acting Secretary of AEON Biopharma, Inc., a Delaware corporation (the “Corporation”), and that the foregoing bylaws were approved on September [  ], 2021, effective as of September [  ], 2021 by the Corporation’s board of directors.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this ___ day of September, 2021.

Alex Wilson

General Counsel and Secretary

EX-4.6

Exhibit4.6

AEON BIOPHARMA, INC.

AMENDMENT TO SUBORDINATED CONVERTIBLE PROMISSORY NOTE

This Amendment (this “Amendment”) to the Subordinated Convertible Promissory Note, as defined below, is made as of            (the “Effective Date”), by and between AEON Biopharma, Inc., a Delaware corporation (the “Company”), and Daewoong Pharmaceutical Co., Ltd., a company organized and existing under the laws of the Republic of Korea (the “Holder”). Capitalized terms used but not otherwise defined herein shall have the same meanings as set forth in the Note Purchase Agreement, as defined below, or the Original Note, as applicable.

RECITALS

A.The Company and the Holder entered into that certain Note Purchase Agreement, dated August 25, 2020 (as amended, restated, modified or supplemented from time to time, the “Note Purchase Agreement”), pursuant to which the Company issued to the Holder (i) a Subordinated Convertible Promissory Note, in the initial principal amount of $10,000,000, dated August 27, 2020, and (ii) a Subordinated Convertible Promissory Note, in the initial principal amount of $15,000,000, dated September 18, 2020 (the “Original Note”);

B.Concurrent with the execution of this Amendment, the Company and the Holder are entering into an amendment to the Note Purchase Agreement, to provide for the issuance of an additional subordinated convertible promissory note to be issued by the Company in favor of the Holder, in the initial principal amount of $5,000,000, and dated of even date herewith (the “Subsequent Note”), and desire to amend the conversion provisions of Sections 3(a) and 3(b) of the Original Note to account for the issuance of the Subsequent Note;

C.Pursuant to Section 11 of the Original Note, the Original Note may be amended with the written consent of the Company and the Holder, and the Company and the Holder have now agreed to amend the Original Notes as set forthbelow.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

1.Section 3(a) of the Original Note is hereby amended and restated in its entirety as follows:

(a)Holder Optional Conversion During Conversion Period. At any time following the date that is 12 months after the Final Funding Date and prior to the repayment or conversion of this Note in full, Holder may, in its sole and absolute discretion and upon delivery of a written notice to the Company (a “Conversion Election Notice”) at least five (5) Business Days prior to the anticipated conversion, elect to convert all of the then outstanding Principal Amount and all accrued and unpaid interest into shares of Common Stock; provided, that such election shall also be made by Holder at the same time with respect to all other notes issued to Holder under the Purchase Agreement.  The number of shares of Common Stock issuable upon any conversion of this Note shall be equal to (i) the outstanding Principal Amount (excluding PIK Principal) divided by $30,000,000 and

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(ii) multiplied by 11.99% of the aggregate of (A) all of the shares of Common Stock then outstanding plus (B) all shares of Common Stock issuable upon conversion or exercise of all of the Company’s (or any of its Subsidiaries’) outstanding convertible or exercisable securities, including without limitation shares of convertible Preferred Stock, Subsidiary Securities, and all outstanding vested or unvested options or warrants to purchase the Company’s capital stock, but excluding all Out-of-the-Money Options (in all cases of clause (B), whether or not such securities are convertible or exercisable at such time), plus (C) all shares of Common Stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time), plus (D) the shares of Common Stock issuable pursuant to this Section 3(a).  In the event that Holder exercises its conversion rights under this Section 3(a) and the Company subsequently undertakes an Initial Public Offering prior to the Maturity Date, the Company shall issue to Holder such number of additional shares of Common Stock, if any, to put Holder in the same position as if Holder’s exercise was effected pursuant to Section 3(b).  “Common Stock” shall mean shares of the Company’s common stock, par value $0.0001.  “In-the-Money Option” shall mean an option (whether vested or unvested) to purchase the Company’s Common Stock that is outstanding and unexercised as of immediately prior to conversion of this Note and that has an exercise price per share that is less than the fair market value of the Company’s Common Stock, as determined in good faith by the Board of Directors of the Company, which determination shall be consistent with the Board of Directors’ determination of fair market value of the Company’ s Common Stock for any other purposes, including without limitation in connection with any incentive plans of the Company or any of its Subsidiaries; provided however, that in the event this Note is being converted upon the Initial Public Offering of the Company, the fair market value of the Company’s common stock shall be deemed to be the price at which the Company’s common stock is being sold in the Initial Public Offering.  “Out-of-the-Money Option” shall mean an option to purchase the Company’s common stock that is not an In-the-Money Option.  “Subsidiary Securities” shall mean any securities (including without limitation preferred stock, options, warrants, and convertible debt) of any of the Company’s Subsidiaries that (A) are currently convertible into or exercisable for shares of the Company’s Common Stock, or (B) become, prior to or upon conversion of this Note pursuant to Section 3(a) or Section 3(b) hereof, convertible into or exercisable for shares of the Company’s Common Stock, whether by virtue of a merger of any such Subsidiary with the Company, by way of exchange, assumption by the Company, or otherwise.

2.Section 3(b) of the Original Note is hereby amended and restated in its entirety as follows:

(b)Automatic Conversion.  Immediately prior to an Initial Public Offering, all of the then outstanding Principal Amount and accrued and unpaid interest under this Note will automatically convert into shares of Common Stock.  The number of shares of Common Stock issuable upon conversion of this Note shall be equal to (i) the outstanding Principal Amount (excluding PIK Principal) divided by $30,000,000 and (ii) multiplied by the greater of (A) 11.99% of the Pre-IPO Shares of the Company, and (B) that number of shares having an aggregate value of $24,000,000 immediately prior to the Initial Public Offering based upon a price per share of such Common Stock issued to the public in the Initial Public Offering; provided, however, that in no event shall Holder’s ownership exceed 18% of the Pre-IPO Shares of the Company after taking into account conversion of this Note and all other notes issued to Holder under the Purchase Agreement.  In the event, and only in the event, that shares of the Company are sold in the Initial Public Offering whereby the Pre-Money Valuation of the Company is $200,000,000 or greater (the “Threshold”), within five

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(5) Business Days of the conversion of this Note pursuant to this Section 3(b), the Company shall pay to the Holder the PIK Principal plus all accrued and unpaid interest under this Note either in cash or by the issuance of additional shares of Common Stock at the price per share in the Initial Public Offering, which payment method shall be at the Company’s sole election.  “Initial Public Offering” means the closing of the issuance and sale of shares of Common Stock of the Company in the Company’s first underwritten public offering pursuant to an effective registration statement under the Securities Act (a “Registration Statement”). “Pre-IPO Shares” means the sum of (i) all shares of Common Stock that are outstanding immediately prior to the Initial Public Offering, plus (ii) all shares of Common Stock issuable upon conversion or exercise of all of the Company’s (or any of its Subsidiaries’) outstanding convertible or exercisable securities, including without limitation shares of convertible Preferred Stock, Subsidiary Securities, and all outstanding vested or unvested options or warrants to purchase the Company’s capital stock, but excluding all Out-of-the-Money Options (in all cases of clause (ii), whether or not such securities are convertible or exercisable at such time), plus (iii) all shares of Common Stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time), plus (iv) the Common Stock issuable pursuant this Section 3(b).  “Pre-Money Valuation” of the Company means the aggregate value of the Company’s issued and outstanding Common Stock, as calculated by multiplying the price per share of the shares of Common Stock being sold in connection with the Initial Public Offering by the number of shares of the Company’s Common Stock issued and outstanding immediately prior to the Initial Public Offering on a fully diluted basis, assuming the conversion and/or issuance of (x) any convertible securities of the Company and/or other shares issued or reserved for under any Company equity incentive plan and (y) any convertible securities of any Subsidiary of the Company and/or other shares issued or reserved for under any equity incentive plan of any Subsidiary of the Company that are currently convertible into or exercisable for shares of the Company’s Common Stock, or that become, prior to or upon conversion of this Note pursuant to this Section 3(b) hereof, convertible into or exercisable for shares of the Company’s Common Stock, whether by virtue of a merger of any such Subsidiary with the Company, by way of exchange, assumption by the Company, or otherwise.  

3.Schedule I of the Original Note is hereby amended, restated and replaced in its entirety with Schedule I attached hereto.

4.Except as herein amended, the Original Note shall in all other respects remain unchanged and in full force andeffect.

5.This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Amendment by facsimile transmission or electronic mail shall be effective as delivery of a manually executed counterparthereof.

6.The Governing Law, Consent to Jurisdiction; Waiver of Jury Trial provisions set forth in Section 10 of the Subordinated Convertible Promissory Note are incorporated herein by reference, mutatis mutandis.

7.The obligations of confidentiality set forth in Article 14 of the License and Supply Agreement are incorporated herein by reference, mutatis mutandis.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company and the Holder have executed this Amendment as of the date set forth in the first paragraph hereof.

COMPANY:
AEON BIOPHARMA, INC.
By:
Name:	Marc Forth
Title:	Chief Executive Officer

HOLDER:
DAEWOONG PHARMACEUTICAL CO., LTD.
By:
Name:	Sengho Jeon
Title:	Chief Executive Officer

[SIGNATURE PAGE TO AMENDMENT TO SUBORDINATED CONVERTIBLE PROMISSORY NOTE (        )]

SCHEDULE I

• Unsecured Promissory Note, outstanding principal sum $3,003,213.82, held by Dental Innovations Investment A BV, and outstanding principal sum $1,985,513.45, held by Dental Innovations Apus Investment BV, dated June 19, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Simhambhatla Family Living Trust, dated November 1, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Andrew Willis, dated December 12, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Jaywin Holdings LLC, dated December 12, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Vikram Malik, dated December 18, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Strathspey Crown, dated December 18, 2019.

[SIGNATURE PAGE TO AMENDMENT TO SUBORDINATED CONVERTIBLE PROMISSORY NOTE (        )]

EX-4.6(A)

Exhibit4.6(a)

AEON BIOPHARMA, INC.

AMENDMENT TO SUBORDINATED CONVERTIBLE PROMISSORY
NOTE

This Amendment (this “Amendment”) to the Subordinated Convertible Promissory Note, as defined below, is made as of May 10, 2021 (the “Effective Date”), by and between AEON Biopharma, Inc., a Delaware corporation (the “Company”), and Daewoong Pharmaceutical Co., Ltd., a company organized and existing under the laws of the Republic of Korea (the “Holder”). Capitalized terms used but not otherwise defined herein shall have the same meanings as set forth in the Note Purchase Agreement, as defined below, or the Original Note, as applicable.

RECITALS

A.The Company and the Holder entered into that certain Note Purchase Agreement, dated August 25, 2020 (as amended, restated, modified or supplemented from time to time, the “Note Purchase Agreement”), pursuant to which the Company issued to the Holder (i) a Subordinated Convertible Promissory Note, in the initial principal amount of $10,000,000, dated August 27, 2020, and (ii) a Subordinated Convertible Promissory Note, in the initial principal amount of $15,000,000, dated September 18, 2020 (the “Original Note”);

B.Concurrent with the execution of this Amendment, the Company and the Holder are entering into an amendment to the Note Purchase Agreement, to provide for the issuance of an additional subordinated convertible promissory note to be issued by the Company in favor of the Holder, in the initial principal amount of $5,000,000, and dated of even date herewith (the “Subsequent Note”), and desire to amend the conversion provisions of Sections 3(a) and 3(b) of the Original Note to account for the issuance of the Subsequent Note;

C.Pursuant to Section 11 of the Original Note, the Original Note may be amended with the written consent of the Company and the Holder, and the Company and the Holder have now agreed to amend the Original Notes as set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

1.Section 3(a) of the Original Note is hereby amended and restated in its entirety as follows:

(a)Holder Optional Conversion During Conversion Period. At any time following the date that is 12 months after the Final Funding Date and prior to the repayment or conversion of this Note in full, Holder may, in its sole and absolute discretion and upon delivery of a written notice to the Company (a “Conversion Election Notice”) at least five (5) Business Days prior to the anticipated conversion, elect to convert all of the then outstanding Principal Amount and all accrued and unpaid interest into shares of Common Stock; provided, that such election shall also be made by Holder at the same time with

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respect to all other notes issued to Holder under the Purchase Agreement. The number of shares of Common Stock issuable upon any conversion of this Note shall be equal to (i) the outstanding Principal Amount (excluding PIK Principal) divided by $30,000,000 and (ii) multiplied by 11.99% of the aggregate of (A) all of the shares of Common Stock then outstanding plus (B) all shares of Common Stock issuable upon conversion or exercise of all of the Company’s (or any of its Subsidiaries’) outstanding convertible or exercisable securities, including without limitation shares of convertible Preferred Stock, Subsidiary Securities, and all outstanding vested or unvested options or warrants to purchase the Company’s capital stock, but excluding all Out-of-the-Money Options (in all cases of clause (B), whether or not such securities are convertible or exercisable at such time), plus (C) all shares of Common Stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time), plus (D) the shares of Common Stock issuable pursuant to this Section 3(a). In the event that Holder exercises its conversion rights under this Section 3(a) and the Company subsequently undertakes an Initial Public Offering prior to the Maturity Date, the Company shall issue to Holder such number of additional shares of Common Stock, if any, to put Holder in the same position as if Holder’s exercise was effected pursuant to Section 3(b). “Common Stock” shall mean shares of the Company’s common stock, par value $0.0001. “In-the-Money Option” shall mean an option (whether vested or unvested) to purchase the Company’s Common Stock that is outstanding and unexercised as of immediately prior to conversion of this Note and that has an exercise price per share that is less than the fair market value of the Company’s Common Stock, as determined in good faith by the Board of Directors of the Company, which determination shall be consistent with the Board of Directors’ determination of fair market value of the Company’ s Common Stock for any other purposes, including without limitation in connection with any incentive plans of the Company or any of its Subsidiaries; provided,however, that in the event this Note is being converted upon the Initial Public Offering of the Company, the fair market value of the Company’s common stock shall be deemed to be the price at which the Company’s common stock is being sold in the Initial Public Offering. “Out-of-the-Money Option” shall mean an option to purchase the Company’s common stock that is not an In-the-Money Option. “Subsidiary Securities” shall mean any securities (including without limitation preferred stock, options, warrants, and convertible debt) of any of the Company’s Subsidiaries that (A) are currently convertible into or exercisable for shares of the Company’s Common Stock, or (B) become, prior to or upon conversion of this Note pursuant to Section 3(a) or Section 3(b) hereof, convertible into or exercisable for shares of the Company’s Common Stock, whether by virtue of a merger of any such Subsidiary with the Company, by way of exchange, assumption by the Company, or otherwise.

2.Section 3(b) of the Original Note is hereby amended and restated in its entirety as follows:

(a)Automatic Conversion. Immediately prior to an Initial Public Offering, all of the then outstanding Principal Amount and accrued and unpaid interest under this Note will automatically convert into shares of Common Stock. The number of shares of Common Stock issuable upon conversion of this Note shall be equal to (i) the outstanding Principal Amount (excluding PIK Principal) divided by $30,000,000 and (ii) multiplied by the greater of (A) 11.99% of the Pre-IPO Shares of the Company, and (B) that number of

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shares having an aggregate value of $24,000,000 immediately prior to the Initial Public Offering based upon a price per share of such Common Stock issued to the public in the Initial Public Offering; provided, however, that in no event shall Holder’s ownership exceed 18% of the Pre-IPO Shares of the Company after taking into account conversion of this Note and all other notes issued to Holder under the Purchase Agreement. In the event, and only in the event, that shares of the Company are sold in the Initial Public Offering whereby the PreMoney Valuation of the Company is $200,000,000 or greater (the “Threshold”), within five(5) Business Days of the conversion of this Note pursuant to this Section 3(b), the Company shall pay to the Holder the PIK Principal plus all accrued and unpaid interest under this Note either in cash or by the issuance of additional shares of Common Stock at the price per share in the Initial Public Offering, which payment method shall be at the Company’s sole election. “Initial Public Offering” means the closing of the issuance and sale of shares of Common Stock of the Company in the Company’s first underwritten public offering pursuant to an effective registration statement under the Securities Act (a “Registration Statement”). “Pre- IPO Shares”means the sum of (i) all shares of Common Stock that are outstanding immediately prior to the Initial Public Offering, plus (ii) all shares of Common Stock issuable upon conversion or exercise of all of the Company’s (or any of its Subsidiaries’) outstanding convertible or exercisable securities, including without limitation shares of convertible Preferred Stock, Subsidiary Securities, and all outstanding vested or unvested options or warrants to purchase the Company’s capital stock, but excluding all Out-of-the-Money Options (in all cases of clause (ii), whether or not such securities are convertible or exercisable at such time), plus (iii) all shares of Common Stock issuable upon conversion of any convertible debt (whether or not such debt is convertible at such time), plus (iv) the Common Stock issuable pursuant this Section 3(b).“Pre-Money Valuation” of the Company means the aggregate value of the Company’s issued and outstanding Common Stock, as calculated by multiplying the price per share of the shares of Common Stock being sold in connection with the Initial Public Offering by the number of shares of the Company’s Common Stock issued and outstanding immediately prior to the Initial Public Offering on a fully diluted basis, assuming the conversion and/or issuance of (x) any convertible securities of the Company and/or other shares issued or reserved for under any Company equity incentive plan and (y) any convertible securities of any Subsidiary of the Company and/or other shares issued or reserved for under any equity incentive plan of any Subsidiary of the Company that are currently convertible into or exercisable for shares of the Company’s Common Stock, or that become, prior to or upon conversion of this Note pursuant to this Section 3(b) hereof, convertible into or exercisable for shares of the Company’s Common Stock, whether by virtue of a merger of any such Subsidiary with the Company, by way of exchange, assumption by the Company, or otherwise.

3.Schedule I of the Original Note is hereby amended, restated and replaced in its entirety with Schedule I attached hereto.

4.Except as herein amended, the Original Note shall in all other respects remain unchanged and in full force and effect.

5.This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to

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constitute one and the same instrument. Delivery of this Amendment by facsimile transmission or electronic mail shall be effective as delivery of a manually executed counterpart hereof.

6.The Governing Law, Consent to Jurisdiction; Waiver of Jury Trial provisions set forth in Section 10 of the Subordinated Convertible Promissory Note are incorporated herein by reference, mutatis mutandis.

7.The obligations of confidentiality set forth in Article 14 of the License and Supply Agreement are incorporated herein by reference, mutatis mutandis.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company and the Holder have executed this Amendment as of the date set forth in the first paragraph hereof.

COMPANY:
AEON BIOPHARMA, INC.
By:.
	Name:Marc Forth
	Title:Chief Executive Officer

HOLDER:
DAEWOONG PHARMACEUTICAL CO., LTD.
By:.
	Name:Sengho Jeon
	Title:Chief Executive Officer

(SIGNATURE PAGE TO AMENDMENT TO SUBORDINATED CONVERTIBLE PROMISSORY NOTE ($15,000,000))

SCHEDULE I

• Unsecured Promissory Note, outstanding principal sum $3,003,213.82, held by Dental Innovations Investment A BV, and outstanding principal sum $1,985,513.45, held by Dental Innovations Apus Investment BV, dated June 19, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Simhambhatla Family Living Trust, dated November 1, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Andrew Willis, dated December 12, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Jaywin Holdings LLC, dated December 12, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Vikram Malik, dated December 18, 2019.

• Unsecured Promissory Note, outstanding principal sum $997,745.45, held by Strathspey Crown, dated December 18, 2019.

EX-4.7(A)

Exhibit4.7(a)

AEON BIOPHARMA, INC.

FIRST AMENDMENT

TO THE

THIRD AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

This First Amendment to the Third Amended and Restated Investors’ Rights Agreement (this “Amendment”), is made and entered into as of October 2, 2021, by and among AEON Biopharma, Inc. (f/k/a Alphaeon Corporation, the “Company”) and the Investors signatory hereto.

WHEREAS: The Company, the Investors signatory hereto, other Investors and, solely as to Sections 4.2, 4.3, 6.1, and 6.6 and Article 7, Strathspey Crown Holdings Group, LLC (f/k/a Strathspey Crown Holdings, LLC) entered into that certain Third Amended and Restated Investors’ Rights Agreement, dated as of April 19, 2017 (the “Agreement”);

WHEREAS: Pursuant to Section 7.6 of the Agreement, except as otherwise expressly provided within the Agreement, the Agreement may be amended by written agreement of the Company and the Holders (as defined in the Agreement) of at least a majority of the Registrable Securities (as defined in the Agreement) then outstanding (voting on an as-converted basis and giving effect to price-based anti-dilution) (the “Requisite Holders”);

WHEREAS: Pursuant to Section 7.6 of the Agreement, (i) any waiver or amendment of the provisions of Sections 6.1, 6.2 or 6.6 shall require the prior written consent of Longitude Venture Partners II, L.P., (ii) any waiver or amendment of the provisions of Sections 3.5, 3.9, 6.1, 6.2 or 6.6 shall require the prior written consent of Alpha International Investment Ltd., and (iii) any waiver or amendment of the provisions of Section 6.1 shall require the prior written consent of Dental Innovations BVBA;

WHEREAS: Pursuant to Section 4.6 of the Agreement, the rights of first refusal and co-sale established by Section 4 of the Agreement may be amended by written consent of the Major Investors (as defined in the Agreement) then holding a majority of the Registrable Securities (as defined in the Agreement) held by Major Investors (the “Requisite Major Investors”);

WHEREAS: The Company and the Investors signatory hereto constitute the Requisite Holders, the Requisite Major Investors and include each of Longitude Venture Partners II, L.P., Alpha International Investment Ltd. and Dental Innovations BVBA; and

WHEREAS: The parties hereto desire to amend the Agreement as set forth herein.

NOW, THEREFORE: For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby covenant and agree to be bound as follows:

1.Capitalized Terms.  Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned to them in the Agreement.

2.Amendments.

(a)Section 2.7 of the Agreement is hereby amended and restated in its entirety to read as follows:

“2.7Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Sections 2.2, 2.3 or 2.4 shall terminate as to such Holder:

(a) upon the third anniversary of the closing date of an IPO, and

(b) except as to Alpha, such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during a three-month period without registration.”

(b)Section 4.6 of the Agreement is hereby amended and restated in its entirety to read as follows:

“4.6Termination and Waiver of Rights of First Refusal and Co-Sale. The rights of first refusal and co-sale established by this Section 4 shall not apply to, and shall terminate upon the earlier of, (i) the effective date of the registration statement pertaining to an IPO or (ii) a Liquidation Event (as defined in the Restated Certificate). The rights of first refusal and co-sale established by this Section 4 may be amended, or any provision waived with the written consent of Major Investors then holding a majority of the Registrable Securities held by Major Investors.”

(c)Section 6.1(e) of the Agreement is hereby amended to add a new clause (iii) as follows:

“(iii)This Section 6.1(e) shall terminate upon the effective date of the registration statement pertaining to an IPO.”

(d)Section 6.1(f) of the Agreement is hereby amended and restated in its entirety to read as follows:

“(f)Committee Membership. Prior to the effective date of the registration statement pertaining to an IPO, for so long as the Series A Director, Series B Director, and Lender Directors serve on the Board under such designations, each shall have the right to serve on the Company’s Audit Committee, if satisfactorily qualified to serve in the Company’s reasonable discretion, Compensation Committee, and Finance and Operations Committee and may serve on any other committee of the Board upon the mutual agreement of such director and the Chief Executive Officer of the Company or the Chairman of the Board. The Board shall have taken all requisite action at a regular or special meeting of the Board (or by

2

unanimous written consent) to appoint Simone Blank as the Chair of the Audit Committee and Finance and Operations Committee for so long as she remains Chairman of the Board.”

(e)Section 6.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

“Section 6.2.Observer. Until the consummation of an IPO, each of Longitude and Alpha shall be entitled to designate a Board Observer (an “Observer”), who shall be entitled to participate in the meetings of the Board, without voting rights, and to receive all materials provided to the Board; provided, however, that the Company reserves the right to exclude any Observer from access to any material or meeting or portion thereof if the Company determines in good faith, upon advice of counsel, that such exclusion is reasonably necessary (1) to preserve the attorney-client privilege, or (2) to protect highly confidential proprietary information of the Company. Subject to the proviso set out above, the Observers shall be invited and entitled to attend all meetings of the Board and its committees.”

(f)Section 6.5 of the Agreement is hereby deleted in its entirety.

(g)Section 6.8 is hereby added as a new section of the Agreement immediately before Section 7:

“6.8Termination. Notwithstanding any other provision of the Agreement, the rights granted pursuant to this Article 6 shall terminate and be of no further effect upon the effective date of the registration statement pertaining to an IPO.”

(h)Section 7.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

“Section 7.2.Survival. The representations, warranties, covenants, and agreements made herein shall survive any investigation made by any Holder or Investor and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. The terms and provisions of Section 5 shall survive any public offering of the Company’s equity securities.”

(i)Section 7.6 of the Agreement is hereby amended and restated in its entirety to read as follows:

“Section 7.6.Amendment and Waiver. Except as otherwise expressly provided within this Agreement, this Agreement may be amended or modified and

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the obligations of the Company and the rights of the Holders and Investors under this Agreement may be waived only upon the written consent of (i) the Company and (ii) the Holders of at least a majority of the Registrable Securities then outstanding (voting on an as-converted basis and giving effect to the price-based anti-dilution that occurs at any time after the date hereof). Notwithstanding anything contained herein to the contrary, prior to the consummation of an IPO, (i) any waiver or amendment of the provisions of Sections 6.1 or 6.2 with respect to the Series A Director, and Series A-related Designated Director and Observer, or Section 6.6 shall require the prior written consent of Longitude, (ii) any waiver or amendment of the provisions of Sections 3.5, 3.9, 6.1 or 6.2 with respect to the Series B Director, and Series B-related Designated Director and the Observer designated by Alpha, or Section 6.6 shall require the prior written consent of Alpha, and (iii) any waiver or amendment of the provisions of Section 6.1 with respect to the Lender Director, and Lender-related Designated Director designated by Dental Innovations, shall require the prior written consent of Dental Innovations.”

3.Effective Date. This Amendment shall be effective upon the execution hereof by the Company and the Requisite Holders and the Requisite Major Investors, including each of Longitude Venture Partners II, L.P., Alpha International Investment Ltd. and Dental Innovations BVBA.

4.No Further Amendment. Except as expressly amended hereby, the Agreement is in all respects ratified and confirmed and all of the terms and conditions and provisions thereof shall remain in full force and effect. This Amendment is limited precisely as written and, except as set forth in Section 2 of this Amendment, shall not be deemed to be an amendment to any other term or condition of the Agreement or any of the documents referred to therein.  In the event of a conflict between the terms of the Agreement and the terms of this Amendment, the terms of this Amendment shall control.

5.Effect of Amendment.  This Amendment shall form a part of the Agreement for all purposes, and each party thereto and hereto shall be bound hereby. From and after the execution of this Amendment by the parties hereto, any reference in the Agreement to “this Agreement,” “hereof,” “herein,” “hereunder” and words or expressions of similar import shall be deemed a reference to the Agreement as amended hereby.  Upon execution of this Amendment by the Company and the Requisite Holders and the Requisite Major Investors, including each of Longitude Venture Partners II, L.P., Alpha International Investment Ltd. and Dental Innovations BVBA, this Amendment shall be binding on all parties to the Agreement, regardless of whether such party has consented to this Amendment.

6.Governing Law.  This Amendment and any controversy arising out of or relating to this Amendment shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

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7.Captions.  All articles and section headings or captions contained in this Amendment are inserted only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Amendment or the intent of any provision thereof.

8.Severability.    If any provision of this Amendment or application to any party or circumstance shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Amendment or the application of such provision to any other party or circumstances shall not be affected thereby, and each provision shall be valid and shall be enforced to the fullest extent permitted by law.

9.Counterparts; Execution. This Amendment may be executed in counterparts, each of which so executed shall be deemed to be an original, and all of which together shall constitute one instrument. Delivery or acceptance of this Amendment or any portion thereof by facsimile transmission or digitally, or in any electronic fashion or other transmission method (including without limitation, pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com), shall have the same effect as if delivered personally and any such transmission signature, initial or notation, shall have the same effect as if it were an original and shall be binding upon the maker thereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

COMPANY:

AEON BIOPHARMA, INC.

By: /s/ Marc Forth                                                       

     Name: Marc Forth

     Title:   Chief Executive Officer

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

DENTAL INNOVATIONS INVESTMENT A BV (as partial successor in interest to Dental Innovations BVBA)

By: /s/ Frank Laukoetter                           

     Name: Frank Laukoetter  

     Title: Managing Director  

DENTAL INNOVATIONS APUS INVESTMENT BV (as partial successor in interest to Dental Innovations BVBA)

By: /s/ Frank Laukoetter                 Name: Frank Laukoetter      Title: Managing Director

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

LONGITUDE VENTURE PARTNERS II, L.P.

By:  Longitude Capital Partners II, LLC

Its:   General Partner

By:  /s/ Juliet Tammenoms Bakker                                         

     Name: Juliet Tammenoms Bakker

     Title: Managing Director

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

ALPHA INTERNATIONAL INVESTMENT LTD.

By: /s/ Darren O’Brien                                          

     Name: Darren O’Brien

     Title: MD

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

STRATHSPEY CROWN HOLDINGS GROUP, LLC

By: /s/ Vikram Malik                                                 

     Name: Vikram Malik

     Title: Managing Partner

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

HEALTHCARE VENTURES HOLDINGS LIMITED

By: /s/ Vivian Lee                                                         

     Name: Vivian Lee

     Title:

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

H&S MANAGEMENT LP

By: /s/ Michael Schulman                                                         

     Name: Michael Schulman

     Title: Manager

[Signature Page to Waiver of Registration Rights and Notice]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

INVESTOR

Simone Blank  

Name of Stockholder (Print exact name)

By: /s/ Simone Blank                                                

_______________________________

[Signature Page to First Amendment to the Third Amended and Restated Investors’ Rights Agreement]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

INVESTOR

Jost Fischer  

Name of Stockholder (Print exact name)

By: /s/ Jost Fischer                                                

_______________________________

[Signature Page to Waiver of Registration Rights and Notice]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

INVESTOR

Robert Grant  

Name of Stockholder (Print exact name)

By: /s/ Robert Grant                                                

_______________________________

[Signature Page to Waiver of Registration Rights and Notice]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

INVESTOR

Hans Keirstead  

Name of Stockholder (Print exact name)

By: /s/ Hans Keirstead                                                

_______________________________

[Signature Page to Waiver of Registration Rights and Notice]

IN WITNESS WHEREOF, each of the undersigned has executed this First Amendment to the Third Amended and Restated Investors’ Rights Agreement as of the date first written above.

INVESTOR

Vikram Malik  

Name of Stockholder (Print exact name)

By: /s/ Vikram Malik                                                

_______________________________

[Signature Page to Waiver of Registration Rights and Notice]

EX-5.1

Exhibit 5.1

	650 Town Center Drive, 20th Floor
	Costa Mesa, California  92626-1925
	FIRM / AFFILIATE OFFICES
	Tel: +1.714.540.1235  Fax: +1.714.755.8290
	www.lw.com

	FIRM / AFFILIATE OFFICES
	Austin	Milan
	Beijing	Moscow
	Boston	Munich
October 4, 2021	Brussels	New York
	Century City	Orange County
	Chicago	Paris
	Dubai	Riyadh
AEON Biopharma, Inc.	Düsseldorf	San Diego
4040 MacArthur Blvd., Suite 260	Frankfurt	San Francisco
Newport Beach, California 92660	Hamburg	Seoul
	Hong Kong	Shanghai
	Houston	Silicon Valley
	London	Singapore
	Los Angeles	Tokyo
	Madrid	Washington, D.C.

Re:  Registration Statement on Form S-1 (Registration No. 333-259609)

Ladies and Gentlemen:

We have acted as special counsel to AEON Biopharma, Inc., a Delaware corporation (the “Company”), in connection with the proposed issuance of up to $92,000,000 of shares (including shares subject to the underwriters’ option to purchase additional shares) of common stock, $0.0001 par value per share (the “Shares”). The Shares are included in a registration statement on Form S-1 under the Securities Act of 1933, as amended (the “Act”), filed with the Securities and Exchange Commission (the “Commission”) on September 17, 2021 (Registration No. 333-259609) (as amended, the “Registration Statement”). The term “Shares” shall include any additional shares of common stock registered by the Company pursuant to Rule 462(b) under the Act in connection with the offering contemplated by the Registration Statement. This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus (the “Prospectus”), other than as expressly stated herein with respect to the issue of the Shares.

As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We are opining herein as to General Corporation Law of the State of Delaware (the “DGCL”), and we express no opinion with respect to any other laws.

October 4, 2021

Page 2

Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof, when the Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the purchasers, and have been issued by the Company against payment therefor (not less than par value) in total numbers that do not exceed the total number of shares (a) available under the Company’s certificate of incorporation and (b) authorized by the board of directors in connection with the offering contemplated by the Registration Statement, and in the circumstances contemplated by the form of underwriting agreement most recently filed as an exhibit to the Registration Statement, the issue and sale of the Shares will have been duly authorized by all necessary corporate action of the Company, and the Shares will be validly issued, fully paid and non-assessable.In rendering the foregoing opinion, we have assumed that the Company will comply with all applicable notice requirements regarding uncertificated shares provided in the DGCL.

This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus under the heading “Legal Matters.” We further consent to the incorporation by reference of this letter and consent into any registration statement filed pursuant to Rule 462(b) with respect to the Shares. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Latham & Watkins LLP

EX-10.3

Exhibit 10.3

AEON BIOPHARMA, INC.

INDEMNIFICATION AND ADVANCEMENT AGREEMENT

This Indemnification and Advancement Agreement (“Agreement”) is made as of, 2020 by and between AEON Biopharma, Inc., a Delaware corporation (the “Company”), and (“Indemnitee”). This Agreement supersedes and replaces any and all previous Agreements between the Company and Indemnitee covering indemnification and advancement.

RECITALS

WHEREAS, the Board of Directors of the Company (the “Board”) believes that highly competent persons have become more reluctant to serve publicly-held corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification and advancement of expenses against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The Bylaws and Certificate of Incorporation of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification and advancement of expenses;

WHEREAS, the uncertainties relating to such insurance, to indemnification, and to advancement of expenses may increase the difficulty of attracting and retaining such persons;

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws, Certificate of Incorporation and any resolutions adopted pursuant thereto, and is not a substitute therefor, nor diminishes or abrogates any rights of Indemnitee thereunder; and

WHEREAS, Indemnitee does not regard the protection available under the Bylaws, Certificate of Incorporation, DGCL and insurance as adequate in the present circumstances, and may not be willing to serve or continue to serve as an officer or director without adequate additional protection, and the Company desires Indemnitee to serve or continue to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified and be advanced expenses.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. Indemnitee agrees to serve as a [director/officer/agent/employee/fiduciary] of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). This Agreement does not create any obligation on the Company to continue Indemnitee in such position and is not an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.

Section 2. Definitions. As used in this Agreement:

(a)“Affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended (as in effect on the date hereof).

(b)“Agent” means any person who is or was a director, officer or employee of the Company or an Enterprise or other person authorized by the Company or an Enterprise to act for or represent the interests of the Company or an Enterprise, respectively.

(c)“Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company.

(d)A “Change in Control” occurs upon the earliest to occur after the date of this Agreement of any of the following events:

i.Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing more than fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative beneficial ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

ii.Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(d)(i), 2(d)(iii) or 2(d)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;

iii.Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;

iv.Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

v. Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

vi. For purposes of this Section 2(d), the following terms have the following meanings:

1) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

2)“Person” has the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person excludes (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

3)“Beneficial Owner” has the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner excludes any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

(e)[“Affiliated Entities” means [ ● ] and its Affiliates and Related Parties.]

(f)“Corporate Status” describes the status of a person who is or was acting as a director, officer, employee, fiduciary, or Agent of the Company or an Enterprise.

(g)“Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(h)“Enterprise” means any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other entity for which Indemnitee is or was serving at the request of the Company as a director, officer, employee, fiduciary or Agent.

(i)“Expenses” shall be broadly construed and shall include, without limitation, all reasonable costs, disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a deponent or witness in, or otherwise participating in, a Proceeding (including all reasonable attorneys’ fees, retainers, court costs, mediation fees, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed

on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement and ERISA excise taxes and penalties). Expenses also include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, do not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(j)“finally adjudged” or “final adjudication” means determined by a final (not interlocutory) judgment or other adjudication of a court or arbitration or administrative body of competent jurisdiction as to which there is no further right or option of appeal or the time within which an appeal must be filed has expired without such filing (and from which there is no further right of appeal).

(k)“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” does not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel, regardless of the manner in which such Independent Counsel was selected.

(l)“Potential Change in Control” means the occurrence of any of the following events: (i) the Company enters into any written or oral agreement, undertaking or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) any Person or the Company publicly announces an intention to take or consider taking actions which if consummated would constitute a Change in Control; (iii) any Person who becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 5% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors increases his beneficial ownership of such securities by 5% or more over the percentage so owned by such Person on the date hereof; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(m)“Proceeding” shall be broadly construed and mean any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of Indemnitee’s Corporate Status or by reason of any action taken by Indemnitee (or a failure to take action by Indemnitee) or of any action (or failure to act) on Indemnitee’s part while acting pursuant to Indemnitee’s Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement. A Proceeding also includes a situation the Indemnitee believes in good faith may lead to or culminate in the institution of a Proceeding.

(n)“Related Party” means, with respect to any Person, (a) any controlling stockholder, controlling member, general partner, subsidiary, spouse or immediate family member (in the case of an individual) of such Person, (b) any estate, trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or owners of which consist solely of one or more Persons referred to in the immediately preceding clause (a), or (c) any executor, administrator, trustee, manager, director or other similar fiduciary of any Person referred to in the immediately preceding clause (b), acting solely in such capacity.

Section 3. Indemnity in Third-Party Proceedings. The Company will indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, the Company will indemnify Indemnitee to the fullest extent permitted by applicable law against all loss and liability suffered, Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein if (a) such Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and (b) in the case of a criminal Proceeding, such Indemnitee had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company will indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, the Company will indemnify Indemnitee to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Notwithstanding the foregoing, if applicable law so provides, the Company will not indemnify Indemnitee for Expenses under this Section 4 related to any claim, issue or matter in a Proceeding for which Indemnitee has been finally adjudged by a court to be liable to the Company, unless, and only to the extent that, the Court of Chancery of the State of Delaware or any court in which the Proceeding was brought determines that such indemnification may be made.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding in which Indemnitee is successful, on the merits or otherwise. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, will be deemed to be a successful result as to such claim, issue or matter.

Section 6.Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement and to the fullest extent permitted by the DGCL, the Company will indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding to which Indemnitee is not a party but to which Indemnitee, by reason of Indemnitee’s Corporate Status, is a witness, deponent, interviewee, or otherwise asked to participate.

Section 7.Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company will indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

Section 8. Additional Indemnification. Notwithstanding any limitation in Sections 3, 4, or 5, the Company will hold harmless and indemnify Indemnitee against all against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf to the fullest extent permitted by applicable law (including but not limited to, the DGCL and any amendments to or replacements of the DGCL adopted after the date of this Agreement that expand the Company’s ability to indemnify its officers and directors) if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally adjudged (subject to the presumptions set forth in Section 13) to be unlawful.

Section 9. Exclusions. Notwithstanding any provision in this Agreement, the Company is not obligated under this Agreement to make any indemnification payment to Indemnitee in connection with any Proceeding:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except to the extent provided in Section 16(b), and except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(d) hereof) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, if any, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act; or

(c) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Proceeding or part of any Proceeding is to enforce Indemnitee’s rights to indemnification or advancement, of Expenses, including a Proceeding (or any part of any Proceeding) initiated pursuant to Section 14 of this Agreement, (ii) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

Section 10. Advances of Expenses.

(a) The Company will advance, to the fullest extent permitted by the DGCL, but subject to the terms of this Agreement, all Expenses incurred by Indemnitee or on behalf of Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee or any Proceeding (or any part of any Proceeding) initiated by Indemnitee if (i) the Proceeding or part of any Proceeding is to enforce

Indemnitee’s rights to obtain indemnification or advancement of Expenses from the Company or Enterprise, including a proceeding initiated pursuant to Section 14 or (ii) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation. The Company will advance the Expenses within twenty (20) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.

(b)Advances will be unsecured and interest free. Indemnitee undertakes to repay the amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company, thus Indemnitee qualifies for advances upon the execution of this Agreement and delivery to the Company. No other form of undertaking is required other than the execution of this Agreement. The Company will make advances without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.

Section 11. Procedure for Notification of Claim for Indemnification or Advancement.

(a)Indemnitee will notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. Indemnitee will include in the written notification to the Company a description of the nature of the Proceeding and the allegations underlying the Proceeding and provide such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Indemnitee’s failure to so notify the Company will not relieve the Company from any obligation it may have to Indemnitee under this Agreement, and any delay or defect in so notifying the Company will not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company will, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification or advancement.

(b)The Company will be entitled to participate in the Proceeding at its own expense, provided, that the Company will not be entitled to assume the defense of such Proceedings on Indemnitee’s behalf without Indemnitee’s prior written consent.

(c) The Company will not settle any Proceeding (in whole or in part) if such settlement would attribute to Indemnitee any admission of liability or impose any Expense, judgment, liability, fine, penalty or obligation or limitation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld.

Section 12. Procedure Upon Application for Indemnification.

(a) Unless a Change in Control has occurred, the determination of Indemnitee’s entitlement to indemnification will be made:

i. by a majority vote of the Disinterested Directors, even though less than a quorum of the Board;

ii. by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board;

iii. if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by written opinion provided by Independent Counsel selected by the Board; or

iv. if so directed by the Board, by the stockholders of the Company.

(b) If a Change in Control has occurred, the determination of Indemnitee’s entitlement to indemnification will be made by written opinion provided by Independent Counsel selected by Indemnitee (unless Indemnitee requests such selection be made by the Board).

(c) The party selecting Independent Counsel pursuant to subsection (a)(iii) or (b) of this Section 12 will provide written notice of the selection to the other party. The notified party may, within ten (10) days after receiving written notice of the selection of Independent Counsel, deliver to the selecting party a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection will set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected will act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Court of Chancery of the State of Delaware Court has determined that such objection is without merit. If, within thirty (30) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, Independent Counsel has not been selected or, if selected, any objection to has not been resolved, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for the appointment as Independent Counsel of a person selected by such court or by such other person as such court designates. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel will be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(d) Indemnitee will cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. The Company will advance and pay any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making the indemnification determination irrespective of the determination as to Indemnitee’s entitlement to indemnification and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company promptly will advise Indemnitee in writing of the determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied and providing a copy of any written opinion provided to the Board by Independent Counsel.

(e) If it is determined that Indemnitee is entitled to indemnification, the Company will make payment to Indemnitee within ten (10) days after such determination.

Section 13. Presumptions and Effect of Certain Proceedings.

(a)It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination will, to the fullest extent not prohibited by law, presume Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company will, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption by clear and convincing evidence. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the

circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, will be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b) If the determination of the Indemnitee’s entitlement to indemnification has not been made pursuant to Section 12 within sixty (60) days after the later of (i) receipt by the Company of Indemnitee’s request for indemnification pursuant to Section 11(a) and (ii) the final disposition of the Proceeding for which Indemnitee requested Indemnification (the “Determination Period”), the requisite determination of entitlement to indemnification will, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee will be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law. The Determination Period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, the Determination Period may be extended an additional fifteen (15) days if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a)(iv) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, will not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

(d) For purposes of any determination of good faith, Indemnitee will be deemed to have acted in good faith if Indemnitee acted based on the records or books of account of the Company, its subsidiaries, or an Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Company, its subsidiaries, or an Enterprise in the course of their duties, or on the advice of legal counsel for the Company, its subsidiaries, or an Enterprise or on information or records given or reports made to the Company or an Enterprise by an independent certified public accountant or by an appraiser, financial advisor or other expert selected with reasonable care by or on behalf of the Company, its subsidiaries, or an Enterprise. Further, Indemnitee will be deemed to have acted in a manner “not opposed to the best interests of the Company,” as referred to in this Agreement if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan. Whether or not the foregoing provisions of this Section 13(d) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. The provisions of this Section 13(d) are not exclusive and do not limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e) The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise may not be imputed to Indemnitee for purposes of determining Indemnitee’s right to indemnification under this Agreement.

(f)The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

Section 14. Remedies of Indemnitee.

(a) Indemnitee may commence litigation against the Company in the Court of Chancery of the State of Delaware to obtain indemnification or advancement of Expenses provided by this Agreement in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) the Company does not timely advance Expenses pursuant to Section 10 of this Agreement, (iii) the determination of entitlement to indemnification is not made pursuant to Section 12 of this Agreement within the Determination Period, (iv) the Company does not indemnify Indemnitee pursuant to Section 5 or 6 or the second to last sentence of Section 12(d) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) the Company does not indemnify Indemnitee pursuant to Section 3, 4, 7, or 8 of this Agreement within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee must commence such Proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such Proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause does not apply in respect of a Proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 5 of this Agreement. The Company will not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) If a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 will be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee may not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company will have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be and will not introduce evidence of the determination made pursuant to Section 12 of this Agreement.

(c)If a determination is made pursuant to Section 12 of this Agreement that Indemnitee is entitled to indemnification, the Company will be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) The Company is, to the fullest extent not prohibited by law, precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and will stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

(e) It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement or to recover under any directors’ and officers’ liability insurance policy by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. The Company, to the fullest extent permitted by law, will (within ten (10) days after receipt by the Company of a written request therefor) advance to Indemnitee such Expenses which are incurred by Indemnitee in connection with any action concerning this Agreement, Indemnitee’s right to indemnification or advancement of Expenses from the Company, or concerning any directors’ and officers’ liability insurance policies maintained by the Company and will indemnify Indemnitee against any and all such Expenses, regardless of whether Indemnitee is ultimately determined to be entitled to such indemnification, unless the court determines that each of the Indemnitee’s claims in such Proceeding were made in bad faith or were frivolous.

Section 15. Establishment of Trust.

(a) In the event of a Potential Change in Control or a Change in Control, the Company will, upon written request by Indemnitee, create a trust for the benefit of Indemnitee (the “Trust”) and from time to time upon written request of Indemnitee will fund such Trust in an amount sufficient to satisfy the reasonably anticipated indemnification and advancement obligations of the Company to the Indemnitee in connection with any Proceeding for which Indemnitee has demanded indemnification and/or advancement prior to the Potential Change in Control or Change in Control (the “Funding Obligation”). The trustee of the Trust (the “Trustee”) will be a bank or trust company or other individual or entity chosen by the Indemnitee and reasonably acceptable to the Company. Nothing in this Section 15 relieves the Company of any of its obligations under this Agreement.

(b) The amount or amounts to be deposited in the Trust pursuant to the Funding Obligation will be determined by mutual agreement of the Indemnitee and the Company or, if the Company and the Indemnitee are unable to reach such an agreement, by Independent Counsel selected in accordance with Section 12(b) of this Agreement. The terms of the Trust will provide that, except upon the consent of both the Indemnitee and the Company, upon a Change in Control: (i) the Trust may not be revoked, or the principal thereof invaded, without the written consent of the Indemnitee; (ii) the Trustee will advance Expenses, to the fullest extent permitted by applicable law, within two (2) business days of a request by the Indemnitee; (iii) the Company will continue to fund the Trust in accordance with the Funding Obligation; (iv) the Trustee will promptly pay to the Indemnitee all amounts for which the Indemnitee is entitled to indemnification pursuant to this Agreement or otherwise; and (v) all unexpended funds in such Trust revert to the Company upon mutual agreement by the Indemnitee and the Company or, if the Indemnitee and the Company are unable to reach such an agreement, by Independent Counsel selected in accordance with Section 12(b) of this Agreement, that the Indemnitee has been fully indemnified under the terms of this Agreement. The terms of the Trust shall provide that New York law (without regard to its conflicts of laws rules) will govern the Trust and the Trustee will consent to the exclusive jurisdiction of Court of Chancery of the State of Delaware, in accordance with Section 25 of this Agreement.

Section 16. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The indemnification and advancement of Expenses provided by this Agreement are not exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the bylaws of the Company, any agreement, a vote of stockholders or a resolution of directors, or otherwise. The indemnification and advancement of Expenses provided by this Agreement may not be limited or restricted by any amendment, alteration or repeal of the Certificate of Incorporation, the bylaws of the Company or this Agreement in any way with respect to any action taken or omitted by Indemnitee in Indemnitee’s Corporate Status occurring prior to any such amendment, alteration or repeal of this Agreement. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Bylaws, Certificate of Incorporation, or this Agreement, it is the intent of the parties hereto that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy is cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or employment of any other right or remedy.

(b)The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)].

i.The Company hereby acknowledges and agrees:

1) the Company is the indemnitor of first resort with respect to any request for indemnification or advancement of Expenses made pursuant to this Agreement concerning any Proceeding arising from or related to Indemnitee’s Corporate Status with the Company;

2)the Company is primarily liable for all indemnification and indemnification or advancement of Expenses obligations for any Proceeding arising from or related to Indemnitee’s Corporate Status, whether created by law, organizational or constituent documents, contract (including this Agreement) or otherwise;

3) any obligation of any other Persons with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)] to indemnify Indemnitee and/or advance Expenses to Indemnitee in respect of any proceeding are secondary to the obligations of the Company’s obligations;

4) the Company will indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated [(including, any Affiliated Entity) or insurer of any such Person; and

ii.the Company irrevocably waives, relinquishes and releases (A) any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)] from any claim of contribution, subrogation, reimbursement, exoneration or indemnification, or any other recovery of any kind in respect of amounts paid by the Company to Indemnitee pursuant to this Agreement [and (B) any right to participate in any claim or remedy of Indemnitee against any Affiliated Entity (or former Affiliated Entity), whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Affiliated Entity (or former Affiliated Entity), directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right].

iii. In the event any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)] or their insurers advances or extinguishes any liability or loss for Indemnitee, the payor has a right of subrogation against the Company or its insurers for all amounts so paid which would otherwise be payable by the Company or its insurers under this Agreement, and the Company shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable such payor to bring suit to enforce such rights. The Company and the undersigned agree that such payor shall be a third-party beneficiary with respect to this Section 16(b)(iii), entitled to enforce this Section 16(b)(iii) as though such payor was a party to this Agreement. In no event will payment by any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)] or their insurers affect the obligations of the Company hereunder or shift primary liability for the Company’s obligation to indemnify or advance of Expenses to any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)].

iv. Any indemnification or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Affiliated Entity)] is specifically in excess over the Company’s obligation to indemnify and advance Expenses or any valid and collectible insurance (including but not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company.

(c)To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, the Company will obtain a policy or policies covering Indemnitee to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies, including coverage in the event the Company does not or cannot, for any reason, indemnify or advance Expenses to Indemnitee as required by this Agreement. If, at the time of the receipt of a notice of a claim pursuant to this Agreement, the Company has director and officer liability insurance in effect, the Company will give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies. The Company will thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. Indemnitee agrees to make reasonable efforts to assist the Company’s efforts to cause the insurers to pay such amounts.

(d) The Company has not entered into as of the date hereof, and following the date hereof shall not enter into, any indemnification agreement or similar arrangement, or amend any existing agreement or arrangement, with any existing or future director or officer of the Company that has the effect of establishing rights of indemnification and contribution benefiting such director or officer in a manner more favorable in any respect than the rights of indemnification and contribution established in favor of the Indemnitee by this Agreement, unless, in each such case, the Indemnitee is offered the opportunity to receive the rights of indemnification and contribution of such agreement or arrangement. All such agreements and arrangements shall be in writing.

Section 17. Duration of Agreement. This Agreement and the obligations of the Company hereunder continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee ceases to have a Corporate Status or (b) one (1) year after the final adjudication or final termination by settlement of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto. The indemnification and advancement of Expenses rights provided by or granted pursuant to this Agreement are binding upon and enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the

Company), continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. The Company shall require and shall cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) of all or substantially all of the business or assets of the Company to, by written agreement, expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

Section 18. Severability. If any provision or provisions of this Agreement is held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) will not in any way be affected or impaired thereby and remain enforceable to the fullest extent permitted by law; (b) such provision or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) will be construed so as to give effect to the intent manifested thereby.

Section 19. Interpretation. Any ambiguity in the terms of this Agreement will be resolved in favor of Indemnitee and in a manner to provide the maximum indemnification and advancement of Expenses permitted by law. The Company and Indemnitee intend that this Agreement provide to the fullest extent permitted by law for indemnification in excess of that expressly provided, without limitation, by the Certificate of Incorporation, the Bylaws, vote of the Company stockholders or disinterested directors, or applicable law.

Section 20. Enforcement.

(a)The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving or continuing to serve as a director or officer of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and is not a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

Section 21. Modification and Waiver. No supplement, modification or amendment of this Agreement is binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement will be deemed or constitutes a waiver of any other provisions of this Agreement nor will any waiver constitute a continuing waiver.

Section 22. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company does not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

Section 23. Notices. All notices, requests, demands and other communications under this Agreement will be in writing and will be deemed to have been duly given if (a) delivered by hand to the other party, (b) sent by reputable overnight courier to the other party or (c) sent by facsimile transmission or electronic mail, with receipt of oral confirmation that such communication has been received:

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee provides to the Company.

(b) If to the Company to:

AEON Biopharma, Inc. 4040 MacArthur Blvd., Suite 260 Newport Beach, California 92660
Attention:	Chief Executive Officer
	General Counsel

or to any other address as may have been furnished to Indemnitee by the Company.

Section 24. Contribution.

(a) Whether or not the indemnification provided in Sections 3, 4 or 8 hereof is available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b) Without diminishing or impairing the obligations of the Company set forth in Section 24(a), if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, will contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 25. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties are governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or Proceeding arising out of or in connection with this Agreement may be brought only in the Court of Chancery of the State of Delaware and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware for purposes of any action or Proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or Proceeding in the Court of Chancery of the State of Delaware, and (iv) waive, and agree not to plead or to make, any claim that any such action or Proceeding brought in the Court of Chancery of the State of Delaware has been brought in an improper or inconvenient forum.

Section 26. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which will for all purposes be deemed to be an original but all of which together constitutes one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 27. Headings. The headings of this Agreement are inserted for convenience only and do not constitute part of this Agreement or affect the construction thereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

AEON BIOPHARMA, INC.	INDEMNITEE
By:	By:
Name:	Name:
Office:	Address:

EX-10.4

Exhibit10.4

AEON BIOPHARMA, INC.

2021 INCENTIVE AWARD PLAN

ARTICLE I.
Purpose

The Plan’s purpose is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities.  Capitalized terms used in the Plan are defined in Article XI.

ARTICLE II.
Eligibility

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.

ARTICLE III.
Administration and Delegation

3.1Administration.  The Plan is administered by the Administrator.  The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan.  The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable.  The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award Agreement as it deems necessary or appropriate to administer the Plan and any Awards.  The Administrator’s determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.

3.2Appointment of Committees.  To the extent Applicable Laws permit, the Board or the Administrator may delegate any or all of its powers under the Plan to one or more Committees or committees of officers of the Company or any of its Subsidiaries.  The Board or the Administrator, as applicable, may rescind any such delegation, abolish any such committee or Committee and/or re-vest in itself any previously delegated authority at any time.

ARTICLE IV.Stock Available for Awards

4.1Number of Shares.  Subject to adjustment under Article VIII and the terms of this Article IV, the maximum number of Shares that may be issued pursuant to Awards under the Plan shall be equal to the Overall Share Limit.  Shares issued under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.

4.2Share Recycling.   If all or any part of an Award expires, lapses or is terminated, exchanged for or settled in cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such

Shares or not issuing any Shares covered by the Award, the unused Shares covered by the Award will, as applicable, become or again be available for Award grants under the Plan. In addition, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award and/or to satisfy any applicable tax withholding obligation with respect to an Award (including Shares retained by the Company from the Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan.  The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not count against the Overall Share Limit.  Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under Section 4.1 and shall not be available for future grants of Awards: (i) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (ii) Shares purchased on the open market with the cash proceeds from the exercise of Options.  

4.3Incentive Stock Option Limitations.  Notwithstanding anything to the contrary herein, no more than 50,000,000 Shares may be issued pursuant to the exercise of Incentive Stock Options.

4.4Substitute Awards.  In connection with an entity’s merger or consolidation with the Company or the Company’s acquisition of an entity’s property or stock, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate.  Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan.  Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees, Consultants or Directors prior to such acquisition or combination.

4.5Non-Employee Director Compensation.  Notwithstanding any provision to the contrary in the Plan, the Administrator may establish compensation for non-employee Directors from time to time, subject to the limitations in the Plan.  The sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of Awards granted to a non-employee Director as compensation for services as a non-employee Director during any fiscal year of the Company may not exceed $600,000.

ARTICLE V.
Stock Options and Stock Appreciation Rights

5.1General.  The Administrator may grant Options or Stock Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive

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Stock Options.  A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement.  

5.2Exercise Price.  The Administrator will establish each Option’s and Stock Appreciation Right’s exercise price and specify the exercise price in the Award Agreement.  The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option (subject to Section 5.6) or Stock Appreciation Right.   Notwithstanding the foregoing, in the case of an Option or a Stock Appreciation Right that is a Substitute Award, the exercise price per share of the Shares subject to such Option or Stock Appreciation Right, as applicable, may be less than the Fair Market Value per share on the date of grant; provided that the exercise price of any Substitute Award shall be determined in accordance with the applicable requirements of Sections 424 and 409A of the Code.

5.3Duration.  Each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that, subject to Section 5.6, the term of an Option or Stock Appreciation Right will not exceed ten years.  Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Stock Appreciation Right (other than an Incentive Stock Option) (i) the exercise of the Option or Stock Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Stock Appreciation Right shall be extended until the date that is 30 days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Stock Appreciation Right.  Notwithstanding the foregoing, to the extent permitted under Applicable Laws, if the Participant, prior to the end of the term of an Option or Stock Appreciation Right, violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right of the Participant and the Participant’s transferees to exercise any Option or Stock Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the Company otherwise determines.

5.4Exercise.  Options and Stock Appreciation Rights may be exercised by delivering to the Company a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes.  Unless the Administrator otherwise determines, an Option or Stock Appreciation Right may not be exercised for a fraction of a Share.

5.5Payment Upon Exercise.  Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by:

(a)cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;

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(b)if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;  

(c)to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value;

(d)to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date;

(e)to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or

(f)to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.

5.6Additional Terms of Incentive Stock Options.  The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code.  If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Option’s grant date, and the term of the Option will not exceed five years.  All Incentive Stock Options will be subject to and construed consistently with Section 422 of the Code.  By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer.  Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or ceases to qualify as an “incentive stock option” under Section 422 of the Code.  Any Incentive Stock Option or portion thereof that fails to qualify as an “incentive stock option” under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Stock Option.

ARTICLE VI.
Restricted Stock; Restricted Stock Units

6.1General.  The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the Company’s right to repurchase all or part of such Shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such Shares) if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award.  In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement.  

6.2Restricted Stock.

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(a)Dividends.  Participants holding Shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement.  In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Common Stock of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.  

(b)Stock Certificates.  The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of Shares of Restricted Stock, together with a stock power endorsed in blank.

6.3Restricted Stock Units.

(a)Settlement.  The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election, in a manner intended to comply with Section 409A.

(b)Stockholder Rights. A Participant will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit.

ARTICLE VII.
Other Stock or Cash Based Awards; DIVIDEND EQUIVALENTS

7.1Other Stock or Cash Based Awards.  Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled.  Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines.  

7.2Dividend Equivalents.  A grant of Restricted Stock Units or Other Stock or Cash Based Award may provide a Participant with the right to receive Dividend Equivalents, and no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.  Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Award with to which the Dividend Equivalents are paid and subject to other terms and conditions as set forth in the Award Agreement.  

ARTICLE VIII.
Adjustments for Changes in Common Stock
and Certain Other Events

8.1Equity Restructuring(a).  In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article VIII, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award’s exercise price or grant price (if applicable), granting new Awards to Participants, and making a cash payment to Participants.  The

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adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.

8.2Corporate Transactions.  In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:  

(a)To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;  

(b)To provide that such Award shall vest and, to the extent applicable, be exercisable as to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

(c)To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;  

(d)To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article IV on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price or applicable performance goals), and the criteria included in, outstanding Awards;  

(e)To replace such Award with other rights or property selected by the Administrator; and/or

(f)To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.

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8.3Effect of Non-Assumption in a Change in Control.  Notwithstanding the provisions of Section 8.2, if a Change in Control occurs and a Participant’s Awards are not continued, converted, assumed, or replaced with a substantially similar award by (a) the Company, or (b) a successor entity or its parent or subsidiary (an “Assumption”), and provided that the Participant has not had a Termination of Service, then, immediately prior to the Change in Control, such Awards shall become fully vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse, in which case, such Awards shall be canceled upon the consummation of the Change in Control in exchange for the right to receive the Change in Control consideration payable to other holders of Common Stock (i) which may be on such terms and conditions as apply generally to holders of Common Stock under the Change in Control documents (including, without limitation, any escrow, earn-out or other deferred consideration provisions) or such other terms and conditions as the Administrator may provide, and (ii) determined by reference to the number of Shares subject to such Awards and net of any applicable exercise price; provided that to the extent that any Awards constitute “nonqualified deferred compensation” that may not be paid upon the Change in Control under Section 409A without the imposition of taxes thereon under Section 409A, the timing of such payments shall be governed by the applicable Award Agreement (subject to any deferred consideration provisions applicable under the Change in Control documents); and provided, further, that if the amount to which the Participant would be entitled upon the settlement or exercise of such Award at the time of the Change in Control is equal to or less than zero, then such Award may be terminated without payment. The Administrator shall determine whether an Assumption of an Award has occurred in connection with a Change in Control.

8.4Administrative Stand Still.  In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock, including any Equity Restructuring or any securities offering or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to 60 days before or after such transaction.

8.5General.  Except as expressly provided in the Plan or the Administrator’s action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation.  Except as expressly provided with respect to an Equity Restructuring under Section 8.1 or the Administrator’s action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price.  The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares.  The Administrator may treat Participants and Awards (or portions thereof) differently under this Article VIII.

ARTICLE IX.
General Provisions Applicable to Awards

9.1Transferability.  Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Stock Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except for certain beneficiary designations, by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable

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only by the Participant.  Any permitted transfer of an Award hereunder shall be without consideration, except as required by Applicable Law.  References to a Participant, to the extent relevant in the context, will include references to a Participant’s authorized transferee that the Administrator specifically approves.

9.2Documentation.  Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. The Award Agreement will contain the terms and conditions applicable to an Award.  Each Award may contain terms and conditions in addition to those set forth in the Plan.

9.3Discretion.  Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award.  The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

9.4Termination of Status.  The Administrator will determine how an authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award and the extent to which, and the period during which the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.

9.5Withholding.  Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by Applicable Law to be withheld in connection with such Participant’s Awards by the date of the event creating the tax liability.  The Company may deduct an amount sufficient to satisfy such tax obligations based on the applicable statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant. In the absence of a contrary determination by the Company (or, with respect to withholding pursuant to clause (ii) below with respect to Awards held by individuals subject to Section 16 of the Exchange Act, a contrary determination by the Administrator), all tax withholding obligations will be calculated based on the maximum applicable statutory withholding rates.  Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the foregoing payment forms if one or more of the payment forms below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding; provided that such amount is paid to the Company at such time as may be required by the Administrator, or (iv) to the extent permitted by the Company, any combination of the foregoing payment forms approved by the Administrator. Notwithstanding any other provision of the Plan, the number of Shares which may be so delivered or retained pursuant to clause (ii) of the immediately preceding sentence shall be limited to the number of Shares which have a Fair Market Value on the date of delivery or retention no greater than the aggregate amount of such liabilities based on the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable award under generally accepted accounting principles in the United States of America); provided, however, to the extent such Shares were acquired by Participant from the Company as compensation, the Shares must have been held for the minimum period required by applicable accounting rules to avoid a charge to the Company’s earnings for financial reporting purposes; provided, further, that, any such Shares delivered or retained shall be rounded up to the nearest whole Share

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to the extent rounding up to the nearest whole Share does not result in the liability classification of the applicable Award under generally accepted accounting principles in the United States of America. If any tax withholding obligation will be satisfied under clause (ii) above by the Company’s retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.

9.6Amendment of Award; Repricing.  The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Non-Qualified Stock Option.  The Participant’s consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Award, or (ii) the change is permitted under Article VIII or pursuant to Section 10.6.  Notwithstanding the foregoing or anything in the Plan to the contrary, the Administrator may, without the approval of the stockholders of the Company, (i) reduce the exercise price per share of outstanding Options or Stock Appreciation Rights or (ii) cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original Options or Stock Appreciation Rights.

9.7Conditions on Delivery of Stock.  The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company’s satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws.  The Company’s inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.

9.8Acceleration.  The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.

9.9Cash Settlement.  Without limiting the generality of any other provision of the Plan, the Administrator may provide, in an Award Agreement or subsequent to the grant of an Award, in its discretion, that any Award may be settled in cash, Shares or a combination thereof.

9.10Broker-Assisted Sales9.11. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (i) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (ii) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (iii) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (iv) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (v) the Company

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and its designees are under no obligation to arrange for such sale at any particular price; and (vi) in the event the proceeds of such sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.

ARTICLE X.
Miscellaneous

10.1No Right to Employment or Other Status.  No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company or any of its Subsidiaries.  The Company and its Subsidiaries expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement or in the Plan.

10.2No Rights as Stockholder; Certificates.  Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares.  Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).  The Company may place legends on stock certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws.

10.3Effective Date and Term of Plan.  Unless earlier terminated by the Board, the Plan will become effective on the day prior to the Public Trading Date (the “Effective Date”) and will remain in effect until the tenth anniversary of the Effective Date, but Awards previously granted may extend beyond that date in accordance with the Plan.  Notwithstanding anything to the contrary in the Plan, an Incentive Stock Option may not be granted under the Plan after 10 years from the earlier of (i) the date the Board adopted the Plan or (ii) the date the Company’s stockholders approved the Plan. If the Plan is not approved by the Company’s stockholders, the Plan will not become effective, no Awards will be granted under the Plan.

10.4Amendment of Plan.  The Board may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Overall Share Limit, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant’s consent.  No Awards may be granted under the Plan during any suspension period or after the Plan’s termination.  Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination.  The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

10.5Provisions for Foreign Participants.  The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

10.6Section 409A.  

(a)General.  The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under

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Section 409A apply.  Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award’s grant date.  The Company makes no representations or warranties as to an Award’s tax treatment under Section 409A or otherwise.  The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant “nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A.

(b)Separation from Service.  If an Award constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award upon a termination of a Participant’s Service Provider relationship will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs upon or after the termination of the Participant’s Service Provider relationship.  For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms means a “separation from service.”

(c)Payments to Specified Employees.  Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee” (as defined under Section 409A and as the Administrator determines) due to his or her “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest).  Any payments of “nonqualified deferred compensation” under such Award payable more than six months following the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to be made.

10.7Limitations on Liability.  Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary.  The Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Administrator’s approval) arising from any act or omission concerning this Plan unless arising from such person’s own fraud or bad faith.

10.8Lock-Up Period.  The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to 180 days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.

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10.9Data Privacy.  As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan.  The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”).  The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management.  These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country.  By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares.  The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan.  A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative.  If the Participant refuses or withdraws the consents in this Section 10.9, the Company may cancel Participant’s ability to participate in the Plan and, in the Administrator’s discretion, the Participant may forfeit any outstanding Awards.  For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.

10.10Severability.  If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.

10.11Governing Documents.  If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply.

10.12Governing Law.  The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the State of Delaware.

10.13Claw-back Provisions.  All Awards (including, without limitation, any proceeds, gains or other economic benefit actually or constructively received by Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as and to the extent set forth in such claw-back policy or the Award Agreement.

10.14Titles and Headings.  The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan’s text, rather than such titles or headings, will control.

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10.15Conformity to Securities Laws.  Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws.  Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in conformance with Applicable Laws.  To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws.

10.16Relationship to Other Benefits.  No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.

ARTICLE XI.
Definitions

As used in the Plan, the following words and phrases will have the following meanings:

11.1“Administrator” means the Board or a Committee to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.

11.2“Applicable Laws” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted.

11.3“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Dividend Equivalents, or Other Stock or Cash Based Awards.

11.4“Award Agreement” means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.

11.5“Board” means the Board of Directors of the Company.

11.6“Change in Control” means and includes each of the following:

(a)A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, Strathspey Crown Holdings Group, LLC, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

(b)During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in

13

subsections (a) or (c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

(c)The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

(i)which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii)after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.  

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or portion of any Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b) or (c) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).

The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

11.7“Closing Date” means the date on which the closing of the Company’s initial public offering of Common Stock in a firm commitment underwriting occurs.

11.8“Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

11.9“Committee” means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit.  To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3; however, a Committee member’s

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failure to qualify as a “non-employee director” within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.  

11.10“Common Stock” means the common stock of the Company.

11.11“Company” means AEON Biopharma, Inc., a Delaware corporation, or any successor.

11.12 “Consultant” means any person, including any adviser, engaged by the Company or any of its Subsidiaries to render services to such entity.

11.13“Designated Beneficiary” means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant’s rights if the Participant dies or becomes incapacitated.  Without a Participant’s effective designation, “Designated Beneficiary” will mean the Participant’s estate.

11.14“Director” means a Board member.

11.15“Dividend Equivalents” means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.

11.16“Employee” means any employee of the Company or its Subsidiaries.

11.17“Equity Restructuring” means, as determined by the Administrator, a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, or other large, nonrecurring cash dividend, that affects the Shares (or other securities of the Company) or the share price of Common Stock (or other securities of the Company) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

11.18“Exchange Act” means the Securities Exchange Act of 1934, as amended.

11.19“Fair Market Value” means, as of any date, the value of a share of Common Stock determined as follows: (a) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (b) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (c) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion.

Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company’s initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

11.20“Greater Than 10% Stockholder” means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.

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11.21“Incentive Stock Option” means an Option intended to qualify as an “incentive stock option” as defined in Section 422 of the Code.

11.22“Non-Qualified Stock Option” means an Option, or portion thereof, not intended or not qualifying as an Incentive Stock Option.

11.23“Option” means an option to purchase Shares, which will either be an Incentive Stock Option or a Non-Qualified Stock Option.

11.24“Other Stock or Cash Based Awards” means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property awarded to a Participant under Article VII.

11.25“Overall Share Limit” means the sum of (a) 3,000,000 Shares (the “Initial Share Limit”), provided, that, on the Closing Date, the Initial Share Limit shall be adjusted upwards or downwards to a number of shares of Common Stock such that, if each share is issued under the Plan immediately following the Closing Date and becomes an outstanding share, that number of shares would equal 12% of the then-outstanding shares of Common Stock, excluding any shares that may be issued by the Company upon exercise of the underwriters’ over-allotment option; and (b) an annual increase on the first day of each calendar year beginning January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 4% of the aggregate number of shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of Shares as is determined by the Board.

11.26 “Participant” means a Service Provider who has been granted an Award.

11.27“Performance Criteria” mean the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period, which may include the following: net earnings or losses (either before or after one or more of interest, taxes, depreciation, amortization, and non-cash equity-based compensation expense); gross or net sales or revenue or sales or revenue growth; net income (either before or after taxes) or adjusted net income; profits (including but not limited to gross profits, net profits, profit growth, net operation profit or economic profit), profit return ratios or operating margin; budget or operating earnings (either before or after taxes or before or after allocation of corporate overhead and bonus); cash flow (including operating cash flow and free cash flow or cash flow return on capital); return on assets; return on capital or invested capital; cost of capital; return on stockholders’ equity; total stockholder return; return on sales; costs, reductions in costs and cost control measures; expenses; working capital; earnings or loss per share; adjusted earnings or loss per share; price per share or dividends per share (or appreciation in or maintenance of such price or dividends); regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; financial ratios (including those measuring liquidity, activity, profitability or leverage); debt levels or reductions; sales-related goals; financing and other capital raising transactions; cash on hand; acquisition activity; investment sourcing activity; and marketing initiatives, any of which may be measured in absolute terms or as compared to any incremental increase or decrease. Such performance goals also may be based solely by reference to the Company’s performance or the performance of a Subsidiary, division, business segment or business unit of the Company or a Subsidiary, or based upon performance relative to performance of other companies or upon comparisons of any of the indicators of performance relative to performance of other companies.

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11.28“Plan” means this 2021 Incentive Award Plan.

11.29 “Public Trading Date” means the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system, or, if earlier, the date on which the Company becomes a “publicly held corporation” for purposes of Treasury Regulation Section 1.162-27(c)(1).

11.30“Restricted Stock” means Shares awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

11.31“Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date awarded to a Participant under Article VI subject to certain vesting conditions and other restrictions.

11.32“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act.

11.33“Section 409A” means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.

11.34“Securities Act” means the Securities Act of 1933, as amended.

11.35“Service Provider” means an Employee, Consultant or Director.

11.36“Shares” means shares of Common Stock.

11.37“Stock Appreciation Right” means a stock appreciation right granted under Article V.

11.38“Subsidiary” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

11.39“Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

11.40“Termination of Service” means the date the Participant ceases to be a Service Provider.

* * * * *

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EX-10.5

Exhibit 10.5

AEON BIOPHARMA, INC.

2021 INCENTIVE AWARD PLAN

STOCK OPTION GRANT NOTICE

AEON Biopharma, Inc., a Delaware corporation (the “Company”) has granted to the participant listed below (“Participant”) the stock option (the “Option”) described in this Stock Option Grant Notice (the “Grant Notice”), subject to the terms and conditions of the AEON Biopharma, Inc. 2021 Incentive Award Plan (as amended from time to time, the “Plan”) and the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.  Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.

Participant:
Grant Date:
Exercise Price per Share:	[Can be no less than 100% of the FMV on the Grant Date]
Shares Subject to the Option:
Final Expiration Date:	[Can be no later than 10th anniversary of Grant Date]
Vesting Commencement Date:
Vesting Schedule:	[To be specified]
Type of Option	[Incentive Stock Option]/[Non-Qualified Stock Option]

By accepting (whether in writing, electronically or otherwise) the Option, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.  

AEON BIOPHARMA, INC.	PARTICIPANT
By:
Name:	[Participant Name]
Title:

Exhibit A

STOCK OPTION AGREEMENT

Capitalized terms not specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

ARTICLE I.
GENERAL

1.1Grant of Option.  The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the “Grant Date”).

1.2Incorporation of Terms of Plan.  The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

ARTICLE II.
PERIOD OF EXERCISABILITY

2.1Commencement of Exercisability.  The Option will vest and become exercisable according to the vesting schedule in the Grant Notice (the “Vesting Schedule”) except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated.  Notwithstanding anything in the Grant Notice, the Plan or this Agreement to the contrary, unless the Administrator otherwise determines, the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant’s Termination of Service for any reason (after taking into consideration any accelerated vesting and exercisability which may occur in connection with such Termination of Service).

2.2Duration of Exercisability.  The Vesting Schedule is cumulative.  Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires.  The Option will be forfeited immediately upon its expiration.

2.3Expiration of Option.  The Option may not be exercised to any extent by anyone after, and will expire on, the first of the following to occur:

(a)The final expiration date in the Grant Notice; provided, however, such final expiration date may be extended pursuant to Section 5.3 of the Plan;

(b)Except as the Administrator may otherwise approve, the expiration of three months from the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Cause (as defined below) or by reason of Participant’s death or disability;

(c)Except as the Administrator may otherwise approve, the expiration of one year from the date of Participant’s Termination of Service by reason of Participant’s death or disability; and

(d)Except as the Administrator may otherwise approve, Participant’s Termination of Service for Cause.

As used in this Agreement, “Cause” means any of the following events that the Board has determined, in good faith, has occurred: (i) Participant’s failure to substantially perform Participant’s duties (other than a failure resulting from Participant’s disability), including Participant’s failure to follow any lawful directive from the Board or Participant’s immediate supervisor; (ii) Participant’s violation of any code or standard

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of behavior generally applicable to Employees or executives of the Company; (iii) engaging in conduct that may reasonably result in reputational, economic or financial injury to the Company or its affiliates; (iv) Participant’s commission of, indictment for or plea of nolo contendere to a felony, any crime involving fraud or embezzlement under federal, state or local laws or a crime involving moral turpitude; (v) Participant’sfailure to devote substantially all of Participant’sworking time to the business of the Company and its affiliates; (vi) Participant’sunlawful use (including being under the influence) or possession of illegal drugs on the premises of the Company or any of its affiliates or while performing Participant’sduties and responsibilities for the Company or any of its affiliates; (vii) Participant’scommission of an act of fraud, willful misconduct or gross negligence with respect to the Company or its affiliates, or Participant’smaterial breach of fiduciary duty against the Company or any of its affiliates; (viii) Participant’sengaging in misconduct in connection with the performance of any of Participant’sduties, including by embezzlement or theft from the Company or its affiliates, misappropriating funds from the Company or its affiliates or securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company or its affiliates; or (ix) Participant’sactive disloyalty to the Company or its affiliates, including willfully aiding a competitor or improperly disclosing confidential information.

ARTICLE III.
EXERCISE OF OPTION

3.1Person Eligible to Exercise.  During Participant’s lifetime, only Participant may exercise the Option.  After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by Participant’s Designated Beneficiary as provided in the Plan.

3.2Partial Exercise.  Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole Shares.

3.3Tax Withholding.

(a)The Company shall withhold, or cause to be withheld, Shares otherwise vesting or issuable under this Option in satisfaction of any applicable withholding tax obligations.  The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding no greater than the aggregate amount of such liabilities based on the maximum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income.

(b)Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale of Shares.  The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant’s tax liability.

ARTICLE IV.
OTHER PROVISIONS

4.1Adjustments.  Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

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4.2Notices.  Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address,email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

4.3Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

4.4Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

4.5Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

4.6Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b‑3) that are requirements for the application of such exemptive rule.  To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

4.7Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

4.8Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

4.9Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.

4.10Not a Contract of Employment.  Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby

3

expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

4.11Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

4.12Incentive Stock Options.  If the Option is designated as an Incentive Stock Option:

(a)Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect to the shares is granted) with respect to which stock options intended to qualify as “incentive stock options” under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such stock options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such stock options (including the Option) will be treated as non-qualified stock options.  Participant further acknowledges that the rule set forth in the preceding sentence will be applied by taking the Option and other stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code.  Participant also acknowledges that if the Option is exercised more than three months after Participant’s Termination of Service, other than by reason of death or disability, the Option will be taxed as a Non-Qualified Stock Option.

(b)Participant will give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (a) within two years from the Grant Date or (b) within one year after the transfer of such Shares to Participant.  Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

* * * * *

4

EX-10.6

Exhibit 10.6

AEON BIOPHARMA, INC.

2021 INCENTIVE AWARD PLAN

RESTRICTED STOCK Unit Grant Notice

AEON Biopharma, Inc., a Delaware corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the AEON Biopharma, Inc. 2021 Incentive Award Plan (as amended from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.

Participant:
Grant Date:
Number of RSUs:
Vesting Commencement Date:
Vesting Schedule:	[To be specified]

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.

AEON BIOPHARMA, INC. PARTICIPANT

By:
Name:	[Participant Name]
Title:

Exhibit A

RESTRICTED STOCK UNIT AGREEMENT

Capitalized terms not specifically defined in this Restricted Stock Unit Agreement (this “Agreement”) have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.

Article I.
general

1.1Award of RSUs. The Company has granted the RSUs to Participant effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”).  Each RSU represents the right to receive one Share as set forth in this Agreement.  Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.

1.2Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

1.3Unsecured Promise.  The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.

Article II.
VESTING; forfeiture AND SETTLEMENT

2.1Vesting; Forfeiture.  The RSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated.  In the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company.  

2.2Settlement.

(a)The RSUs will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than March 15 of the year following the year in which the RSU’s vesting date occurs.

(b)Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.

Article III.
TAXATION AND TAX WITHHOLDING

3.1Representation.  Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.

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3.2Tax Withholding.

(a)Unless the Administrator otherwise determines, the Company shall withhold, or cause to be withheld, Shares otherwise vesting or issuable under this Award (including the RSUs) in satisfaction of any applicable withholding tax obligations.  The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a Fair Market Value on the date of withholding no greater than the aggregate amount of such liabilities based on the maximum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income.

(b)Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares.  The Company and its Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

Article IV.
other provisions

4.1Adjustments.  Participant acknowledges that the RSUs and the Shares subject to the RSUs  are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

4.2Notices.  Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.

4.3Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

4.4Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.

4.5Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

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4.6Limitations Applicable to Section 16 Persons.Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

4.7Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

4.8Agreement Severable.  In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

4.9Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.

4.10Not a Contract of Employment.  Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.

4.11Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.

* * * * *

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EX-10.7

Exhibit 10.7

AEON BIOPHARMA, INC.

2021 EMPLOYEE STOCK PURCHASE PLAN

Article I.
PURPOSE

The purposes of this AEON Biopharma, Inc. 2021 Employee Stock Purchase Plan (as it may be amended or restated from time to time, the “Plan”) are to assist Eligible Employees of AEON Biopharma, Inc., a Delaware corporation (the “Company”), and its Designated Subsidiaries in acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Code, and to help Eligible Employees provide for their future security and to encourage them to remain in the employment of the Company and its Designated Subsidiaries.

Article II.
DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. Masculine, feminine and neuter pronouns are used interchangeably and each comprehends the others.

2.1“Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article XI. The term “Administrator” shall refer to the Committee unless the Board has assumed the authority for administration of the Plan as provided in Article XI.

2.2“Applicable Law” shall mean the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where rights under this Plan are granted.

2.3“Board” shall mean the Board of Directors of the Company.

2.4“Change in Control” shall mean

(a)A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission or a transaction or series of transactions that meets the requirements of clauses (i) and (ii) of subsection (c) below) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, Strathspey Crown Holdings Group, LLC, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

(b)During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) of the Company (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

(c)The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

(i)which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii)after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.  

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any portion of any right that constitutes “nonqualified deferred compensation,” the transaction or event constituting the Change in Control with respect to such right (or portion thereof) must also constitute a “change in control event” (as defined in Treasury Regulation §1.409A-3(i)(5)) to trigger the payment event for such right, to the extent required by Section 409A of the Code.  The Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

2.5“Closing Date” means the date on which the closing of the Company’s initial public offering of Common Stock in a firm commitment underwriting occurs.

2.6“Code” shall mean the Internal Revenue Code of 1986, as amended and the regulations issued thereunder.

2.7“Common Stock” shall mean the common stock of the Company and such other securities of the Company that may be substituted therefor pursuant to Article VIII.

2.8“Company” shall mean AEON Biopharma, Inc., a Delaware corporation.

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2.9“Compensation” of an Eligible Employee shall mean the gross cash compensation received by such Eligible Employee as compensation for services to the Company or any Designated Subsidiary, including prior week adjustment and overtime payments, but excluding vacation pay, holiday pay, jury duty pay, funeral leave pay, military leave pay, commissions and periodic bonuses, one-time bonuses (e.g., retention or sign on bonuses), education or tuition reimbursements, travel expenses, business and moving reimbursements, income received in connection with any stock options, stock appreciation rights, restricted stock, restricted stock units or other compensatory equity awards, fringe benefits, other special payments and all contributions made by the Company or any Designated Subsidiary for the Employee’s benefit under any employee benefit plan now or hereafter established.

2.10“Designated Subsidiary” shall mean any Subsidiary designated by the Administrator in accordance with Section 11.3(b).

2.11“Effective Date” shall mean the date the Plan is adopted by the Board.

2.12“Eligible Employee” shall mean an Employee who does not, immediately after any rights under this Plan are granted, own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of Common Stock and other stock of the Company, a Parent or a Subsidiary (as determined under Section 423(b)(3) of the Code). For purposes of the foregoing sentence, the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock that an Employee may purchase under outstanding options shall be treated as stock owned by the Employee; provided, however, that the Administrator may provide in an Offering Document that an Employee shall not be eligible to participate in an Offering Period if: (a) such Employee is a highly compensated employee within the meaning of Section 423(b)(4)(D) of the Code, (b) such Employee has not met a service requirement designated by the Administrator pursuant to Section 423(b)(4)(A) of the Code (which service requirement may not exceed two years), (c) such Employee’s customary employment is for 20 hours or less per week, (d) such Employee’s customary employment is for less than five months in any calendar year and/or (e) such Employee is a citizen or resident of a foreign jurisdiction and the grant of a right to purchase Common Stock under the Plan to such Employee would be prohibited under the laws of such foreign jurisdiction or the grant of a right to purchase Common Stock under the Plan to such Employee in compliance with the laws of such foreign jurisdiction would cause the Plan to violate the requirements of Section 423 of the Code, as determined by the Administrator in its sole discretion; provided, further, that any exclusion in clauses (a), (b), (c), (d) or (e) shall be applied in an identical manner under each Offering Period to all Employees, in accordance with Treasury Regulation Section 1.423-2(e).

2.13“Employee” shall mean any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the Company or any Designated Subsidiary. “Employee” shall not include any director of the Company or a Designated Subsidiary who does not render services to the Company or a Designated Subsidiary as an employee within the meaning of Section 3401(c) of the Code. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three -month period.

2.14“Enrollment Date” shall mean the first Trading Day of each Offering Period.

2.15“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

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2.16“Fair Market Value” means, as of any date, the value of a share of Common Stock determined as follows: (a) if the Common Stock is listed on any established stock exchange, its Fair Market Value will be the closing sales price for such Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (b) if the Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (c) without an established market for the Common Stock, the Administrator will determine the Fair Market Value in its discretion.

2.17“Offering Document” shall have the meaning given to such term in Section 4.1.

2.18“Offering Period” shall have the meaning given to such term in Section 4.1.

2.19“Parent” shall mean any corporation, other than the Company, in an unbroken chain of corporations ending with the Company if, at the time of the determination, each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

2.20“Participant” shall mean any Eligible Employee who has executed a subscription agreement and been granted rights to purchase Common Stock pursuant to the Plan.

2.21“Plan” shall mean this AEON Biopharma, Inc. 2021 Employee Stock Purchase Plan, as it may be amended from time to time.

2.22 “Purchase Date” shall mean the last Trading Day of each Purchase Period.

2.23“Purchase Period” shall refer to one or more periods within an Offering Period, as designated in the applicable Offering Document; provided, however, that, in the event no Purchase Period is designated by the Administrator in the applicable Offering Document, the Purchase Period for each Offering Period covered by such Offering Document shall be the same as the applicable Offering Period.

2.24“Purchase Price” shall mean the purchase price designated by the Administrator in the applicable Offering Document (which purchase price shall not be less than 85% of the Fair Market Value of a Share on the Enrollment Date or on the Purchase Date, whichever is lower); provided, however, that, in the event no purchase price is designated by the Administrator in the applicable Offering Document, the purchase price for the Offering Periods covered by such Offering Document shall be 85% of the Fair Market Value of a Share on the Enrollment Date or on the Purchase Date, whichever is lower; provided, further, that the Purchase Price may be adjusted by the Administrator pursuant to Article VIII and shall not be less than the par value of a Share.

2.25“SecuritiesAct” shall mean the Securities Act of 1933, as amended.

2.26“Share” shall mean a share of Common Stock.

2.27“Subsidiary” shall mean any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the determination, each of the corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain; provided, however, that a limited liability company or partnership may be treated as a Subsidiary to the extent either

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(a) such entity is treated as a disregarded entity under Treasury Regulation Section 301.7701-3(a) by reason of the Company or any other Subsidiary that is a corporation being the sole owner of such entity, or (b) such entity elects to be classified as a corporation under Treasury Regulation Section 301.7701-3(a) and such entity would otherwise qualify as a Subsidiary.

2.28 “TradingDay” shall mean a day on which national stock exchanges in the United States are open for trading.

Article III.
SHARES SUBJECT TO THE PLAN

3.1Number of Shares. Subject to Article VIII, the aggregate number of Shares that may be issued pursuant to rights granted under the Plan shall be equal to 1% of the then-outstanding shares of Common Stock, excluding any shares that may be issued by the Company upon exercise of the underwriters’ over-allotment option. In addition to the foregoing, subject to Article VIII, on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, the number of Shares available for issuance under the Plan shall be increased by that number of Shares equal to the lesser of (a) 1% of the Shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of Shares as determined by the Board. If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for issuance under the Plan. Notwithstanding anything in this Section 3.1 to the contrary, the number of Shares that may be issued or transferred pursuant to the rights granted under the Plan shall not exceed an aggregate of 25,000,000 Shares, subject to Article 8.

3.2Stock Distributed. Any Common Stock distributed pursuant to the Plan may consist, in whole or in part, of authorized and unissued Common Stock, treasury stock or Common Stock purchased on the open market.

Article IV.
Offering Periods; Offering Documents; Purchase dates

4.1Offering Periods. The Administrator may from time to time grant or provide for the grant of rights to purchase Common Stock under the Plan to Eligible Employees during one or more periods (each, an “Offering Period”) selected by the Administrator. The terms and conditions applicable to each Offering Period shall be set forth in an “Offering Document” adopted by the Administrator, which Offering Document shall be in such form and shall contain such terms and conditions as the Administrator shall deem appropriate. The Administrator shall establish in each Offering Document one or more Purchase Periods during such Offering Period during which rights granted under the Plan shall be exercised and purchases of Shares carried out during such Offering Period in accordance with such Offering Document and the Plan.  The provisions of separate Offering Periods under the Plan need not be identical.

4.2Offering Documents. Each Offering Document with respect to an Offering Period shall specify (through incorporation of the provisions of this Plan by reference or otherwise):

(a)the length of the Offering Period, which period shall not exceed 27 months;

(b)the length of the Purchase Period(s) within the Offering Period;

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(c)the maximum number of Shares that may be purchased by any Eligible Employee during such Offering Period, which, in the absence of a contrary designation by the Administrator specified in the applicable Offering Document, shall be 30,000 Shares;

(d)in connection with each Offering Period that contains more than one Purchase Period, the maximum aggregate number of Shares which may be purchased by any Eligible Employee during each Purchase Period, which, in the absence of a contrary designation by the Administrator specified in the applicable Offering Document, shall be 30,000 Shares; and

(e)such other provisions as the Administrator determines are appropriate, subject to the Plan.

Article V.
ELIGIBILITY AND PARTICIPATION

5.1Eligibility. Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to the requirements of this Article V and the limitations imposed by Section 423(b) of the Code.

5.2Enrollment in Plan.

(a)Except as otherwise set forth in an Offering Document or determined by the Administrator, an Eligible Employee may become a Participant in the Plan for an Offering Period by delivering a subscription agreement to the Company by such time prior to the Enrollment Date for such Offering Period (or such other date specified in the Offering Document) designated by the Administrator and in such form as the Company provides.

(b)Each subscription agreement shall designate a whole percentage of such Eligible Employee’s Compensation to be withheld by the Company or the Designated Subsidiary employing such Eligible Employee on each payday during the Offering Period as payroll deductions under the Plan. The designated percentage may not be less than 1% and may not be more than the maximum percentage specified by the Administrator in the applicable Offering Document (which percentage shall be 15% in the absence of any such designation). The payroll deductions made for each Participant shall be credited to an account for such Participant under the Plan and shall be deposited with the general funds of the Company.

(c)A Participant may decrease the percentage of Compensation designated in his or her subscription agreement, subject to the limits of this Section 5.2, or may suspend his or her payroll deductions, at any time during an Offering Period; provided, however, that the Administrator may limit the number of changes a Participant may make to his or her payroll deduction elections during each Offering Period in the applicable Offering Document (and in the absence of any specific designation by the Administrator, a Participant shall be allowed two decreases and one suspension (but no increases) to his or her payroll deduction elections during each Offering Period with respect to such Offering Period). Any such change or suspension of payroll deductions shall be effective with the first full payroll period following five business days after the Company’s receipt of the new subscription agreement (or such shorter or longer period as may be specified by the Administrator in the applicable Offering Document).  In the event a Participant suspends his or her payroll deductions, such Participant’s cumulative payroll deductions prior to the suspension shall remain in his or her account and shall be applied to the purchase of Shares on the next occurring Purchase Date and shall not be paid to such Participant unless he or she withdraws from participation in the Plan pursuant to Article VII.

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(d)Except as otherwise set forth in Section 5.8 or in an Offering Document or determined by the Administrator, a Participant may participate in the Plan only by means of payroll deduction and may not make contributions by lump sum payment for any Offering Period.

5.3Payroll Deductions. Except as otherwise provided in the applicable Offering Document or Section 5.8, payroll deductions for a Participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which the Participant’s authorization is applicable, unless sooner terminated by the Participant as provided in Article VII or suspended by the Participant or the Administrator as provided in Section 5.2 and Section 5.6, respectively.

5.4Effect of Enrollment. A Participant’s completion of a subscription agreement will enroll such Participant in the Plan for each subsequent Offering Period on the terms contained therein until the Participant either submits a new subscription agreement, withdraws from participation under the Plan as provided in Article VII or otherwise becomes ineligible to participate in the Plan.

5.5Limitation on Purchase of Common Stock. An Eligible Employee may be granted rights under the Plan only if such rights, together with any other rights granted to such Eligible Employee under “employee stock purchase plans” of the Company, any Parent or any Subsidiary, as specified by Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase stock of the Company or any Parent or Subsidiary to accrue at a rate that exceeds $25,000 of the fair market value of such stock (determined as of the first day of the Offering Period during which such rights are granted) for each calendar year in which such rights are outstanding at any time. This limitation shall be applied in accordance with Section 423(b)(8) of the Code.

5.6Decrease or Suspension of Payroll Deductions. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 5.5 or the other limitations set forth in this Plan, a Participant’s payroll deductions may be suspended by the Administrator at any time during an Offering Period. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares by reason of Section 423(b)(8) of the Code, Section 5.5 or the other limitations set forth in this Plan shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

5.7Foreign Employees. In order to facilitate participation in the Plan, the Administrator may provide for such special terms applicable to Participants who are citizens or residents of a foreign jurisdiction, or who are employed by a Designated Subsidiary outside of the United States, as the Administrator may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Such special terms may not be more favorable than the terms of rights granted under the Plan to Eligible Employees who are residents of the United States. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose. No such special terms, supplements, amendments or restatements shall include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.

5.8Leave of Absence. During leaves of absence approved by the Company meeting the requirements of Treasury Regulation Section 1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan by making cash payments to the Company on his or her normal payday equal to his or her authorized payroll deduction.

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Article VI.
grant and Exercise of rights

6.1Grant of Rights. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period shall be granted a right to purchase the maximum number of Shares specified under Section 4.2, subject to the limits in Section 5.5, and shall have the right to buy, on each Purchase Date during such Offering Period (at the applicable Purchase Price), such number of whole Shares as is determined by dividing (a) such Participant’s payroll deductions accumulated prior to such Purchase Date and retained in the Participant’s account as of the Purchase Date, by (b) the applicable Purchase Price (rounded down to the nearest Share). The right shall expire on the earlier of: (x) the last Purchase Date of the Offering Period, (y) last day of the Offering Period and (z) the date on which the Participant withdraws in accordance with Section 7.1 or Section 7.3.

6.2Exercise of Rights. On each Purchase Date, each Participant’s accumulated payroll deductions and any other additional payments specifically provided for in the applicable Offering Document will be applied to the purchase of whole Shares, up to the maximum number of Shares permitted pursuant to the terms of the Plan and the applicable Offering Document, at the Purchase Price. No fractional Shares shall be issued upon the exercise of rights granted under the Plan, unless the Offering Document specifically provides otherwise. Any cash in lieu of fractional Shares remaining after the purchase of whole Shares upon exercise of a purchase right will be carried forward and applied toward the purchase of whole Shares for the following Offering Period, unless the Administrator provides in the applicable Offering Document that such amounts shall be credited to a Participant’s account and returned to the Participant in one lump sum payment in a subsequent payroll check as soon as practicable after the exercise date.  Shares issued pursuant to the Plan may be evidenced in such manner as the Administrator may determine and may be issued in certificated form or issued pursuant to book-entry procedures.

6.3Pro Rata Allocation of Shares. If the Administrator determines that, on a given Purchase Date, the number of Shares with respect to which rights are to be exercised may exceed (a) the number of Shares that were available for issuance under the Plan on the Enrollment Date of the applicable Offering Period, or (b) the number of Shares available for issuance under the Plan on such Purchase Date, the Administrator may in its sole discretion provide that the Company shall make a pro rata allocation of the Shares available for purchase on such Enrollment Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants for whom rights to purchase Common Stock are to be exercised pursuant to this Article VI on such Purchase Date, and shall either (i) continue all Offering Periods then in effect, or (ii) terminate any or all Offering Periods then in effect pursuant to Article IX. The Company may make pro rata allocation of the Shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares shall be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

6.4Withholding. At the time a Participant’s rights under the Plan are exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of, the Participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, that arise upon the exercise of the right or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Participant.

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6.5Conditions to Issuance of Common Stock. The Company shall not be required to issue or deliver any certificate or certificates for, or make any book entries evidencing, Shares purchased upon the exercise of rights under the Plan prior to fulfillment of all of the following conditions:

(a)The admission of such Shares to listing on all stock exchanges, if any, on which the Common Stock is then listed;

(b)The completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, that the Administrator shall, in its absolute discretion, deem necessary or advisable;

(c)The obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable;

(d)The payment to the Company of all amounts that it is required to withhold under federal, state or local law upon exercise of the rights, if any; and

(e)The lapse of such reasonable period of time following the exercise of the rights as the Administrator may from time to time establish for reasons of administrative convenience.

Article VII.
WITHDRAWAL; CESSATION OF ELIGIBILITY

7.1Withdrawal. A Participant may withdraw all but not less than all of the payroll deductions credited to his or her account and not yet used to exercise his or her rights under the Plan at any time by giving written notice to the Company in a form acceptable to the Company no later than  one week prior to the end of the Offering Period (or such shorter or longer period specified by the Administrator in the Offering Document). All of the Participant’s payroll deductions credited to his or her account during an Offering Period shall be paid to such Participant as soon as reasonably practicable after receipt of notice of withdrawal and such Participant’s rights for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of Shares shall be made for such Offering Period. If a Participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the next Offering Period unless the Participant is an Eligible Employee and timely delivers to the Company a new subscription agreement.

7.2Future Participation. A Participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or a Designated Subsidiary or in subsequent Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.

7.3Cessation of Eligibility. Upon a Participant’s ceasing to be an Eligible Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan pursuant to this Article VII and the payroll deductions credited to such Participant’s account during the Offering Period shall be paid to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 12.4, as soon as reasonably practicable, and such Participant’s rights for the Offering Period shall be automatically terminated.

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Article VIII.Adjustments upon Changes in Stock

8.1Changes in Capitalization. Subject to Section 8.3, in the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), Change in Control, reorganization, merger, amalgamation, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any outstanding purchase rights under the Plan, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (a) the aggregate number and type of Shares (or other securities or property) that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 and the limitations established in each Offering Document pursuant to Section 4.2 on the maximum number of Shares that may be purchased); (b) the class(es) and number of Shares and price per Share subject to outstanding rights; and (c) the Purchase Price with respect to any outstanding rights.

8.2Other Adjustments. Subject to Section 8.3, in the event of any transaction or event described in Section 8.1 or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate (including without limitation any Change in Control), or of changes in Applicable Law or accounting principles, the Administrator, in its discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any right under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

(a)To provide for either (i) termination of any outstanding right in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon the exercise of such right had such right been currently exercisable or (ii) the replacement of such outstanding right with other rights or property selected by the Administrator in its sole discretion;

(b)To provide that the outstanding rights under the Plan shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar rights covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

(c)To make adjustments in the number and type of Shares (or other securities or property) subject to outstanding rights under the Plan and/or in the terms and conditions of outstanding rights and rights that may be granted in the future;

(d)To provide that Participants’ accumulated payroll deductions may be used to purchase Common Stock prior to the next occurring Purchase Date on such date as the Administrator determines in its sole discretion and the Participants’ rights under the ongoing Offering Period(s) shall be terminated; and

(e)To provide that all outstanding rights shall terminate without being exercised.

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8.3No Adjustment Under Certain Circumstances. No adjustment or action described in this Article VIII or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to fail to satisfy the requirements of Section 423 of the Code.

8.4No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to outstanding rights under the Plan or the Purchase Price with respect to any outstanding rights.

Article IX.
Amendment, modification and termination

9.1Amendment, Modification and Termination. The Administrator may amend, suspend or terminate the Plan at any time and from time to time; provided, however, that approval of the Company’s stockholders shall be required to amend the Plan to: (a) increase the aggregate number, or change the type, of shares that may be sold pursuant to rights under the Plan under Section 3.1 (other than an adjustment as provided by Article VIII); (b) change the corporations or classes of corporations whose employees may be granted rights under the Plan; or (c) change the Plan in any manner that would cause the Plan to no longer be an “employee stock purchase plan” within the meaning of Section 423(b) of the Code.

9.2Certain Changes to Plan. Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected, to the extent permitted by Section 423 of the Code, the Administrator shall be entitled to change or terminate the Offering Periods, limit the frequency and/or number of changes in the amount withheld from Compensation during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of payroll withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion to be advisable that are consistent with the Plan.

9.3Actions In the Event of Unfavorable Financial Accounting Consequences. In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:

(a)altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;

(b)shortening any Offering Period so that the Offering Period ends on a new Purchase Date, including an Offering Period underway at the time of the Administrator action; and

(c)allocating Shares.

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Such modifications or amendments shall not require stockholder approval or the consent of any Participant.

9.4Payments Upon Termination of Plan. Upon termination of the Plan, the balance in each Participant’s Plan account shall be refunded as soon as practicable after such termination, without any interest thereon.

Article X.
TERM OF PLAN

The Plan shall be effective on the Effective Date. The effectiveness of the Plan shall be subject to approval of the Plan by the stockholders of the Company within 12 months following the date the Plan is first approved by the Board. No right may be granted under the Plan prior to such stockholder approval. No rights may be granted under the Plan during any period of suspension of the Plan or after termination of the Plan.

Article XI.
ADMINISTRATION

11.1Administrator. Unless otherwise determined by the Board, the Administrator of the Plan shall be the Compensation Committee of the Board (or another committee or a subcommittee of the Board to which the Board delegates administration of the Plan) (such committee, the “Committee”). The Board may at any time vest in the Board any authority or duties for administration of the Plan.

11.2Action by the Administrator. Unless otherwise established by the Board or in any charter of the Administrator, a majority of the Administrator shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present and, subject to Applicable Law and the Bylaws of the Company, acts approved in writing by a majority of the Administrator in lieu of a meeting, shall be deemed the acts of the Administrator. Each member of the Administrator is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Designated Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

11.3Authority of Administrator. The Administrator shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

(a)To determine when and how rights to purchase Common Stock shall be granted and the provisions of each offering of such rights (which need not be identical).

(b)To designate from time to time which Subsidiaries of the Company shall be Designated Subsidiaries, which designation may be made without the approval of the stockholders of the Company.

(c)To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(d)To amend, suspend or terminate the Plan as provided in Article IX.

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(e)Generally, to exercise such powers and to perform such acts as the Administrator deems necessary or expedient to promote the best interests of the Company and its Subsidiaries and to carry out the intent that the Plan be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Code.

11.4Decisions Binding. The Administrator’s interpretation of the Plan, any rights granted pursuant to the Plan, any subscription agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

Article XII.
MISCELLANEOUS

12.1Restriction upon Assignment. A right granted under the Plan shall not be transferable other than by will or the applicable laws of descent and distribution, and is exercisable during the Participant’s lifetime only by the Participant. Except as provided in Section 12.4 hereof, a right under the Plan may not be exercised to any extent except by the Participant. The Company shall not recognize and shall be under no duty to recognize any assignment or alienation of the Participant’s interest in the Plan, the Participant’s rights under the Plan or any rights thereunder.

12.2Rights as a Stockholder.With respect to Shares subject to a right granted under the Plan, a Participant shall not be deemed to be a stockholder of the Company, and the Participant shall not have any of the rights or privileges of a stockholder, until such Shares have been issued to the Participant or his or her nominee following exercise of the Participant’s rights under the Plan. No adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution or other rights for which the record date occurs prior to the date of such issuance, except as otherwise expressly provided herein or as determined by the Administrator.

12.3Interest.No interest shall accrue on the payroll deductions or contributions of a Participant under the Plan.

12.4Designation of Beneficiary.

(a)A Participant may, in the manner determined by the Administrator, file a written designation of a beneficiary who is to receive any Shares and/or cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to a Purchase Date on which the Participant’s rights are exercised but prior to delivery to such Participant of such Shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the Participant’s rights under the Plan. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary shall not be effective without the prior written consent of the Participant’s spouse.

(b)Such designation of beneficiary may be changed by the Participant at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

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12.5Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

12.6Equal Rights and Privileges. Subject to Section 5.7, all Eligible Employees will have equal rights and privileges under this Plan so that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Subject to Section 5.7, any provision of this Plan that is inconsistent with Section 423 of the Code will, without further act or amendment by the Company, the Board or the Administrator, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code.

12.7Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

12.8Reports. Statements of account shall be given to Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of Shares purchased and the remaining cash balance, if any.

12.9No Employment Rights. Nothing in the Plan shall be construed to give any person (including any Eligible Employee or Participant) the right to remain in the employ of the Company or any Parent or Subsidiary or affect the right of the Company or any Parent or Subsidiary to terminate the employment of any person (including any Eligible Employee or Participant) at any time, with or without cause.

12.10Notice of Disposition of Shares. Each Participant shall give prompt notice to the Company of any disposition or other transfer of any Shares purchased upon exercise of a right under the Plan if such disposition or transfer is made: (a) within two years from the Enrollment Date of the Offering Period in which the Shares were purchased or (b) within one year after the Purchase Date on which such Shares were purchased. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer.

12.11Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.

12.12Electronic Forms. To the extent permitted by Applicable Law and in the discretion of the Administrator, an Eligible Employee may submit any form or notice as set forth herein by means of an electronic form approved by the Administrator. Before the commencement of an Offering Period, the Administrator shall prescribe the time limits within which any such electronic form shall be submitted to the Administrator with respect to such Offering Period in order to be a valid election.

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EX-10.8

Exhibit 10.8

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”), dated as of [______], 2021, is between AEON Biopharma, Inc., a Delaware corporation (the “Company”), and Marc Forth, an individual (“Employee”), effective as of [______], 2021¹ (the “Amended Effective Date”).  

WHEREAS, the Employee and the Company previously entered into that certain Employment Agreement, by and between the Company and Employee, dated May 7, 2019 (the “Original Agreement”);

WHEREAS, the Company desires to continue to employ the Employee as the Chief Executive Officer of the Company, and to enter into an agreement embodying the terms of such employment;

WHEREAS, as of the Amended Effective Date, the Original Agreement shall terminate and be superseded by this Agreement; and

WHEREAS, the Employee desires to accept such continuation of employment with the Company, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. POSITION AND RESPONSIBILITIES

a.Position.  Employee shall be employed by the Company to render services to the Company in the position of Chief Executive Officer of the Company.  Employee shall report directly to the Company’s Board of Directors (the “Board”).  Employee shall use his good faith efforts to perform such duties and responsibilities and shall have such authorities as are normally related to such positions in accordance with the standards of the industry and any additional duties of an executive nature that the Board now or hereafter assigns to Employee consistent with his position as the Company’s principal executive officer.  Employee shall also serve as a member of the Board for no additional compensation, subject to election in accordance with the Company’s applicable governing documents.  The principal place of Employee’s employment under this Agreement shall be at the Company’s current offices in Orange County, California or, to the extent permitted by the Company, from the Employee’s home or other remote location, except for travel to other locations as necessary to fulfill the Employee’s duties and responsibilities to the Company.

b.Other Activities.  During his employment with the Company, Employee shall (i) devote substantially all of Employee’s business time and energy to the performance of Employee’s duties for the Company and (ii) hold no other employment.  Notwithstanding anything to the contrary contained herein, Employee may (A) serve as a director or member of a committee or organization involving no actual or potential conflict of interest with the Company and its subsidiaries and affiliates; (B) deliver lectures and fulfill speaking engagements; (C) engage in charitable and community activities; and (D) invest his personal assets in such form or manner that will not violate this Agreement or Company policies applicable to Employee or that involves

¹  Note to Draft: The Agreement will be effective as of the closing of the IPO.

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an actual or potential conflict of interest with the Company; provided, however,that the activities described in clauses (A), (B), (C) or (D) do not materially affect or interfere with the performance of Employee’s duties and obligations to the Company.

2. COMPENSATION AND BENEFITS

a.Base Salary.  In consideration of the services to be rendered under this Agreement, the Company shall pay Employee a salary at the rate of $550,000 per year (“Base Salary”).  The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice in installments not less frequently than monthly.  Employee’s Base Salary shall be reviewed from time to time (not less frequently than annually) in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be increased, but not decreased in the sole discretion of the Board.

b.Annual Bonus.  Employee shall be eligible to participate in the Company’s annual discretionary incentive plan, under which Employee shall be eligible to receive an annual incentive bonus, as determined by the Board in its reasonable discretion (the “Annual Bonus”), with a target bonus equal to 100% of the Base Salaryin each full calendar year of employment based on 100% achievement of key performance indicators for Employee and the Company as determined by the Board in consultation with Employee.  The terms of any written Annual Bonus plan developed by the Board shall govern any Annual Bonus that may be paid.  Any Annual Bonus shall be paid in all events within two and one-half months after the end of the year in which such Annual Bonus becomes earned, provided that no Annual Bonus shall be considered earned or payable unless, subject to Section 5(c), Employee has remained continuously employed through the last day of the fiscal year for which such Annual Bonus was earned.

c.Benefits.  Employee shall be eligible to participate in the benefits made generally available by the Company to its other senior executives, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.

d.Vacation.  Employee’s vacation and other paid time off shall be governed by the Company’s usual policies applicable to senior management employees, it being understood that such policies will provide a level of annual vacation time for Employee that is consistent with his position and data for principal executive officers of similarly situated companies of the peer group companies referenced above.

e.Expenses.  The Company shall reimburse Employee for reasonable business expenses incurred, and for any other approved expenses incurred, in the performance of Employee’s duties hereunder in accordance with the Company’s customary expense reimbursement guidelines.

f.Employment Policy.  As an employee of the Company, Employee shall be subject to the Company’s policies, procedures, practices, rules and regulations as adopted or as amended from time to time in the Company’s sole discretion.

g.Indemnification.  Employee shall be covered under a directors’ and officers’ liability insurance policy paid for by the Company both during and after (while there remains any potential liability to Employee) the termination of Employee’s employment to the extent that the Company maintains such a liability insurance policy now or in the future for its active officers and directors.  

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In addition, concurrently herewith the Company and Employee are entering into an Indemnification Agreement.

3. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

a.At-Will Employment.  Employee’s employment under this Agreement shall continue indefinitely for no specific term.  Notwithstanding anything to the contrary in the forgoing, Employee’s employment hereunder is terminable at will by the Company or by Employee at any time (for any reason or for no reason).

b.Termination for Cause.  The Company may terminate Employee’s employment under this Agreement for Cause or without Cause.  For purposes of this Agreement, “Cause” shall mean any of the following: (i) the commission of any act of fraud, embezzlement or willful dishonesty by Employee which materially and adversely affects the business of the Company; (ii) any unauthorized use or disclosure by Employee of confidential information or trade secrets of the Company that constitutes a willful and material breach of the Employee’s obligations under applicable laws or the PIIA defined and described below; (iii) the willful refusal or willful omission by Employee to perform any lawful duties properly required of him under this Agreement, provided that any such failure or refusal has been communicated to Employee in writing (which specifies the circumstances purportedly constituting Cause) and Employee has been provided a reasonable opportunity to correct it (if reasonable correction is possible); (iv) any willful act or willful omission by Employee involving malfeasance or gross negligence in the performance of Employee’s duties to, or willful and material deviation from any lawful and reasonable policies or directives of, the Company, provided, however, that in the case of deviations from policies or directives, the Company must give Employee notice of such deviations and, if curable, an opportunity to cure or correct the deviation; (v) willful conduct on the part of Employee which constitutes the material breach of any statutory or common law duty of loyalty to the Company; or (vi) any illegal act by Employee constituting a felony which the Board determines materially and adversely affects the business of the Company.  In the event of any purported termination for Cause, Employee shall be given advance notice of such termination and an opportunity to appear before the Board (with counsel) before the termination of employment occurs.  For purposes of this definition, no act or failure to act, on Employee’s part shall be considered “willful” unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.  Notwithstanding the foregoing, the Company cannot terminate Employee for Cause based on circumstances that were known to a senior executive or director of the Company (other than Employee himself) for more than six months before the Company gave Employee notice of termination for Cause pursuant to this Agreement.

c.Termination for Disability.  The Company may also terminate Employee’s employment under this Agreement due to the Disability of Employee.  For purposes of this Agreement, “Disability” shall mean the Employee is disabled by any physical or mental condition that renders him unable to perform the essential functions of his position with or without reasonable accommodation as required by law for any period of ninety (90) consecutive days or an aggregate of one-hundred-twenty (120) days during any 12-month period.

d.Termination upon Death.  Employee’s employment under this Agreement shall terminate automatically upon Employee’s death.

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4. TERMINATION BY EMPLOYEE

Employee may terminate his employment under this Agreement at any time upon written notice for any reason or no reason at all, with or without Good Reason.  For purposes of this Agreement, “Good Reason”shall mean any of the following which is not corrected by the Company within thirty (30) days after the Company has received written notice from Employee referring to this Section 4 and specifying the circumstances purportedly constituting Good Reasonand the correction sought (such notice to be given within ninety (90) days after the occurrence of such circumstance): (a) a material diminution in Employee’s title, duties, authorities, or responsibilities; (b) a material reduction in Employee’s Base Salary or Annual Bonus opportunity; (c) requiring Employee to relocate his principal place of business more than 30 miles outside of the Company’s Orange County, California office; (d) if Employee’s term as a director is scheduled to end for any reason during Employee’s employment by the Company and while Employee is still willing to serve on the Board, if the Company does not re-nominate Employee to continue to serve on the Board and recommend to stockholders Employee’s election to the Board (other than a break in service that is promptly remedied by the Company’s prompt re- appointment of Employee to the Board); provided, however, that the Company shall not be obligated to cause such nomination if (i) any of the events constituting Cause have occurred and not been cured or (ii) Employee has issued a notice of termination; or (e) a material breach by the Company of any provision of this Agreement or any other agreement between the Company and Employee.  Notwithstanding the foregoing, a termination of Employee’s employment with the Company shall not constitute a termination for Good Reason unless such termination occurs not more than six (6) months following the initial existence of the condition claimed to constitute Good Reason.

5. TERMINATION OBLIGATIONS

a.Termination of Employment.  Employee’s right to compensation and benefits under this Agreement, if any, upon termination of employment shall be determined in accordance with this Section 5.

b.All Terminations of Employment.  Upon any termination of employment, Employee shall be entitled to prompt and full payment of all earned but unpaid Base Salary, accrued but unused vacation, and any Annual Bonus that has become fully earned and payable under this Agreement for the year preceding the year in which the date of termination occurs (collectively, the “Accrued Benefits”).  Except as provided in Section 5(c), Employee’s rights following a termination of employment with respect to any benefits, incentives or awards provided to Employee pursuant to the terms of any plan, program or arrangement sponsored or maintained by the Company, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program or arrangement, and this Agreement shall have no effect upon such terms except as specifically provided herein.  Employee’s rights following a termination of employment with respect to Company equity-based awards then-held by Employee shall be governed by the applicable award agreement.  Company acknowledges that any rights Employee may have to indemnification for actions taken as an officer or director under the Company’s charter, other arrangements and its insurance policies shall not be forfeited or terminated with respect to any actions or omissions prior to any termination of employment.

c.Termination of Employment by Company without Cause or by Employee for Good Reason.  If the Company terminates Employee’s employment under this Agreement for any reason other than Cause, or Employee terminates his employment under this Agreement for Good Reason, and Employee enters into a release as provided in Section 5(e), then in addition to the

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Accrued Benefits, Employee shall be entitled to the following, subject to Employee’s continued compliance with the PIIA and any restrictive covenants that may apply to Employee:

(i) a gross amount equal to 12 months’ of Employee’s then current Base Salary, minus appropriate withholding and payroll deductions, payable in equal installments through the Company’s regular payroll over the 12 month period following the Employee’s date of termination;

(ii)a gross amount equal to the Annual Bonus (if any) that Employee would have earned for the calendar year in which the termination of his employment occurs based on the target level of achievement, pro-rated based on the number of full months Employee was employed in that calendar year of his employment, minus appropriate withholding and payroll deductions, payable at the time the Company normally pays Annual Bonuses after the close of the fiscal year in which Employee’s employment terminates; and

(iii)subject to Employee’s valid election to continue healthcare coverage under Section 4980B of the Code (as defined below), the Company’s continued payment of the cost (to the same extent that the Company was doing so immediately before the termination date) for all group employee benefit coverage continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to the same extent provided by the Company’s group plans immediately before the termination date for twelve (12) months after the termination date (the “COBRA Benefits”); provided, however, if the Company determines, in its sole discretion, that it cannot pay for the COBRA Benefits without potentially incurring financial cost or penalties under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then the Company shall, in lieu thereof, pay Employee a taxable cash amount that it would otherwise have paid for the COBRA Benefits, in monthly installments over the same time period, which payment shall be made regardless of whether Employee elects health care continuation coverage.

d.Other Terminations.  Upon termination of Employee’s employment by Company for Cause or by Employee for any reason other than Good Reason, or by reason of Employee’s death or Disability, Employee shall be entitled only to the compensation and benefits provided in Section 5(b) and no severance compensation and benefits.

e.Release.  Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement upon a termination of employment beyond the Accrued Benefits (including any post-termination benefits or amounts under this Agreement) shall only be payable if Employee delivers to the Company and does not revoke a general release of claims in a form prescribed by the Company, provided such release does not purport to revoke any of the rights provided pursuant to this Agreement or rights to continued indemnification for actions taken as an officer or director prior to the termination of employment.  Such release must be executed and delivered (and no longer subject to revocation, if applicable) within the time period prescribed by the Company following the termination of employment (in accordance with applicable law).  Any payments of severance that would otherwise be made during the period before the release becomes effective (i.e., not more than 52 days after the date of termination of employment) shall instead be made on the first regular payroll date after the date the release becomes effective.

f.Resignation and Cooperation.  Upon any termination of employment, Employee shall be deemed to have resigned from all offices and directorships then held with the Company, including any such positions with its subsidiaries.  Following a termination of employment, Employee shall cooperate reasonably in the orderly transfer of his duties to other employees.  

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Employee shall also reasonably (after taking into account Employee’s post-termination responsibilities and obligations) cooperate with the Company in the defense of anyaction brought by any third party against the Company that relates to Employee’s employment by the Company.  The Company agrees to reimburse Employee, on an after-tax basis, for all reasonable expenses (including legal fees and expenses if Employee reasonably believes separate counsel (independent of the Company’s counsel) to be appropriate under the prevailing circumstances) actually incurred in connection with his provision of such testimony or assistance as may be requested by the Company or its representatives or counsel.  The second sentence of this Section 5(f) does not require Employee to cooperate against his own legal interests.

g.Continuing Obligations.  Employee understands and agrees that Employee’s obligations under Sections 5, 6, and 7 herein (including the exhibits and schedules described therein) shall survive a termination of employment and the termination of this Agreement.

h.No Mitigation or Offset.  Employee shall not be obligated to seek other employment or take any actions to mitigate the payments or continuation of benefits required under Section 5(c).  In addition, the Company will not be entitled to reduce or offset the amount of any compensation or benefits payable to Employee under this Agreement by the amount of salary, bonus or other compensation of any kind, and/or benefits, earned or received by Employee from any other employment, self-employment or other activities at any time.  Notwithstanding the foregoing, the Company shall be entitled to immediately cease making further health care payments required in Section 5(c) to the extent that Employee secures other employment that provides health care coverage.  Employee covenants to immediately inform the Company upon securing such other employment and coverage and to return any overpayments of such benefits made by the Company.

6. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION

Employee hereby acknowledges that he has previously entered into an Employee Proprietary Information and Inventions Agreement in the form attached hereto as Schedule A (the “PIIA”), which remains in effect in accordance with its terms.

7. ARBITRATION

Employee hereby acknowledges that he has previously entered into an Agreement to Arbitrate attached hereto as Schedule B, which remains in effect in accordance with its terms.

8. AMENDMENTS; WAIVERS; REMEDIES

This Agreement may not be amended or waived except by a writing signed by Employee and by a duly authorized representative of the Company other than Employee.  Failure to exercise any right under this Agreement shall not constitute a waiver of such right.  Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches.  All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.

9. ASSIGNMENT; BINDING EFFECT

a.Assignment.  The performance of Employee is personal hereunder, and Employee agrees that Employee shall have no right to assign and shall not assign or purport to assign any

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rights or obligations under this Agreement.  The Company agrees that it shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement without Employee’s written consent.  If the Company does not require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place, Employee shall have GoodReason toterminate employment in accordance with Sections 4 and 5(c) of this Agreement.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any suchsuccessor which assumes and agrees to perform this Agreement by operation of law orotherwise.

b.Binding Effect.  Subject to the foregoing restriction on assignment by Employee and the Company, this Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates, officers, directors, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Employee.

10. ATTORNEYS’ FEES

In any dispute arising from or relating to this Agreement or Employee’s hiring, employment, compensation, benefits, or termination, the prevailing party shall be entitled to recover its attorneys’ fees and costs.  Each party hereto shall bear its own legal fees and costs incurred in connection with the negotiation of this Agreement and the documents referenced herein.

11. NOTICES

All notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class registered or certified mail, return receipt requested, to the principal address of the other party, as set forth below.  The date of notice shall be deemed to be the earlier of (i) actual receipt of notice by any permitted means, or (ii) five business days following dispatch by overnight delivery service or the United States Mail.  Employee shall be obligated to notify the Company in writing of any change in Employee’s address.  Notice of change of address shall be effective only when done in accordance with this paragraph.

Company’s Notice Address:

4040 MacArthur Blvd., Suite 260

Newport Beach, CA 92660

Attention: Legal

Employee’s Notice: to Employee at his address on file in the Company’s payroll records

12. SEVERABILITY

If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect.  In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then

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such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.

13. TAX MATTERS

a.Withholding.  Any and all amounts payable under this Agreement or otherwise shall be subject to, and the Company and its affiliates may withhold from such amounts, any federal, state, local or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

b.Section 409A Compliance.

(i)The intent of the parties hereto is that payments and benefits under this Agreement be exempt from (to the extent possible) Section 409A (“Section 409A”) of the Internal Revenue Code of 1986 and the regulations and guidance promulgated thereunder, as amended (collectively, the “Code”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the parties hereto of the applicable provision without violating the provisions of Section 409A.

(ii)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “nonqualified deferred compensation” under Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(iii)To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Employee, (B) any right to reimbursement or in- kind benefits shall not be subject to liquidation or exchange for another benefit and (C) no such reimbursement, expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

(iv)For purposes of Section 409A, Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be at the sole discretion of the Board.

(v)Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.

(vi)Notwithstanding any other provision of this Agreement, to the extent required to avoid the imposition of tax, penalties or interest under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided under this Agreement

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that are delayed as a result of the foregoing shall insteadbe paid on the first day of the seventh month following thedate of Employee’s separation from service (or Employee’s death, if earlier).

c.Section 280G.

(i)Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Employee under any other Company plan or agreement (such payments or benefits are collectively referred to as the “Benefits”) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is referred to hereinafter as the “Limited Benefit Amount”).  Unless Employee shall have given prior written notice specifying a different order to the Company to effectuate the Limited Benefit Amount, any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Benefits by first reducing or eliminating amounts which are payable from any cash severance, then from any payment in respect of an equity award that is not covered by Treas.  Reg. Section 1.280G-1 Q/A-24(b) or (c), then from any payment in respect of an equity award that is covered by Treas.  Reg. Section 1.280G-1 Q/A-24(c), in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as defined below).  Any notice given by Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Employee’s rights and entitlements to any benefits or compensation.

(ii)A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by the Company’s independent public accountants or another certified public accounting firm or executive compensation consulting firm of national reputation designated by the Company and acceptable to Employee (the “Firm”) at the Company’s expense.  The Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and Employee within ten (10) business days of the date of termination of Employee’s employment, if applicable, or such other time as reasonably requested by the Company or Employee.

14. EXCEPTIONS

Notwithstanding anything in this Agreement or the PIIA to the contrary, nothing contained in this Agreement shall prohibit either party (or either party’s attorney(s)) from (a) filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or cooperating with any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation, (b) communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S. Department of Justice) for the purpose of reporting or investigating a suspected violation of law, or from providing such information to the party’s attorney(s) or in a sealed complaint or other document filed in a lawsuit or other governmental proceeding and/or (c) receiving an award for information provided to any governmental agency.  Pursuant to 18 USC Section 1833(b), the Employee will not be held criminally or civilly liable under any federal or state trade secret law for

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the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Further, nothing in this Agreement is intended to or shall preclude either party from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law.  If the Employee is required to provide testimony, then unless otherwise directed or requested by a governmental agency or law enforcement, the Employee shall notify the Company as soon as reasonably practicable after receiving any such request of the anticipated testimony.

15. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of California.

16. INTERPRETATION

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party.  Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this Agreement.  Whenever the context requires, references to the singular shall include the plural and the plural the singular.

17. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT

Each party agrees that any and all of such party’s obligations under this Agreement, including any agreement contemplated hereby, shall survive a termination of employment.

18. COUNTERPARTS

This Agreement may be executed in any number of counterparts, and the signature pages may be transmitted by pdf or electronic means, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.

19. AUTHORITY

Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.

20. ENTIRE AGREEMENT

As of the Amended Effective Date, this Agreement is intended to be the final, complete and exclusive statement of the terms of Employee’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the agreements referenced in Sections 2(g), 6 and 7 above).  The Employee agrees that the Original Agreement shall be terminated and of no further force or effect from and after the Amended Effective Date.  In the event that the Employee’s employment with the Company is terminated prior to the Amended Effective Date,

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this Agreement (including, without limitation, the immediately preceding sentence) shall have no force or effect.To the extent that the practices, policies or procedures of the Company, now or in the future, apply to EmployeeandareinconsistentwiththetermsofthisAgreement,theprovisionsofthisAgreement shall control.  Any subsequent change in Employee’s duties, position or compensation shall not affect the validity or scope of this Agreement.

21. EMPLOYEE ACKNOWLEDGEMENT

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EMPLOYEE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EMPLOYEE IS FULLY AWARE OF ITS LEGAL EFFECT AND THAT EMPLOYEE HAS ENTERED INTO IT FREELY BASED ON EMPLOYEE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

[The rest of this page intentionally left blank; signatures appear on the following page.]

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By signing below, each of the partieshereto acknowledgesand agrees to all of the terms of this Employment Agreement, effective as of the Amended Effective Date.

MARC FORTH (“Employee”)

Sign Name:

AEON BIOPHARMA, INC., a Delaware Corporation (the “Company”)

Sign Name:
Print name:	[______]
Title:	[______]

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SCHEDULE A TO EMPLOYMENT AGREEMENT

Employee Proprietary Information and Inventions Agreement

[TO BE INSERTED]

SCHEDULE B TO EMPLOYMENT AGREEMENT

Agreement to Arbitrate

[TO BE INSERTED]

EX-10.9

Exhibit 10.9

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”), dated as of [______], 2021, is between AEON Biopharma, Inc., a Delaware corporation (the “Company”), and Chris Carr, an individual (“Employee”), effective as of [______], 2021¹ (the “Amended Effective Date”).  

WHEREAS, the Employee and the Company previously entered into that certain Executive Employment Agreement, by and between the Company and Employee, dated September 23, 2019 (the “Original Agreement”);

WHEREAS, the Company desires to continue to employ the Employee as the Chief Financial Officer of the Company, and to enter into an agreement embodying the terms of such employment;

WHEREAS, as of the Amended Effective Date, the Original Agreement shall terminate and be superseded by this Agreement; and

WHEREAS, the Employee desires to accept such continuation of employment with the Company, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. POSITION AND RESPONSIBILITIES

a.Position. Employee shall be employed by the Company to render services to the Company in the position of Chief Financial Officer of the Company. Employee shall report directly to the Chief Executive Officer (the “CEO”). Employee shall use his good faith efforts to perform such duties and responsibilities and shall have such authorities as are normally related to such position in accordance with the standards of the industry and any additional duties of an executive nature that the CEO now or hereafter assigns to Employee consistent with his position as the Company’s Chief Financial Officer. The principal place of Employee’s employment under this Agreement shall be at the Company’s current offices in Orange County, California or, to the extent permitted by the Company, from the Employee’s home or other remote location, except for travel to other locations as necessary to fulfill the Employee’s duties and responsibilities to the Company.

b.Other Activities. During his employment with the Company, Employee shall (i) devote substantially all of Employee’s business time and energy to the performance of Employee’s duties for the Company (other than Employee’s service on such boards of directors approved in advance by the Company’s Board of Directors (the “Board”), which approval will not be unreasonably withheld) and (ii) hold no other employment.

2. COMPENSATION AND BENEFITS

a.Base Salary. In consideration of the services to be rendered under this Agreement, the Company shall pay Employee a salary at the rate of $400,000 per year (“Base Salary”). The Base Salary shall be paid at a bi-weekly rate in accordance with the Company’s regularly established payroll practice. Employee’s Base Salary shall be reviewed from time to time (not less frequently than annually) in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be increased, but not decreased in the sole discretion of the Board.

¹  Note to Draft: The Agreement will be effective as of the closing of the IPO.

b.Annual Bonus. Employee shall be eligible to participate in the Company’s annual discretionary incentive plan, under which Employee shall be eligible to receive an annual incentive bonus, to the extent that a bonus is offered for that fiscal year, as determined by senior management and the Board in their discretion (the “Annual Bonus”), with a target bonus opportunity initially equal to 40% of the Base Salaryin each full calendar year of employment based on 100% achievement of management business objectives for Employee and the Company as determined by senior management and the Board in their sole discretion and communicated to Employee on or before the 90th day of each year. The terms of any written Annual Bonus plan developed by the Board shall govern any Annual Bonus that may be paid. Any Annual Bonus shall be paid in all events within two and one-half months after the end of the year in which such Annual Bonus becomes earned, provided that no Annual Bonus shall be considered earned or payable unless, subject to Section 5(c), Employee has remained continuously employed through the payment date of the Annual Bonus.

c.Benefits. Employee shall be eligible to participate in the benefits made generally available by the Company to its other senior executives, in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion.

d.Vacation. Employee’s vacation and other paid time off shall be governed by the Company’s usual policies applicable to senior management employees, it being understood that such policies will provide a level of annual vacation time for Employee that is consistent with his position and data for principal executive officers of similarly situated companies of the peer group companies referenced above.

e.Expenses. The Company shall reimburse Employee for reasonable business expenses incurred, and for any other approved expenses incurred, in the performance of Employee’s duties hereunder in accordance with the Company’s customary expense reimbursement guidelines.

f.Employment Policy. As an employee of the Company, Employee shall be subject to and abide by the Company’s policies, procedures, practices, rules and regulations as adopted or as amended from time to time in the Company’s sole discretion.

g.Indemnification. Employee shall be covered under a directors’ and officers’ liability insurance policy paid for by the Company both during and after (while there remains any potential liability to Employee) the termination of Employee’s employment to the extent that the Company maintains such a liability insurance policy now or in the future for its active officers and directors. In addition, concurrently herewith the Company and Employee are entering into an Indemnification Agreement.

3. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

a.At-Will Employment.  Employee’s employment under this Agreement shall continue indefinitely for no specific term.  Notwithstanding anything to the contrary in the forgoing, Employee’s employment hereunder is terminable at will by the Company or by Employee at any time (for any reason or for no reason).

b.Termination for Cause. The Company may terminate Employee’s employment under this Agreement for Cause or without Cause.  For purposes of this Agreement, “Cause” shall mean any of the following: (i) the commission of any act of fraud, embezzlement or willful dishonesty by Employee which adversely affects the business of the Company; (ii) any unauthorized use or disclosure by Employee of confidential information or trade secrets of the Company, including, without limitation, any material breach of the PIIA (as defined in Section 6); (iii) a material breach by Employee of any provision of this Agreement or any other agreement between Employee and the Company; (iv) the refusal or omission by Employee to perform any lawful duties properly required of his under this Agreement, provided that any such failure or refusal has been communicated to Employee in writing and Employee has been provided

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a reasonable opportunity to correct it, if correction is possible; (v) any act or omission by Employee involving malfeasance or gross negligence in the performance of Employee’s duties to, or material deviation from any of the policies or directives of, the Company, provided, however, that in the case of deviations from policies or directives, (A) the Company must give Employee notice of such deviations within thirty (30) days of the Company becoming aware of such an occurrence, (B) Employee must be given thirty (30) days to cure or correct the deviation, if curable, and (C) Employee may only be terminated if the deviation remains uncured after thirty (30) days, if curable, following written notice and upon the approval of the Board of Directors; (vi) conduct on the part of Employee which constitutes the breach of any statutory or common law duty of loyalty to the Company; or (vii) any illegal act by Employee which the Board determines adversely affects the business of the Company, or any felony committed by Employee, as evidenced by conviction thereof.

c.Termination for Disability.  The Company may also terminate Employee’s employment under this Agreement due to the Disability of Employee.  For purposes of this Agreement, “Disability” shall mean the Employee is disabled by any physical or mental condition that renders him unable to perform the essential functions of his position with or without reasonable accommodation as required by law for any period of ninety (90) consecutive days or an aggregate of one-hundred-twenty (120) days during any 12-month period.

d.Termination upon Death. Employee’s employment under this Agreement shall terminate automatically upon Employee’s death.

4. TERMINATION BY EMPLOYEE

Employee may terminate his employment under this Agreement at any time upon written notice for any reason or no reason at all, with or without Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the following which is not corrected by the Company within thirty (30) days after the Company has received written notice from Employee referring to this Section 4 and specifying the circumstances purportedly constituting Good Reason and the correction sought (such notice to be given within thirty (30) days after the occurrence of such circumstance): (a) a material diminution in Employee’s title, duties, authorities, and responsibilities, unless a position with similar duties is offered; (b) a material reduction (10% or more) in Employee’s Base Salary or Annual Bonus opportunity, unless part of a Company-wide compensation reduction including similarly situated employees; (c) requiring Employee to relocate his principal place of business more than 30 miles outside of the Orange County, California; or (d) a material breach by the Company of any provision of this Agreement or any other agreement between the Company and Employee. Notwithstanding the foregoing, a termination of Employee’s employment with the Company shall not constitute a termination for Good Reason unless such termination occurs not more than ninety (90) days following the initial existence of the condition claimed to constitute Good Reason.

5. TERMINATION OBLIGATIONS

a.Termination of Employment. Employee’s right to compensation and benefits under this Agreement, if any, upon termination of employment shall be determined in accordance with this Section 5.

b.All Terminations of Employment. Upon any termination of employment, Employee shall be entitled to prompt and full payment of all earned but unpaid Base Salary, accrued but unused vacation, and any Annual Bonus that has become fully earned and payable under this Agreement for the year preceding the year in which the date of termination occurs, regardless of whether the payment date of the Annual Bonus for the preceding year is scheduled to occur after Employee’s termination date (collectively, the “Accrued Benefits”). Except as provided in Section 5(c), Employee’s rights following a termination of employment with respect to any benefits, incentives or awards provided to Employee

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pursuant to the terms of any plan, program or arrangement sponsored or maintained by the Company, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program or arrangement, and this Agreement shall have no effect upon such terms except as specifically provided herein. Employee’s rights following a termination of employment with respect to Company equity-based awardsthen-held by Employee shall be governed by the applicable award agreement. Company acknowledges that any rights Employee may have to indemnification for actions taken as an officer or director under the Company’s charter, other arrangements and its insurance policies shall not be forfeited or terminated with respect to any actions or omissions prior to any termination of employment.

c.Termination of Employment by Company without Cause or by Employee for Good Reason. If the Company terminates Employee’s employment under this Agreement for any reason other than (i) Cause, or (ii) as the result of death or Disability, or Employee terminates his employment under this Agreement for Good Reason, and Employee enters into a release as provided in Section 5(e) (a “Qualified Termination”), then in addition to the Accrued Benefits,Employee shall be entitled to the following, subject to Employee’s continued compliance with the PIIA and any restrictive covenants that may apply to Employee:

(i)a gross amount equal to six months of Employee’s then current Base Salary, minus appropriate withholding and payroll deductions; provided, however, that in the event the Qualified Termination occurs within two months prior to, on or within 12 months after a Change in Control (as such term is defined in the Company’s 2021 Incentive Award Plan), then the amount shall be 12 months of Employee’s then current Base Salary (in any event, the “Severance”).  The Severance shall be paid in substantially equal installments in accordance with the Company’s normal payroll practices over the six-month period following the date of termination (or the 12-month period following the date of termination, if the Severance equals 12 months of Employee’s then current Base Salary); provided, however, that if the date of termination occurs on or within 12 months after a Change in Control that constitutes a “change in control event” for purposes of Section 409A (as defined below), the Severance shall be paid in a single lump sum within 60 days following the date of termination;

(ii)a gross amount equal to 100% of the targeted Annual Bonus that Employee could have earned for the calendar year in which the termination of his employment occurs minus appropriate withholding and payroll deductions, payable at the time the Company normally pays Annual Bonuses after the close of the fiscal year in which Employee’s employment terminates; and

(iii)subject to Employee’s valid election to continue healthcare coverage under Section 4980B of the Code (as defined below), the Company’s continued payment of the cost (to the same extent that the Company was doing so immediately before the termination date) for all group employee benefit coverage continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to the same extent provided by the Company’s group plans immediately before the termination date during the COBRA Period (the “COBRA Benefits”); provided, however, if the Company determines, in its sole discretion, that it cannot pay for the COBRA Benefits without potentially incurring financial cost or penalties under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then the Company shall, in lieu thereof, pay Employee a taxable cash amount that it would otherwise have paid for the COBRA Benefits, in monthly installments over the same time period, which payment shall be made regardless of whether Employee elects health care continuation coverage. For purposes of this Agreement, “COBRA Period” shall mean the period beginning on the date of termination and ending on the six-month anniversary thereof; provided, however, that in the event the Qualified Termination occurs within two months prior to, on or within 12 months after a Change in Control, then the COBRA Period instead shall end on the 12-month anniversary thereof.

d.Other Terminations.  Upon termination of Employee’s employment by Company for Cause, or as a result of death or Disability, or by Employee for any reason other than Good Reason,

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Employee shall be entitled only to the compensation and benefits provided in Section 5(b) and no severance compensation and benefits.

e.Release. Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement upon a termination of employment beyond the Accrued Benefits (including any post-termination benefits or amounts under this Agreement) shall only be payable if Employee delivers to the Company and does not revoke a general release of claims in a form prescribed by the Company, provided such release does not purport to revoke any of the rights provided pursuant to this Agreement or rights to continued indemnification for actions taken as an officer or director prior to the termination of employment. Such release must be executed and delivered (and no longer subject to revocation, if applicable) within the time period prescribed by the Company following the termination of employment (in accordance with applicable law). Any payments of severance that would otherwise be made during the period before the release becomes effective (i.e., not more than 52 days after the date of termination of employment) shall instead be made on the first regular payroll date after the date the release becomes effective.

f.Resignation and Cooperation. Upon any termination of employment, Employee shall be deemed to have resigned from all offices and directorships then held with the Company, including any such positions with its subsidiaries. Following a termination of employment, Employee shall cooperate reasonably in the orderly transfer of his duties to other employees. Employee shall also reasonably (after taking into account Employee’s post-termination responsibilities and obligations) cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Employee’s employment by the Company.  Notwithstanding the foregoing, if Employee is required to provide testimony in any proceeding, Employee shall testify truthfully.

g.Continuing Obligations. Employee understands and agrees that Employee’s obligations under Sections 5, 6, and 7herein (including the exhibits and schedules described therein) shall survive a termination of employment and the termination of this Agreement.

6. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION

Employee hereby acknowledges that he has previously entered into an Employee Proprietary Information and Inventions Agreement in the form attached hereto as Schedule A (the “PIIA”), which remains in effect in accordance with its terms.

7. ARBITRATION

Employee hereby acknowledges that he has previously entered into the Company’s standard Agreement to Arbitrate in the form attached hereto as Schedule B, which remains in effect in accordance with its terms.

8. COVENANTS

a.Nondisparagement.  Employee agrees that he shall refrain from making, directly or indirectly, either orally or in writing, any critical, disparaging, denigrating, or untrue statements about the Company or any affiliated and related entities, and their respective agents, officers, directors, shareholders, members, managers, employees, attorneys, insurers, subsidiaries, predecessors, successors and assigns, or the Company’s products, services or business.  This section shall not apply (i) if Employee is compelled to testify in a legal proceeding, including any legal proceeding between the parties to this Agreement, and (ii) in connection with Employee filing a charge with, participating in a proceeding before or otherwise communicating with the Equal Employment Opportunity Commission, California Department of Fair Employment and Housing, the National Labor Relations Board, the

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Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission.

b.Nonsolicitation.  As further consideration for the Company entering into this Agreement, Employee agrees that during Employee’s employment and for a period of two (2) years following the date of his termination of employment, he will not (i) solicit, directly or indirectly, any employee currently employed by the Company to leave the employment of the Company or any contractor or consultant currently doing business with the Company to cease doing business with the Company, or (ii) use any trade secret of the Company or its subsidiaries or affiliates to induce or attempt to induce, or assist anyone else to induce or attempt to induce, any existing or prospective customers or suppliers of the Company to reduce or discontinue their business with the Company.

9. ATTORNEYS’ FEES AND COSTS

In any dispute arising from or relating to this Agreement or Employee’s hiring, employment, compensation, benefits, or termination, the prevailing party shall be entitled to recover its attorneys’ fees and costs.

10. AMENDMENTS; WAIVERS; REMEDIES

This Agreement may not be amended or waived except by a writing signed by Employee and by a duly authorized representative of the Company other than Employee. Failure to exercise any right under this Agreement shall not constitute a waiver of such right. Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.

11. ASSIGNMENT; BINDING EFFECT

a.Assignment. The performance of Employee is personal hereunder, and Employee agrees that Employee shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement. This Agreement may be assigned or transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets.

b.Binding Effect. Subject to the foregoing restriction on assignment by Employee, this Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates, officers, directors, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Employee.

12. NOTICES

All notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class registered or certified mail, return receipt requested, to the principal address of the other party, as set forth below. The date of notice shall be deemed to be the earlier of (i) actual receipt of notice by any permitted means, or (ii) five business days following dispatch by overnight delivery service or the United States Mail. Employee shall be obligated to notify the Company in writing of any change in Employee’s address. Notice of change of address shall be effective only when done in accordance with this paragraph.

Company’s Notice Address:

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4040 MacArthur Blvd., Suite 260

Newport Beach, CA 92660

Attention: Legal

Employee’s Notice: to Employee at his address on file in the Company’s payroll records

13. SEVERABILITY

If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.

14. TAX MATTERS

a.Withholding. Any and all amounts payable under this Agreement or otherwise shall be subject to, and the Company and its affiliates may withhold from such amounts, any federal, state, local or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

b.Section 409A Compliance.

(i)The intent of the parties hereto is that payments and benefits under this Agreement be exempt from (to the extent possible) Section 409A (“Section 409A”) of the Internal Revenue Code of 1986 and the regulations and guidance promulgated thereunder, as amended (collectively, the “Code”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the parties hereto of the applicable provision without violating the provisions of Section 409A.

(ii)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “nonqualified deferred compensation” under Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(iii)To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Employee, (B) any right to reimbursement or in- kind benefits shall not be subject to liquidation or exchange for another benefit and (C) no such reimbursement, expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

(iv)For purposes of Section 409A, Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be at the sole discretion of the Board.

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(v)Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.

(vi)Notwithstanding any other provision of this Agreement, to the extent required to avoid the imposition of tax, penalties or interest under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided under this Agreement that are delayed as a result of the foregoing shall instead be paid on the first day of the seventh month following the date of Employee’s separation from service (or Employee’s death, if earlier).

c.Section 280G.

(i)Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Employee under any other Company plan or agreement (such payments or benefits are collectively referred to as the “Benefits”) would be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is referred to hereinafter as the “Limited Benefit Amount”). Unless Employee shall have given prior written notice specifying a different order to the Company to effectuate the Limited Benefit Amount, any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Benefits by first reducing or eliminating amounts which are payable from any cash severance, then from any payment in respect of an equity award that is not covered by Treas. Reg. Section 1.280G-1 Q/A-24(b) or (c), then from any payment in respect of an equity award that is covered by Treas. Reg. Section 1.280G-1 Q/A-24(c), in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as defined below). Any notice given by Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Employee’s rights and entitlements to any benefits or compensation.

(ii)A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by the Company’s independent public accountants or another certified public accounting firm or executive compensation consulting firm of national reputation designated by the Company and acceptable to Employee (the “Firm”) at the Company’s expense. The Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and Employee within ten (10) business days of the date of termination of Employee’s employment, if applicable, or such other time as reasonably requested by the Company or Employee.

15. EXCEPTIONS

Notwithstanding anything in this Agreement or the PIIA to the contrary, nothing contained in this Agreement shall prohibit either party (or either party’s attorney(s)) from (a) filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or cooperating with any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation, (b) communicating directly with, cooperating with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S. Department of Justice) for the purpose of

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reporting or investigating a suspected violation of law, or from providing such information to the party’s attorney(s) or in a sealed complaint or other document filed in a lawsuit or other governmental proceeding and/or (c) receiving an award for information provided to any governmental agency.  Pursuant to 18 USC Section 1833(b), the Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Further, nothing in this Agreement is intended to or shall preclude either party from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law.  If the Employee is required to provide testimony, then unless otherwise directed or requested by a governmental agency or law enforcement, the Employee shall notify the Company as soon as reasonably practicable after receiving any such request of the anticipated testimony.

16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of California.

17. INTERPRETATION

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Sections and section headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Agreement. Whenever the context requires, references to the singular shall include the plural and the plural the singular.

18. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT

Each party agrees that any and all of such party’s obligations under this Agreement, including any agreement contemplated hereby, shall survive a termination of employment.

19. COUNTERPARTS

This Agreement may be executed in any number of counterparts, and the signature pages may be transmitted by pdf or electronic means, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.

20. AUTHORITY

Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.

21. ENTIRE AGREEMENT

As of the Amended Effective Date, this Agreement is intended to be the final, complete and exclusive statement of the terms of Employee’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the agreements referenced in Sections 2(g), 6 and 7above). The Employee agrees that the Original Agreement shall be terminated and of no further force or effect from and after the Amended Effective Date.  In the event that the Employee’s employment with the Company is terminated prior to the Amended Effective Date, this Agreement (including, without limitation, the immediately

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preceding sentence) shall have no force or effect. To the extent that the practices, policies or procedures of the Company, now or in the future, apply to Employee and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control. Any subsequent change in Employee’s duties, position or compensation shall not affect the validity or scope of this Agreement.

22. EMPLOYEE ACKNOWLEDGEMENT

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EMPLOYEE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EMPLOYEE IS FULLY AWARE OF ITS LEGAL EFFECT AND THAT EMPLOYEE HAS ENTERED INTO IT FREELY BASED ON EMPLOYEE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

[The remainder of this page has intentionally been left blank. The signature page follows on the next page.]

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By signing below, each of the parties hereto acknowledges and agrees to all of the terms of this Employment Agreement, effective as of the Amended Effective Date.

CHRIS CARR (“Employee”)

Sign Name:

AEON BIOPHARMA, INC., a Delaware Corporation (the “Company”)
Sign Name:
Print Name:		Marc Forth
Title:	Chief Executive Officer

[Signature Page to Chris Carr Employment Agreement]

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SCHEDULE A TO EMPLOYMENT AGREEMENT

Employee Proprietary Information and Inventions Agreement

[TO BE INSERTED]

SCHEDULE B TO EMPLOYMENT AGREEMENT

Agreement to Arbitrate

[TO BE INSERTED]

EX-10.10

Exhibit 10.10

aeon biopharma, inc.

NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

Eligible Directors (as defined below) on the board of directors (the “Board”) of AEON Biopharma, Inc. (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Program (this “Program”).  The cash and equity compensation described in this Program shall be paid or be made, as applicable, automatically as set forth herein and without further action of the Board, to each member of the Board who is not an employee of the Company or any of its parents, affiliates or subsidiaries (each, an “Eligible Director”), who may be eligible to receive such cash or equity compensation, unless such Eligible Director declines the receipt of such cash or equity compensation by written notice to the Company.

This Program shall become effective upon the closing of the initial public offering of the Company’s common stock (the “Effective Date”) and shall remain in effect until it is revised or rescinded by further action of the Board.  This Program may be amended, modified or terminated by the Board at any time in its sole discretion. No Eligible Director shall have any rights hereunder, except with respect to equity awards granted pursuant to Section 2 of this Program.  

1.Cash Compensation.

a.Annual Retainers.  Each Eligible Director shall be eligible to receive an annual cash retainer of $42,000 for service on the Board.  

b.Additional Annual Retainers.  An Eligible Director shall be eligible to receive the following additional annual retainers, as applicable:

(i)Chairman of the Board.  An Eligible Director serving as Chairman of the Board shall be eligible to receive an additional annual retainer of $25,000 for such service.

(iii)Audit Committee.  An Eligible Director serving as Chairperson of the Audit Committee shall be eligible to receive an additional annual retainer of $20,000 for such service.  An Eligible Director serving as a member of the Audit Committee (other than the Chairperson) shall be eligible to receive an additional annual retainer of $10,000 for such service.

(iv)Compensation Committee.  An Eligible Director serving as Chairperson of the Compensation Committee shall be eligible to receive an additional annual retainer of $15,000 for such service.  An Eligible Director serving as a member of the Compensation Committee (other than the Chairperson) shall be eligible to receive an additional annual retainer of $7,500 for such service.

(v) Nominating and Corporate Governance Committee.  An Eligible Director serving as Chairperson of the Nominating and Corporate Governance Committee shall be eligible to receive an additional annual retainer of $10,000 for such service.  An Eligible Director serving as a member of the Nominating and Corporate Governance Committee (other than the Chairperson) shall be eligible to receive an additional annual retainer of $5,000 for such service.

c.Payment of Retainers.  The annual cash retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than 30 days following the end of each calendar quarter.  In the event an Eligible Director does not serve as a director, or in the applicable positions described in Section 1(b), for an

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entire calendar quarter, the retainer paid to such Eligible Director shall be prorated for the portion of such calendar quarter actually served as a director, or in such position, as applicable.

2.Equity Compensation.  

a.General.  Eligible Directors shall be granted the equity awards described below.  The awards described below shall be granted under and shall be subject to the terms and provisions of the Company’s 2021 Incentive Award Plan or any other applicable Company equity incentive plan then-maintained by the Company (such plan, as may be amended from time to time, the “Equity Plan”) and may be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the forms approved by the Board prior to or in connection with such grants.  All applicable terms of the Equity Plan apply to this Program as if fully set forth herein, and all grants of equity awards hereby are subject in all respects to the terms of the Equity Plan.  Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Equity Plan.

b.Initial Awards.  Each Eligible Director who is initially elected or appointed to serve on the Board after the Effective Date automatically shall be granted an Option (as defined in the Equity Plan) with a value of $175,000 (the “Initial Award”).  The Initial Award shall be granted on the date on which such Eligible Director is appointed or elected to serve on the Board, and shall vest in substantially equal installments on each of the first, second and third anniversary of the applicable grant date, subject to continued service through the applicable vesting date.

c.Annual Awards.  An Eligible Director who is serving on the Board as of the date of the annual meeting of the Company’s stockholders (the “Annual Meeting”) each calendar year beginning with calendar year 2022 shall be granted, on such Annual Meeting date, an Option with a value of $125,000 (an “Annual Award” and together with the Initial Award, the “Director Awards”).  Each Annual Award shall vest in full on the earlier to occur of (i) the one-year anniversary of the applicable grant date and (ii) the date of the next Annual Meeting following the grant date, subject to continued service through the applicable vesting date.

d.Accelerated Vesting Events.  Notwithstanding the foregoing, an Eligible Director’s Director Award(s) shall vest in full immediately prior to the occurrence of a Change in Control to the extent outstanding at such time.

e.Provisions Applicable to Awards.  With respect to any Option granted under this Program:

i.The exercise price per Share with respect to an Option shall be equal to the Fair Market Value of a Share on the applicable grant date.

ii.An Option shall have a maximum term of ten years from the applicable grant date.

iii.The number of Shares subject to an Option shall be determined by dividing the value of the Option by the per share Black-Scholes valuation as of the applicable grant date, utilizing the same assumptions that the Company uses in preparation of its financial statements.

3.Compensation Limits.  Notwithstanding anything to the contrary in this Program, all compensation payable under this Program will be subject to any limits on the maximum amount of non-employee Director compensation set forth in the Equity Plan, as in effect from time to time.

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EX-10.11

Exhibit 10.11

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10).  Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.  

LICENSE & SUPPLY AGREEMENT

THIS LICENSE AND SUPPLY AGREEMENT (hereinafter this “Agreement”) is entered into this 20th day of December, 2019 (the “Effective Date”), by and between Daewoong Pharmaceutical Co., Ltd, a corporation organized and existing under the laws of the Republic of Korea, having its main office at Bongeunsaro 114-gil 12, Gangnam-gu, Seoul 06170 (hereinafter “DAEWOONG”); and AEON Biopharma, Inc., a corporation organized and existing under the laws of Delaware, United States, having its main office at 4040 MacArthur Blvd, Newport Beach, CA, USA 92660 (hereinafter “AEON”).

For the purpose of this Agreement, DAEWOONG and AEON will be referred to respectively as a “Party” and collectively as “Parties.”

WITNESSETH:

WHEREAS, DAEWOONG has extensive experience in research, development and manufacture of Product and owns valuable technical information and know-how on manufacture, use, market and sale of Product;

WHEREAS, DAEWOONG has the rights for distribution, importation, drug registration, promotion, marketing and sale of Product and AEON desires to obtain an exclusive license to the same in the Territory in the Field subject to the terms and conditions set out in this Agreement and DAEWOONG desires to grant such an exclusive license in the Territory in the Field;

WHEREAS, DAEWOONG has the capability to manufacture and supply Product to AEON and AEON desires to purchase the Product for Clinical Trials and for resale in the Territory in the Field from DAEWOONG;

WHEREAS, Evolus, Inc. (“Evolus”) paid consideration in the amount of 1,000,000 USD to DAEWOONG pursuant to that certain License and Supply Agreement dated September 30, 2013, as amended, for the exclusive option to exercise the right to expand the permitted uses of the Product to include all therapeutic uses (the “Option”) and, furthermore, the Option was exercised in consideration for the payment of 7,500,000 USD to DAEWOONG pursuant to those certain notices of exercise delivered to DAEWOONG on September 21, 2018; provided that such therapeutic use rights associated with the Option were held in trust for the benefit of AEON pending the execution of this Agreement; and

WHEREAS, both Parties desire to ensure that Information that is disclosed to the other Party shall remain confidential during the Term and after the termination of this Agreement, for any reason whatsoever.

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NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as Follows:

Article 1.Definitions.

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below:

1.1 “Affiliates” with respect to any Person means (a) any corporation or business entity of which fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by such Person; or (b) any corporation or business entity which, directly or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership interest permitted by law) or more of the securities or other ownership interests representing the equity, the voting stock or if applicable, the general partnership interest, of such Person; or (c) any corporation or business entity of which fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by a Person described in (a) or (b).

1.2 “Agreement” has the meaning set forth in the preamble.

1.3 “Certificate of Analysis” means a certificate in writing, signed by an authorized employee of DAEWOONG, that certifies the conformity of Product to the relevant Technical Specifications.

1.4 “Certificate of Compliance” means a certificate in writing, signed by an authorized employee of DAEWOONG, that certifies that Product was manufactured in compliance with GMP and cGMP.

1.5 “Clinical Research Organization” or “CRO” means independent organization that provides outsourced pharmaceutical research services or Clinical Trial for drugs.

1.6 “Clinical Trial” means any research study of Product with human subjects designed to provide specific data to determine either or both of the safety and efficacy of Product for filing a regulatory application as required under Code of Federal Regulations Title 21.

1.7 “Commercial Launch” means the first commercial sale by AEON or its Affiliates of Product in the Field to a distributor, wholesaler or other person engaged in the commercial business similar thereto for distribution, or to an end user or a consumer in the Territory.

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1.8 “Commercialize” or “Commercialization” means any action directed to developing, marketing, promoting, distributing, importing or selling Productin the Field. Commercialize will also include post-approval Clinical Trials.

1.9 “Commercialization Plan” means, with respect to Product, any and all plans and activities directed to the development, marketing, promotion, distribution, offering for sale, and selling of Product and importing Product for sale in the Territory in accordance with this Agreement any plan for Regulatory Approval and any Marketing Plan, as set forth in Annex B hereto.

1.10 “Commercially Reasonable Efforts” means, with respect to a Party’s obligations under this Agreement, the carrying out of such obligations or tasks in a diligent manner consistent with customary practices of comparable companies in the specialty pharmaceutical industry for the development or commercialization of a comparable pharmaceutical product at a similar stage of development or commercialization in light of the intellectual property and competitive landscape relevant to such product, the safety and efficacy profile of a product, the development and regulatory approval (including any reimbursement approval) risks associated with such product, and the anticipated commercial viability.  

1.11 “Competitive Product” means any product that is classified as an injectable botulinum toxin (other than the Product) launched in the Territory after the Effective Date of this Agreement

1.12 “DAEWOONG Trademarks” has the meaning set forth in Article 3.2.

1.13 “Effective Date” has the meaning set forth in the preamble.

1.14 “Field” means all therapeutic uses, including without limitation headache, upper limb spasticity, cervical dystonia, hyperhidrosis, blepharospasm, strabismus, overactive bladder, neuropsychiatric, gastrointestinal and other therapeutic indications.

1.15 “GMP” or “GMPs” shall mean Good Manufacturing Practices as determined by applicable regulatory requirements set forth by relevant Governmental Authorities of the applicable jurisdiction and “cGMP” shall mean current Good Manufacturing Practices as determined by applicable regulatory requirements set forth by relevant Governmental Authorities of the applicable jurisdiction.

1.16 “Governmental Authority” or “Governmental Authorities” means any supranational, national, regional, state or local government, court, governmental agency, authority. board bureau, instrumentality or regulatory body.

1.17 “Governmental Authorization” means any approval, permit, license, certificate, franchise, permission, clearance, registration, qualification or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any law.

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1.18 “Information” means any and all information disclosed or otherwise made available by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”), its agents, independent contractors or employees in any manner, whether communicated in writing or orally or by any method and all copies thereof, including without limitation, any business information. such as product or marketing plans and strategies, vendor or customer relationships, finances, or business operations or affairs, any information of legal nature, any information or know-how of scientific, technical or clinical nature, related to research or development efforts, future development, trade secrets, manufacturing processes, engineering, designs. Clinical Trial, field tests, process, technique, work‑in‑process, algorithm, program, design, drawings formula or test data, formulations and methods of manufacture or use, and any other information which is or has been disclosed by the Receiving Party.

1.19 “Initial Marketing Plan” means the initial Marketing Plan of Product as set forth in the Commercialization Plan.

1.20 “Initial Term” has the meaning set forth in Article 15.1.

1.21 “Joint Steering Committee” or “JSC” has the meaning set forth in Article 11.1.

1.22 “Legal Proceeding” means any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or arbitration panel.

1.23 “Manufacturing Plan” means the manufacturing plan as agreed by the Parties periodically.

1.24 “Marketing Authorization” means approval from the relevant Governmental Authority necessary to market and sell Product in the Territoryas a pharmaceutical or commercial product in any formulation or dosage form, together with ah subsequent submissions, supplements and amendments thereto.

1.25 “Marketing Authorization Application” means an application for permit, report, or other regulatory submission filed in accordance with the laws or regulations of the relevant Governmental Authorities to obtain a Marketing Authorization.

1.26 “Marketing Plan” means each marketing plan of Product agreed by Parties periodically and set forth in the Commercialization Plan.

1.27 “Material” means ingredients, contents, composition, or components of Product.

1.28 “Net Sales” means the net sales on behalf of AEON and any of its Affiliates or authorized sublicensees or assignees for Product sold to third parties other than sublicensees/assignees, as determined in accordance with generally accepted accounting principles consistently applied at AEON (“Accounting Principles”). The deductions booked by AEON and its Affiliates, sublicensees and assignees to calculate the recorded net sales from gross sales include the following:

(a) Normal trade and cash discounts;

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(b) Amounts repaid or credited by reasons of defects, rejections, recalls or returns;

(c) Rebates and chargebacks to customers and third parties (including, without limitation, Medicare, Medicaid, TriCare, Managed Healthcare);

(d) Any amounts recorded in gross revenue associated with goods provided to customers for free – with the exception of samples;

(e) Amounts provided or credited to customers through coupons, other discount programs and co-pay assistance programs;

(f) Delayed ship order credits, discounts or payments related to the impact of price increases between purchase and shipping dates; and

(g) Fee for service payments to customers for any non-separable services (including compensation for maintaining agreed inventory levels and providing information).

Provided, however, with respect to the calculation of Net Sales: (i) Net Sales only include the value charged or invoiced on the first sale to a third party and sales between or among AEON and its Affiliates and authorized sublicensees/assignees shall be disregarded for purposes of calculating Net Sales; (ii) if Product is delivered to the third party before being invoiced (or is not invoiced), Net Sales will be calculated at the time all the revenue recognition criteria under Accounting Principles are met; and (iii) distributors/resellers shall not be considered as sublicensees/assignees.

Upon the request of DAEWOONG, but not exceeding once in any one (1) year period and upon reasonable notice, AEON shall permit an independent certified accountant, selected by DAEWOONG and acceptable to AEON, which acceptance shall not be unreasonably withheld, to have access to such records of AEON as may be necessary to verify the accuracy of the Net Sales submitted to DAEWOONG hereunder.  The independent certified accountant shall verify to DAEWOONG the amount of Net Sales by country and disclose no other information revealed in its audit. Any such audit of records shall be at DAEWOONG’S expense.

1.29 “Person” means an individual, partnership, corporation, joint stock company, estate, trust (including a business trust), limited liability company, unincorporated association, joint venture or other entity or a Governmental Authority.

1.30 “Product(s)” means any pharmaceutical or biological preparation containing botulinum toxin type A with 900 kDa protein complex for therapeutic use in the Territory.

1.31 “Product Samples” mean any form of Product to be used solely for promotional purposes and identified with appropriate wording, if necessary.

1.32 “Protocol” means a document that describes the objectives, design, methodology, statistical considerations mid process of a Clinical Trial.

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1.33 “Purchase Order” means a written order in substantially in the form set forth in Annex C attached hereto, setting forth (a) Product to be supplied, (b) delivery dates, (c) applicable Product price, and (d) any other terms and conditions for manufacturing such Product, as set forth in Annex C.

1.34 “Regulatory Approval” means any applicable approvals of any Governmental Authorities, including without limitation, where applicable, Marketing Authorization, schedule classifications, permits, licenses, registration, necessary and relevant to market, distribute, promote and commercialize Product in the Territory.

1.35 “Technical Specification” means the set of requirements or standards to be met by Product as set forth in Annex E, as may be amended from time to time by mutual agreement of the Parties.

1.36 “Term” means the Initial Term together with any Renewal Term.

1.37 “Territory” means the United States of America and its territories and possessions, the EU, Australia, Canada, Russia, and the CIS, and South Africa. As used herein, (a) “EU” means all of the European Union member states as of the applicable time during the Term (for the avoidance of doubt, including the United Kingdom) and (b) CIS means all of the Commonwealth of Independent member states as of the applicable time during the Term. From time to time in this Agreement, all regions within the Territory other than the United States of America and its territories and possessions are sometimes referred to herein as the “Non-US Territory”, and the United States and its territories and possessions are referred to as the “US Territory.”

1.38 “Trademark” means Nabota™.

Article 2.License; Exclusivity; Right of First Negotiation.

2.1 During the Term, DAEWOONG hereby grants to AEON an exclusive (even as to DAEWOONG and its Affiliates) right and license, to import, distribute, promote, market, develop, offer for sale and otherwise commercialize or exploit Product in the Field in the Territory. AEON shall have the right to Commercialize Product through one or more third party distributors and/or resellers, and AEON’s relationship with any such distributor-reseller shall not constitute a sublicense hereunder.

2.2 Subject to the terms and conditions of this Agreement: (a) DAEWOONG shall manufacture and supply Product for the Territory for the Field exclusively to AEON and its Affiliates; and (b) subject to Article 4.9, AEON and its Affiliates shall purchase all of its requirements of Product for the Territory for the Field exclusively from DAEWOONG.

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2.3 Except as specifically set forth in this Agreement AEON and its Affiliates will not acquire any license or other intellectual property interest, by implication or otherwise, in any Information disclosed to it under this Agreement or under any patent rights owned or otherwise controlled by DAEWOONG or its Affiliates.

2.4 In the event that DAEWOONG or its Affiliates intend to directly or indirectly (i) develop or commercialize, or (ii) assist any other Person to develop or commercialize, any Competitive Product, DAEWOONG shall promptly provide written notice thereof to AEON. If within [***] of receipt of such notice, AEON elects to expand the definition of Product to include a Competitive Product, DAEWOONG shall negotiate in good faith exclusively with AEON the terms and conditions of such expansion. If the Parties fail to reach a definitive agreement within [***] of AEON’s election, DAEWOONG shall be free to develop and commercialize the applicable Competitive Product itself or provide such rights to a third party, provided; however, that if DAEWOONG offers to, or is prepared to accept an offer from, any such third party on terms more favorable to such third party than those last offered to AEON, it shall notify AEON, and AEON shall have [***] to accept such terms. If within [***] following DAEWOONG’s initial notice under this Article 2.4, DAEWOONG does not commence development and commercialization activities for such Competitive Product (as evidenced by a filing for regulatory approval to begin clinical studies in the United States) or does not enter into a definitive agreement with a third party to develop and commercialize such Competitive Product, AEON’s right of first negotiation and right of first refusal under this Article 2.4 shall be re-instated.

Article 3.Trademarks.

3.1 Nothing in this Agreement shall require or oblige AEON to use the DAEWOONG Trademarks in relation to Product. However, any marketing, promotion, sale and/or distribution by AEON of Product that carries, or sold by reference to, the DAEWOONG Trademarks shall be governed by the relevant provisions of this Agreement.

3.2 DAEWOONG shall, at its own expense, register and maintain the trademark(s) used by DAEWOONG and its Affiliates in connection with Product, including, without limitation, the Trademark (collectively, the “DAEWOONG Trademarks”); provided, however, that DAEWOONG shall not change, amend or otherwise modify the DAEWOONG Trademarks in the Territory without the prior written consent of AEON. AEON shall have no rights in respect to the DAEWOONG Trademarks, designs, copyrights and other proprietary rights used on or embodied in Product except as necessary to accomplish the purpose of this Agreement.

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3.3 Each Party shall notify the other Party of any actual, suspected or threatened infringement, violation or misappropriation within the Territory of the DAEWOONG Trademarks (“Infringement”) that comes to its attention. DAEWOONG shall have the sole and exclusive right to send notices and bring and conduct action in relation to any Infringement in the Territory; provided, however, in the event that DAEWOONG does not take reasonable steps to prevent any individual Infringement within thirty (30) days of becoming aware or receiving written notice thereof, AEON shall thereafter have the sole right (but shall not be under any obligation in this regard) to send notices and bring and conduct actions in relation to such Infringement. The Parties will cooperate fully with each other in taking all reasonable steps requested by the other Party in connection with any Infringement action, including joining in any Legal Proceedings. DAEWOONG shall bear the costs of any such Legal Proceedings, and shall be entitled to any damages, account of profits and/or awards of costs recovered.

3.4 DAEWOONG hereby grants to AEON an exclusive, irrevocable, sub‑licensable, assignable, fully paid-up license during the Term: (a) to use the DAEWOONG Trademark(s) to import, distribute, promote, market, offer for sale and otherwise commercialize or otherwise exploit Product in the Territory in the Field, and (b) to prepare, obtain and maintain Marketing Authorization in the Territory for the Field. For the avoidance of doubt, the rights granted to AEON hereunder is limited in the Territory and only for the Field and within the limits provided by this Agreement.

3.5 AEON shall not alter or add to DAEWOONG Trademark(s) without the prior written consent of DAEWOONG. For the avoidance of doubt, AEON may use its trade name, trademarks and logos on packaging, leaflets, advertising and promotional materials for Product together with the DAEWOONG Trademarks.

3.6 During the Term, AEON shall not (a) contest the validity of the DAEWOONG Trademarks; or (b) without the prior written consent of DAEWOONG, apply, or attempt to apply, for the registration or use, in the Territory or anywhere else, of the DAEWOONG Trademarks or any trademarks identical with or confusingly similar to the DAEWOONG Trademarks.

3.7 After the Term, AEON shall refrain from any further use of the DAEWOONG Trademarks or of any marks which may cause confusion to a third party; provided, however, that DAEWOONG shall grant AEON permission to sell off Product sourced from DAEWOONG prior to the end of the Term. [***].

Article 4.Supply of Product.

4.1 DAEWOONG shall manufacture and supply Product to AEON in a primary packaged and labeled form. Product packaging shall display the logo of DAEWOONG (to the extent required by applicable law) and AEON and the outer label shall be marked using English language in accordance with applicable laws and Product’s Regulatory Approvals.

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4.2 AEON’s estimate sales forecast of the Product during the Term of Agreement in the Territory in the Field is set forth in Annex D. Within ninety (90) days after the Effective Date, AEONshall provide DAEWOONG with a non-binding twelve (12) month rolling forecast of its requirements of Product, which the Parties agree is not a commitment to buy any stated quantity. Thereafter, on at least a quarterly basis, AEON shall provide DAEWOONG with an updated twelve (12) month rolling forecast, together with a binding six (6) month forecast to the extent AEON has requested Safety Stock as described in Article4.10 below. Each such forecast shah be referred to herein as a “Forecast.”

4.3 AEON may from time to time submit Purchase Orders to DAEWOONG for Product in accordance with the forecasting requirements in Article 4.2. Orders will be shipped on CIF Los Angeles port.

4.4 Once a Purchase Order for Product and Product Samples has been received by DAEWOONG, it shall be considered as irrevocable.

4.5 AEON agrees herein to place an Order for Product not later than [***] from receipt of Regulatory Approval.

4.6 Individual Purchase Orders of Product shall be placed at least [***] in advance of the required delivery date.

4.7 For the purpose of Commercialization, AEON will store and maintain the full quantity of Product in a clean, secured area in accordance with the reasonable directions and specifications provided by DAEWOONG in writing in connection thereof in the Territory. AEON will advise DAEWOONG on the applicable requirements specifically deriving from the laws and regulations in the Territory.

4.8 AEON agrees that DAEWOONG and its collaborators and agents, in DAEWOONG’s sole discretion, which collaborators and Agents will be subject to appropriate obligations of confidentiality, will have the right upon reasonable prior notice, to observe and to inspect and to audit AEON’s facility to ascertain compliance by AEON with the terms of this Agreement, including without limitation (a) the holding facilities for Product, and (b) AEON’s compliance with applicable law, including cGMP (if applicable). Following any such audit, DAEWOONG will discuss its observations and conclusions with AEON and corrective actions, if any, will be agreed upon by the Parties, and executed by AEON using Commercially Reasonable Efforts.

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4.9 In addition to any other rights and remedies available to AEON, AEON shall have the right to recover lost profits in the event that DAEWOONG fails to deliver at least [***] in any [***] (a “Supply Default Event”). For purposes of this provision, lost profits would be equal to [***] of AEON operating profit (sales less direct expenses and the puce paid by AEON for such Products) on Products that have not been shipped against firm Purchase Orders during the period leading up to the Supply Default Event and bona fide Purchase Orders submitted by AEON that are consistent with the Forecast during the Supply Default Period (as defined below). Such payment shall be made with respect to all Product not shipped in the period giving rise to the Supply Default and for the period until DAEWOONG is again timely shipping Product to meet AEON’s needs (the “Supply Default Period”). The first such payment shall be made within [***] of the Supply Default Event, and every [***] thereafter.

AEON agrees to permit full disclosure to DAEWOONG of AEON’s accounting records, solely related to the calculation of lost profits, for the [***] ending on the first day of the month in which the Supply Event Default occurred.

In the event that DAEWOONG is unable to supply both AEON’s requirements of Product and its own and third parties’ requirements for Product, DAEWOONG shall allocate Product that DAEWOONG has in inventory and that DAEWOONG is able to Product, so that AEON receives its requirements of Product in priority to DAEWOONG and third parties.

4.10 At the request of AEON, DAEWOONG shall at its own cost and expense during the Term, maintain an amount of inventory of Product equal to AEON’s requirements for Product for [***] based on AEON’s most recent forecast (“Safety Stock”). The Safety Stock shall be (i) maintained for the sole benefit of AEON and its Affiliates, (ii) shall be stored at a secure facility in compliance with GMP, and (iii) shall not be used for the benefit of any other customer of DAEWOONG. DAEWOONG shall rotate the Safety Stock on a “First Expiry-First Out” basis for routine fulfillment of firm orders, subject to Article 7.9. Such Safety Stock shall be independent of any safety stock maintained for the benefit of DAEWOONG or any other customer of DAEWOONG. in the event DAEWOONG is not able to supply AEON Product pursuant to any firm Purchase Order, DAEWOONG shall draw upon the Safety Stock maintained for AEON to make up for any shortfall. Within five (5) days after the end of each calendar quarter, DAEWOONG shall deliver a report to AEON describing the quantities of the Safety Stock remaining as of the end of such quarter.

Article 5.[Intentionally Omitted].

Article 6.Price.

6.1 For Product ordered by AEON, AEON shall pay to DAEWOONG the prices set forth in Annex A hereto, calculated on CIF Los Angeles port. In the event that any Product is not timely shipped, the price for such late order shall be reduced by [***] for each full week of delay.

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6.2 All amounts payable and calculations made hereunder shall be in United States Dollars (“USD”) payable within [***] of invoice receipt, except to the extent such invoices, or any part thereof, are disputed in good faith by AEON; provided, that, if the invoice receipt date is prior to shipment of the applicable Products, the [***] shall instead be calculated from the shipment date.

6.3 DAEWOONG is not liable for and DAEWOONG will not reimburse, or otherwise pay, for any cost due to any possible devaluation of any local currency corresponding to the value of USD.

6.4 Unless otherwise provided by the relevant laws or treaties, any sales and similar taxes imposed by any Governmental Authorities in relation to the payments made under this Agreement shall be paid by AEON regardless to whom they are charged, and AEON shall not withhold the payment to DAEWOONG, in whole or in part, for such taxes.

6.5 AEON shall be responsible for obtaining and maintaining any and all authorizations from Governmental Authorities in the Territory and for making all the payments to DAEWOONG hereunder; provided, however, that DAEWOONG shall provide AEON with all necessary information to enable AEON to obtain and maintain any such authorization.

6.6 If any sum due and payable under this Agreement by AEON shall not have been paid on or before the applicable due date, simple interest shall accrue on the unpaid amount at the rate of [***] % per annum, calculated on a daily basis from the due date until the date actual payment is made, without prejudice to any other claim or remedy available to DAEWOONG, except to the extent such invoices, or any part thereof, are disputed in good faith by AEON. AEON also agrees to pay all collection costs, including DAEWOONG’s legal costs for the collection of any amount due and unpaid, to the extent that such amounts are determined by a court of competent jurisdiction or other applicable Governmental Authority to be due to DAEWOONG. Without prejudice to any of its other rights, DAEWOONG may withhold shipments of Product if AEON has not paid any invoice when due, except to the extent such invoices, or any part thereof, are disputed in good faith by AEON.

Article 7.Quality; Acceptance and Rejection; Indemnification.

7.1 Quality.

(a) Product supplied hereunder by DAEWOONG shall meet the Technical Specifications. DAEWOONG shall not subcontract or delegate any portion of its obligations hereunder to a third party or Affiliate without the prior written consent of AEON. Changes to the Technical Specifications require prior written approval of AEON and in the event that compliance with such change requires additions and/or modifications to the existing product registrations of AEON or its Affiliates, the Parties will meet to decide how to implement the change.

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(b) DAEWOONG warrants that (i) it shall manufacture and supply Product and carry on operations at its Product facility in full compliance with (A) cGMP and standards specified by GMP, the drug master files,and all other regulatory guidelines and requirements as applicable, and (B) all legal requirements, including, the prevailing laws and regulations on health, safety and environmental protection, and (ii) Product will not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as amended from time to time.

(c) Each time DAEWOONG ships Product to AEON, or an Affiliate or designee of AEON, it shall provide AEON with a Certificate of Analysis and a Certificate of Compliance. During the Term, DAEWOONG shall keep and maintain a drug master file for the Product and authorize AEON to incorporate by reference all information and documentation contained therein.

(d) Following thirty (30) days prior written notice (or sooner to the extent required by any Governmental Authority), DAEWOONG shall allow AEON (or its designee) to visit the facilities where the Product is manufactured during regular business hours to assure AEON of the quality standards used. DAEWOONG shall make documentation available for on-site inspections at DAEWOONG’s site and provide to AEON information reasonably requested by AEON to (i) assist AEON in determining whether any delivery complies fully with the terms of this Agreement; (ii) assist AEON or its Affiliates in obtaining any and all regulatory approvals necessary to market proprietary products containing Product; and/or (iii) enable AEON to comply with any statutory or regulatory requirements, or with a request by any Governmental Authority.  

7.2 Promptly upon receipt of each shipment of Product, AEON shall diligently inspect each Product as to any defects or missing quantities, as far as reasonably practical.

7.3 If AEON determines that any such Product is damaged or defective, AEON will notify DAEWOONG in writing, providing a complete report on the nature, effects, possible cause and relevancy of the defect, and deliver to DAEWOONG no later than [***] after the receipt of such Product by AEON.

7.4 AEON shall not return Product to DAEWOONG without prior written consent of DAEWOONG (such consent shall not be unreasonably withheld) in connection with a claim made pursuant to Article 7.3.

7.5 When a claim of defect or damages is made by AEON, DAEWOONG shall analyze a sample of Product taken from such delivered quantity. Should DAEWOONG find the claim of AEON is justifiable, then DAEWOONG shall promptly replace, at its expense, such Product with defect with equal quantity of Product that meets the Technical Specifications.

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7.6 In the event that DAEWOONG does not agree with AEON that Product that has been rejected under the provisions of this Article 7 fails, the matter shall, at the request of either Party, be submitted to an independent analytical laboratory acceptable to both Parties, which will resolve the discrepancy in the analysis taking into consideration the counter-sample of the rejected Product kept by DAEWOONG. The decision of said laboratory shall be final, not subject to appeal and neither Party shall unreasonably withhold its approval of an independent laboratory proposed by the other.

7.7 Should the independent laboratory agree with the complaint, then:

(a) The last sentence of Article 7.5 shall apply; and

(b) The cost of the assay and any other services performed by the independent laboratory shall be borne by the Party whose opinion was not supported by the independent laboratory.

7.8 Article 7.7 shall not apply, where Parties agree or the independent laboratory declares that:

(a) Product meets the Technical Specifications; or

(b) the failure of such non-conforming Product results from AEON’s:

(i) negligent or defective transportation of Product following the delivery condition by DAEWOONG; or

(ii) negligent or defective handling, storage or use of Product by AEON.

7.9 All Product supplied by DAEWOONG to AEON shall have [***] of DAEWOONG’s shell life as approved by the FDA or any other Governmental Authority at time of receipt by AEON. Subject to the foregoing, (a) DAEWOONG shall not be responsible for any expired units of Product, including without limitation to those returned by wholesalers, pharmacists, doctors, or other Persons to whom AEON sold Product in the Territory, and (b) AEON shall not be entitled to any replacement of the expired Product or to any compensation of any kind from DAEWOONG.

7.10 Each Party will, at its own expense, carry and maintain, during the Term and a subsequent period of [***] after its expiry or termination whatever the cause and the time may be, insurance sufficient to cover its obligations and liabilities hereunder.

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7.11 AEON shall indemnify, defend, and hold harmless DAEWOONG and its employees, officers, directors and agents (hereinafter respectively referred to as an “DAEWOONG Indemnitee”) from and against, any and all losses, costs, expenses, liabilities and damages of every kind and nature (including, without limitation, reasonable attorney fees) (hereinafter collectively referred to as “Claims”) incurred by a DAEWOONG Indemnitee arising from: (a) willful misconduct or any grossly negligent acts or omissions on the part of AEON or its employees or agents in performing duties obligations in connection with this Agreement, or (b) AEON’s breach of this Agreement except to the extent that any such Claim is caused by DAEWOONG’s own willful misconduct or grossly negligent acts or omissions. DAEWOONG agrees to give AEON prompt written notice of any Claim, and agrees to reasonably cooperate with AEON in the defense of any Claim, provided that each DAEWOONG Indemnitee will be entitled to participate in the defense of any Claim and employ counsel at its own cost and expense.

7.12 DAEWOONG shall indemnify, defend, and hold harmless AEON and its employees, officers, directors and agents (hereinafter respectively referred to as an “AEON Indemnitee”) from and against any and all Claims arising from; (a) willfull misconduct or any grossly negligent acts or omissions on the part of DAEWOONG or its employees or agents in performing duties obligations in connection with this Agreement; (b) DAEWOONG’s breach of this Agreement, or (c) an allegation that Product or any DAEWOONG Trademark infringes or misappropriates the rights, including without limitation intellectual property rights, of a third party; except to the extent that any such Claim is caused by AEON’s own willful misconduct or grossly negligent acts or omissions. AEON agrees to give DAEWOONG prompt written notice of any Claim, and agrees to reasonably cooperate with DAEWOONG in the defense of any Claim, provided that each AEON Indemnitee will be entitled to participate in the defense of any Claim and employ counsel at its own cost and expense.

7.13 In the event and to the extent of any Recall or Seizure of any Product, as hereinafter defined, due to an improper act or omission of DAEWOONG or a third party acting on its behalf (excluding AEON or its Affiliates), DAEWOONG shall, at the written election of AEON and, without limiting DAEWOONG’s indemnity obligations under Article 7.12. [***]. For purposes of this Agreement, “Recall” means (i) any action by AEON or any of its Affiliate to recover title to or possession of any Product sold or shipped (including market withdrawal) based on Governmental Authority action or the good faith belief of AEON or such Affiliate that such action was necessity under the circumstance, and/or (ii) any decision by AEON not to sell or ship Product to third parties that would have been subject to recall if it had been sold or shipped, in each ease taken in the good faith belief that such action was necessary under the circumstances; and “Seizure” means any action by any Governmental Authority to detain or destroy any Product.

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7.14 Within thirty (30) days following the Effective Date, the Parties shall agree upon and implement a (a) quality agreement specifying the responsibilities of each Party with respect to quality and regulatory requirements; and (b) procedure for the mutual exchange of adverse event reports and safety information associated with the Product. Details of the operating procedure respecting such adverse event reports and safety information exchange shall be the subject of a mutually-agreed written pharmacovigilance agreement between the Parties which shall be entered into within such thirty (30) day period.

Article 8.Technical Assistance.

8.1 If AEON requests that DAEWOONG provide AEON with technical assistance with the Commercial Plan or a Clinical Trial, including without limitation information and illustrated material, and advertising material suitable for the promotion and advertising of Products, then DAEWOONG shall provide such assistance at no cost or expense to AEON.

8.2 Any expenses of AEON’s personnel dispatched for training shall be borne by AEON. Further, if the training is completed in the Territory, AEON shall also compensate expenses incurred by DAEWOONG personnel who train AEON’s personnel.

Article 9.Drug Registration.

9.1 The Parties agree to fully cooperate in good faith under this Agreement in connection with the Marketing Authorization(s), supplying and commercialization of Product in the Territory in the Field to the extent permitted by any applicable laws. For purposes thereof, each Party shall provide (or request its Affiliates to provide) to the other Party and/or the JSC any necessary Information and such other information as may be reasonably required under this Agreement.

9.2 During the Term, AEON, at its sole cost and expense, shall use Commercially Reasonable Efforts to (i) obtain Regulatory Approvals required by Governmental Authorities in relation to the Commercial Plan of Product in Territory in the Field, including but not limited to preparing and filing all necessary applications and (ii) maintain any such Regulatory Approvals.  

9.3 During the Term, AEON agrees to use Commercially Reasonable Efforts to achieve all Regulatory Approvals necessary for Products to be marketed in the Territory in the Field. AEON shall be responsible for preparing, submitting requirements and prosecuting any study for the Marketing Authorization in the Territory in the Field. AEON shall be responsible for completing all technical non-clinical studies and Clinical Trials required for such Marketing Authorization Application(s). DAEWOONG will provide all materials and documentations requested by AEON to register the Product in the Territory. [***]. For avoidance of doubt, any documents, study results and reports made pursuant to this Article 9 or otherwise communicated between the Parties will be subject to the confidentiality provisions of Article 14. Further, AEON and its consultants shall exercise Commercially Reasonable Efforts to achieve Marketing Authorization for a Product in the Territory in the Field.

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9.4 Each Party shall provide the other Party with reasonable prior notice of all material meetings, conferences and discussions scheduled with any relevant Governmental Authority concerning any Regulatory Approval relating to Products to the extent such notice is practicable and in any event shall use its reasonable efforts to provide such notice as promptly as practicable. At all such meetings, conferences or discussions, such other Party shall have the right to attend and participate (accompanied by a translator, consultants or advisors, if so decided by such Party), either in person or by telephone, to the extent permitted by the applicable Governmental Authority at such other Party’s sole cost and expense; provided, further that such other Party shall have the right to comment in timely fashion on any such approval applications or communication with Governmental Authorities, which comments such Party shall reasonably consider.

9.5 Subject to [***], AEON shall provide DAEWOONG with complete and accurate record of the dossier related to all Regulatory Approvals obtained by AEON or its Affiliates or sub-licensees that relate to Product, including copies of: (a) all the correspondence exchanged with Governmental Authorities; (b) any certificate of Marketing Authorizations in the Territory related to Product within fourteen (14) days of completion of such registration; (c) subsequent amendments or supplements thereto; and (d) any regulatory documents and certificates relating to the foregoing that DAEWOONG requests. [***].  

9.6 [***].

Article 10.Marketing and Promotion.

10.1 Upon obtaining all necessary Regulatory Approvals, AEON shall use Commercially Reasonable Efforts to Commercialize Product in the Territory in the Field. Subject to the terms and conditions of this Agreement, AEON shall be responsible for the establishment and implementation for Commercialization of Product in the Territory in the Field as set forth in Initial Marketing Plan. AEON will discuss with DAEWOONG the following:

(a) Initial Marketing Plan for Product within [***] after obtaining Marketing Authorization in the Territory in the Field; and

(b) Annual Marketing Plan [***] prior to the end of each calendar year.

10.2 AEON shall submit to DAEWOONG semi-annual review reports on January 1 and July 31 of each calendar year which will include, but without limitation, the following, with respect to Product in the Territory in the Field: (a) customer requirements with respect to Product; (b) market analysis; (c) competition; (d) any primary or secondary market research; (e) details of any changes in applicable laws in Territory; and (f) all in market sales data.

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10.3 For the avoidance of doubt, AEON will bear all costs and expenses related to the activities related to Commercialization of Productin the Territory in the Field as well as cost related to obtaining and maintaining associated Marketing Authorizations.

10.4 AEON shall use Commercially Reasonable Efforts to Commercialize Product in the Territory in the Field and to provide physicians, practitioners and other prescribers with information and support related to Product in the Territory in the Field. AEON’s obligations in connection with Commercialization of Product in the Territory are set out in Initial Marketing Plan. Further, on at least a Calendar Year basis, AEON shall provide DAEWOONG with a written summary of AEON’s planned and completed Commercialization activities with respect to Product in the Territory, covering subject matter at a level of detail sufficient to enable DAEWOONG to determine AEON’s compliance with its diligence obligations in this Article 10.

10.5 AEON will, in implementing the Marketing Plan, use Commercially Reasonable Efforts to protect and preserve the good image and reputation of DAEWOONG and Product, and shall ensure that no marketing or promotional effort will violate any applicable laws.

Article 11.Joint Steering Committee (JSC).

11.1 The Parties shall promptly, and in any event within thirty (30) days from execution of this Agreement establish a joint steering committee (“Joint Steering Committee” or “JSC”) to review and provide input on all, Commercialization Plans of Product in the Territory. The JSC shall be comprised of an equal number of representatives from each of the Parties, including both development and commercial representatives of Parties. In addition, it is contemplated that senior executive and managerial personnel of each Party will serve as members of the JSC or will periodically participate in meetings of the JSC, when so required to assure that relevant matters are reviewed and jointly approved by the senior executive management of both Parties.

11.2 The JSC shall meet at least once each calendar quarter or as otherwise agreed to by the Parties. At least one meeting in each year shall be held in person, as face to face meetings.

11.3 The JSC shall exercise such authority in good faith in accordance with the terms of this Agreement. In the event that JSC is unable to reach a decision on any matter within thirty (30) days, the matter shall be referred to the top management of each Party for resolution.

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11.4 The JSC shall review, and make recommendations with regards to Commercialization Plan to be performed by AEON hereunder. To that end, the JSC shall review; and make recommendations with regards to, the following; provided, however, that AEON shall, in its reasonable discretion, have the authority to make final decisions with respect to the following matters:

(a) the implementation of the plan for Drug Registration and strategy for filling application for Regulatory Approval for Products in the Territory;

(b) all regulatory aspects of Products, including but not limited to, each and every regulatory action, communication, and filing and submission including any supplements or amendments thereto to relevant Governmental Authorities in the Territory with respect to Products;

(c) schedule and implementation strategy for all applications for Regulatory Approval;

(d) coordinate the provision of expertise from both Parties to the JSC with respect to pre-clinical or clinical studies related to Product recommended by the JSC;

(e) suggest updates to, and implementation of, Marketing Plan; and

(f) the marketing, promotion, sale and/or distribution of Product.

11.5 Each Party may attend the JSC and other meetings together with interpreters, it being also agreed that the agendas and minutes of the meetings will be written in English and that the reports and information to be reviewed or evaluated in JSC and meetings will be accompanied with their corresponding translation into English (when not originally prepared in English).

Article 12.Prohibition on Certain Activities.

12.1 During the Term, AEON and its Affiliates shall not, directly or indirectly, other than through DAEWOONG (a) purchase, import, export, sell or distribute any Competitive Product in the Territory in the Field, or assist any third party to do so; (b) sell Product outside the Territory, or (c) sell Product to any Person in the Territory who such Person knows intends to sell such Product outside the Territory.

12.2 During the initial [***] period following the Effective Date, DAEWOONG and its Affiliates shall not, directly or indirectly, (a) purchase, import, export, sell, distribute, or otherwise deal in any Competitive Product in the Territory in the Field, or assist any other third party to do so; (b) sell any Competitive Product to any Person (other than AEON and its Affiliates or designees) inside the Territory; or (c) sell any Competitive Product to any Person outside the Territory who such Person knows intends to sell such Product inside the Territory.

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12.3 During the Term, DAEWOONG and its Affiliates shall not, directly or indirectly, other than through AEON, (a) purchase, import, export, sell, distribute, or otherwise deal in Product in theTerritory in the Field, or assist any other third party to do so; (b) sell any Product to any Person (other than AEON and its Affiliates or designees) inside theTerritory; or (c) sell any Product to any Person outside the territory who such Person knows intends to sell such Product inside the Territory.

Article 13.Other Obligations of Parties.

13.1 Each Party shall promptly inform the other Party of any relevant changes in laws and regulations that such Person becomes aware of that may affect Drug Registration (including the local regulatory requirements classification, marketing authorization and safety), and Commercialization of Product in the Territory.

13.2 In its execution of the Commercialization Plan of Product and its other obligations under this Agreement, AEON will comply with all applicable laws.

13.3 AEON shall, at DAEWOONG’s sole cost and expense, submit to DAEWOONG all texts, tapes and recordings of any printed, audio or video promotional material of Product produced in the Territory.

13.4 AEON shall commence conducting non-clinical studies and/or Clinical studies use Commercially Reasonable Efforts to follow the schedule set forth in the Commercialization Plan.

13.5 Before conducting the Clinical Trials in the Territory, AEON shall submit the Protocol to DAEWOONG and provide the interim findings and final results of non‑clinical and clinical studies to DAEWOONG promptly. DAEWOONG shall not publish or reveal non-clinical and clinical data to third parties without prior written consent of AEON. For the avoidance of doubt, any documents, study results and reports made pursuant to this Article 13 shall be the Information of AEON and subject to the confidentiality provisions of Article 14.

13.6 AEON shall use Commercially Reasonable Efforts: (a) to advance Product through completion of Clinical Trials in accordance with the Regulatory Plan; (b) to obtain Marketing Authorization in accordance with the Marketing Plan; and (c) to conduct the Commercialization Plan.

13.7 DAEWOONG shall, at its own cost and expense, develop, qualify and maintain a site for the manufacture of Product (including the active ingredient therein) so that there exists, at a minimum, sufficient capacity to meet [***] of AEON’s Forecast, and DAEWOONG shall insure that site for the manufacture of Product is in a qualified and validated state appropriate for inclusion as a manufacturing site for Product as required by the U.S. FDA and any other regulations in the Territory. [***].

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Article 14.Obligation of Confidentiality.

14.1 During the Term, and for [***] thereafter, each of the Parties will keep confidential and not disclose or use any of the Information of the other Party except in the performance of its obligations and exercise of its rights under this Agreement. Each Party will treat the other Party’s Information with the same degree of confidentiality as it keeps its own confidential information (but in no event will it use less than reasonable care with such Information). Notwithstanding the foregoing, the provisions of this Article 14 shall not apply to any information that can be shown by the Receiving Party:

(a) To have been known to or in the possession of the Receiving Party prior to the date of its actual receipt from the Disclosing Party without breaching any provision of this Agreement or any other agreement between the Parties or of any agreement between the Disclosing Party and a Third Party, by such Third Party;

(b) To be or to have become available to the public other than through any act or omission of the Receiving Party in breach of this Agreement or any other agreement between the Parties;

(c) To have been disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party that had no obligation to the Disclosing Party not to disclose such information to others; or

(d) To have been subsequently independently developed by the Receiving Party without use of the Disclosing Party Information as demonstrated by competent contemporaneous tangible records.

14.2 Receiving Party shall ensure that its Affiliates, directors or employees, who have access to Information, shall consider and hold any of the Information as herein contemplated.

14.3 Each Party may disclose the other Party’s Information hereunder solely to the extent such disclosure is reasonably necessary in connection with complying with applicable laws; provided that in the event of any such disclosure of the Disclosing Party’s Information by the Receiving Party, the Receiving Party will, except where impracticable, give reasonable advance notice to the Disclosing Party of such disclosure requirement (so that the Disclosing Party may seek a protective order and/or other appropriate remedy or waive compliance with the confidentiality provisions of this Article 14 and will use its Commercially Reasonable Efforts to secure confidential treatment of such confidential Information required to be disclosed).

14.4 Each Receiving Party shall keep Information belonging to the Disclosing Party in appropriately secure locations. Upon expiration or termination of this Agreement, any and all Information possessed in tangible form by a Receiving Party, or its Affiliates, or its or any of their directors, officers, employees, agents, consultants, and clinical investigators and belonging to the Disclosing Party, shall, upon written request, be destroyed to the extent practicable and not used or disclosed by the Receiving Party, its Affiliates, or any of their directors, officers, employees, agents, consultants, and clinical investigators; provided, however, that a Party may retain one (1) copy of any Information in an appropriately secure location solely for use by its legal department to ensure compliance with the confidentiality provisions of this Agreement.

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14.5 DAEWOONG and AEON each acknowledge the other Party’s interest in publishing the results of its scientific research in order to obtain recognition within the scientific community and to advance the state of scientific knowledge. Authorship of any publication shall be determined based on the accepted standards used in peer-reviewed, academic journals at the time of the proposed publication. Each Party also recognizes the mutual interest in obtaining valid patent protection and in protecting business interests and trade secret information. Consequently, except for disclosures permitted pursuant to Article 14.1, if either Party, its employees or consultants wishes to publish or present to any third party, during the Term, results of the scientific, preclinical and clinical studies or any information about Product, or the results of any program to discover or develop any of the above, it shall deliver to the other Party a copy of the proposed written publication or an outline of an oral disclosure at least fifteen (15) days prior to submission for publication or presentation. The reviewing Party shall notify the other Party within fifteen (15) days of receipt of such proposed publication whether such draft publication contains (i) Information of the reviewing Party, or (ii) information that if published would have an adverse effect on a patent application covering the subject matter of this Agreement, the reviewing Party shall have the right to (a) propose modifications to the publication or presentation for patent reasons, trade secret reasons, confidentiality reasons or business reasons or (b) request a reasonable delay in publication or presentation in order to protect patentable information. If the reviewing Party requests a delay to protect patentable information, the publishing Party shall delay submission or presentation for a period not to exceed thirty (30) days to enable patent applications protecting each Party’s rights in such information to be filed in accordance with the terms of this Agreement. Upon expiration of such thirty (30) days, the publishing Party shall be free to proceed with the publication or presentation. If the reviewing Party reasonably requests modifications to the publication or presentation to prevent disclosure of material trade secret or proprietary business information, the publishing Party shall edit such publication to prevent the disclosure of such information prior to submission of the publication or presentation. After the termination or expiration of this Agreement, the Parties shall continue to be obligated to adhere to the guidelines set out in Article 14.4 and this Article 14.5, but solely with respect to publications or presentations to any third party containing information about Product.

14.6 Once approval for a publication or presentation has been granted, the relevant Party shall be entitled to use the specific information contained in such publication or presentation after the date of its publication or presentation without seeking further approval. General comments made by a Party relating to the relationship between DAEWOONG and AEON established by this Agreement, including, for example, general comments made in response to inquiries at professional meetings and other similar circumstances, are not intended to be restricted by the provisions of this Article 14 provided such information has been disclosed to the public previously or cleared for such disclosure by the other Party. For the avoidance of doubt, neither Party shall be entitled to publish Information of the other in violation of Article 14.

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14.7 DAEWOONG and AEON shall agree upon the timing and content of an initial press release relating to this Agreement and the transactions contemplated herein. Except to the extent already disclosed in that initial press release, no disclosure of the subject matter of this Agreement or its terms may be made by either Party, and no Party shall use the name, trademark, trade name or logo of the other Party or its employees in any publicity, news release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except as may be required by applicable laws, regulations, or judicial order. The Party desiring to make any such public announcement shall provide the other Party with a written copy of the proposed announcement in sufficient time prior to public release to allow such other Party to comment upon such announcement, prior to public release.

Article 15.Term.

15.1 The initial term of this Agreement (the “Initial Term”) shall commence as of the Effective Date and shall expire on the later of (a) the fifth (5th) anniversary of the grant of Marketing Authorization in the Territory, or (b) the tenth (10th) anniversary of the Effective Date. This Agreement shall be automatically extended for unlimited additional three (3) year terms after the expiration of the Initial Term (each, a “Renewal Term”). For avoidance of doubt, except as otherwise provided herein, on expiration or termination of this Agreement, the licenses granted by DAEWOONG to AEON hereunder shall also expire and be revoked.

15.2 Except as otherwise required by law or any rule of any stock exchange, each Party shall keep the existence and terms of the Agreement confidential, and the negotiations relating hereto in accordance with the terms of Article 14.

Article 16.Termination.

16.1 A Party may terminate this Agreement in its entirety upon written notice of termination to the other Party, if: (a) the other Party breaches any of its duties or obligations hereunder, (such breaches will be referred to as “Default”); and (b) such Default continues without being cured or remedied within ninety (90) days (or 30 days in case of a payment default) after the defaulting Party receives written notice of such Default from the non-defaulting Party; provided, however, that if the pertinent breach is not capable of cure within ninety (90) days, but is capable of cure, and the defaulting Party has promptly commenced, and is and continues to diligently pursuing good faith the remedy of any such breach, then such cure period shall be extended for such period as may be reasonably required to effectuate such cure; provided, further, however, that if such breach is not capable of cure, the non‑defaulting Party may terminate this Agreement, or suspend performance under this Agreement, immediately by delivery of written notice thereof to such defaulting Party.

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16.2 This Agreement shall terminate forthwith without notice when any of following events occurs to AEON: (a) bankruptcy or insolvency or filing of a petition therefor; (b) assignment of its business, or this Agreement in whole or in part or rights thereof, for the benefit of creditors; (c) appointment of a receiver over any of its assets not vacated in sixty (60) days thereafter; or (d) filing of any other petition based upon the alleged bankruptcy or insolvency not dismissed within ninety (90) days thereafter.

Article 17.Representations, Warranties and Covenants.

17.1 Each Party represents and warrants to the other Party that:

(a) Such Party is duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization;

(b) Such Party has the full corporate power and is duly authorized to enter too, execute and deliver this Agreement, and to carry out and otherwise perform its obligations hereunder;

(c) This Agreement has been duly executed and delivered by, and is the legal and valid obligation binding upon such Party and the entry into, the execution and delivery of, and the carrying out and other performance of its obligations under this Agreement by such Party (i) does not conflict with, or contravene or constitute any default under, any agreement, instrument or understanding, oral or written, to which it is a party, including its certificate of incorporation or by‑laws, and (ii) does not violate applicable law or any judgment, injunction, order or decree of any Governmental Authority having jurisdiction over it;

(d) No government authorization, consent, approval, license, exemption of or filing or registration with any court or Governmental Authority, under any applicable law currently in effect, is or will be necessary for, or in connection with, the transaction contemplated by this Agreement or any other agreement or instrument executed in connection herewith, or for the performance by such Party of its obligations under this Agreement and such other agreements; and

(e) Neither such Party, nor any of its employees, officers, subcontractors, or consultants who have rendered or will render services relating to Products; (i) has ever been debarred or is subject or debarment or convicted of a crime for which an entity or person could be debarred by the FDA under 21 U.S.C. Section 335a (or subject to a similar sanction of any other Governmental Authority) or (ii) has ever been under indictment for a crime for which a person or entity could be so debarred.

17.2 DAEWOONG represents and warrants to AEON as follows;

(a) Litigation. As of the Effective Date, there is no Legal Proceeding pending or threatened against DAEWOONG, that (i) relates to Product, or (ii) challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the transactions contemplated by this Agreement. No event has occurred, and no claim, dispute or other condition or circumstance exists, that will, or could reasonably be expected to, give rise to or serve as a basis for the commencement of any such Legal Proceeding.

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(b) Regulatory Matters.

(i) DAEWOONG and each of its Affiliates is in compliance in all material respects with all applicable laws that relate to the manufacture, development, or Commercialization of Product;

(ii) Neither DAEWOONG nor any of its Affiliates has received any written communication regarding, and has not been and is not now subject to, any adverse inspection, compelled or voluntary recall, investigation, regulatory enforcement action, penalty or corrective or remedial action by any Governmental Authority, in each case that relates to (i) Product, (ii) any alleged or actual violation by DAEWOONG or Product of any Governmental Authorization or other requirements of any Governmental Authority relating to the commercialization of Product, (iii) any alleged or actual failure to have or maintain in effect all Governmental Authorizations required in connection with the conduct of the manufacture, development or Commercialization of Product, or (iv) any alleged or actual failure to be in compliance with applicable laws with respect to Product, and no event has occurred. and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to result in any of the foregoing.

(iii) There has not been any occurrence of any Product recall, market withdrawal or replacement, or post-sale warning conducted by or on behalf of DAEWOONG or any of its Affiliates concerning Product or any product recall, market withdrawal or replacement conducted by or on behalf of any entity as a result of any alleged defect in Product.

(iv) No Legal Proceeding seeking the recall, withdrawal, suspension or seizure of Product is pending with respect to DAEWOONG for any of its Affiliates), nor was any such Legal Proceeding pending at any time during the last three (3) years.

(v) At no time during the last three (3) years has DAEWOONG (or any of its Affiliates) received any written notice that any Governmental Authority has commenced, or threatened to commence, any Legal Proceeding to withdraw its approval, registration or licensure of Product or has initiated or threatened to initiate any action to seize or enjoin the production of Product.

(vi) The information contained in all reports filed with any Governmental Authority is accurate and complete in all material respects and there has been no adverse occurrence, event, effect, study, test, article, report, investigation, or finding that was omitted from such reports, that would require amendment, modification, updating or supplementing of such reports, or that would require disclosure in a future report.

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(c) Compliance with Laws.

(i) DAEWOONG (and each of its Affiliates) is in compliance in all material respects with all laws applicable to it which relate materially to Product. Neither DAEWOONG nor its Affiliates has received any written notice within the past three (3) years of any asserted violation of any such laws and neither DAEWOONG nor its Affiliates has received any written notice within the past three (3) years that any investigation or review by any Governmental Authority with respect to the Product is pending or that any such investigation or review is contemplated.

(ii) The Product is not (i) subject to the international Traffic in Arms Regulations and (ii) controlled at a level greater than EAR99/AT under the Export Administration Regulations or an equivalent level of control under non-U.S. export control laws.

(iii) DAEWOONG is not, nor are any of its employees, customers or other business partners, in either case, in connection with the Commercialization of Product (A) located in any sanctioned countries; (B) owned or controlled by any entity located in any sanctioned country; or (C) included on any restricted parties lists, as such terms are defined under applicable U.S. and non-U.S. export control and economic sanctions laws.

(d) Intellectual Property Rights.

(i) The Trademark has been duly registered or filed in the Territory with the appropriate Governmental Authorities.

(ii) There are no outstanding claims asserted in writing against DAEWOONG alleging that its manufacture, development or Commercialization of Product infringes or misappropriates any intellectual property or other proprietary rights of any other Person.

(iii) DAEWOONG’S manufacture, development or Commercialization of Product does not infringe or misappropriate any intellectual property or other proprietary rights of any other Person,

Article 18.Effect of Termination.

18.1 Upon termination of this Agreement for any reason, AEON shall immediately cease to Commercialize Product in the Territory; and shall cease to use Information, patent rights, and Trademarks owned by or associated with DAEWOONG and its Affiliates; provided, however, that AEON shall have the right to sell off Product sourced from DAEWOONG prior to the termination of this Agreement.

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18.2 Upon termination of this Agreement for any reason, each Party hereto shall also make no further use of any of the Information of the other Party and, except as required by law, each Party shall immediately send to the other Party all documents and media containing any such Information or, at the request of the Disclosing Party, destroy the same (in which case the Receiving Party shall certify such destruction in writing).

18.3 Article 3.5, Article 6.6, Article 7, Article 9.6, Article 14, Article 17, Article 18, Article 20, Article 21, and Article 25 and any other provision of this Agreement that by its terms would survive expiration or termination, shall survive expiration or termination of this Agreement.

18.4 Termination of this Agreement, for any reason, shall not affect either Party’s obligation to pay all outstanding amounts having already accrued while this Agreement remained in effect.

18.5 Termination or expiry of this Agreement, or assignment or transfer of rights or obligations under this Agreement, shall not prejudice any right or remedy having arisen before such Termination, expiry, assignment, or transfer arising from this Agreement.

Article 19.Force Majeure.

Neither Party shall be considered liable for any failure or delay to perform any obligation under this Agreement, if such failure or delay arises directly or indirectly from any act of God, war, strikes, labor conflicts, riots, fires, floods, explosions, deluge, natural calamities, wreckage of material, delayer interruption of transportation, fire, accident, civil commotion, change in law or any other cause making compliance with this Agreement practically impossible or exorbitant beyond the reasonable control of the Parties hereto. The affected Party will notify the other Party of such force majeure circumstances as soon as reasonably practical, and will promptly undertake all reasonable efforts necessary to cure such force majeure circumstances. In the event that a force majeure circumstance exists which prevents a Party from carrying out a material obligation under this Agreement, and such circumstance continues for a [***] period following the occurrence of such force majeure event, then either Party may terminate this Agreement by providing written notice to the other Party; provided, however, that the affected Party may only terminate this Agreement if the affected Party has undertaken all reasonable efforts accessary to cure such force majeure circumstances.

Article 20.Arbitration.

In case any disputes arise out of or in connection with this Agreement or any further amendment thereto, Parties shall try to resolve such dispute amicably. In the event that Parties fail to settle the dispute through amicable negotiation, such dispute shall be submitted to and finally settled by arbitration in [***] in accordance with the rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with such rules. The language to be used in the arbitral proceedings shall be English.

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Article 21.Governing Law.

This Agreement and all rights and liabilities of Parties hereunder shall be governed and construed in accordance with the [***], without giving effect to that body of laws pertaining to conflicts of laws.

Article 22.Notice.

Any notice given by either Party to the other Party shall be in writing, and may be given by e-mail, (confirmed as received by the intended recipient), personal service, registered airmail, or by cable, telex or facsimile to the address most recently notified by such other Party. If a Party changes its address, notice thereof must be given in writing to the other Party.

Article 23.Assignment and Succession.

23.1 AEON shall not assign the same or any part thereof to any other person whatsoever without the prior written consent of DAEWOONG; provided, however, that (a) AEON may assign this Agreement, including its duties and obligations hereunder to an Affiliate; and (b) AEON may assign this Agreement in connection with any sale or transfer of the business to which this Agreement relates, whether by sale of assets, sale of stock, merger or otherwise; provided, further, however, that the successor of the business has the financial wherewithal to continue the obligations under this Agreement.

23.2 This Agreement shall be binding upon and inure to the benefit of either Party and its successors and assignees.

Article 24.Non-Competition.

24.1 AEON and its Affiliates shall not develop, register, manufacture, promote, market and sell any Product in the Territory during the term of the Agreement, other than Product acquired from DAEWOONG.

24.2 DAEWOONG shall not directly or indirectly develop, register, manufacture, promote, market and sell any Product in the Territory in the Field, or assist or enable any third party to do so, during the term of the Agreement, other than development, manufacture and sales of Product to AEON and its Affiliates under this Agreement.

Article 25.Miscellaneous.

25.1 If any term, covenant or condition of this Agreement or the application thereof to any Party or circumstance shall, to any extent, be held to be invalid or unenforceable by a court or administrative agency of competent jurisdiction, then (a) the remainder of this Agreement and the application of such term, covenant or condition to Parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law; and (b) the Parties covenant and agree to renegotiate any such term, covenant or application thereof in good faith in order to provide a reasonably acceptable alternative to the term, covenant or condition of this Agreement or the application thereof that is invalid or unenforceable, it being the intent of the Parties that the basic purposes of this Agreement are to be effectuated.

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25.2 This Agreement, including all Annexes attached hereto, which are hereby incorporated herein by reference, sets forth all covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes and terminates all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof including any confidentiality agreement entered into by the Parties prior to the Effective Date. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as set forth herein.

25.3 The Parties hereto shall act in all matters pertaining to this Agreement as independent contractors and nothing contained herein shall be construed to place Parties in the relationship of principal and agent or employer and employee. Neither Party shall have right to enter into contracts in the name or on behalf of the other.

25.4 This Agreement shall be executed in English and may additionally be executed in other languages (including Korean). In the event of any difference or inconsistency among different language versions of this Agreement, English version shall prevail in all respect.

[Signature Page Follows]

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IN WITNESS WHEREOF, Parties have this AGREEMENT executed by their duly authorized representatives as of the Effective Date.

Agreed and accepted for on behalf of

DAEWOONG PHARMACEUTICAL CO., LTD.

/s/ Sengho Jeon

Date: December 20, 2019

Name: Sengho Jeon

Title: President and Chief Executive Officer

Agreed and accepted for and on behalf of

AEON BIOPHARMA, INC.,

/s/ Marc Forth

Date: December 20, 2019

Name: Marc Forth

Title: President and Chief Executive Officer

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Attachment

Annex A:Product Price

Annex B:Commercialization Plan

Annex C:Purchase Order

Annex D:Sales Forecast

Annex E:Technical Specifications

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Annex A

Product Price

• [***] USD per [***] IU vial

• [***] USD per [***] IU vial

• [***] USD per [***] IU vial

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Annex B

Commercialization Plan

[***]

32

[***]

33

[***]

34

[***]

35

[***]

36

[***]

37

[***]

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Annex C

PURCHASE ORDER

THIS PURCHASE ORDER, entered into pursuant to the terms of that certain License & Supply Agreement dated ____________________ (the “Agreement”), is made by and between Daewoong Pharmaceutical Co., Ltd. (for itself and its subsidiaries) and AEON Biopharma, Inc. (including its Affiliates). All capitalized terms not otherwise defined heroin will have the meaning so attributed to such terms in the Agreement.

Product and Ordered Quantity:

Delivery Date:

Packaging Specification (if any):

Payment:

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Annex D

SALES FORECAST

[***]

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Annex E

TECHNICAL SPECIFICATIONS

Test items	Acceptance criteria	Method	Analytical procedure	Specification
1. Appearance	[***]	[***]	[***]	[***]
2. pH	[***]	[***]	[***]	[***]
3. Sterility	[***]	[***]	[***]	[***]
4. Bacterial endotoxins	[***]	[***]	[***]	[***]
5. Water	[***]	[***]	[***]	[***]
6. Potency	[***] of labeled activity	[***]	[***]	[***]
7. Identification	[***]	[***]	[***]	[***]
8. Solubility	[***]	[***]	[***]	[***]
9. Foreign insoluble matter	[***]	[***]	[***]	[***]
10. Insoluble particulate matter	[***] particles/vial [***] particles/vial	[***]	[***]	[***]

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EX-13.13

Exhibit 10.13

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10).  Such excluded information is not material and is the type that the registrant treats as private or confidential.

SETTLEMENT AND LICENSE AGREEMENT

This Settlement and License Agreement (“Agreement”) made and entered into as of June 21, 2021 (the “Effective Date”), by and between, on the one hand Medytox, Inc. (“Medytox”) a company duly organized and existing under the laws of South Korea, having its principal office at 78 Gangni 1-gil Ochang-up Cheongwon-gu Cheongju-si North Chungcheong 28126, Republic of South Korea, and, on the other hand, AEON Biopharma, Inc., (“AEON”) a company duly organized and existing under the laws of Delaware, having its principal office at 4040 MacArthur Boulevard, Suite 260, Newport Beach, CA 92660 (each individually a “Party,” and collectively the “Parties”).

WHEREAS, Allergan, Inc. and Allergan Limited (collectively, “Allergan”) and Medytox are co-complainants in the case captioned Certain Botulinum Toxin Products, Processes for Manufacturing or Relating to Same and Certain Products Containing Same; Inv. No. 337-TA-1145, before the United States International Trade Commission (“ITC”) alleging violations by Daewoong Pharmaceuticals Co., Ltd. (“Daewoong”) and Evolus, Inc. (“Evolus”) of Section 337 of the Tariff Act of 1930 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain botulinum toxin products, processes for manufacturing or relating to same and certain products containing same by reason of misappropriation of trade secrets, the threat or effect of which is to destroy or substantially injure a domestic industry in the United States (the “ITC Action”).

WHEREAS, the ITC issued a final determination in Investigation No. 337-TA-1145 on December 22, 2020.  The parties to Investigation No. 337-TA-1145 pursued various appeals of the final determination to the U.S. Court of Appeals for the Federal Circuit, including in cases captioned Nos. 21-1653 and 21-1654 (the “Federal Circuit Appeal”).  The Federal Circuit Appeal is pending.

WHEREAS, Medytox is the holder and/or controls the use of a strain of C. botulinum and certain trade secrets regarding the manufacture of botulinum toxin.

WHEREAS, AEON is pursuing marketing approvals from various governmental authorities for prabotulinumtoxinA, a botulinum toxin product that is manufactured by Daewoong in Korea.

WHEREAS, AEON and Daewoong are parties to a License & Supply Agreement, entered into December 20, 2019 (the “AEON-Daewoong Supply Agreement”),

WHEREAS, AEON’s business is dependent on the Daewoong Toxin manufactured by Daewoong and to be supplied to AEON under the AEON-Daewoong Supply Agreement.

WHEREAS, on December 16, 2020, the ITC determined there was a misappropriation of trade secrets relating to Medytox’s manufacturing process and ordered a Limited Exclusion Order and Cease and Desist Order against Evolus and Daewoong for 21 months.

WHEREAS, Medytox filed a Complaint against Evolus, Daewoong, Daewoong Co. Ltd., AEON (formerly Alphaeon Corp.), Sch-Aeon, LLC, Byung Kook Lee (“Dr. Lee”), Chun Yoon, Jae Seung Yoon, and Chang Woo Suh, captioned Medytox Inc. v. Daewoong Pharmaceuticals Co., Ltd., Case No. 30-2017-00924912-CU-IP-CJC, in the Superior Court of California, Orange County, alleging violations of California Bus. and Prof. Code § 17200, et seq., violations of California Uniform Trade Secret Act, Cal. Civ. Code § 3426, conversion based on alleged theft of Medytox’s C. botulinum strain, intentional interference with prospective economic relations, unjust enrichment, and breach of contract (the “California Action”).

WHEREAS, Medytox filed a Complaint against AEON and Daewoong captioned Medytox Inc. v. AEON Biopharma, Inc. and Daewoong Pharmaceutical Co., Ltd., Case No. 8:21-CV-00903, in the United States District Court for the Central District of California, alleging trade secret misappropriation in violation of the Defend Trade Secrets Act, 18 U.S.C. § 1836 (the “Federal Action”).

WHEREAS, Medytox filed a civil complaint, requested a criminal investigation, and filed a complaint with the Ministry of SMEs and Startups against Daewoong in Korea based on alleged theft of Medytox’s C. botulinum strain, and misappropriation of trade secrets and seeking relief that may affect AEON’s rights in the Territory (the “Korean Actions”).

WHEREAS, pursuant to the terms of this Agreement, the Parties mutually desire to resolve the disputes which are the subject matter of the ITC Action, the California Action and the Federal Action in order to avoid risks and expenses of litigations related to those actions; and to resolve any indirect disputes which are the subject matter of the Korean Actions insofar as they might adversely impact AEON’s ability to have the Licensed Products manufactured by Daewoong.

WHEREAS, the Parties desire to enter into a negotiated and consensual license agreement to settle all outstanding disputes and avoid future disputes between them with regard to the matters alleged in the California Action, the Federal Action, the ITC Action, and the Korean Actions.

WHEREAS, because Medytox through this Agreement is obtaining equity shares in AEON and the right to receive future royalties from AEON, Medytox and AEON mutually desire the success of the AEON Business.

WHEREAS, reference in this Agreement to any Party or Daewoong shall include reference to all of such entities’ present or future Affiliates.

NOW, THEREFORE, in consideration of the foregoing and the mutual undertakings set forth in this Agreement, the receipt and adequacy of which are hereby acknowledged, and with the foregoing recitals being incorporated herein, the Parties, intending to be legally bound, agree as follows:

1.Definitions.  For purposes of this Agreement, the following words and expressions shall, unless context otherwise requires, have the following meanings:

1.1“Accounting Standards” mean the U.S. Generally Accepted Accounting Principles (“GAAP”).

1.2“Actions” mean the ITC Action, the California Action, the Federal Action, and the Korean Actions.

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1.3“AEON Business” means the importation and Commercialization of the Daewoong Toxin in the Territory and obtaining or maintaining Marketing Authorization and any Regulatory Materials for the Daewoong Toxin in the Territory.

1.4“Affiliate(s)” with respect to any Party means any individual, corporation, association, or other business entity (collectively, “Person”) that directly or indirectly controls, is controlled by, or is under common control with the Party in question.  As used in this definition of “Affiliate,” the term “control” shall mean the direct or indirect ownership of fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest.  The Parties agree that Daewoong is not an Affiliate and will not be permitted to become an Affiliate with the Company’s approval under the terms of this Agreement.  

1.5“Business Day” means 9:00 am to 5:00 pm Eastern Time on a day other than a Saturday, Sunday, federal, or bank holiday in the United States.

1.6“Commercialization” means the activities, either by itself or through its sub-licensees, agents, resellers, distributors, suppliers, partners, co-promoters, or similar associates, of using, supplying, exporting to territories for which AEON has rights to market and/or sell Licensed Product, pricing, promoting, distributing, selling, offering to sell, disposing, offering to dispose, or keeping of any Licensed Product in the Territory.  “Commercialize” has a correlative meaning.

1.7“Confidential Information” means all non-public materials, information and data concerning the disclosing party and its operations that is disclosed by the disclosing party to the receiving party pursuant to this Agreement, orally or in writing, electronic or tangible form, or otherwise obtained by the receiving party through observation or examination of the disclosing party’s operations.  Confidential Information includes, but is not limited to, information about the disclosing party’s financial condition and projections; business, marketing or strategic plans; sales information; customer lists; price lists; databases; trade secrets; product prototypes and designs; agreements with its shareholders and investors; techniques, formulae, algorithms and other non-public information.  Confidential Information includes such information disclosed during the Actions.  Notwithstanding the foregoing, Confidential Information of a party shall not include that portion of such materials, information and data that, and only to the extent that, the recipient can establish by written documentation:  (a) is known to the recipient as evidenced by its written records before receipt thereof from the disclosing party, (b) is disclosed to the recipient free of confidentiality obligations by a Third Party who has the right to make such disclosure without obligations of confidentiality, (c) is or becomes part of the public domain through no fault of the recipient, or (d) the recipient can reasonably establish is independently developed by persons on behalf of recipient without the use of the information disclosed by the disclosing party.  Notwithstanding anything else in this definition, any information that has been maintained under seal in the ITC Action is Confidential Information, including, but not limited to information relating to Medytox’s botulinum toxin manufacturing process.

1.8“Daewoong” means Daewoong Pharmaceutical Co., Ltd., and all of its present and future Affiliates.

1.9“Daewoong Toxin” means botulinum neurotoxin products currently known as ABP-450, which are manufactured by Daewoong or its Affiliates, or any successor to Daewoong or its Affiliates, with the generic name prabotulinumtoxinA.

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1.10“Fully-Diluted Shares” shall mean the sum of (a) the aggregate number of shares of Common Stock of the Company that are issued and outstanding as of the time of determination, plus (b) the aggregate number of shares of Common Stock of the Company issuable upon the conversion of shares of Preferred Stock or other capital stock or securities convertible into or exchangeable for shares of Common Stock that are outstanding as of the time of determination, plus (c) the aggregate number of share of Common Stock of the Company that are issuable pursuant to any outstanding subscriptions, options, rights, warrants, stock appreciation rights, phantom equity, or other agreements or commitments obligating the Company to issue, transfer or sell any shares of its capital stock or any class or other equity in the Company.

1.11“Government Authority” means any federal, state, national, supranational, local, or other government, whether domestic or foreign, including any subdivision, department, agency, instrumentality, authority (including any regulatory or administrative authority), body, commission, board, or bureau thereof, or any court, tribunal, or arbitrator.

1.12 “Licensed Product” means any botulinum neurotoxin products manufactured by Daewoong or its Affiliates, or any successor to Daewoong or its Affiliates, with the generic name prabotulinumtoxinA for any of AEON’s products made according to a process that is or will be approved by, and whose sale and/or marketing is or will be approved by a Government Authority in the Territory.  Licensed Product includes, but is not limited to, the prabotulinumtoxinA product currently known as ABP-450 that is under development and is planned to be marketed in the Territory.

1.13“Licensed Rights” mean Medytox’s strain of C. botulinum and trade secrets regarding the manufacture of botulinum toxin that were, could have been, or will be alleged in the California Action, Federal Action, ITC Action, and/or Korean Actions to have been misappropriated.

1.14“Manufacturing” means all activities, either by itself or through its suppliers, agents, Affiliates, manufacturers, related to the manufacturing, production or making of the Licensed Product, or any component thereof, for Commercialization or use in the Territory, including, but not limited to test method development and stability testing, formulation, process development, manufacturing scale-up, manufacturing any Licensed Product in bulk or finished form for development, manufacturing the drug substance for any Licensed Product, manufacturing the drug product for any Licensed Product, manufacturing a finished Licensed Product for Commercialization, packaging, in-process and finished Licensed Product testing, release of a Licensed Product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of a Licensed Product, regulatory activities related to any of the foregoing and any shipping, export and distribution to and within the Territory of such Licensed Products and importation of such Licensed Products into the Territory.  “Manufacture” has a correlative meaning.

1.15“Marketing Authorization” means an approval or authorization from the appropriate Government Authority in the Territory (including a BLA and all licenses, registrations, and pricing or reimbursement approvals) as required to permit Commercialization in and for the Territory (including clinical testing, manufacture, distribution, or use of such Licensed Product).

1.16“Medytox/Daewoong Dispute” means Medytox’s dispute with Daewoong concerning the toxin licensed by AEON under the AEON-Daewoong Supply Agreement, including without limitation the claims actually made or which could be made in the ITC Action, the California Action, the Federal Action, the Korean Actions, and any other pending or future dispute related to the Licensed Rights.

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1.17“Net Sales” means the net sales of Licensed Product sold by AEON or any of its Affiliates to Third Parties, as determined in accordance with the Accounting Standards, including requirements for revenue recognition, and does not include any downstream sales, including any sales by AEON’s customers to consumers.

1.18“Regulatory Materials” means regulatory applications, submissions, notifications, communications, correspondence, registrations, common technical documents, technical documents, Marketing Authorizations or other filings made to, received from or otherwise conducted with a Government Authority in order to Commercialize the Licensed Product in the Territory.

1.19“Release Date” means the date on which payment under Section 4.1.1 of this Agreement has been made, provided that (a) no party has exercised its right to terminate this Agreement and (b) this Agreement is assumed pursuant to a court order in the event AEON enters into bankruptcy proceedings.

1.20“Reporting Period” means a calendar quarter (or three month period) during the Royalty Period  .

1.21“Royalty” means [***] of Net Sales in the Territory; provided that in the event that the Issued Shares cease to represent more than fifteen percent of the Company’s Fully-Diluted Shares then (x) from and after the fifth (5th) anniversary of the Effective Date until the tenth (10th) anniversary of the Effective Date, the Royalty shall mean [***] of Net Sales in the Territory and (y) from and after the tenth (10th) anniversary of the Effective Date, the Royalty shall mean [***] of Net Sales in the Territory.

1.22“Royalty Period” means the period starting after the first [***] of commercial sales of a Licensed Product by AEON to any Third Party and ending on the fifteenth (15^th) anniversary of such date.

1.23 “Sales and Royalty Report” means a written report or reports showing each of (1) the Net Sales for any Licensed Product in the Territory during the Reporting Period, by AEON and its Affiliates and Sublicensees, and (2) the Royalties payable in U.S. Dollars which shall have accrued hereunder with respect to such Net Sales.  For the avoidance of doubt, the Sales and Royalty Report shall be considered Confidential Information under this Agreement and shall be limited to those employees of Medytox that have a need to know such information for purposes of accounting for the Royalty, and shall not be utilized for Medytox’s pricing strategy, sales, marketing, or other commercial activities.

1.24“Territory” shall mean worldwide, with the exception of South Korea.

1.25“Third Party” means any person or entity other than Medytox, AEON, or their Affiliates.

2.Mutual Releases; Dismissals.

2.1The Parties agree that this Agreement is in full and final settlement of all and any claims or cause of action, directly or indirectly, that Medytox and their respective Affiliates, on the one hand, and AEON and their respective Affiliates on the other hand, have against the other relating to the Licensed Rights in the Territory, including relating to the Actions and to any actions

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against Dr. B.K. Lee, including Medytox’s complaints against Dr. Lee in the Indiana Commercial Court captioned Medytox Inc. v. Byung Kook Lee, Cause No. 49D13-1805-PL-017584, and in the Marion County Commercial Court, captioned Medytox, Inc. v. Byung Kook Lee, 49D01-1805-PL-017584, (Marion County Commercial Court Oct. 4, 2018) (the “Lee Actions”), and including without limitation any claims for damages, interest, or costs.  To the extent necessary, within five (5) Business Days of the Effective Date, Medytox shall file, or cause to be filed, an appropriate document (except in the event of termination of this Agreement pursuant to Sections 9.2 or 9.3 or the occurrence of the circumstances described in Section 13.6) in the Korean Actions that Medytox is not seeking and that, to the extent it is within Medytox’s control, the Korean Actions shall not adversely affect any rights granted under the License pursuant to Section 3, including the right to Manufacture, have Manufactured, Commercialize, and obtain or maintain Marketing Authorization and any Regulatory Materials related to the Licensed Product in the Territory from the inception of time and through the Royalty Period.  Medytox further agrees that it will be legally bound by the submitted document, and it will not revoke the filing of such document or the relief requested therein, unless this Agreement is terminated  For the avoidance of doubt, and as stated in Section 3.2, the Licenses shall be operable, as prescribed in this Agreement, notwithstanding any potential remedies issued in the Actions.

2.2Effective as of the Release Date, and subject to Section 13.6, Medytox, on behalf of itself, each of its Affiliates and each of its respective officers, directors, shareholders, members, agents, and representatives, hereby irrevocably and unconditionally releases, acquits and forever discharges AEON and all current, former, and future Affiliates, subsidiaries, members, managers, directors, officers, shareholders, employees, predecessors, successors, and agents, and its customers, agents, attorneys, licensors, distributors, resellers, purchasers, donees, vendors, or vendees (collectively, the “AEON Releasees”) from all past and present actions, causes of action, claims for relief or demands in law or in equity, and from any claims for or allegations of liability, debts, contracts, promises, obligations, damages, attorneys’ fees, costs, interest, or expenses, whether fixed or contingent, asserted or unasserted, that Medytox has against any of the AEON Releasees, for, upon, or by reason of any act, omission, representation, or any other matter or cause, respecting the Commercialization or Manufacturing of Licensed Products and the Licensed Rights in the Territory, and all causes of action that were, could have been, or will be asserted in the Actions.  Nothing contained in this Section 2.2 will release the AEON Releasees from any claim based upon any material misrepresentations made in this Agreement unless cured within sixty (60) days of receiving written notice thereof from Medytox, or material breach of any material provision of this Agreement that is incapable of remedy, or if capable of remedy is not remedied to the reasonable satisfaction of Medytox within sixty (60) days of service of written notice by Medytox.  Medytox agrees that AEON can, without interference from Medytox, Manufacture, have Manufactured, Commercialize, and obtain or maintain Marketing Authorization and any Regulatory Materials related to the Licensed Product in the Territory from the inception of time and through the Royalty Period.

2.3Effective as of the Release Date, AEON, on behalf of itself, each of its Affiliates and each of its respective officers, directors, shareholders, members, agents, and representatives, hereby irrevocably and unconditionally releases, acquits and forever discharges Medytox, and its current, former, and future Affiliates, subsidiaries, members, managers, directors, officers, shareholders, employees, predecessors, successors, and agents, and its customers, agents, attorneys, licensors, distributors, resellers, purchasers, donees, vendors, or vendees (collectively, the “Medytox Releasees”) from all past and present actions, causes of action, claims for relief or demands in law or in equity, and from any claims for or allegations of liability, debts, contracts, promises, obligations, damages, attorneys’ fees, costs, interest, or expenses, whether fixed or contingent, asserted or unasserted, that AEON has against any of the Medytox Releasees, for, upon, or by reason of any

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act, omission, representation, or any other matter or cause, respecting the Licensed Rights as they pertain to the Commercialization or Manufacturing of Licensed Products or component(s) thereof, and all causes of action that were, could have been, or will be asserted in the Actions.  Nothing contained in this Section 2.3 will release the Medytox Releasees from any claim based upon any material misrepresentations made in this Agreement unless cured within sixty (60) days of receiving written notice thereof from AEON, or material breach of any material provision of this Agreement that is incapable of remedy, or if capable of remedy is not remedied to the reasonable satisfaction of AEON within sixty (60) days of service of written notice by AEON.

2.4Effective as of the Effective Date, AEON hereby releases, indemnifies, and holds Medytox harmless from any and all product liability claims, actions, losses, damages, and liabilities resulting from or arising out of the use or sale of Licensed Products under this Agreement.

2.5For the avoidance of doubt, all releases under this Section 2 do not release either Party and/or their Affiliates from their contractual obligations under this Agreement and are without prejudice to the Parties’ rights to raise claims, defend claims, and seek remedies for breach of this Agreement.

2.6Unknown Claims/California Civil Code Section 1542 Waiver:  The Parties each expressly assume the risk that by entering into this Agreement and the releases contained herein, each will forever waive claims, causes of action, and damages that may exist before the Effective Date of this Agreement, but which it does not know of, or suspect to exist, and which, if known, would have materially affected the Party’s decision to enter into this Agreement.  In that regard, the Parties acknowledge that they have been informed by their counsel of the provisions of Section 1542 of the Civil Code of the State of California, and expressly waive and relinquish all rights and benefits which they might have had under that section which reads as follows:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

The Parties hereby expressly waive and relinquish all rights and benefits under that Section 1542 of the Civil Code of the State of California and any law or legal principle of similar effect in any jurisdiction with respect to the release granted in this Settlement Agreement.

2.7Dismissal of Federal Circuit Appeal.  Within three days of execution of this Agreement, Medytox shall pursue dismissal of the Federal Circuit Appeal as moot and agrees that as a result of the dismissal that the ITC’s final determination in 337-TA-1145 will be vacated.

2.8Dismissal of claims in Federal Action.  Within five days of execution of this Agreement, Medytox shall take all steps necessary to dismiss with prejudice all claims against AEON in the Federal Action.

2.9California Action.  Medytox shall not take any step to revive or otherwise pursue the California Action with respect to AEON.

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3.License.

3.1Commercialization License.  Medytox hereby grants AEON and its Affiliates a non-exclusive, royalty bearing, irrevocable (except pursuant to Sections 9.2 or 9.3 or the occurrence of the circumstances described in Section 13.6) right and license to the Licensed Rights to Commercialize and obtain or maintain the Marketing Authorization and all Regulatory Materials related to any Licensed Product in the Territory (the “Commercialization License”).

3.2Manufacturing License.  Medytox hereby grants AEON and its Affiliates a non-exclusive, royalty bearing, irrevocable (except pursuant to Sections 9.2 or 9.3 or the occurrence of the circumstances described in Section 13.6) right and license to the Licensed Rights to Manufacture or have Manufactured Licensed Product (including by non-Affiliates of AEON, and specifically including Daewoong or its Affiliates, or any successor to Daewoong or its Affiliates) for the Territory, including to Manufacture and have Manufactured Licensed Product outside the Territory so long as such Licensed Product is or will be Commercialized, used to obtain or maintain Marketing Authorization and all Regulatory Materials related to any Licensed Product in the Territory (the “Manufacturing License” and collectively with the Commercialization License, the “Licenses”).  For the avoidance of doubt, the Licenses shall be operable through the end of the Royalty Period notwithstanding any potential remedies issued in the ITC Action, the California Action, the Federal Action or the Korean Actions.

3.3AEON and its Affiliates shall have the right to grant written sublicenses of the Commercialization License granted under Section 3.1 and/or the Manufacturing License granted under Section 3.2 to non-Affiliate entities (individually, “Sublicensee” and collectively, “Sublicensees”), with prior approval from Medytox, which shall not be unreasonably withheld.  The parties agree that it shall not be unreasonable for Medytox to withhold consent for any proposed sublicense to Daewoong.  For avoidance of doubt, the parties agree that no sublicense is necessary for AEON to have Manufactured Licensed Product by Daewoong pursuant to the Manufacturing License.  If AEON grants such a sublicense, AEON shall ensure that all of the applicable terms and conditions of this Agreement shall apply to the Sublicensee to the same extent that they apply to AEON for all purposes.  For the avoidance of doubt, Sublicensee does not include any Third-Party through which AEON or its Affiliates utilize the Commercialization License or Manufacturing License pursuant to Section 3.1 and 3.2 respectively.

4.License Payments.

4.1In consideration for the grant of the Licenses described in Section 3, AEON shall provide Medytox the following consideration set forth in Sections 4.1.1 and 4.1.2 (the “License Payments”):

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4.1.1Issuance of Equity.  AEON shall issue 26,680,511shares of Common Stock (the “Issued Shares”) to Medytox pursuant to the terms of the Share Issuance Agreement attached hereto as Exhibit A (the “Share Issuance Agreement”).  Further, in the event that the Company completes an Initial Public Offering (as defined in the Share Issuance Agreement) and the Issued Shares cease to represent at least ten (10%) percent of the Company’s then-outstanding shares of capital stock immediately following the closing of such Offering, AEON shall issue to Medytox a number of additional shares of Common Stock (the “Additional Shares”) such that the Issued Shares plus such Additional Shares equal ten (10%) percent of the Company’s then-outstanding shares of capital stock immediately following the closing of the Company’s Initial Public Offering.  The issuance of the Additional Shares shall be subject to Medytox entering into such additional documentation as reasonably requested by the Company.

4.1.2Royalties.  During the Royalty Period, AEON will be obligated to pay the Royalty to Medytox.  Such Royalty payments will be made for a given Reporting Period within seventy-five (75) days of the end of each calendar quarter containing the applicable Reporting Period.  Each Royalty payment shall be accompanied by a Sales and Royalty Report sent to Medytox at the E-mail address set forth in Section 13.4.  For the avoidance of doubt, the Sales and Royalty Report shall be considered Confidential Information under this Agreement and shall be limited to those employees of Medytox that have a need to know such information for purposes of accounting for the Royalty and shall not be utilized for Medytox’s pricing strategy, sales, marketing, or other commercial activities.

4.2Payments due under this Section will remitted in accordance with instructions to be provided by Medytox.

4.3To the extent that there are any deductions to Net Sales for a Reporting Period that occur after the Royalty payment for that Reporting Period has been made, such deductions shall be accounted for as a credit against any Royalty Payment payable in a subsequent Reporting Period.  Any such credit shall be set forth on the Sales and Royalty Report for the Reporting Period in which the credit is accounted for.  To the extent that there are any deductions to Net Sales that occur after AEON has made its last Royalty payment, or, in the event of termination pursuant to Sections 9.1, 9.2, or 9.3 during the Royalty Period, its last Royalty payment, Medytox shall reimburse AEON for such deduction within twenty (20) Business Days after AEON notifies Medytox of such deduction, provided such notice is made within sixty (60) days of the end of the calendar Royalty Period.

4.4For the avoidance of doubt, only one Royalty payment under Section 4.1 is due for any Licensed Product, whether manufactured or sold by AEON, their Affiliates, sublicensees, agents, resellers, distributors, suppliers, partners, co-promoters, or similar associates for Commercialization.

4.5In the event of termination, as set forth in Sections 9.1, 9.2, or 9.3, AEON shall still be required to make any Royalty Payments accrued through the effective date of such termination on the schedule set forth in Section 4.1.2 and Medytox shall still be required to make any reimbursements for any deductions to Net Sales that occur after AEON has made its last Royalty Payment.

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5.Termination of Licenses.  After the Royalties Period ends and AEON has made the Royalty payments set forth in Section 4, the Commercialization License and Manufacturing License shall be fully paid up and irrevocable.  

6.[Intentionally Omitted]

7.Records and Audits.

7.1AEON shall keep complete, true, and accurate books and records in accordance with the Accounting Standards in relation to this Agreement, including in relation to Net Sales of Licensed Products and Royalties.  AEON will keep such books and records for at least three (3) years following the calendar year to which they pertain.

7.2Audit Rights.  On an annual basis, Medytox may, upon written request and at its own expense, cause an internationally recognized independent accounting firm (“Auditor”), which is reasonably acceptable to AEON, to inspect the relevant records of AEON to verify the Royalties payable by AEON and the related reports, statements, and books of accounts, within the three (3) years prior to the year in which such audit is conducted, as applicable.  Before beginning its audit, the Auditor shall execute an undertaking acceptable to AEON by which the Auditor agrees to keep confidential all information reviewed during the audit.  Medytox may designate one external law firm who, upon execution of the same undertaking to AEON required of the Auditor, may review the Auditor’s work and the information on which it is based.  The Auditor shall have the right to disclose to Medytox and its designated external law firm only its conclusions regarding any payments owed under this Agreement.

7.3AEON shall make its records available for inspection by the Auditor during AEON’s regular business hours at such place or places where such records are customarily kept, upon receipt of reasonable advance notice from Medytox and/or the Auditor.  The records shall be reviewed solely to verify the accuracy of AEON’s Royalty payments and compliance with this Agreement.  Such inspection right shall not be exercised more than once in any calendar year and not more frequently than once with respect to records covering any specific period of time, unless a prior inspection has revealed any underpayment by AEON.  Medytox agrees to hold in strict confidence all information received and all information learned in the course of any audit or inspection or otherwise, except to the extent necessary to enforce its rights under this Agreement or to the extent required to comply with any law, regulation, or judicial order.

7.4The Auditor shall provide its audit report and the basis for any determination to AEON at the time such report is provided to Medytox before it is considered final.

7.5In the event that the final result of the inspection reveals an undisputed underpayment or overpayment by AEON, the underpaid or overpaid amount shall be settled promptly.  If the inspection identifies an underpayment or overpayment that is disputed, the Parties will address the dispute in accordance with Section 13.7 of this Agreement.  

7.6Medytox shall pay for such inspections, as well as its expenses associated with enforcing its rights with respect to payments hereunder.  If an underpayment of more than seven point five percent (7.5%) of the total payments due for the applicable audit period is discovered, the reasonable fees and expenses charged by the Auditor shall be paid by AEON.

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8.Information Rights/Quarterly Business Meetings.

8.1Information Rights.  So long as Medytox owns [***] or more of the issued and outstanding Common Stock of AEON, on a fully diluted basis, AEON will furnish to Medytox:

8.1.1as soon as available, but not less than one hundred twenty (120) days after the end of each fiscal year, a balance sheet of AEON, as at the end of such fiscal year, and a statement of income and a statement of cash flows of AEON, for such year, all prepared in accordance with the Accounting Standards consistently applied (except as noted therein or as disclosed to the recipients thereof) and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail.  Such financial statements shall be accompanied by a report and opinion thereon by independent public accountants selected by AEON’s Board of Directors; and

8.1.2as soon as available, but not less than forty-five (45) days after the end of each of the first, second and third quarterly accounting periods in each fiscal year of AEON, a balance sheet of AEON as of the end of each such quarterly period, and a statement of income and a statement of cash flows of AEON for such period and for the current fiscal year to date, prepared in accordance with generally accepted accounting principles consistently applied (except as noted therein or as disclosed to the recipients thereof), with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.

8.2Quarterly Business Reviews.  Once per fiscal quarter, Medytox may request a business review of AEON attended by the Chief Executive Officer of AEON and such other business leaders as selected by Medytox that are reasonably available on such date for one full business day (the “Quarterly Business Review”).  The purpose of the Quarterly Business Review shall be for Medytox to review and discuss topics, subject to any attorney-client or work product privilege limitations, including sales results, marketing activities, research and development activities, regulatory status, promotional plans, business development activities and such other matters reasonably requested by Medytox.  Each Party shall bear the expense of participation of its respective employees in the Quarterly Business Review meetings.  Information presented or discussed at Quarterly Business Reviews shall be considered Confidential Information.

9.Term and Termination.

9.1This Agreement begins on the Effective Date and shall continue in full force and effect until the end of the License Period and be irrevocable, unless sooner terminated as herein provided pursuant to Sections 9.2 or 9.3 provided herein or the occurrence of circumstances described in Section 13.6.  In the event that this Agreement is terminated under any of the foregoing provisions, the Commercialization License and Manufacturing License will also be terminated.  Notwithstanding the foregoing, the payment obligations, including without limitation the payment obligations under Section 4, including any credit for any deductions, for Net Sales prior to termination, and the audit rights provided in Section 7 that are necessary to audit the records relevant to those obligations, will survive termination of this Agreement.

9.2Termination for Challenge.  If AEON or any of its Affiliates or Sublicensees challenges before a court, tribunal, or government agency the validity, enforceability, scope, or protected status of any of the Licensed Rights, including but not limited to the trade secret status of any trade secret included within the scope of this Agreement, then Medytox may terminate this Agreement after fifteen (15) Business Days of service of written notice to AEON.

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9.3Termination for Cause.  Any Party may terminate the Agreement with immediate effect by written notice to the other Party in the event that the other Party commits a material breach of any material provision of this Agreement that is incapable of remedy, or if capable of remedy is not remedied to the reasonable satisfaction of the non-breaching Party within sixty (60) days of service of written notice by the non-breaching Party.

9.4Any right to terminate this Agreement or to cancel rights and obligations hereunder is in addition to and without prejudice to any other rights or remedies any Party may be entitled to under this Agreement, at law or otherwise.  On termination or expiry of this Agreement, any rights or remedies either Party may have arising from any breach of this Agreement shall continue to be enforceable.

9.5In the event of this Agreement being terminated, the confidentiality provisions of Section 12, the arbitration provisions of Section 13.7, and any other terms of this Agreement as may be necessary for interpretative purposes, shall survive such termination or expiry.

10.Representations and Warranties.  Each Party is entering into this Agreement in reliance of the following representations and warranties of the other Parties, all of which are acknowledged to be material, and which include the following:

10.1The execution, delivery, and performance of the obligations under this Agreement are within its power, and have been duly authorized by all necessary corporate or business action, do not contravene any law or any contractual provision binding on it, and do not require any consent or approval of any person or government authority except as set forth herein or such consents and approvals as have been obtained and are in full force and effect.

10.2This Agreement constitutes the Party’s legal, valid, and binding obligation and is enforceable in accordance with its terms.

10.3As of the Effective Date, Medytox represents and warrants that it has the exclusive right and power to grant the Licenses to the Licensed Rights.

10.4As of the Effective Date, Medytox represents and warrants that the California Action, the Federal Action, the ITC Action, the Korean Actions, and Medytox’s submissions to the U.S. Food and Drug Administration and Health Canada represent the only suits, complaints, grievances, demands, claims, citizen’s petitions, causes of action in, of or before any Governmental Authority to which Medytox is a party, or in which Medytox is directly or indirectly participating, that would (i) adversely affect AEON’s right to make, have made, Commercialize, or obtain or maintain Marketing Authorization and any Regulatory Materials for the Licensed Products in the Territory, (ii) stop AEON’s right to Manufacture or have Manufactured the Licensed Products, or any of its components, for Commercialization, or (iii) adversely affect AEON’s ability to maintain the Marketing Authorization or any Regulatory Materials related to the Licensed Products in the Territory.  Medytox further represents and warrants that the Lee Actions do not directly or indirectly (i) adversely affect AEON’s right to make, have made, Commercialize, or obtain or maintain Marketing Authorization and any Regulatory Materials for the Licensed Products in the Territory, (ii) stop AEON’s right to Manufacture or have Manufactured the Licensed Products, or any of its components, for Commercialization, or (iii) adversely affect AEON’s ability to maintain the Marketing Authorization or any Regulatory Materials related to the Licensed Products in the Territory.

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10.5AEON warrants, as to the License Payments, that at the time of any such payment that AEON will make or cause to be made pursuant to Section 4 of this Agreement, AEON will not be insolvent, nor will the License Payments required to be made render AEON insolvent, within the meaning of and/or for the purposes of the United States Bankruptcy Code, including §§ 101 and 547 thereof.

10.6AEON represents and warrants that, as of the Effective Date, AEON and Daewoong are not a party to any agreements other than (a) the AEON-Daewoong Supply Agreement (b)  (b) that certain Note Purchase Agreement, dated as of August 25, 2020 by and between AEON and Daewoong (and the agreements related thereto, each as amended) and (c) the Convertible Promissory Notes, dated August 27, 2020, September 18, 2020 and May 12, 2021 (each as amended), issued by AEON to Daewoong.  Except as disclosed in the prior sentence, as of the Effective Date, there are no agreements between AEON and Daewoong whereby Daewoong or an Affiliate of Daewoong could acquire, directly or indirectly, equity in AEON.

10.7AEON represents and warrants that AEON’s contract with Daewoong provides an exclusive right and license to import, distribute, promote, market, develop, offer for sale and otherwise commercialize or exploit any pharmaceutical or biological preparation containing botulinum toxin type A with 900 kDa protein complex for therapeutic use in the territory and for the term agreed upon with Daewoong.

10.8CFIUS Representation.  AEON does not:  produce, design, test, manufacture, fabricate, or develop one or more “critical technologies,” as that term is defined in the Defense Production Act of 1950, as amended, including all implementing regulations thereof.

10.9Each Party hereto represents and warrants to the other Party that, as of the Effective Date, the warranting Party is not subject to any judgment, order, injunction, decree, or award of any court, administrative agency, or governmental body that would or might interfere with its performance of any of its obligations hereunder.

10.10Each Party warrants that it will not form any new or use any existing entity, or assign its rights and obligations under this Agreement or its other assets to another entity, to avoid compliance with any of the provisions of this Agreement

10.11Each of the Parties agrees that this Agreement is a compromise of the Parties’ claims and defenses in the disputed California Action, Federal Action and ITC Action, and is intended to be, a full and complete settlement, discharge and release of those Actions and related claims as to the Parties, subject to Section 13.6.  None of the Parties admits to or concedes any liability or wrongdoing whatsoever, and this Agreement is not, and shall not be described or characterized by any Party, or by its directors, executives, employees, agents or other representatives, as an admission by any Party or their Affiliates of any liability or wrongdoing.

10.12The existence of this Settlement Agreement, its provisions and terms shall not be interpreted, construed, deemed, invoked, offered or received in evidence or otherwise used by any person in this or any other action or proceeding, civil, criminal or administrative, except in a proceeding to enforce the terms or conditions of the Agreement.  The existence of this Agreement, its provisions and terms are not, and shall not be argued by any person to be or to be deemed to be evidence of, a concession or admission of, nor to create a presumption of any fault, liability or wrongdoing as to any

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facts or claims alleged or asserted in the California Action, Federal Action or ITC Action or any other action or proceeding.

10.13Each of the Parties agrees to take all action necessary to carry out the intentions of the Parties as expressed in this Agreement.

10.14Covenant Not to Sue and Indemnity.  

10.14.1Medytox on behalf of itself, and each of its Affiliates and each of their respective officers, directors, shareholders, members, agents, and representatives, each covenant not to, directly or indirectly, alone or by, with or through others, cause, induce, allow to continue or authorize or voluntarily assist, participate, or cooperate in the commencement, maintenance, or prosecution of any action, proceeding, petition, or investigation alleging misappropriation of the Licensed Rights or any cause of action asserted or that could have been asserted in any of the Actions, which would adversely affect AEON’s right to Commercialize the Licensed Products in the Territory, to obtain or maintain Marketing Authorization and any Regulatory Materials for the Licensed Products in the Territory, or to Manufacture or have Manufactured the Licensed Products, or any component thereof, for Commercialization or use in the Territory, except that the foregoing shall not apply in the event that the Agreement is terminated pursuant to Sections 9.2, 9.3 (in the event of termination based on a material breach by AEON) or 13.6 of this Agreement.

10.14.2Through the end of the Royalty Period, Medytox shall not seek an injunction or any other relief in any action, including but not limited to the Korean Actions, that would impede or interfere in any way with AEON’s ability to secure supply of the Daewoong Toxin.

10.14.3In the event that Allergan or Abbvie, an Affiliate of Allergan or Abbvie, or any other Third Party which has or claims to have a business or contractual relationship with Medytox asserts or pursues any action, proceeding, petition, or investigation arising from or related to the Medytox/Daewoong Dispute (a “Third Party Claim”), Medytox shall make best efforts to prevent such Third Party Claim from interfering with or impeding in any way the AEON Business.  Such best efforts shall include, if appropriate, intervening in and defending against the Third Party Claim.

10.14.4In the event that a Third Party Claim is brought against AEON or an Affiliate of AEON, Medytox shall indemnify, defend and hold harmless AEON and/or any Affiliate of AEON against all losses, costs, liabilities, damages, and expenses, including, without limitation, reasonable attorneys’ fees and disbursements.

10.15No Other Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF EITHER PARTY; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

11.Daewoong.

11.1Nothing in this Agreement creates any right enforceable by Daewoong.

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12.Confidentiality.

12.1Settlement Terms.  This Agreement, its Exhibit, and its terms and conditions including all financial terms, the substance of all negotiations and all Confidential Information disclosed by either Party to the other, irrespective of when disclosed, are confidential to the Parties, their Affiliates, and their advisers, who shall not disclose them to, or otherwise communicate them to, any Third Party, or use directly or indirectly, without the written consent of the other Party, other than:

• to the relevant Party’s auditors, insurers, and lawyers on terms which preserve confidentiality;

• pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure;

• as far as necessary to implement and enforce any of the terms of this Agreement on terms which preserve confidentiality; or

• as otherwise authorized in writing and in advance by all other Parties.

Except as provided in Section 9.2, no Party shall issue a press release regarding this Agreement or make any public disclosure of the terms of this Agreement without the prior written approval of the other Parties.  Any Party may confirm that the litigation between Medytox and AEON has been resolved on confidential terms, as well as the following terms: (1) the number of shares issued to Medytox, (2) the fact that the shares issued to Medytox reflect 20% of AEON’s outstanding shares, and (3) that AEON will pay Medytox a single-digit royalty during the 15 year Royalty Period.  For the avoidance of doubt, no Party is restricted from disclosing information about the Settlement Terms to the extent such terms have been made public in a manner consistent with the terms of this Agreement.

The Parties understand and agree that AEON may be required to file the complete Agreement as an exhibit to future securities filings, which would be filed with the Securities and Exchange Commission, less those financial terms that AEON together with its counsel reasonably believes it may obtain confidential treatment for from the Securities and Exchange Commission.  AEON shall notify the other Parties within three (3) Business Days if the Securities and Exchange Commission denies confidential treatment of any part of the Agreement.

Notwithstanding anything to the contrary in this Agreement, the Parties understand and agree that each Party can disclose the existence and/or terms of this Agreement (a) to comply with its obligations under the law, including, without limitation, the United States Securities Act of 1933, as amended, and the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”); (b) in order to comply with the listing standards, rules, regulations or agreements of any national or international securities exchange, the NASDAQ Global Market or New York Stock Exchange or other similar laws, rules, or regulations of a governmental or regulatory authority; (c) to respond to an inquiry of a government authority or regulatory authority as required by law; (d) to comply with a court order or applicable law, governmental regulations, or investigative requests; or (e) in a judicial, administrative, or arbitration proceeding, if, in the reasonable opinion of the disclosing Party’s counsel is mandated by a subpoena, discovery request, or other compulsory process.  In any such event, the Party making such disclosure shall (i) provide the other Parties as much advance notice as reasonably practicable of the required disclosure, (ii) cooperate with the other Parties in any reasonable attempt to

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prevent or limit the disclosure, including to secure a protective order or confidential treatment of this Agreement or portions thereof, and (iii) limit any disclosure to the specific purpose at issues.

12.2Confirmation of Settlement.  The Parties are entitled to confirm to Third Parties the fact that the California Action, the Federal Action and the ITC Action have been resolved on confidential terms, but not the terms of such resolution as set forth in this Agreement, in the form of a statement to be agreed, to the extent such terms have not otherwise been made public in a manner consistent with the terms of this Agreement.  

13.General Provisions.

13.1Choice of Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California and the United States of America, without regard to the principles of conflicts of laws.  To the extent any dispute between the Parties regarding this Agreement is not arbitrated pursuant to Section 13.7, the federal and state courts in California shall have jurisdiction over the parties hereto in all matters arising hereunder and the parties hereto agree that the venue with respect to such matters will be [***].

13.2Headings.  Headings are solely for the convenience of the Parties and shall not be deemed to define, construe, characterize, or limit any of the provisions of this Agreement.

13.3Assignments.  This Agreement shall inure to the benefit of, and be binding upon, the successors, legal representatives or assigns of the Parties.  For the avoidance of doubt, this Agreement shall survive a change of control of one or more of the Parties and no Party shall gain the right to terminate this Agreement upon the change of control of the other Party.

13.4Notices.  All notices required or permitted by this Agreement shall be in writing and shall be sent by first class mail, postage prepaid, or by delivery by a reputable delivery service such as Federal Express or DHL, addressed as follows, or sent via fax transmission with confirmation of receipt, and additional copy via email as indicated:

Medytox:

[***]

AEON:

[***]

Any Party may change the address to which notices shall be sent to it by notice in writing to all other Parties.

13.5Equitable Relief.  Each Party acknowledges and agrees that the Parties’ obligations and undertakings pursuant to Section 2 of this Agreement are reasonable and necessary to protect their respective legitimate interests, that the Parties would not have entered into this Agreement in the absence of such provisions, and that a Party’s material breach or threatened breach or failure to comply with Section 2 shall cause the other Party significant and irreparable harm, the amount of which shall be extremely difficult to estimate and ascertain, and for which money damages shall not be adequate.  The Parties further acknowledge and agree that they shall have the right to apply to any court of competent jurisdiction for an injunction order restraining any material breach or threatened

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breach of Section 2 of this Agreement or sales of Licensed Products not consistent with the rights granted under this Agreement and specifically enforcing the terms and provisions of such Section of this Agreement.  Each Party agrees that it shallnot challenge any of the foregoing acknowledgements and agreements in this Section 13.5 concerning injunctive relief in any proceeding brought by the other Party.

13.6Bankruptcy.  If a case is commenced in respect of AEON under Title 11 of the United States Code or similar domestic or foreign law, or if a trustee, receiver, conservator or other fiduciary is appointed under any similar domestic or foreign law, and in the event of the entry of a final order of a court of competent jurisdiction determining that the transfer of money or any portion thereof under this Agreement to or on behalf of Medytox to be a preference, voidable transfer, fraudulent transfer, or similar transaction and any portion thereof is required to be returned, then the Parties shall jointly move the relevant court or agency of competent jurisdiction to vacate any releases made pursuant to this Agreement, which releases shall then be null and void, and the Parties shall be restored to their respective positions in the California Action, the Federal Action, the ITC Action, and the Korean Actions immediately prior to the date of this Agreement.

13.7Arbitration.  Except for disputes regarding equitable relief under Section 13.5, if any disputes arise out of or in connection with this Agreement or any further amendment thereto, the Parties shall try to resolve such dispute amicably.  In the event that the Parties fail to settle the dispute through amicable negotiation, such dispute shall be submitted to and finally settled by arbitration in [***],in accordance with the rules of JAMS by one or more arbitrators appointed in accordance with such rules.  The language to be used in the arbitral proceedings shall be English.

13.8Taxes; Withholding.

(a)In the event that any payment under this Agreement becomes subject to withholding taxes under applicable laws or regulations, the payor shall withhold from the payment the amount of such taxes due and timely pay to the proper governmental authority the amount of any taxes withheld.  The payor shall deliver to the payee the original or a certified copy of a receipt issued by the applicable governmental authority evidencing the payment of the taxes withheld, a copy of the tax return reporting such payment, or other evidence of such payment reasonably satisfactory to payee.  The Parties agree to cooperate with one another and use reasonable efforts to minimize or eliminate any such tax withholding or similar obligations in respect of any payments or transfers (including the issuance or transfer of shares of stock) made to Medytox under this Agreement including taking into account any reduction to withholding available under a tax treaty to which the payee is entitled and taking all appropriate steps related thereto.  Each Party agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect (including pursuant to Section 13.8(c)(ii) below), it shall update such form or certification or promptly notify the other Party in writing of its legal inability to do so.

(b)In furtherance of the foregoing, the Parties shall cooperate to (i) determine to which jurisdiction or jurisdictions each payment made hereunder is allocable and the portion allocable to each such jurisdiction (based upon the Net Sales or the utilization of intellectual property in each such jurisdiction), (ii) determine the treatment of each such payment for tax purposes in each such jurisdiction, and (iii) report each payment made hereunder consistent with such determination for all tax purposes in all affected jurisdictions.

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(c)With respect to the portion of any payments made under this Agreement that are allocable to sources within the United States in accordance with the principles of Paragraph (b) hereof:

(i)Medytox represents that it is, and at all relevant times will be, entitled to the benefits of the United States - Republic of Korea Income Tax Convention (the “Treaty”), including, without limitation, where applicable the reduced rate of taxation on royalties specified in paragraph (1) of Article 14 thereof, with respect to such payments of which it is the beneficial owner;

(ii)Medytox shall provide AEON with a validly completed and duly executed IRS Form W-8BEN-E (or IRS Form W-9 if applicable) claiming any exemption from or reduced rate of withholding described in clause (i); and

(iii)the Parties agree that each such License Payment shall be treated as a payment of a royalty pursuant to the Internal Revenue Code of 1986, as amended, and the Treaty.

(d)Within thirty (30) days after demand therefore, Medytox shall indemnify AEON and each of its directors, officers and affiliates, and hold each of them harmless from and against, and shall pay and reimburse each of them for, (i) any loss or liability attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, or obligation in this Section 13.8, and (ii) all U.S. federal withholding taxes, penalties, fees, interest, additions to tax or other assessments related to the underpayment of any taxes, or the failure to pay to the Internal Revenue Service any taxes that were required to be withheld from any payment made hereunder, together with any out-of-pocket fees and expenses (including attorneys’ and accountants’ fees) incurred in connection therewith arising from a claim made against AEON by the Internal Revenue Service, provided that (a) in the event of such a claim Medytox is provided prompt notice thereof, (b) AEON reasonably cooperates in good faith with Medytox in the adjudication of said claim, (c) the claim results in a final order requiring a payment within the scope of this subsection, and (d) such claim is not settled or otherwise resolved without Medytox’s consent (not to be unreasonably withheld, conditioned or delayed).  Medytox further agrees that AEON shall have the right, in its discretion, to offset any Royalty or License Payment required to be paid pursuant to this Agreement by any amount due under this Section 13.8(d) to the extent such amount is not otherwise paid by Medytox to AEON within the thirty (30) day period provided in this paragraph (and any amount subject to such offset shall be treated as paid to AEON for all purposes under this Agreement).

(e)The Parties shall not take any position for any tax purpose inconsistent with any provision of this Section 13.8, absent a final and binding determination by a taxing authority in the relevant jurisdiction(s), in which case parties shall also cooperate to seek conforming adjustments in any other relevant jurisdictions.  The Parties shall keep each other reasonably informed, and shall notify the other Party promptly of any inquiry of any taxing authority relating in any way to such determination, allocation or treatment or otherwise in respect of the taxation of any payments made hereunder (including the issuance of the Issued Shares), and shall, without limiting the generality of Section 13.8(a), reasonably cooperate in responding to any such inquiry and in any related audit or contest.  No settlement of any audit, proceeding, examination or contest with respect to taxes or the taxation of the parties with respect to any payments made hereunder shall be agreed to by either Party without the consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed).

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13.9Entire Agreement.  All rights not expressly granted by the Parties under this Agreement are reserved by the Parties and, except as explicitly set on in this Agreement, no other express or implied license or rights under any intellectual property of any Party are granted or intended to be granted under this Agreement.  The Parties acknowledge that this Agreement sets forth the entire agreement and understanding of the Parties and supersedes all prior written or oral agreements or understandings with respect to the subject matter hereof.  No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by an authorized agent or representative of both parties hereto.  No course of dealing or usage of trade shall be used to modify the terms and conditions herein.  This Agreement shall be binding on each of the Parties and their respective permitted successors and assigns.

13.10Severability.  If any provision of this Agreement is found by a court of competent jurisdiction to be unlawful, invalid, void, or unenforceable in whole or in part for any reason, such provision or such part thereof shall be deemed separate from and shall in no way affect the validity, legality, and enforceability of the remainder of this Agreement.  If such provision or part thereof is deemed unlawful, void, or unenforceable due to its scope or breadth, such provision or part thereof shall be deemed valid to the extent of the scope or breadth permitted by law.  The Parties agree to renegotiate in good faith any provision held to be invalid, illegal, or unenforceable, it being the intent of the Parties that the basic purposes of the Agreement are to be effectuated.

13.11Counterparts.  This Agreement may be executed in counterparts, and execution by each of the Parties of any one of such counterparts will constitute due execution of this Agreement.  Each such counterpart hereof shall be deemed to be an original instrument, and all such counterparts together shall constitute but one agreement.  Execution and delivery of this Agreement by facsimile by either Party shall be legal, valid, and binding to the same extent as an original signature.

13.12Non-Disparagement.  No party shall, or encourage or induce others to, disparage or make defamatory remarks, comments, statements, representations, or other communications concerning any other Party or its respective Affiliates, officers, directors, shareholders, members, agents, representatives, products, or services, whether directly or indirectly, in writing, orally, or otherwise.  Notwithstanding the foregoing, nothing in this Agreement shall preclude a Party from making truthful statements that are required by applicable law, regulation, or legal process. Nothing in the foregoing is intended to impede legitimate competition or commercially reasonably sales and marketing tactics, including commercially reasonable comparison of Licensed Products with any other product on the market.

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IN WITNESS WHEREOF, the Parties have fully executed and delivered this Settlement Agreement as of the day and year first written above.

MEDYTOX, INC.
By:	/s/ Hyun Ho Jung
Name:	Hyun Ho Jung
Title:	CEO & President
AEON BIOPHARMA, INC.
By:	/s/ Marc Forth
Name:	Marc Forth
Title:	President and Chief Executive Officer

Signature Page for Settlement and License Agreement

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption "Experts" and to the use of our report dated June 7, 2021 (except for the third paragraph of Note 14, as to which the date is October 4, 2021), in Amendment No. 1 to the Registration Statement on Form S-1 (333-205609) and related Prospectus of AEON Biopharma, Inc. for the registration of shares of its common stock.

/s/ Ernst & Young LLP

Irvine, California

October 4, 2021