Note 10.    Share-based Compensation Stock Incentive Plans

2019 Incentive Award Plan

In June 2019, Old AEON established the 2019 Incentive Award Plan (the “2019 Incentive Award Plan”), as amended from time to time, that provides for the granting of incentive and nonqualified stock options, restricted stock units (“RSU”), restricted stock and stock appreciation rights to its employees, members of the Board of Directors and non-employee consultants. 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.

In connection with the Merger, the Company assumed the 2019 Incentive Award Plan and all options and RSU awards that were outstanding immediately prior to the Merger were converted into substantially similar awards covering shares of the Company’s common stock based on a conversion ratio of approximately 1.078 to 1 share. Additionally, the exercise price for the awards were repriced to $720.00 for all options. The fair value of the replacement awards that were vested based on the value immediately prior to the Merger were included as purchase consideration. The remaining value of the replacement awards is recognized as compensation expense over the remaining vesting period.

Prior to the consummation of the Merger, a total of 237,500 shares of ABP Sub Inc. common stock were available for issuance under the 2019 Incentive Award Plan. Following the effective date of the 2023 Plan, in the event that an outstanding award expires or is cancelled for any reason, the shares allocable to the unexercised or cancelled portion of such award from the 2019 Incentive Award Plan will be added back to the shares of common stock available for issuance under the 2023 Plan.

Certain RSU awards contain performance-based vesting criteria based on the achievement of the same milestones as the contingent consideration (see Note 6 Fair Value Measurements for additional information). Upon designation of a probable milestone, the Company expenses the proportionate RSU’s over the vesting term, calculated as the period from the date the milestone was determined to be probable and the expected achievement date of the milestone.

The following table summarizes stock option activity in 2025 under 2019 Incentive Award Plan:

​

​

As of December 31, 2025 and 2024, the weighted average remaining contractual life of options outstanding and options exercisable was 5.0 years and 6.0 years.

During the years ended December 31, 2025 and 2024, the Company recognized $1.6 million and $2.9 million, respectively, of share-based compensation expense related to stock options granted.

As of December 31, 2025, total unrecognized compensation expense related to nonvested stock options was $0.2 million, which is expected to be recognized over the weighted-average remaining requisite service period of 1 month.

The following table summarizes restricted stock units activity in 2025 under the 2019 Incentive Award Plan:

​

​

During the year ended December 31, 2025 and 2024, the Company recognized $1.3 million and $1.3 million, respectively, of share-based compensation expense related to restricted stock units granted, excluding restricted stock units with earnout vesting criteria. For the restricted stock units with earnout vesting criteria, the Company recognized $(0.7) million and $0.3 million of (gain) expense for the years ended December 31, 2025 and 2024, respectively. During the third quarter of 2025, the Company determined that the earnout vesting criteria was no longer probable, as such, the Company reversed $1.0 million of share-based compensation expense related to the restricted stock units with earnout criteria.

As of December 31, 2025, total unrecognized compensation expense related to nonvested restricted stock units, excluding restricted stock units with earnout vesting criteria, was $1.7 million, which is expected to be recognized over the weighted-average remaining requisite service period of 12 months. As of December 31, 2025, the unrecognized compensation expense related to the restricted stock units with the earnout criteria, due to the vesting criteria not being probable, was $4.7 million, and will be recognized when the milestones are determined to be probable over the RSUs vesting term, calculated as the period from the date the milestone was determined to be probable and the expected achievement date of the milestone. As of December 31, 2025, there were 408 restricted stock units with earnout vesting criteria that were forfeited due to milestone deadline not achieved.

AEON Biopharma Inc. 2023 Incentive Award Plan

In connection with the Merger, the Company’s Board adopted, and its stockholders approved, the 2023 Plan, which became effective upon the consummation of the Merger, that provides for the granting of nonqualified stock options, restricted stock and stock appreciation rights to employees, members of the Board and non-employee consultants. On December 2, 2025, the Company’s Board adopted an amendment and restatement of the 2023 Incentive Award Plan (as amended and restated, the “2023 Plan”), and on January 21, 2026, our stockholders approved the 2023 Plan. The 2023 Plan will remain in effect until January 21, 2036, the tenth anniversary of the date the Company’s stockholders approved the 2023 Plan, unless earlier terminated. Stock options granted generally expire ten

years after their original date of grant and generally vest between three years to four years with equal installments vesting on each anniversary of the grant date, subject to continued service through the applicable vesting date.

The aggregate number of shares of the Company’s common stock available for issuance under the 2023 Incentive Award Plan is equal to (a) 17,846,923 shares of common stock and (b) any shares which, as of the original effective date of the 2023 Incentive Award Plan, are subject to an award outstanding under the 2019 Incentive Award Plan (each, a “Prior Plan Award”), and which, on or following the original effective date of the 2023 Incentive Award Plan, become available for issuance under the 2023 Plan as provided in the 2023 Plan. In addition, the number of shares of common stock available for issuance under the 2023 Plan will be annually increased on January 1 of each calendar year beginning in 2027 and ending in 2033 by an amount equal to the lesser of (i) 5% of the number of fully-diluted number of shares outstanding on the final day of the immediately preceding calendar year or (ii) such other number of shares as is determined by the Board. Any shares issued pursuant to the 2023 Plan may consist, in whole or in part, of authorized and unissued common stock, treasury common stock or common stock purchased on the open market. As of December 31, 2025, there were 40,398 shares of common stock available for issuance under the 2023 Plan.

The following table summarizes stock options activity in 2025 under the 2023 Plan:

​

​

There were no options granted in 2025. The weighted average per share fair value of options granted in 2024 was $135.50. The weighted average remaining contractual life of options outstanding and options exercisable as of December 31, 2025 and 2024 was 8.5 years and 9.5 years, respectively.

During the years ended December 31, 2025 and 2024, the Company recognized $2.7 million and $1.6 million, respectively, of share-based compensation expense related to stock options granted.

As of December 31, 2025 total unrecognized compensation expense related to nonvested stock options was $2.6 million, which is expected to be recognized over the weighted-average remaining requisite service period of 7 months.

The following table summarizes restricted stock units activity in 2025 under the 2023 Plan:

​

​

During the years ended December 31, 2025 and 2024, the Company recognized $0.4 and $0.1 million, respectively of share-based compensation expense related to restricted stock units granted.

As of December 31, 2025, total unrecognized compensation expense related to nonvested restricted stock units was $0.3 million which is expected to be recognized over the weighted-average remaining requisite service period of 8 months.

AEON Biopharma Inc. 2025 Employment Inducement Incentive Award Plan

Effective April 19, 2025, the Board adopted the 2025 Employment Inducement Incentive Award Plan (the “Inducement Plan”) and, subject to the adjustment provisions of the Inducement Plan, reserved 1,000,000 shares of the Company’s Class A common stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan provides for the grant of equity-based awards, including non-statutory stock options, restricted stock units, restricted stock, stock appreciation rights, performance shares and performance stock units, and its terms are substantially similar to the 2023 Plan. In accordance with the Company Guide, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non employment with the Company), as an inducement material to the individuals’ entry into employment with the Company or being rehired following a bona fide period of interruption of employment by the Company. The Inducement Plan was adopted without stockholder approval pursuant to the applicable provisions of the Company Guide. As of December 31, 2025, there were 268,825 shares of common stock available for issuance under the Inducement Plan.

For the year ended December 31, 2025 there were 59,034 stock options issued, with weighted average exercise price of $0.41 per share. The weighted average fair value of options granted as of December 31, 2025 was $0.37 per share. The weighted average remaining contractual life of options outstanding and options exercisable as of December 31, 2025 was 9.3 years. During the year ended December 31, 2025, the Company recognized de minimus amounts of share-based compensation expense related to stock options granted. As of December 31, 2025, total unrecognized compensation expense related to nonvested stock options was $18 thousand, which is expected to be recognized over the weighted average remaining requisite service period of 40 months.

For the year ended December 31, 2025, there were 672,141 restricted stock units issued, with weighted averaged grant date fair value of $0.65 per share. During the year ended December 31, 2025, the Company recognized de minimus amounts of share-based compensation expense related to restricted stock units granted. As of December 31, 2025, total unrecognized compensation expense related to nonvested restricted stock units was $0.4 million, which is expected to be recognized over the weighted-average remaining requisite service period of 44 months.

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 is amortized on a straight-line basis over the requisite service period. The Company records share-based compensation expense net of actual forfeitures.

During the years ended December 31, 2025 and 2024, the Company recognized $5.3 million and $4.7 million, respectively, of share-based compensation expense in selling, general and administrative expenses, and $1.6 million and $1.5 million, respectively, in research and development expenses in the accompanying consolidated statements of operations and comprehensive (loss) income.

The fair value of stock options under the 2019 Plan and 2023 Plan was estimated using the following assumptions:

​

​

Fair Value of the Underlying common stock.    The fair value of the stock price is the closing price for the Company’s common stock as reported on the NYSE American.

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 sufficient 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.