Evolus, Inc. (NASDAQ:EOLS) Q2 2022 Earnings Conference Call August 1, 2022 9:00 AM ET Company Participants David Erickson - Vice President, Investor Relations David Moatazedi - President and Chief Executive Officer Rui Avelar - Chief Medical Officer and Head of Research and Development Conference Call Participants Louise Chen - Cantor Fitzgerald Annabel Samimy - Stifel Marc Goodman - SVB Greg Fraser - Truist Securities Serge Belanger - Needham and Company Douglas Tsao - H.C. Wainwright Uy Ear - Mizuho Opera ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ ...

gg evolus™ M A Y 202 2 Investor Presentation | --- | --- | --- | |-------|-------------------|-------| | | | | | | | | | | | | | | 8 | | | | | | | | our Purpose | | | | To make the her | | | | beauty experience | | | | delightful and | | | | achievable | | Disclosures Special Note Regarding Forward-Looking Statements This presentation contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained i ...

Financial Data and Key Metrics Changes - First quarter sales grew to nearly $34 million, reflecting a year-over-year growth of 177% compared to the first quarter of 2021 [9][12] - The company expects to achieve the upper end of its full year sales guidance range of $143 million to $150 million, equating to a year-over-year growth rate approaching 50% [11][33] - Reported gross margin for the first quarter was 59%, with an adjusted gross margin of 61% [26] - Non-GAAP loss from operations improved to $10.3 million in Q1 2022 from $12.2 million in Q4 2021 [29] Business Line Data and Key Metrics Changes - The company added more than 575 new accounts in the first quarter, the highest quarterly increase in the past two years, bringing the total to over 7,500 purchasing customers [15] - The Evolus Rewards program grew to over 335,000 members, with nearly 90,000 consumers rewarded during the quarter [19][60] Market Data and Key Metrics Changes - The aesthetics market is expected to grow in the teens to up to 20%, while the company anticipates a growth rate of approximately 50% [41][55] - The pricing environment for neurotoxin products in the U.S. remains healthy, with an increase in average selling price [25][56] Company Strategy and Development Direction - The company is focused on expanding its European footprint with the launch of Nuceiva planned for the third quarter, starting in the U.K. and Germany [20][21] - Evolus aims to build a powerful brand appealing to millennials, which is expected to drive long-term growth [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong growth in 2022, supported by robust market dynamics and the successful relaunch of Jeuveau [10][41] - The company is closely monitoring macroeconomic factors like inflation and supply chain issues but believes its fixed transfer pricing will mitigate significant impacts [56] Other Important Information - The company ended the first quarter with $107 million in cash, down from $146 million at the end of 2021, but expects this balance to fund operations through cash flow breakeven [30][31] - The final installment of a $5 million settlement payment is due in Q1 2023, which will fully satisfy total milestone settlement obligations [32] Q&A Session Summary Question: Market dynamics and share gains - Management noted that the aesthetics market is experiencing significant growth, with the company benefiting from both market growth and share gains [41][44] Question: Market share evolution and macro headwinds - The company expects to continue expanding its market share, with a favorable backdrop for growth despite potential macroeconomic challenges [55][56] Question: Loyalty program progress - The loyalty program has enrolled nearly 400,000 consumers, with repeat treatments hitting an all-time high, indicating strong consumer satisfaction [60][62] Question: Business development environment - The evolving market presents opportunities for corporate development, with the company focused on durable assets to build its portfolio [67][70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________ FORM 10-Q _________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ ...

Evolus, Inc. (NASDAQ:EOLS) Q4 2021 Earnings Conference Call March 3, 2022 4:30 PM ET Company Participants David Erickson – Vice President-Investor Relations David Moatazedi – President and Chief Executive Officer Rui Avelar – Chief Medical Officer and Head-Research and Development Lauren Silvernail – Executive Vice President-Corporate Development and Chief Financial Officer Conference Call Participants Marc Goodman – SVB Leerink Louise Chen – Cantor Fitzgerald Annabel Samimy – Stifel Greg Fraser – Truist Se ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Evolus is a performance beauty company whose primary product, Jeuveau®, competes in the self-pay aesthetic market for treating frown lines - Evolus operates as a performance beauty company with its first commercial product, Jeuveau®, a 900 kDa purified botulinum toxin type A, targeting the self-pay aesthetic market for the treatment of glabellar lines (frown lines)[29](index=29&type=chunk)[30](index=30&type=chunk) - The company is pursuing international expansion, having received regulatory approval in Canada and Europe, with plans to launch in select European countries in **Q3 2022** and Australia in **2023**[32](index=32&type=chunk) - Evolus's growth strategy includes an aesthetic-only focus, leveraging KOL relationships, international expansion, a digital customer engagement platform, and portfolio diversification[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - The company's TRANSPARENCY clinical program, involving over 2,100 patients, provided robust data for regulatory approvals, demonstrating **non-inferiority to BOTOX®**[40](index=40&type=chunk)[48](index=48&type=chunk)[51](index=51&type=chunk) - Evolus initiated a Phase II clinical trial in November 2021 to investigate a **higher strength, 40-unit dose** of Jeuveau® for glabellar lines[56](index=56&type=chunk) - The company relies exclusively on **Daewoong Pharmaceuticals Co Ltd** for the manufacturing and supply of Jeuveau® under a license and supply agreement[57](index=57&type=chunk)[59](index=59&type=chunk) - As of December 31, 2021, the company had **167 full-time employees**, with 69% being women[89](index=89&type=chunk)[90](index=90&type=chunk) Fiscal Year 2021 Revenue | Region/Segment | Revenue (USD) | | :--- | :--- | | U.S. Net Product Revenue | $99.0 million | | Canada Net Service Revenue | $0.7 million | [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company's viability is threatened by its dependence on a single product, a history of losses, and significant legal and competitive risks - The company's business is **entirely dependent on the successful commercialization** of its only product, Jeuveau®[99](index=99&type=chunk) - Evolus has a limited operating history and has incurred significant losses, with a **net loss of $46.8 million in 2021** and an accumulated deficit of **$422.9 million**[100](index=100&type=chunk)[102](index=102&type=chunk) - Failure to comply with settlement agreements with Medytox and Allergan could lead to litigation or loss of marketing rights, while **royalty payments reduce profitability**[104](index=104&type=chunk)[107](index=107&type=chunk) - The business faces **significant competition** from large, experienced companies with greater financial resources and brand recognition, such as AbbVie Inc (marketer of BOTOX®)[114](index=114&type=chunk) - Evolus **relies solely on Daewoong to manufacture Jeuveau®**, making it vulnerable to production problems or termination of the supply agreement[158](index=158&type=chunk) - The company is reliant on its digital technology, and **system failures or cybersecurity breaches** could disrupt operations and harm the business[121](index=121&type=chunk)[124](index=124&type=chunk) - Significant stock ownership is concentrated among **Medytox (13.4%)**, **Alphaeon 1, LLC (10.9%)**, and **Daewoong (5.6%)**, allowing them to exert significant control[225](index=225&type=chunk) - The company is subject to **securities class action and shareholder derivative lawsuits**, which could result in substantial costs and divert management's attention[227](index=227&type=chunk)[228](index=228&type=chunk) [Unresolved Staff Comments](index=49&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[266](index=266&type=chunk) [Properties](index=49&type=section&id=Item%202.%20Properties) Evolus leases its corporate headquarters in Newport Beach, California, under a lease expiring in January 2025 - The company's corporate headquarters is located at 520 Newport Center Drive, Suite 1200, Newport Beach, CA 92660[267](index=267&type=chunk) - The facility is leased, covers approximately **17,758 square feet**, and the lease expires on January 31, 2025[267](index=267&type=chunk) [Legal Proceedings](index=49&type=section&id=Item%203.%20Legal%20Proceedings) The company is defending against securities class action and shareholder derivative lawsuits related to its rights to sell Jeuveau® - A securities class action lawsuit was filed against the company and certain officers, alleging violations of the Securities Exchange Act of 1934 related to statements about Jeuveau® and the ITC Action[268](index=268&type=chunk) - A shareholder derivative lawsuit was filed against certain officers and directors with substantially similar allegations as the class action, asserting claims for breach of fiduciary duty and waste of corporate assets[269](index=269&type=chunk) - The company received a demand from a putative stockholder to inspect its books and records under Section 220 of the Delaware General Corporations Law[271](index=271&type=chunk) [Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[275](index=275&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=50&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "EOLS," and it does not anticipate paying cash dividends in the foreseeable future - The company's common stock has been listed on the Nasdaq under the symbol **"EOLS"** since February 12, 2018[278](index=278&type=chunk) - As of February 28, 2022, there were approximately **30 holders of record** of the common stock[279](index=279&type=chunk) - The company has **never declared or paid cash dividends** and does not anticipate doing so in the foreseeable future[280](index=280&type=chunk) [[Reserved]](index=51&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net revenues grew 76.3% to $99.7 million in 2021, though profitability remains impacted by settlement costs, with liquidity bolstered by new financing [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Net revenues rose 76.3% to $99.7 million in 2021, while net loss significantly narrowed to $46.8 million from $163.1 million in 2020 - Net revenues from Jeuveau® sales **increased by $43.1 million (76.3%)** in 2021 compared to 2020, driven by higher sales volume and a higher net average selling price in the U.S[300](index=300&type=chunk) - Gross profit margin was **79.0% in 2021**, up from 62.4% in 2020; however, adjusted gross profit margin decreased to **56.3%** from 67.6% due to new royalty payments[306](index=306&type=chunk) - Selling, general and administrative expenses **increased by $13.9 million (14.1%)** in 2021, primarily due to increased commercial activities, including direct-to-consumer marketing[307](index=307&type=chunk) Comparison of Results of Operations (Years Ended Dec 31) | (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | **Total net revenues** | **$99.7** | **$56.5** | | Product cost of sales | $43.5 | $18.3 | | Settlement payment from Daewoong | ($25.5) | $— | | Selling, general and administrative | $112.1 | $98.2 | | Litigation settlement expenses | $— | $83.4 | | **Loss from operations** | **($44.4)** | **($153.1)** | | **Net loss** | **($46.8)** | **($163.1)** | [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The company improved its financial position with $146.3 million in cash, supported by a public offering, an ATM program, and a new term loan - In April 2021, the company completed a follow-on public offering, selling 10,350,000 shares of common stock for net proceeds of approximately **$92.4 million**[317](index=317&type=chunk) - In December 2021, the company entered into a new loan agreement with Pharmakon for up to **$125.0 million**, with the first tranche of **$75.0 million** funded on December 29, 2021[320](index=320&type=chunk) - The company fully repaid its outstanding obligations of **$76.4 million** under its previous credit facility with Oxford Finance, LLC in January 2021[325](index=325&type=chunk) - The **$40.0 million Daewoong Convertible Note**, along with accrued interest, was converted into 3,136,869 shares of common stock in March 2021[293](index=293&type=chunk)[329](index=329&type=chunk) Financial Position as of December 31, 2021 | Metric | Amount (USD millions) | | :--- | :--- | | Cash and cash equivalents | $146.3 | | Working capital | $121.1 | | Stockholders' equity | $81.9 | | Accumulated deficit | $422.9 | [Critical Accounting Policies and Estimates](index=62&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies involve significant judgment, particularly in revenue recognition, contingent royalty valuation, and intangible asset amortization - Revenue is recognized when control of goods transfers to the customer, with product revenues recorded **net of sales-related adjustments** for rebates and loyalty programs[351](index=351&type=chunk)[353](index=353&type=chunk) - The fair value of the contingent royalty obligation to the Evolus Founders is determined using a **discounted cash flow method**, which relies on significant unobservable (Level 3) inputs[355](index=355&type=chunk) - Goodwill is reviewed for impairment annually in the fourth quarter, and **no impairment has been recorded**[356](index=356&type=chunk)[429](index=429&type=chunk) - Intangible assets consist mainly of the definite-lived distribution right for Jeuveau®, which is amortized on a straight-line basis over an estimated useful life of **20 years**[358](index=358&type=chunk)[430](index=430&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - Not applicable[363](index=363&type=chunk) [Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited financial statements, which show a net loss of $46.8 million and total assets of $257.5 million for 2021 Balance Sheet Highlights (as of Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $146,256 | $102,562 | | Total current assets | $178,799 | $127,612 | | Total assets | $257,483 | $209,068 | | Total current liabilities | $57,663 | $180,248 | | Total liabilities | $175,607 | $282,026 | | Total stockholders' equity (deficit) | $81,876 | ($72,958) | Statement of Operations Highlights (Year Ended Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Total net revenues | $99,673 | $56,540 | | Loss from operations | ($44,405) | ($153,068) | | Net loss | ($46,810) | ($163,013) | | Net loss per share, basic and diluted | ($0.94) | ($4.83) | Statement of Cash Flows Highlights (Year Ended Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($33,388) | ($57,871) | | Net cash provided by investing activities | $4,030 | $12,194 | | Net cash provided by financing activities | $73,052 | $38,347 | | Change in cash and cash equivalents | $43,694 | ($7,330) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=102&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure matters - None[603](index=603&type=chunk) [Controls and Procedures](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2021[605](index=605&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2021, based on the COSO 2013 framework[606](index=606&type=chunk) - **No changes in internal control** over financial reporting occurred during the fourth quarter of 2021 that materially affected, or are reasonably likely to materially affect, these controls[607](index=607&type=chunk) [Other Information](index=102&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[610](index=610&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=103&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[612](index=612&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=104&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - The required information for this item is **incorporated by reference** from the company's Proxy Statement for its 2022 Annual Meeting of Stockholders[614](index=614&type=chunk)[616](index=616&type=chunk) - The company has a **Code of Conduct** available on its website, and any amendments or waivers for officers or directors will be posted there[617](index=617&type=chunk) [Executive Compensation](index=105&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2022 Proxy Statement - The required information for this item is **incorporated by reference** from the company's Proxy Statement for its 2022 Annual Meeting of Stockholders[619](index=619&type=chunk) [Security Ownership of Certain of Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20of%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the company's 2022 Proxy Statement - The required information for this item is **incorporated by reference** from the company's Proxy Statement for its 2022 Annual Meeting of Stockholders[621](index=621&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=107&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2022 Proxy Statement - The required information for this item is **incorporated by reference** from the company's Proxy Statement for its 2022 Annual Meeting of Stockholders[623](index=623&type=chunk) [Principal Accounting Fees and Services](index=107&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding accounting fees and services is incorporated by reference from the company's 2022 Proxy Statement - The required information for this item is **incorporated by reference** from the company's Proxy Statement for its 2022 Annual Meeting of Stockholders[624](index=624&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=108&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and all exhibits filed as part of the annual report - This item lists the financial statements, notes that financial statement schedules have been omitted as not applicable, and provides an **index of all exhibits** filed with the 10-K[627](index=627&type=chunk) [Form 10-K Summary](index=111&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[641](index=641&type=chunk)

gg evolus™ J A N U A R Y 202 2 Investor Presentation | --- | --- | --- | |-------|-------------------|-------| | | | | | | | | | | | | | | 8 | | | | | | | | our Purpose | | | | To make the her | | | | beauty experience | | | | delightful and | | | | achievable | | Disclosures Special Note Regarding Forward-Looking Statements This presentation contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts con ...

Evolus, Inc. (NASDAQ:EOLS) Q3 2021 Earnings Conference Call November 2, 2021 9:00 AM ET Company Representatives David Moatazedi - President, Chief Executive Officer Lauren Silvernail - Chief Financial Officer, Executive Vice President, Corporate Development Rui Avelar - Chief Medical Officer, Head of Research and Development David Erickson - Vice President of Investor Relations Conference Call Participants Louise Chen - Cantor Annabel Samimy - Stifel Marc Goodman - SVB Leerink Vamil Divan - Mizuho Securitie ...

PART I - FINANCIAL INFORMATION This section provides the unaudited financial statements, management's discussion, market risk disclosures, and controls and procedures for the reporting period [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed financial statements, highlighting significant revenue growth, reduced liabilities, and a shift to positive stockholders' equity [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) The balance sheet shows significant financial improvement with total liabilities reduced and stockholders' equity turning positive Condensed Balance Sheet Highlights (in thousands) | Metric | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $107,796 | $102,562 | | **Total assets** | $215,220 | $209,068 | | **Total current liabilities** | $71,303 | $180,248 | | **Total liabilities** | $117,816 | $282,026 | | **Total stockholders' equity (deficit)** | $97,404 | $(72,958) | [Condensed Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 2021 net revenues increased 51% but net loss widened, while nine-month revenues grew 81% and net loss narrowed due to a settlement payment Q3 Performance Comparison (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | **Total net revenues** | $26,677 | $17,661 | | **Loss from operations** | $(19,122) | $(8,760) | | **Net loss** | $(19,433) | $(11,459) | | **Net loss per share** | $(0.35) | $(0.34) | Nine-Month Performance Comparison (in thousands, except per share data) | Metric | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | | **Total net revenues** | $65,016 | $35,963 | | **Settlement payment from Daewoong** | $(25,500) | $0 | | **Loss from operations** | $(26,410) | $(45,042) | | **Net loss** | $(28,633) | $(52,319) | | **Net loss per share** | $(0.60) | $(1.55) | [Condensed Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Stockholders' equity transformed from a deficit to a positive balance due to significant equity issuances - Key equity changes in the first nine months of 2021 included the issuance of **6,762,652 shares** for a litigation settlement, **3,136,869 shares** for the conversion of a convertible note, and **10,350,000 shares** from a follow-on offering[31](index=31&type=chunk) [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operations significantly reduced, while financing activities provided inflows, increasing cash and cash equivalents Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(24,344) | $(55,605) | | **Net cash provided by (used in) investing activities** | $4,420 | $(7,507) | | **Net cash provided by financing activities** | $25,158 | $38,347 | - Significant non-cash activities included the conversion of a **$39.8 million** convertible note to equity and the issuance of **$48.4 million** in common stock to settle litigation[37](index=37&type=chunk) [Notes to Condensed Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the company's sole product, litigation settlements, debt extinguishments, and sufficient capital for the next 12 months - The company's sole product is **Jeuveau® (prabotulinumtoxinA-xvfs)**, approved for treating glabellar lines[39](index=39&type=chunk) - In February 2021, the company settled litigation with Medytox and Allergan, agreeing to pay **$35 million** over two years, issue **6.76 million shares**, and pay ongoing royalties on Jeuveau® sales[42](index=42&type=chunk)[99](index=99&type=chunk)[162](index=162&type=chunk) - In March 2021, partner Daewoong agreed to pay the company **$25.5 million** and reimburse certain royalty payments, offsetting some costs from the Medytox/Allergan settlement[42](index=42&type=chunk)[100](index=100&type=chunk)[168](index=168&type=chunk) - In 2021, the company extinguished its major debt obligations by repaying the **$76.4 million** Oxford Term Loan and converting the **$40.8 million** Daewoong Convertible Note into equity[41](index=41&type=chunk)[131](index=131&type=chunk)[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Jeuveau® revenue growth, royalty impact on margins, improved liquidity, and sufficient capital for 12 months [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q3 2021 net revenues grew 50.8% to $26.7 million, but adjusted gross margin declined due to new royalty expenses Q3 2021 vs Q3 2020 Revenue and Margin (in millions) | Metric | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | **Net Revenues** | $26.7 | $17.7 | | **Adjusted Gross Profit Margin** | 56.9% | 72.5% | Nine Months 2021 vs 2020 Revenue and Margin (in millions) | Metric | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | | **Net Revenues** | $65.0 | $36.0 | | **Adjusted Gross Profit Margin** | 57.4% | 69.4% | - The gross profit margin is expected to be materially negatively impacted through September 2022 due to royalty payments from the Medytox/Allergan settlement, partially offset by reimbursements from Daewoong[186](index=186&type=chunk)[197](index=197&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity strengthened to $107.8 million cash, driven by equity offerings and a settlement, enabling debt repayment and sufficient capital - As of September 30, 2021, the company had cash and cash equivalents of **$107.8 million**[221](index=221&type=chunk)[244](index=244&type=chunk) - Major financing activities in 2021 included a follow-on offering (net proceeds **~$92.4M**), ATM sales (net proceeds **$10.9M**), and the repayment of a **$76.4M** term loan[223](index=223&type=chunk)[225](index=225&type=chunk)[228](index=228&type=chunk) - The company has significant upcoming cash obligations, including a **$20.0 million** promissory note payment to Evolus Founders in November 2021 and a **$15.0 million** payment to Medytox/Allergan in Q1 2022[233](index=233&type=chunk)[234](index=234&type=chunk)[238](index=238&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable, indicating no material exposure to market risks requiring quantitative disclosure - The company states this item is **'Not applicable.'**[255](index=255&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting in Q3 2021 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2021[257](index=257&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended September 30, 2021[259](index=259&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, unregistered equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including a securities class action and derivative suits, which the company believes are without merit - The company is a defendant in a putative securities class action lawsuit filed in October 2020, alleging false and misleading statements related to the previous ITC Action[142](index=142&type=chunk) - Two shareholder derivative actions with similar allegations were filed in late 2020 and have been consolidated and stayed pending a decision on the motion to dismiss the class action suit[143](index=143&type=chunk) - The company believes the complaints are **without merit** and has not accrued any liability as it cannot reasonably estimate a range of loss at this time[144](index=144&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks: sole product dependence, historical losses, competition, settlement impacts, manufacturing reliance, and litigation - The company is entirely dependent on the successful commercialization of its only product, **Jeuveau®**, and has a history of significant losses, making its future viability difficult to assess[266](index=266&type=chunk) - The settlement agreements with Medytox and Allergan require substantial payments and ongoing royalties, which will reduce profitability and could lead to litigation or loss of commercialization rights if terms are not met[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - The company relies solely on **Daewoong** for the manufacturing of Jeuveau®, exposing it to production, supply chain, and regulatory compliance risks at Daewoong's single FDA-approved facility[321](index=321&type=chunk) - The company faces significant competition from larger companies with greater financial resources, established brands like **BOTOX**, and broader product portfolios[280](index=280&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the reporting period - The company reported **'None.'** for this item[429](index=429&type=chunk) [Item 3. Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported that this item is not applicable - The company reported **'Not applicable.'** for this item[430](index=430&type=chunk) [Item 4. Mine Safety Disclosures](index=79&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported that this item is not applicable - The company reported **'Not applicable.'** for this item[431](index=431&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item%205.%20Other%20Information) The company reported no other material information required to be disclosed during the period - The company reported **'None.'** for this item[432](index=432&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed concurrently with the 10-Q report, including certifications and interactive data files - The filing includes certifications from the Principal Executive Officer and Principal Financial Officer pursuant to SEC rules and the Sarbanes-Oxley Act of 2002[435](index=435&type=chunk) - Interactive Data Files (**Inline XBRL**) are included as exhibits to the report[435](index=435&type=chunk)