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)

Evolus, Inc. (NASDAQ:EOLS) Q2 2021 Earnings Conference Call August 4, 2021 4:30 PM ET Company Participants David Erickson - VP, IR David Moatazedi - President and CEO Lauren Silvernail - CFO and EVP, Corporate Development Conference Call Participants Annabel Samimy - Stifel Rudy Li - SVB Leerink Carvey Leung - Cantor Fitzgerald Douglas Tsao - H.C. Wainwright Greg Fraser - Truist Securities Operator Greetings and welcome to the Evolus Second Quarter 2021 Earnings Call. At this time, all participants are in a ...

[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides the unaudited financial information, including statements and notes, for the reporting period [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents unaudited condensed financial statements for June 30, 2021, detailing financial position, performance, and cash flows, with notes on key events and settlements [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) The balance sheet as of June 30, 2021, shows significant financial improvement, shifting from a stockholders' deficit to positive equity Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$239,863** | **$209,068** | | Cash and cash equivalents | $131,737 | $102,562 | | **Total Liabilities** | **$133,725** | **$282,026** | | Accrued litigation settlement | $35,000 | $83,421 | | Term loan, net | $0 | $74,384 | | **Total Stockholders' Equity (Deficit)** | **$106,138** | **($72,958)** | [Condensed Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues more than tripled in Q2 2021, significantly narrowing the net loss for the quarter and first six months, aided by strong growth and a settlement payment Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total net revenues** | **$26,098** | **$7,806** | **$38,339** | **$18,302** | | Loss from operations | ($15,302) | ($18,887) | ($7,288) | ($36,282) | | **Net loss** | **($15,601)** | **($21,125)** | **($9,200)** | **($40,860)** | | Net loss per share | ($0.31) | ($0.63) | ($0.21) | ($1.21) | - For the six months ended June 30, 2021, operating expenses included a **$25.5 million** settlement payment received from Daewoong, which was recorded as a reduction to cost of sales[26](index=26&type=chunk) [Condensed Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity shifted from a **$73.0 million** deficit to **$106.1 million** positive equity by June 30, 2021, driven by capital raising - Key equity changes in the first six months of 2021 include the issuance of common stock for a litigation settlement (**$48.4 million**), conversion of a convertible note (**$39.8 million**), and net proceeds from a follow-on offering (**$92.2 million**)[29](index=29&type=chunk) [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) The company generated positive operating cash flow in H1 2021, a reversal from 2020, with substantial financing inflows increasing cash by **$29.2 million** Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $7,781 | ($41,892) | | Net cash provided by (used in) investing activities | $4,399 | ($36,808) | | Net cash provided by (used in) financing activities | $16,995 | ($1,420) | | **Change in cash and cash equivalents** | **$29,175** | **($80,120)** | - Major non-cash financing activities in H1 2021 included the conversion of a **$39.8 million** convertible note to equity and the issuance of **$48.4 million** in common stock for a litigation settlement[34](index=34&type=chunk) [Notes to Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail business, liquidity, and accounting policies, highlighting litigation settlements and major financing events like a **$92.4 million** follow-on offering and debt repayment - In February 2021, the company settled litigation with Medytox and Allergan, agreeing to pay **$35 million** over two years, issue **6.76 million shares** of common stock, and pay ongoing royalties on Jeuveau® sales[39](index=39&type=chunk)[91](index=91&type=chunk) - In March 2021, the company reached an agreement with Daewoong, which included a **$25.5 million** payment to Evolus and reimbursement for a portion of the royalties payable to Medytox and Allergan[39](index=39&type=chunk)[94](index=94&type=chunk) - In April 2021, the company raised approximately **$92.4 million** in net proceeds from a follow-on public offering, and in January 2021, it paid **$76.4 million** to extinguish its term loan with Oxford Finance[40](index=40&type=chunk)[38](index=38&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Jeuveau® commercialization, ITC litigation settlement, and COVID-19 impacts, highlighting revenue growth, narrowed net loss, and key liquidity events [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q2 2021 revenues increased **234.6%** year-over-year, with gross margin decreasing due to new royalty payments, and net loss narrowing to **($15.6 million)** Comparison of Results for the Three Months Ended June 30 (in millions) | Metric | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total net revenues | $26.1 | $7.8 | +234.6% | | Product cost of sales | $11.3 | $1.9 | +494.7% | | Selling, general and administrative | $26.5 | $17.6 | +50.6% | | Net loss | ($15.6) | ($21.1) | -26.1% | - Adjusted gross profit margin decreased to **56.7%** for Q2 2021 from **75.0%** in Q2 2020, with management anticipating negative impacts through September 2022 due to royalty payments from the Medytox/Allergan settlement[199](index=199&type=chunk)[205](index=205&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company held **$131.7 million** in cash, with liquidity strengthened by a **$92.4 million** offering and a **$25.5 million** Daewoong payment, enabling future operations - In April 2021, a follow-on public offering generated net proceeds of approximately **$92.4 million**[233](index=233&type=chunk) - In January 2021, the company paid **$76.4 million** to fully discharge its loan obligations with Oxford Finance[238](index=238&type=chunk) - In March 2021, a **$40.8 million** convertible note held by Daewoong was converted into **3,136,869 shares** of common stock[242](index=242&type=chunk) - Management believes current capital resources are sufficient to fund operations through at least the next twelve months from the report's issuance date[248](index=248&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that quantitative and qualitative disclosures about market risk are not applicable for this reporting period - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[265](index=265&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2021, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[267](index=267&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[269](index=269&type=chunk) [PART II - OTHER INFORMATION](index=50&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides other required information, including legal proceedings, risk factors, and details on equity sales and exhibits [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 9 for details on legal proceedings, including settled Medytox/Allergan litigation and ongoing securities class action lawsuits - The report directs readers to Note 9, "Commitments and Contingencies," for details on legal proceedings[272](index=272&type=chunk) - Key legal matters include the settled Medytox/Allergan litigation and ITC Action, and ongoing securities class action and shareholder derivative lawsuits, which the company believes are without merit and intends to defend against vigorously[137](index=137&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant business risks, including dependence on Jeuveau®, history of losses, financing needs, settlement compliance, competition, and reliance on its sole supplier - The company depends entirely on the successful commercialization of its only product, Jeuveau®, and has a limited operating history with significant losses[276](index=276&type=chunk)[277](index=277&type=chunk) - Failure to comply with the terms of the settlement agreements with Medytox and Allergan could lead to litigation or loss of the ability to commercialize Jeuveau®[281](index=281&type=chunk)[282](index=282&type=chunk) - The business relies solely on Daewoong for the manufacture of Jeuveau®, and any production issues, termination of the agreement, or failure to meet minimum purchase targets could materially harm the business[332](index=332&type=chunk)[335](index=335&type=chunk) - The company faces significant competition from larger, more established companies like AbbVie (formerly Allergan), which have greater financial resources, broader product portfolios, and established customer relationships[291](index=291&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the reporting period - The company reported no unregistered sales of equity securities during the reporting period[440](index=440&type=chunk) [Item 3. Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities for the reporting period - The company reported no defaults upon senior securities[441](index=441&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported that mine safety disclosures are not applicable for this reporting period - The company reported that mine safety disclosures are not applicable[442](index=442&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed under this item for the period - The company reported no other information required to be disclosed under this item[444](index=444&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q report, including CEO and CFO certifications and Inline XBRL documents for financial reporting - The exhibits filed with the report include certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and Inline XBRL data files[448](index=448&type=chunk)

Evolus, Inc. (NASDAQ:EOLS) Q1 2021 Results Conference Call May 12, 2021 4:30 PM ET Company Participants Carol Ruth - The Ruth Group David Moatazedi - President and Chief Executive Officer Lauren Silvernail - Chief Financial Officer and EVP, Corporate Development Rui Avelar - Chief Medical Officer and Head of R&D Conference Call Participants Marc Goodman - SVB Leerink Annabel Samimy - Stifel Louise Chen - Cantor Greg Fraser - Truist Securities Douglas Chow - HCW Vamil Divan - Mizuho Securities Operator Good ...

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, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | her | --- | |-------------------| | | | OUR PURPOSE | | To make the | | beauty experience | | delightful and | | achievable | | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Evolus, Inc. (NASDAQ:EOLS) Q4 2020 Earnings Conference Call March 24, 2021 4:30 PM ET Company Participants Ashwin Agarwal – Vice President, Finance, Investor Relations and Treasurer David Moatazedi – President and Chief Executive Officer Lauren Silvernail – Chief Financial Officer and Executive Vice President, Corporate Development Conference Call Participants Marc Goodman – SVB Leerink Annabel Samimy – Stifel Louise Chen – Cantor Gregg Gilbert – Truist Securities Uy Ear – Mizuho Chris Bialas – H.C. Wainwri ...

PART I [Item 1. Business](index=6&type=section&id=Item%201.%20Business%2E) Evolus is a performance beauty company focused on the self-pay aesthetic market, primarily commercializing Jeuveau for glabellar lines - Evolus is a performance beauty company focused on the self-pay aesthetic market, with its primary product **Jeuveau (prabotulinumtoxinA-xvfs)** for moderate to severe glabellar lines[29](index=29&type=chunk)[30](index=30&type=chunk) - **Jeuveau** was approved by the **U.S. FDA in February 2019** and commercially launched in the **U.S. in May 2019**, with approvals in **Canada (August 2018, launched October 2019)** and the **EU (September 2019, planned launch early 2022)**[30](index=30&type=chunk)[294](index=294&type=chunk) Aesthetic Neurotoxin Market Size | Market | 2020 Revenue (Estimated) | 2023 Revenue (Estimated) | | :----- | :----------------------- | :----------------------- | | Global | $2.5 billion | $3.8 billion | | U.S. | $1.3 billion | $2.1 billion | - The company's strategy includes an **aesthetic-only approach** for marketing and pricing flexibility, leveraging **KOL relationships**, international expansion, and a **differentiated digital platform**[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - Effective **February 18, 2021**, Evolus settled with **Medytox and Allergan**, securing a **license to commercialize Jeuveau** in exchange for **$35.0 million in cash payments** over two years, **royalties on sales (low-double digit until Sept 2022, mid-single digit thereafter until Sept 2032)**, and **6,762,652 shares of common stock** to Medytox[42](index=42&type=chunk)[43](index=43&type=chunk)[116](index=116&type=chunk) - On **March 23, 2021**, Evolus settled with **Daewoong**, receiving **$25.5 million**, cancellation of **$10.5 million in milestone payments**, and reimbursement for royalties, while the **$40.0 million Daewoong Convertible Note** was **converted into 3,136,869 shares of Evolus common stock**[46](index=46&type=chunk)[47](index=47&type=chunk) - Evolus relies **solely on Daewoong** for **Jeuveau's manufacturing and supply** under an **exclusive license** for aesthetic indications in key territories and **co-exclusive rights in Japan**[64](index=64&type=chunk)[66](index=66&type=chunk)[164](index=164&type=chunk) - The U.S. aesthetic neurotoxin market is **highly competitive**, with key players like **Allergan (BOTOX)**, **Galderma (Dysport)**, and **Merz (Xeomin)**, while **Jeuveau** is the **only U.S. neurotoxin without a therapeutic indication**, providing **marketing and pricing flexibility**[69](index=69&type=chunk)[125](index=125&type=chunk) - As of **December 31, 2020**, Evolus had **119 full-time employees**, with **63% being women**, and focuses on talent attraction and retention through competitive compensation and an inclusive culture[98](index=98&type=chunk)[99](index=99&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors%2E) Evolus faces significant risks including going concern doubts, intense competition for its sole product Jeuveau, regulatory non-compliance, supply chain reliance, and stock price volatility - Evolus requires **additional financing** to fund future operations, with failure to obtain capital raising **substantial doubt about its ability to continue as a going concern**[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - The company's business depends **entirely on the successful commercialization of its only product, Jeuveau**, with insufficient adoption risking revenue generation[111](index=111&type=chunk)[128](index=128&type=chunk) - **Non-compliance with Medytox/Allergan settlement terms** could result in litigation, **loss of Jeuveau commercialization rights**, and **adverse financial impacts**[115](index=115&type=chunk)[116](index=116&type=chunk) - The **COVID-19 pandemic** has **adversely affected sales and operations**, particularly for elective procedures, leading to **reduced operating expenses** and a **delayed European launch**[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - **Jeuveau** faces **significant competition** from established neurotoxin products like **BOTOX, Dysport, and Xeomin**, with **larger competitors** possessing greater resources and market share[124](index=124&type=chunk) - **Reliance on Daewoong for Jeuveau manufacturing** exposes Evolus to **production problems**, **regulatory non-compliance**, and potential **supply agreement termination**, severely impacting commercialization[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - **Third-party intellectual property infringement claims**, especially concerning **Jeuveau's manufacturing process**, could **prevent or delay commercialization** and incur **substantial litigation costs**[168](index=168&type=chunk)[169](index=169&type=chunk) - Evolus is subject to **extensive government regulation (FDA, EMA, etc.)** for product approval and marketing, with non-compliance risking **sanctions, fines, and approval withdrawal**[193](index=193&type=chunk)[197](index=197&type=chunk)[203](index=203&type=chunk) - **Alphaeon 1, LLC's concentrated ownership (19.8% as of March 25, 2021)** and contractual rights may exert **significant influence over corporate decisions**, potentially **conflicting with other stockholders' interests**[217](index=217&type=chunk)[218](index=218&type=chunk)[220](index=220&type=chunk) - The trading price of Evolus common stock is **volatile**, influenced by **clinical trial results, regulatory actions, competition, financial performance, and sales by significant stockholders**, leading to **potential substantial losses** for investors[231](index=231&type=chunk)[233](index=233&type=chunk)[235](index=235&type=chunk) [Item 1B. Unresolved Staff Comments](index=45&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments%2E) The company reports no unresolved staff comments applicable to its operations or disclosures [Item 2. Properties](index=45&type=section&id=Item%202.%20Properties%2E) Evolus's corporate headquarters in Newport Beach, California, occupies 17,758 square feet under a lease expiring January 31, 2025 - Evolus's corporate headquarters is a leased facility of approximately **17,758 square feet** in Newport Beach, CA[268](index=268&type=chunk) - The headquarters lease expires on **January 31, 2025**, with current facilities deemed sufficient and alternative space expected to be available[268](index=268&type=chunk) [Item 3. Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings%2E) Evolus resolved significant trade secret litigation with Medytox and Allergan in February 2021, but remains a defendant in ongoing securities class action and shareholder derivative lawsuits - The **Medytox Litigation**, filed in **June 2017**, alleging **Daewoong misappropriated trade secrets for Jeuveau**, was **dismissed on February 23, 2021**, following settlements[269](index=269&type=chunk)[542](index=542&type=chunk) - **Allergan and Medytox** filed an **ITC Complaint in January 2019** alleging **trade secret misappropriation regarding Jeuveau**; **ITC remedial orders in December 2020** were **rescinded** by **February 2021 settlement agreements**[270](index=270&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)[543](index=543&type=chunk)[547](index=547&type=chunk) - Evolus and officers face a **securities class action lawsuit (filed Oct 2020)** alleging **Securities Exchange Act violations** due to **false statements regarding Jeuveau acquisition rights and ITC risks**, consolidated in **November 2020**[274](index=274&type=chunk)[565](index=565&type=chunk) - **Shareholder derivative lawsuits (filed Nov/Dec 2020)** allege **breach of fiduciary duty and waste of corporate assets** against officers and directors, now **consolidated and stayed** pending the securities class action outcome[275](index=275&type=chunk)[566](index=566&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures%2E) The company reports no mine safety disclosures applicable to its operations PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=47&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities%2E) Evolus common stock trades on Nasdaq under "EOLS" since February 2018, with 36 record holders as of March 2021, and the company has never paid dividends - Evolus common stock has been listed and traded on the **Nasdaq** under the symbol **"EOLS"** since **February 12, 2018**[283](index=283&type=chunk) - As of **March 25, 2021**, there were approximately **36 holders of record** for the company's common stock[284](index=284&type=chunk) - Evolus has **never paid cash dividends** and **does not anticipate doing so in the foreseeable future**, retaining funds for operations and growth[285](index=285&type=chunk)[260](index=260&type=chunk) - **No unregistered securities were issued from January 1, 2019, to December 31, 2020**, except as previously disclosed in a Form 8-K[286](index=286&type=chunk) - The company made **no purchases of its equity securities** during the **fourth quarter of the year ended December 31, 2020**[287](index=287&type=chunk) [Item 6. Selected Financial Data](index=48&type=section&id=Item%206.%20Selected%20Financial%20Data%2E) This section indicates that selected financial data is not applicable to the company [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Management discusses Evolus's financial condition, highlighting Jeuveau's market performance, the impact of legal settlements, COVID-19, increased net loss, and ongoing going concern doubts requiring additional capital - Evolus is a performance beauty company focused on the self-pay aesthetic market, with **Jeuveau** as its **first commercial product**, launched in the **U.S. in May 2019**[294](index=294&type=chunk) - The **ITC's December 2020 determination**, including a **21-month import ban on Jeuveau**, was **resolved by February 2021 settlements** involving **$35.0 million in cash payments** over two years, **royalties on sales**, and **6,762,652 shares to Medytox**[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - A **March 2021 settlement with Daewoong** included a **$25.5 million payment** to Evolus, **cancellation of $10.5 million in milestone payments**, and **conversion of a $40.0 million convertible note into 3,136,869 shares of common stock**[298](index=298&type=chunk) - The **COVID-19 pandemic negatively impacted sales in early 2020**, prompting **cost-cutting measures** and **delaying Jeuveau's European launch to early 2022**[307](index=307&type=chunk)[309](index=309&type=chunk) Results of Operations (Years Ended December 31) | Metric | 2020 ($ millions) | 2019 ($ millions) | Change ($ millions) | | :------------------------------------------------------------------ | :---------------- | :---------------- | :------------------ | | Total Net Revenues | 56.5 | 34.9 | 21.6 | | Product Cost of Sales (excludes amortization of intangible assets) | 18.3 | 8.0 | 10.3 | | Selling, General and Administrative | 98.2 | 113.6 | (15.4) | | Research and Development | 1.7 | 4.0 | (2.3) | | Revaluation of contingent royalty obligation to Evolus Founders | (2.0) | 4.2 | (6.2) | | Depreciation and Amortization | 7.0 | 4.1 | 2.9 | | Litigation Settlement Expenses | 83.4 | 0.0 | 83.4 | | Restructuring Costs | 3.0 | 0.0 | 3.0 | | Total Operating Expenses | 209.6 | 133.9 | 75.7 | | Loss from Operations | (153.1) | (99.0) | (54.1) | | Net Loss | (163.1) | (90.1) | (73.0) | - Net revenues **increased by $21.6 million to $56.5 million in 2020**, primarily due to **higher U.S. sales volume**, despite temporary nominal revenue from increased pricing during the ITC review[314](index=314&type=chunk) - Cost of sales **increased by $10.3 million to $18.3 million in 2020**, driven by **higher sales volume**, **depletion of launch-priced inventory**, and **new royalty payments to Allergan and Medytox**[315](index=315&type=chunk) - Gross profit margin **decreased to 67.6% in 2020 from 77.1% in 2019**, primarily due to **marketing program changes, new royalty payments, and lower-cost inventory depletion**[318](index=318&type=chunk) - Selling, general and administrative expenses **decreased by $15.4 million to $98.2 million in 2020**, mainly due to **COVID-19 cost-cutting measures** and the **conclusion of the J.E.T. program**[319](index=319&type=chunk) - Evolus recorded an **$83.4 million charge for litigation settlement expenses in December 2020**, comprising **$35.0 million in cash payments** and the non-cash portion from **issuing 6,762,652 shares of common stock**[322](index=322&type=chunk) - Evolus's current capital resources are **not sufficient to fund operations for the next 12 months**, raising **substantial doubt about its ability to continue as a going concern** and **requiring additional capital**[327](index=327&type=chunk)[409](index=409&type=chunk) Cash Flows (Years Ended December 31) | Metric | 2020 ($ millions) | 2019 ($ millions) | Change ($ millions) | | :----------------------- | :---------------- | :---------------- | :------------------ | | Operating Activities | (57.9) | (93.4) | 35.5 | | Investing Activities | 12.2 | (23.4) | 35.6 | | Financing Activities | 38.3 | 133.5 | (95.2) | | Change in Cash | (7.3) | 16.7 | (24.0) | | Cash, End of Period | 102.6 | 109.9 | | - Cash used in operating activities **decreased by $35.5 million to $57.9 million in 2020**, primarily due to a **decrease in net loss (adjusted for non-cash items)** and working capital timing[350](index=350&type=chunk)[351](index=351&type=chunk) [Item 7A. Quantitative and Qualitative Disclosure About Market Risk](index=62&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk%2E) This section indicates no quantitative or qualitative disclosures about market risk are applicable to the company [Item 8. Financial Statements and Supplementary Data](index=63&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%2E) This section presents Evolus's audited financial statements for 2020 and 2019, with the auditor expressing substantial doubt about the company's going concern ability, alongside detailed notes on accounting policies and debt obligations - The **independent auditor's report (Ernst & Young LLP)** expresses **substantial doubt about Evolus's ability to continue as a going concern** due to **recurring losses and a working capital deficiency**[383](index=383&type=chunk) Balance Sheet Highlights (in thousands) | Metric | December 31, 2020 | December 31, 2019 | | :----------------------------------------- | :---------------- | :---------------- | | Cash and cash equivalents | $102,562 | $109,892 | | Total current assets | $127,612 | $152,197 | | Total assets | $209,068 | $240,442 | | Total current liabilities | $180,248 | $24,439 | | Total liabilities | $282,026 | $160,985 | | Total stockholders' (deficit) equity | $(72,958) | $79,457 | | Accumulated deficit | $(376,072) | $(213,059) | Statements of Operations and Comprehensive Loss (in thousands) | Metric | 2020 | 2019 | | :------------------------------------------------------------------ | :---------- | :---------- | | Total Net Revenues | $56,540 | $34,925 | | Total Operating Expenses | $209,608 | $133,872 | | Loss from Operations | $(153,068) | $(98,947) | | Net Loss | $(163,013) | $(90,034) | | Net Loss Per Share, Basic and Diluted | $(4.83) | $(3.19) | Statements of Cash Flows (in thousands) | Metric | 2020 | 2019 | | :-------------------------------------- | :---------- | :---------- | | Net cash used in operating activities | $(57,871) | $(93,383) | | Net cash provided by investing activities | $12,194 | $(23,434) | | Net cash provided by financing activities | $38,347 | $133,547 | | Cash and cash equivalents, end of period | $102,562 | $109,892 | - As of **December 31, 2020**, Evolus had an **accumulated deficit of $376.1 million** and incurred **net losses of $163.0 million and $90.0 million in 2020 and 2019**, respectively[107](index=107&type=chunk)[112](index=112&type=chunk)[409](index=409&type=chunk) - The company's **significant estimates** for financial statements include **net revenues, allowance for doubtful accounts, fair value measurements, goodwill and long-lived asset valuations, income tax valuations, and stock-based compensation**[417](index=417&type=chunk) - Goodwill and intangible assets include a **definite-lived distribution right for Jeuveau (amortized over 20 years)** and **capitalized internal-use software costs (amortized over 2 years)**, with **no impairment of goodwill or long-lived assets** recorded[439](index=439&type=chunk)[440](index=440&type=chunk)[441](index=441&type=chunk)[442](index=442&type=chunk) - The **Oxford Term Loan of $75.0 million** (funded March 2019) was **fully repaid on January 4, 2021, for $76.4 million**, with **Oxford waiving $4.3 million in fees**[330](index=330&type=chunk)[333](index=333&type=chunk)[520](index=520&type=chunk) - The **$40.0 million Daewoong Convertible Note** (issued July 2020) was **converted into 3,136,869 shares of common stock on March 23, 2021**, at a **conversion price of $13.00 per share**[339](index=339&type=chunk)[528](index=528&type=chunk) - Evolus is obligated to make **quarterly royalty payments (low single digit percentage) on net sales of Jeuveau** and a **$20.0 million promissory note payment in November 2021 to its founders**[304](index=304&type=chunk)[335](index=335&type=chunk) - As of **December 31, 2020**, Evolus had **federal NOL carryforwards of $246.0 million** and **state NOL carryforwards of $149.1 million**, offset by a **full valuation allowance** on net deferred income tax assets[588](index=588&type=chunk)[593](index=593&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=99&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure%2E) The company reports no changes in or disagreements with accountants regarding accounting and financial disclosure [Item 9A. Controls and Procedures](index=99&type=section&id=Item%209A.%20Controls%20and%20Procedures%2E) Management concluded that Evolus's disclosure controls and internal control over financial reporting were effective as of December 31, 2020, with no material changes in Q4 2020 - Evolus's management concluded that disclosure controls and procedures were **effective as of December 31, 2020**[615](index=615&type=chunk) - Management concluded that internal control over financial reporting was **effective as of December 31, 2020**, based on the **COSO (2013 framework)**[616](index=616&type=chunk) - As an **"emerging growth company,"** Evolus is **exempt from the auditor attestation report** on internal control over financial reporting[617](index=617&type=chunk) - **No material changes in internal control over financial reporting** occurred during the **quarter ended December 31, 2020**[617](index=617&type=chunk) [Item 9B. Other Information](index=99&type=section&id=Item%209B.%20Other%20Information%2E) This section indicates no other information is required to be reported PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=101&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance%2E) Information on directors, executive officers, and corporate governance, including the Code of Conduct, is incorporated by reference from the 2021 Proxy Statement - Information on directors, executive officers, and corporate governance is **incorporated by reference** from the **2021 Annual Meeting of Stockholders Proxy Statement**[625](index=625&type=chunk) - Evolus maintains a **Code of Conduct** for all personnel, **available on its website**, with amendments and waivers for officers/directors also posted online[626](index=626&type=chunk) [Item 11. Executive Compensation](index=102&type=section&id=Item%2011.%20Executive%20Compensation%2E) Information on executive compensation is incorporated by reference from the 2021 Annual Meeting of Stockholders Proxy Statement - Information on executive compensation is **incorporated by reference** from the **2021 Annual Meeting of Stockholders Proxy Statement**[628](index=628&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=103&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20of%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters%2E) Information on security ownership of beneficial owners, management, and related stockholder matters is incorporated by reference from the 2021 Proxy Statement - Information on security ownership of certain beneficial owners and management is **incorporated by reference** from the **2021 Annual Meeting of Stockholders Proxy Statement**[630](index=630&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=104&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence%2E) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2021 Proxy Statement - Information on certain relationships and related transactions, and director independence, is **incorporated by reference** from the **2021 Annual Meeting of Stockholders Proxy Statement**[632](index=632&type=chunk) [Item 14. Principal Accounting Fees and Services](index=104&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services%2E) Information on principal accounting fees and services is incorporated by reference from the 2021 Annual Meeting of Stockholders Proxy Statement - Information on principal accounting fees and services is **incorporated by reference** from the **2021 Annual Meeting of Stockholders Proxy Statement**[633](index=633&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=105&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules%2E) This section lists documents filed as part of the Form 10-K, including financial statements and an exhibit index detailing corporate documents and agreements, with some exhibits subject to confidential treatment - Financial statements are **filed as part of this Annual Report on Form 10-K under Item 8**[635](index=635&type=chunk) - Financial statement schedules have been **omitted because they are not applicable**[636](index=636&type=chunk) - The **exhibit index includes various corporate documents** such as the **Amended and Restated Certificate of Incorporation and Bylaws** and the **License and Supply Agreement with Daewoong**[637](index=637&type=chunk) - Certain exhibits have **portions omitted and filed separately with the SEC** due to **confidential treatment requests**[646](index=646&type=chunk) [Item 16. Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary%2E) This section indicates that no Form 10-K Summary is required to be reported

| --- | --- | |-------|-------| | | | | | | | --- | |-------------------| | | | OUR PURPOSE | | To make the | | beauty experience | | delightful and | | achievable | her | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

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 September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to _______ ...