Financial Data and Key Metrics Changes - The fourth quarter 2020 net revenue was $20.6 million, marking a 16% sequential increase over Q3 2020, despite minimal sales in the last two weeks of Q4 due to selling under a bond [20][21] - The full year 2020 non-GAAP loss from operations improved to $54 million, a 33% reduction compared to 2019 [22] - Pro forma cash position at December 31, 2020, was $57 million, with cash burn during Q4 only $3 million due to favorable changes in working capital [23] Business Line Data and Key Metrics Changes - Jeuveau experienced a strong recovery in the second half of 2020, adding over 2,000 accounts during the year, with nearly 600 accounts added in Q4 [11] - Reorder rates for Jeuveau reached 72% by year-end, and over 110,000 patients were enrolled in the Evolus Rewards program [11] Market Data and Key Metrics Changes - The U.S. aesthetic neurotoxin market is expected to reach $1.5 billion in 2021, recovering from $1.25 billion in 2020 and $1.3 billion in 2019 [8][28] - The millennial segment is projected to represent the majority of neurotoxin users in the coming years, with approximately 40% of Jeuveau users being millennials [9] Company Strategy and Development Direction - The company aims to strengthen its balance sheet and resolve legal matters, having eliminated $127 million of debt and obligations [14][15] - A focus on a direct-to-millennial strategy is expected to unlock the full potential of Jeuveau, with plans for a European launch in early 2022 [26][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the aesthetic neurotoxin market's recovery and the positioning of Jeuveau against the millennial demographic [7][12] - The company anticipates Q2 2021 to be the strongest net revenue quarter since launch, with continued growth expected throughout the year [21][42] Other Important Information - The settlement with Daewoong includes a $35 million payment over two years, fully offset by cash payments and the elimination of future milestones [16] - The expected corporate gross margin percentage for 2021 is between 50% and 55%, excluding the first quarter [19] Q&A Session Summary Question: What was the market value in 2020 and 2019? - The U.S. market was valued at approximately $1.3 billion in 2019, declined to $1.25 billion in 2020, and is expected to reach $1.5 billion in 2021 [28][29] Question: How is the company thinking about spending on advertising and promotion? - The company plans to continue investing in promotional activities while managing expenses carefully, with a focus on return on investment [30] Question: Will the dollar amount paid to ProBio affect customer discounts? - The gross margin profile remains strong, allowing the company to maintain pricing programs and promotional spending [33] Question: What are the plans for business development? - The company is considering business development opportunities, focusing on high-quality assets that appeal to a younger demographic [39][53] Question: What is the cash runway and future milestones? - The cash runway is less than 12 months, with a $15 million milestone due this year, but the company is confident in its ability to finance operations [45]

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 _______ ...

Financial Data and Key Metrics Changes - The company reported net revenue of $7.8 million for Q2 2020, with approximately 90% generated in the second half of the quarter [13][25] - Non-GAAP operating expenses were reduced by approximately 37% compared to the prior quarter, totaling $18.3 million [12][27] - The non-GAAP net loss for Q2 2020 was $12.4 million, a 26% reduction from $22.9 million in the prior quarter [30] - Cash burn during Q2 was cut in half to $15 million from $30 million in the prior quarter [31] Business Line Data and Key Metrics Changes - The launch of Jeuveau has been successful, achieving the number 3 market share position in the U.S. aesthetic market [13] - Orders taken via the digital App platform nearly doubled compared to prior quarters, with over 4,400 purchasing accounts [12][12] - The Evolus Rewards program saw nearly 30% of the customer base opt-in within 30 days of launch, with over 16,000 patients enrolled [21][21] Market Data and Key Metrics Changes - The overall aesthetic market was likely down approximately 50% in Q2 2020 due to COVID-19, but a recovery is expected in the third and fourth quarters [39][41] - The company noted that younger demographics, particularly millennials, are increasingly engaging in aesthetic procedures, which is a favorable long-term trend [41][79] Company Strategy and Development Direction - The company has focused on creating a more efficient operating model and leveraging its digital platform to support customers [10][24] - Evolus introduced a stimulus program called Evolus 350, offering flat pricing to customers, which has been a key driver of success [11][17] - The company plans to launch in Europe in 2021, with a focus on aesthetics and potential new products in the pipeline [25][94] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the U.S. toxin category in the latter half of the year, despite not expecting a return to 2019 levels [39][42] - The company remains confident in its ability to achieve profitability on a lower revenue base, contingent on continued strong sales of Jeuveau [30][52] - Management highlighted the importance of resolving the ITC case by November 6 as a significant catalyst for shareholder value [35][74] Other Important Information - The company celebrated the one-year anniversary of Jeuveau's launch, marking it as a success across all measures [13] - The gross margin percentage for Q2 2020 was strong at 75%, with expectations for it to depend on sales levels and promotional activity going forward [26][26] Q&A Session Summary Question: Market share and recovery expectations - Management indicated that the overall aesthetic market was likely down about 50% in Q2, with expectations for gradual recovery but not returning to 2019 levels [39][45] Question: ITC case and profitability path - Management noted that it is not uncommon for the ITC to rule against the ALJ, and they remain confident in overturning the decision [49][50] - The company has significantly reduced its operating expense base, allowing for a clearer path to profitability without additional capital raises [51][52] Question: Consumer loyalty program and competitive landscape - The Evolus Rewards program has seen high adoption rates, and management expects it to result in higher gross margins compared to previous couponing strategies [60][61] - Management welcomed increased competition in the market, believing it will raise awareness and benefit all players in the category [88] Question: Demographic impacts on recovery - Management reported that millennials have not been disproportionately affected by COVID-19 and are expected to represent a larger portion of the aesthetic market in the coming years [78][79] Question: Updates on Nuceiva and cash spend - The company plans to launch Nuceiva in Europe next year, and cash spend is being managed carefully in light of the ITC case [94][96]

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

| --- | --- | --- | |-------|------------------------------------|-------| | | | | | | | | | | evolus™ Q2 2020 Financial Appendix | | | | August 10, 2020 | | | --- | |-------------------| | | | OUR PURPOSE | | To make the | | beauty experience | | delightful and | | achievable | her | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

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Evolus, Inc. (NASDAQ:EOLS) Q1 2020 Earnings Conference Call May 11, 2020 4:30 PM ET Company Participants Ashwin Agarwal – Vice President, Finance, Investor Relations and Treasury David Moatazedi – President and Chief Executive Officer Lauren Silvernail – Chief Financial Officer and Executive Vice President, Corporate Development Conference Call Participants Roanna Ruiz – SVB Leerink Annabel Samimy – Stifel Louise Chen – Cantor Gregg Gilbert – SunTrust Vamil Divan – Mizuho Securities Douglas Tsao – H.C. Wain ...

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements subject to significant risks and uncertainties that could cause actual results to differ materially - The forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially[9](index=9&type=chunk) - Key risk areas highlighted include the ability to successfully commercialize the sole product, **Jeuveau®**[9](index=9&type=chunk) - The potential future impact of the **COVID-19 pandemic** on sales, operations, and financial condition is a major uncertainty[9](index=9&type=chunk)[10](index=10&type=chunk) - The company's performance depends on third-party suppliers and manufacturers[9](index=9&type=chunk) - The results and impact of current and future legal proceedings pose a significant risk[9](index=9&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed financial statements reflect the company's position and performance during its initial commercialization period [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) The balance sheet shows decreased cash and total assets, reflecting the net loss incurred during the quarter Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $34,652 | $109,892 | | Total current assets | $126,142 | $152,197 | | Total assets | $214,151 | $240,442 | | **Liabilities & Equity** | | | | Total current liabilities | $22,613 | $24,439 | | Total liabilities | $151,545 | $160,985 | | Total stockholders' equity | $62,606 | $79,457 | [Condensed Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported its first revenues of $10.5 million but incurred a net loss of $19.7 million due to commercialization costs Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net revenues | $10,496 | $— | | Gross profit | $6,277 | $— | | Loss from operations | $(17,395) | $(25,269) | | Net loss | $(19,735) | $(10,975) | | Net loss per share | $(0.59) | $(0.40) | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) The company used $27.9 million in cash for operating activities, an increase reflecting costs of the commercial launch Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(27,947) | $(19,200) | | Net cash used in investing activities | $(46,188) | $(80,025) | | Net cash (used in) provided by financing activities | $(1,105) | $60,430 | | **Change in cash and cash equivalents** | **$(75,240)** | **$(38,795)** | [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes detail the company's single-product focus, liquidity assessment, significant legal proceedings, and COVID-19 responses - The company's business is focused on its first product, **Jeuveau®**, a 900 kDa purified botulinum toxin type A, launched in the U.S. in May 2019[36](index=36&type=chunk) - Management expects **operating losses and negative cash flows to continue** for at least the next 12 months but believes current capital is sufficient[37](index=37&type=chunk)[39](index=39&type=chunk) - The company is a defendant in a lawsuit and an ITC investigation that could **bar the importation and sale of Jeuveau®** in the United States[141](index=141&type=chunk)[144](index=144&type=chunk) - In response to COVID-19, the company announced significant expense reductions, including **separating approximately 100 employees**[167](index=167&type=chunk) - The company has a credit facility with Oxford Finance for up to $100 million, with a **$75 million tranche funded** in March 2019[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results, the impact of COVID-19, cost-saving measures, and future liquidity [Impact of COVID-19 Outbreak on Our Business](index=34&type=section&id=Impact%20of%20COVID-19%20Outbreak%20on%20Our%20Business) The COVID-19 outbreak severely impacted sales, leading to significant cost-reduction measures and operational changes - The COVID-19 outbreak led to a **dramatic decline in elective procedures**, negatively affecting sales and accounts receivable collections[179](index=179&type=chunk)[180](index=180&type=chunk) - In April 2020, the company implemented cost-saving measures, including **reducing headcount by over 100 employees** and delaying the European launch[181](index=181&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) The analysis compares Q1 2020 to Q1 2019, highlighting initial revenues and increased SG&A from commercialization Comparison of Results of Operations (in millions) | Metric | Q1 2020 | Q1 2019 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $10.5 | $— | $10.5 | | Gross Profit | $6.3 | $— | $6.3 | | Selling, general and administrative | $31.3 | $17.5 | $13.8 | | Research and development | $0.5 | $2.4 | $(1.9) | | Net loss | $(19.7) | $(11.0) | $(8.7) | - The increase in SG&A expenses was primarily due to higher personnel-related costs from **hiring a U.S. sales force** and building out commercial infrastructure[194](index=194&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company has sufficient capital for the next twelve months despite expecting continued losses and missing a credit milestone - As of March 31, 2020, the company had **cash and cash equivalents of $34.7 million** and short-term investments of $65.0 million[203](index=203&type=chunk) - The company **does not expect to meet the net sales milestone** to draw the second $25.0 million tranche of its credit facility[206](index=206&type=chunk) - Management believes **current capital resources are sufficient** to fund operations for at least the next twelve months[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is noted as not applicable for this reporting period - Not applicable[228](index=228&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - Based on an evaluation as of March 31, 2020, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective**[230](index=230&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, such controls[232](index=232&type=chunk) [PART II - OTHER INFORMATION](index=44&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) No material developments in legal proceedings have occurred since the last annual report - There have been **no material developments** with respect to legal proceedings since the company's 2019 Annual Report on Form 10-K[235](index=235&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, single-product dependency, competition, and legal challenges - The **COVID-19 outbreak is a primary risk**, having caused a dramatic decline in elective procedures and potentially leading to prolonged negative impacts[239](index=239&type=chunk)[241](index=241&type=chunk) - The company's business **depends entirely on the successful commercialization of its only product, Jeuveau®**, and it faces significant competition[247](index=247&type=chunk)[253](index=253&type=chunk) - **Ongoing litigation with Medytox and Allergan at the ITC poses a critical risk**; an adverse ruling could result in an exclusion order barring imports and sales of Jeuveau®[286](index=286&type=chunk) - The company **relies solely on Daewoong in South Korea for manufacturing**, making it vulnerable to production disruptions or regulatory issues[267](index=267&type=chunk)[320](index=320&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 reports no unregistered sales of equity securities during the period - None[497](index=497&type=chunk) [Item 3. Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is noted as not applicable - Not applicable[499](index=499&type=chunk) [Item 4. Mine Safety Disclosures](index=79&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is noted as not applicable - Not applicable[501](index=501&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item%205.%20Other%20Information) The company reports no other information to disclose for this period - None[503](index=503&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including officer certifications and XBRL data files - Filed exhibits include **CEO and CFO certifications** pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act[506](index=506&type=chunk) - Interactive Data Files (XBRL documents) are also included as exhibits[507](index=507&type=chunk) [Signatures](index=81&type=section&id=Signatures) The report is duly signed and authorized by the company's principal executive and financial officers on May 11, 2020 - The report was signed on May 11, 2020, by **David Moatazedi, President and Chief Executive Officer**, and **Lauren Silvernail, Chief Financial Officer**[514](index=514&type=chunk)[515](index=515&type=chunk)