Evolus(EOLS) - 2025 Q2 - Quarterly Report

Cover Page Information EVOLUS, INC. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025, indicating its filer status and outstanding common stock - EVOLUS, INC. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] Filer Status | Filer Status | Status | | :------------- | :----- | | Accelerated filer | ☒ | - As of August 1, 2025, there were 64,685,419 shares of common stock outstanding[4] Special Note Regarding Forward-Looking Statements This section cautions readers about forward-looking statements, which are subject to various risks and uncertainties regarding future events and financial conditions - The report contains forward-looking statements subject to risks and uncertainties, including future events, business, financial condition, and regulatory approvals, cautioning readers not to place undue reliance on these statements[8][9][10] Summary of Risk Factors Key risks include significant historical losses, intense product competition, reliance on consumer spending, trade policy impacts, dependence on Symatese, potential financing needs, and Medytox settlement compliance - Key risks include significant losses since inception, intense competition for products like Jeuveau and Evolysse™, reliance on consumer discretionary spending, trade policy risks (tariffs), dependence on Symatese for regulatory approval, potential need for additional financing, and compliance with Medytox settlement agreements[11][14] PART I - FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity (deficit), and statements of cash flows, along with their accompanying notes, providing a detailed financial overview for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific points in time, highlighting changes in financial position Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Cash and cash equivalents | $61,738 | $86,952 | | Total current assets | $144,970 | $151,342 | | Total assets | $228,803 | $232,569 | | Total current liabilities | $63,750 | $62,960 | | Total liabilities | $247,455 | $227,047 | | Total stockholders' equity (deficit) | $(18,652) | $5,522 | - The company's total stockholders' equity shifted from a positive balance of $5,522 thousand at December 31, 2024, to a deficit of $(18,652) thousand at June 30, 2025[19] Condensed Consolidated Statements of Operations and Comprehensive Loss This statement details the company's revenues, expenses, and net loss over specific reporting periods, reflecting operational performance and overall profitability Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total net revenues | $69,387 | $66,909 | $137,909 | $126,242 | | Gross profit | $45,320 | $47,068 | $91,975 | $87,571 | | Loss from operations | $(10,210) | $(7,702) | $(25,382) | $(16,624) | | Net loss | $(17,142) | $(11,350) | $(36,034) | $(24,459) | | Net loss per share, basic and diluted | $(0.27) | $(0.18) | $(0.56) | $(0.40) | - Total net revenues increased by 3.7% for the three months ended June 30, 2025, and by 9.2% for the six months ended June 30, 2025, compared to the respective prior periods[21] - Net loss increased significantly, from $(11,350) thousand to $(17,142) thousand for the three months ended June 30, 2025, and from $(24,459) thousand to $(36,034) thousand for the six months ended June 30, 2025[21] Condensed Consolidated Statements of Stockholders' Equity (Deficit) This statement tracks changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit, over specified periods Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands, except share data) | (in thousands, except share data) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :-------------------------------- | :--------------------------- | :----------------------- | | Common Stock Shares | 63,497,548 | 64,638,978 | | Common Stock Amount | $1 | $1 | | Additional Paid In Capital | $615,825 | $627,379 | | Accumulated Deficit | $(609,399) | $(645,433) | | Total Stockholders' Equity (Deficit) | $5,522 | $(18,652) | - The company's accumulated deficit increased from $(609,399) thousand at December 31, 2024, to $(645,433) thousand at June 30, 2025, reflecting ongoing net losses[24] Condensed Consolidated Statements of Cash Flows This statement reports the cash generated and used by the company across operating, investing, and financing activities, illustrating liquidity and solvency Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(40,423) | $(17,085) | | Net cash used in investing activities | $(4,128) | $(2,051) | | Net cash provided by financing activities | $19,032 | $50,143 | | Net increase (decrease) in cash and cash equivalents | $(25,214) | $30,833 | | Cash and cash equivalents, end of period | $61,738 | $93,671 | - Net cash used in operating activities more than doubled, from $(17,085) thousand in H1 2024 to $(40,423) thousand in H1 2025[27] - Cash provided by financing activities decreased significantly from $50,143 thousand in H1 2024 (due to a follow-on offering) to $19,032 thousand in H1 2025 (primarily from debt modification proceeds)[27] Notes to Condensed Consolidated Financial Statements These notes provide detailed disclosures on the company's business, significant accounting policies, fair value measurements, goodwill and intangible assets, accrued expenses, property and equipment, term loans, operating leases, commitments and contingencies, stockholders' equity, Medytox settlement agreements, and segment reporting, offering crucial context to the condensed consolidated financial statements Note 1. Description of Business This note describes Evolus, Inc.'s core business as a global performance beauty company, its key products, recent launches, financial performance, and significant financing activities - Evolus, Inc. is a global performance beauty company focused on the cash-pay aesthetic market, with products including Jeuveau (botulinum toxin type A) and Evolysse™ (injectable HA gels)[32] - Evolysse™ Form and Evolysse™ Smooth launched in the U.S. in April 2025, with plans for European launch in Q1 2026 and two additional U.S. Evolysse™ products in 2026-2027[32] - The company incurred net losses of $17,142 thousand (Q2 2025) and $36,034 thousand (H1 2025), with an accumulated deficit of $645,433 thousand as of June 30, 2025[34] - In May 2025, Evolus entered an Amended and Restated Loan Agreement with Pharmakon for up to $250 million, with an initial $150 million tranche funded[37] Note 2. Basis of Presentation and Summary of Significant Accounting Policies This note outlines the basis for financial statement preparation, adherence to GAAP, interim reporting considerations, key manufacturing dependencies, and revenue recognition policies - Financial statements are prepared in accordance with GAAP and SEC interim reporting requirements, with interim results not necessarily indicative of full-year performance[38][40] - The company relies on Daewoong for Jeuveau manufacturing and Symatese for Evolysse™ manufacturing, with termination of these agreements posing a material adverse risk[44] - Revenue is recognized when control of goods/services is transferred to customers, net of sales-related adjustments like volume-based rebates and loyalty programs[81][82][86] Note 3. Fair Value Measurements This note details the fair value measurement of financial instruments, particularly the contingent royalty obligation, and the valuation inputs used Contingent Royalty Obligation (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Contingent royalty obligation payable to Evolus Founders | $38,586 | $44,765 | - The fair value of the contingent royalty obligation decreased by $6,179 thousand from December 31, 2024, to June 30, 2025, primarily due to an unrealized gain of $3,914 thousand in Q2 2025[114][118] - The fair value is determined using Level 3 inputs (discounted cash flows) with a discount rate of 13% as of June 30, 2025, reflecting changes in market risk premium[115][117] Note 4. Goodwill and Intangible Assets This note provides a breakdown of the company's goodwill and intangible assets, including distribution rights and capitalized software, along with future amortization estimates Goodwill and Intangible Assets (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Distribution rights, net | $43,597 | $45,207 | | Capitalized software, net | $5,750 | $3,547 | | Intangible assets, net | $49,347 | $48,754 | | Goodwill | $21,208 | $21,208 | | Total as of period end | $70,555 | $69,962 | - Estimated future amortization expense for intangible assets totals $49,347 thousand, with $3,320 thousand remaining in 2025 and $6,540 thousand in 2026[123] Note 5. Accrued Expenses This note presents the composition of accrued expenses, including revenue contract liabilities, payroll, and royalties, and their changes over the reporting period Accrued Expenses (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Accrued revenue contract liabilities | $8,726 | $14,454 | | Accrued payroll and related benefits | $6,522 | $14,127 | | Accrued royalties | $4,279 | $4,743 | | Other accrued expenses | $8,422 | $7,467 | | Total Accrued expenses | $27,949 | $40,791 | - Accrued expenses decreased from $40,791 thousand at December 31, 2024, to $27,949 thousand at June 30, 2025, primarily due to a reduction in accrued revenue contract liabilities and payroll-related benefits[125] Note 6. Property, Plant and Equipment This note details the company's property, plant, and equipment, net of accumulated depreciation, and changes in these assets Property, Plant and Equipment (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Total property, plant, and equipment | $7,710 | $6,745 | | Less: accumulated depreciation | $(4,057) | $(3,523) | | Property, plant and equipment, net | $3,653 | $3,222 | - Net property, plant and equipment increased to $3,653 thousand at June 30, 2025, from $3,222 thousand at December 31, 2024[127] Note 7. Term Loans This note describes the company's new senior secured term loan agreement with Pharmakon, including its terms, funding, interest rates, and compliance with debt covenants - On May 5, 2025, Evolus entered into an Amended and Restated Loan Agreement with Pharmakon for up to $250 million in senior secured term loans, replacing the Prior Pharmakon Loan Agreement[130] - The initial tranche of $150 million was funded, including $125 million to refinance prior loans and $25 million in incremental borrowings, with net proceeds of $23.39 million received[130] - The New Pharmakon Term Loans accrue interest at 3-month SOFR (floor 3.5%) plus 5.0% per annum, with a maturity date of May 5, 2030[130] - As of June 30, 2025, the company was in compliance with its debt covenants, and the effective interest rate was approximately 10.42%[134][135] Note 8. Operating Leases This note outlines the company's operating lease commitments, including the corporate headquarters lease, remaining lease term, discount rate, and future payment obligations - The company's corporate headquarters lease was amended in October 2024 to include additional office space, expiring January 31, 2030[136] Operating Lease Metrics | Metric | June 30, 2025 | December 31, 2024 | | :----- | :------------ | :---------------- | | Weighted-average remaining lease term (years) | 4.6 | 5.1 | | Weighted-average discount rate | 9.9% | 9.7% | - Future minimum operating lease payments total $12,025 thousand, with a present value of $9,431 thousand as of June 30, 2025[140] Note 9. Commitments and Contingencies This note details the company's contractual commitments, including minimum purchase requirements, milestone payments under licensor agreements, and the status of legal proceedings - The Daewoong Agreement includes minimum annual purchase requirements to maintain exclusivity, contingent on governmental approvals and market share[141] - Under the Symatese U.S. Agreement, Evolus is required to make up to €16,200 thousand in milestone payments, contingent on FDA approval of three Evolysse™ products; as of June 30, 2025, these approvals have not been achieved, and no annual milestone payments have been made[146] - The Symatese Europe Agreement includes two milestone payments totaling €3,100 thousand, triggered by European Union MDR approval in October 2024 for three injectable HA gel products[147][148] - A shareholder derivative lawsuit filed in 2020 remains stayed pending a related federal securities class action, which was dismissed in September 2024[149] Note 10. Stockholders' Equity This note provides information on the company's common stock, equity incentive plans, and stock-based compensation expense, reflecting changes in equity - As of June 30, 2025, 64,638,978 shares of common stock were issued and outstanding[155] - The 2024 Employee Stock Purchase Plan (ESPP) was adopted in June 2024, reserving 579,648 shares, with no shares issued under it during the three and six months ended June 30, 2025[156] - The company has 2,125,024 shares available for future issuance under the 2017 Omnibus Incentive Plan and 886,669 shares under the 2023 Inducement Incentive Plan[159][160] Stock-Based Compensation (in thousands) | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation expense | $4,523 | $5,794 | $10,489 | $10,885 | - Unrecognized compensation cost related to unvested service-based stock options and RSUs totaled $48,630 thousand as of June 30, 2025, expected to be expensed over 2.4 and 2.6 years, respectively[175] Note 11. Medytox Settlement Agreements This note details the company's ongoing royalty obligations to Medytox related to net sales of Jeuveau® under settlement agreements - Evolus is obligated to pay Medytox a quarterly, mid-single digit royalty on net sales of Jeuveau from September 17, 2022, to September 16, 2032[176] Accrued Royalties (in thousands) | Accrued Royalties (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Accrued for royalties under Medytox Settlement Agreements | $3,577 | $4,743 | Note 12. Segment Reporting This note clarifies that the company operates as a single segment and provides a breakdown of total net revenues by product, including Jeuveau® and Evolysse™ - The company operates as a single operating and reportable segment focused on performance beauty in the cash-pay aesthetic market[177] Revenue (in thousands) | Revenue (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Jeuveau® | $58,968 | $66,222 | $127,042 | $125,186 | | Evolysse™ | $9,731 | — | $9,731 | — | | Total product revenue, net | $68,699 | $66,222 | $136,773 | $125,186 | | Service revenue | $688 | $687 | $1,136 | $1,056 | | Total net revenues | $69,387 | $66,909 | $137,909 | $126,242 | - Evolysse™ generated $9,731 thousand in product revenue for the three and six months ended June 30, 2025, following its April 2025 U.S. launch[180] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, including an overview of its business, key developments, detailed analysis of results of operations for the three and six months ended June 30, 2025, and a discussion of liquidity and capital resources Overview This overview introduces Evolus as a global performance beauty company, highlights recent product launches and financing, and discusses relevant market trends - Evolus is a global performance beauty company focused on the cash-pay aesthetic market, with Jeuveau® and the newly launched Evolysse™ HA gels[183] - Evolysse™ Form and Evolysse™ Smooth launched in the U.S. in April 2025, contributing $9.7 million in revenue for Q2 2025[185] - The company secured a new $250 million senior secured term loan with Pharmakon in May 2025, with an initial $150 million tranche funded[186] - Market trends show volatility, increased inflation, and rising interest rates, potentially impacting consumer discretionary spending for aesthetic procedures[184] Results of Operations This section provides a detailed analysis of the company's financial performance, comparing revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024 Comparison of the Three Months Ended June 30, 2025 and 2024 This analysis compares the company's financial performance for the second quarter of 2025 against the same period in 2024, detailing changes in revenues, expenses, and profitability Financial Performance (in thousands) | (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :--------------- | :------------ | :------------ | :--------- | :--------- | | Total net revenues | $69,387 | $66,909 | $2,478 | 3.7% | | Cost of goods sold | $24,067 | $19,841 | $4,226 | 21.3% | | Gross profit | $45,320 | $47,068 | $(1,748) | -3.7% | | Gross profit margin | 65.3% | 70.3% | -5.0 pp | | | Selling, general and administrative | $56,675 | $50,152 | $6,523 | 13.0% | | Research and development | $1,837 | $2,350 | $(513) | -21.8% | | Revaluation of contingent royalty obligation | $(3,914) | $1,605 | $(5,519) | -343.9% | | Loss from operations | $(10,210) | $(7,702) | $(2,508) | 32.6% | | Net loss | $(17,142) | $(11,350) | $(5,792) | 51.0% | - Net revenues increased by $2.5 million (3.7%) due to the launch of Evolysse™ in the U.S., partially offset by a decline in Jeuveau® sales[188] - Gross profit margin decreased to 65.3% from 70.3% due to product mix between Jeuveau® and Evolysse™[189][190] - Selling, general and administrative expenses rose by $6.5 million (13.0%) due to higher personnel costs for Evolysse™ launch activities[191] Comparison of the Six Months Ended June 30, 2025 and 2024 This analysis compares the company's year-to-date financial performance for the first half of 2025 against the same period in 2024, detailing changes in revenues, expenses, and net loss Financial Performance (in thousands) | (in thousands) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :--------------- | :------------ | :------------ | :--------- | :--------- | | Total net revenues | $137,909 | $126,242 | $11,667 | 9.2% | | Cost of goods sold | $45,934 | $38,671 | $7,263 | 18.8% | | Gross profit | $91,975 | $87,571 | $4,404 | 5.0% | | Gross profit margin | 66.7% | 69.4% | -2.7 pp | | | Selling, general and administrative | $113,315 | $95,275 | $18,040 | 18.9% | | Research and development | $4,049 | $4,428 | $(379) | -8.6% | | Revaluation of contingent royalty obligation | $(1,763) | $3,183 | $(4,946) | -155.4% | | Loss from operations | $(25,382) | $(16,624) | $(8,758) | 52.7% | | Net loss | $(36,034) | $(24,459) | $(11,575) | 47.3% | - Year-to-date net revenues increased by $11.7 million (9.2%) driven by Evolysse™ launch, despite a decline in Jeuveau® sales[199] - Selling, general and administrative expenses increased by $18.0 million (18.9%) due to higher personnel costs and training for Evolysse™ launch[202] - Net loss for the six months ended June 30, 2025, was $(36.0) million, compared to $(24.5) million in the prior year, reflecting increased operating and non-operating expenses[197] Liquidity and Capital Resources This section discusses the company's cash position, working capital, accumulated deficit, recent financing activities, and future material cash requirements - As of June 30, 2025, Evolus had $61.7 million in cash and cash equivalents, positive working capital of $81.2 million, and a stockholders' deficit of $18.7 million[208] - The company incurred an accumulated deficit of $645.4 million as of June 30, 2025, and used $40.4 million in cash from operating activities during the first six months of 2025[209] - In March 2024, a follow-on offering generated $46.8 million in net proceeds, with an additional $4.2 million from underwriters' option exercise in April 2024[210] - The New Pharmakon Term Loans provide up to $250 million, with an initial $150 million tranche funded in May 2025, providing $23.4 million in net proceeds[213] - Material cash requirements include principal and interest payments on the New Pharmakon Term Loans ($68.3 million in future interest, $14.1 million due within 12 months), quarterly royalties to Evolus Founders and Medytox, and milestone payments under Symatese agreements[230] Critical Accounting Policies and Estimates This section confirms that there have been no material changes to the company's critical accounting policies and estimates since its last annual report - There have been no material changes to the company's critical accounting policies and estimates as discussed in its Annual Report on Form 10-K for the year ended December 31, 2024[232] Recently Issued and Adopted Accounting Pronouncements This section outlines the company's evaluation of the potential impact of recently issued accounting standards on its financial statements - The company is evaluating the impact of ASU No. 2023-09 (Income Tax Disclosures) and ASU No. 2024-03 (Expense Disaggregation Disclosures) on its financial statements[111][112] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section addresses the company's exposure to market risks, primarily from fluctuations in interest rates and foreign currency exchange rates, noting no material changes from previous disclosures - Evolus is exposed to market risk from fluctuations in interest rates and foreign currency exchange rates[234] - As of the report date, there were no material changes in financial market risks compared to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[235] Item 4. Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, and reports no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[236] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control during the three months ended June 30, 2025[238] PART II - OTHER INFORMATION This part covers other significant information not included in the financial statements, such as legal proceedings, risk factors, equity sales, defaults, and exhibits Item 1. Legal Proceedings This section refers to Note 9, 'Commitments and Contingencies,' for information regarding the company's legal proceedings - Information regarding legal proceedings is detailed in Note 9. Commitments and Contingencies[241] Item 1A. Risk Factors This section outlines various risks that could materially and adversely affect the company's business, financial condition, and results of operations, categorized into risks related to business and strategy, relationships with licensors, intellectual property, government regulation, and common stock Risks Related to Our Business and Strategy This section details risks inherent to the company's business model and strategic execution, including profitability challenges, competition, market demand, regulatory reliance, financing needs, and compliance - Evolus has incurred significant losses since inception, with an accumulated deficit of $645.4 million as of June 30, 2025, and profitability is not guaranteed[244] - The company faces significant competition from larger, more experienced companies in the medical aesthetics market, including those with greater financial resources, brand recognition, and product portfolios[245][247] - Commercial success depends on broad aesthetic practitioner adoption and consumer demand for Jeuveau® and Evolysse™, which are sensitive to global economic conditions and discretionary spending[251][252][253] - Reliance on Symatese for regulatory approval of Evolysse™ products in the U.S. poses risks of delays or denials, impacting commercialization[257][258] - The company may require additional financing to fund future operations and corporate development, and failure to obtain capital on acceptable terms could force delays or termination of operations[260][263] - Non-compliance with Medytox settlement terms could lead to litigation or loss of ability to market Jeuveau®, materially affecting business and going concern status[264][266] - The company's digital technology and applications are critical, and system failures or cybersecurity incidents could disrupt operations and harm business[271][273] - Focusing exclusively on the cash-pay healthcare market may limit sales growth and profitability, as it restricts product offerings to cosmetic indications[294] Risks Related to Our Relationship with Our Licensors This section highlights risks stemming from the company's critical dependence on licensor agreements for product commercialization and manufacturing, and the potential impact of their termination or operational issues - Evolus's ability to exclusively commercialize Jeuveau® and Evolysse™ is entirely dependent on the Daewoong Agreement and Symatese agreements, respectively; any breach or termination could severely impact revenues and business opportunities[301] - The company relies solely on Daewoong for Jeuveau® manufacturing and Symatese for Evolysse™ manufacturing, making it vulnerable to production problems or regulatory non-compliance by either licensor[302][304] - Inaccurate demand forecasts for products purchased from licensors could lead to shipment delays, increased inventory costs, or inadequate inventory, negatively affecting financial performance[306] Risks Related to Intellectual Property This section addresses risks concerning intellectual property, including potential infringement claims, the need to protect trademarks and trade secrets, and the costs and challenges of enforcing IP rights globally - Third-party claims of intellectual property infringement, particularly in the competitive medical aesthetics market, could prevent or delay commercialization efforts and interrupt product supply[307][308][309] - The company and its licensors (Daewoong and Symatese) rely on trademarks, trade secret protection, and confidentiality agreements; failure to maintain or protect these rights could impair competitive advantage[311][312][314] - Lawsuits to protect or enforce intellectual property rights are expensive and time-consuming, potentially diverting management attention and risking patent invalidation or narrow interpretation[315][316] - Inability to protect intellectual property rights globally, due to varying laws and enforcement, could allow competitors to use inventions and export infringing products[319][320] Risks Related to Government Regulation This section outlines risks associated with extensive government regulation, including the need for regulatory approvals, ongoing compliance obligations, potential penalties for non-compliance, and the impact of healthcare reforms - The company's business and products are subject to extensive and evolving government regulation by agencies like the FDA and EMA; non-compliance can lead to severe penalties and operating restrictions[330][331] - Delays or failure to obtain regulatory approval for future product candidates would harm commercial prospects and revenue generation[332][334] - Ongoing regulatory obligations and review, including post-marketing requirements and compliance with cGMP, can result in significant additional expense and penalties for non-compliance[338] - Failure to report adverse medical events to regulatory agencies could lead to sanctions, including criminal prosecution or civil monetary penalties[342] - Future exposure to healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act) could result in fines, penalties, and exclusion from federal programs if violations occur[343][345] - Legislative or regulatory healthcare reforms, such as the overturning of the Chevron doctrine, may increase costs, lengthen review times, and create regulatory uncertainty[348][350] Risks Related to Our Common Stock This section discusses risks related to the company's common stock, including price volatility, potential dilution from future sales, anti-takeover provisions, dividend policy, and the burdens of public company compliance - The trading price of Evolus's common stock has been volatile, influenced by various factors including financial estimates, product announcements, regulatory actions, and market speculation[352][353] - Future sales of common stock by the company or significant stockholders, or the perception of such sales, could depress the market price[355][356] - Anti-takeover provisions in the company's charter, bylaws, and Delaware law could discourage takeovers and make it difficult for stockholders to change management or the Board of Directors[357][358] - The company has not paid dividends in the past and does not expect to in the future; any return on investment will be limited to stock value appreciation[366][367] - Being a public company strains resources, diverts management attention, and increases compliance costs due to reporting requirements and corporate governance standards[368][369] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[371] Item 3. Defaults Upon Senior Securities This section indicates that there are no defaults upon senior securities to report - Not applicable; no defaults upon senior securities[372] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the company - Not applicable; no mine safety disclosures[373] Item 5. Other Information This section indicates that there is no other information to report - No other information to report[374] Item 6. Exhibits This section provides a comprehensive list of exhibits filed with the Quarterly Report on Form 10-Q, including corporate documents, loan agreements, certifications, and XBRL data files - Includes Amended and Restated Certificate of Incorporation, Bylaws, Amended and Restated Loan Agreement (May 5, 2025), and various certifications (Rule 13a-14(a), 18 U.S.C. Section 1350)[376] - Contains Inline XBRL Instance Document and Taxonomy Extension Documents for financial data[376] Signatures This section contains the signature of the authorized officer, David Moatazedi, President and Chief Executive Officer, confirming the filing of the report - The report was signed by David Moatazedi, President and Chief Executive Officer (Principal Executive and Principal Financial Officer), on August 5, 2025[382]