1 unchanged sentence
An investment in our company involves a high degree of risk.
−Removed: You should carefully consider the risks and uncertainties described below, together with all the other information in this Annual Report on Form 10-K, including Item 7“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and the notes thereto included in Item 8 “Financial Statements and Supplementary Data.” If any of the following risks actually occurs, our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously harmed.
+Added: You should carefully consider the risks and uncertainties described below, together with all the other information in this Annual Report on Form 10-K, including Item 7“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto included in Item 8 “Financial Statements and Supplementary Data.” If any of the following risks actually occurs, our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously harmed.
The risks and uncertainties described below are not the only ones we face.
5 unchanged sentences
If we are unable to successfully market and sell Jeuveau ® , we may not generate sufficient revenue to continue our business.
−Removed: We currently have only one product, Jeuveau ® , and our business presently depends entirely on our ability to successfully commercialize it in a timely manner.
−Removed: While the product was commercially launched in the United States in May 2019 and through a distribution partner in Canada in October 2019, we have a limited history of generating revenue for Jeuveau ® .
+Added: We currently have only one product, Jeuveau ® , and our business presently depends entirely on our ability to successfully market and sell it in a timely manner.
+Added: While the product was commercially launched in the United States in May 2019, through a distribution partner in Canada in October 2019, in Great Britain in September 2022, and in Germany and Austria in February 2023, we have a limited history of generating revenue for Jeuveau ® .
Our near-term prospects, including our ability to generate revenue, as well as our future growth, depend entirely on the successful commercialization of Jeuveau ® .
−Removed: The commercial success of Jeuveau ® will depend on a number of factors, including our ability to successfully market and sell Jeuveau ® , whether alone or in collaboration with others, including our ability to hire, retain and train sales representatives in the United States.
+Added: The commercial success of Jeuveau ® will depend on a number of factors, including our ability to successfully commercialize Jeuveau ® , whether alone or in collaboration with others, including our ability to hire, retain and train sales representatives in the United States.
Our ability to market and sell Jeuveau ® is also dependent on the willingness of consumers to pay for Jeuveau ® relative to other discretionary items, especially during economically challenging times.
−Removed: Additional factors necessary for the successful commercialization of Jeuveau ® include the availability, perceived advantages, relative cost, relative safety of Jeuveau ® and relative efficacy of competing products, the timing of new product introductions by our competitors, and the sales and marketing tactics of our competitors, including bundling of multiple products, in response to our launch of Jeuveau ® .
+Added: Additional factors necessary for the successful commercialization of Jeuveau ® include the availability, perceived advantages, relative cost, relative safety of Jeuveau ® and relative efficacy of competing products, the timing of new product introductions by us or our competitors, and the sales and marketing tactics of our competitors, including bundling of multiple products, in response to our launch of Jeuveau ® .
+Added: Each of these factors may vary on a country by country basis as we expand our operations.
If we do not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant issues commercializing Jeuveau ® .
2 unchanged sentences
Accordingly, we may not be able to generate sufficient revenue through the sale of Jeuveau ® or any future product candidates to continue our business.
−Removed: We have a limited operating history and have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future.
+Added: We have a limited operating history and have incurred significant losses since our inception and anticipate that we may incur losses in the future.
We have only one product and limited commercial sales, which, together with our limited operating history, makes it difficult to assess our future viability.
1 unchanged sentence
To date, we have invested substantially all of our efforts and financial resources in the clinical development, regulatory approval, and commercial launch of Jeuveau ® , which is currently our only product.
−Removed: We began selling Jeuveau ® in the United States in May 2019 and through a distribution partner in Canada in October 2019 and have a limited history of generating revenue.
−Removed: While we recorded a profit for the three months ended March 31, 2021, largely as a result of a payment received from our partner, Daewoong, we were not profitable and have incurred losses in each year since our inception in 2012.
+Added: We began selling Jeuveau ® in the United States in May 2019, through a distribution partner in Canada in October 2019, in Great Britain in September 2022 and in Germany and Austria in February 2023 and have a limited history of generating revenue.
+Added: We have incurred losses in each year since our inception in 2012.
We have a limited operating history upon which you can evaluate our business and prospects.
3 unchanged sentences
We have recorded net losses of $74.4 million and $46.8 million for the years ended December 31, 2022 and 2021, respectively, and had an accumulated deficit as of December 31, 2022 of $497.3 million.
−Removed: We expect to continue to incur losses for the foreseeable future.
Our ability to achieve revenue and profitability is dependent on our ability to successfully market and sell Jeuveau ® .
Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
−Removed: Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock and our ability to raise capital and continue operations.
+Added: Our prior losses, combined with expected future losses, may adversely affect the market price of our common stock and, if needed, our ability to raise capital to continue operations.
We may require additional financing to fund our future operations, and a failure to obtain additional capital when so needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations.
−Removed: We have utilized substantial amounts of cash since our inception in order to conduct clinical development to support regulatory approval of Jeuveau ® in the United States, EU and Canada and in connection with the launch of Jeuveau ® in the United States and Canada.
+Added: We have utilized substantial amounts of cash since our inception in order to conduct clinical development to support regulatory approval and launch of Jeuveau ® in the United States, Europe, Canada, and Australia.
We expect that we will continue to expend substantial resources for the foreseeable future in order to continue to market and sell Jeuveau ® and for the clinical development of any additional product candidates we may choose to pursue.
−Removed: In the near term, we expect to make payments for expenditures associated with our settlement agreements with Medytox and Allergan, including a $15.0 million payment due in the first quarter of 2022 and $5.0 million in 2023, a portion of which will be reimbursed to us by Daewoong.
−Removed: Additionally, we expect to expend resources furthering the development and continuation of our marketing programs and commercialization infrastructure in connection with commercializing Jeuveau ® within and outside of the United States.
−Removed: In the long term, our expenditures will include costs associated with the continued commercialization of Jeuveau ® and any of our future product candidates, including our proposed higher strength dose of Jeuveau ® , such as research and development, conducting preclinical studies and clinical trials and manufacturing and supplying as well as marketing and selling any products approved for sale.
−Removed: We expect to incur additional costs as we continue to operate as a public company, hire additional personnel and expand our operations.
+Added: While we believe that we currently have adequate capital resources, which consist of cash and cash equivalents and cash generated from operations, to operate our business until our business generates profits and positive cash flow, this belief is based upon certain financial assumptions including net revenue, gross margin, working capital and expense assumptions.
+Added: If these assumptions are incorrect, or if we experience other risks or uncertainties set forth in this Annual Report on Form 10-K, we may require additional capital to operate our business.
+Added: We expect to expend resources furthering the development and continuation of our marketing programs and commercialization infrastructure in connection with commercializing Jeuveau ® within and outside of the United States.
+Added: In the long term, our expenditures will include costs associated with the continued commercialization of Jeuveau ® , research and development, approval and commercialization of products and any of our future product candidates, including our proposed higher strength dose of Jeuveau ® , such as research and development, conducting preclinical studies and clinical trials and manufacturing and supplying as well as marketing and selling any products approved for sale.
Because the commercialization expenditures needed to meet our sales objectives are highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully market and sell Jeuveau ® .
2 unchanged sentences
Accordingly, our actual cash needs may exceed our expectations.
−Removed: If we were to raise additional capital through marketing and distribution arrangements, royalty financing arrangements, or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
+Added: If we were to raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
If we raise additional capital through public or private equity offerings or offerings of securities convertible into our equity, the ownership interest of our existing stockholders will be diluted and the terms of any such securities may have a preference over our common stock.
2 unchanged sentences
If we were to default on any of our indebtedness, we could lose such assets.
−Removed: In the event we do not achieve specified minimum sales targets under the Daewoong Agreement, we will lose exclusivity of the license that we have been granted under the Daewoong Agreement.
+Added: In addition, the global economy, including the financial and credit markets, has recently experienced significant volatility and disruptions, including severely diminished liquidity and credit availability and rising interest rates.
+Added: In the event we are unable to raise sufficient capital to fund our commercialization efforts to achieve specified minimum sales targets under the Daewoong Agreement, we will lose exclusivity of the license that we have been granted under the Daewoong Agreement.
In addition, if we are unable to raise additional capital when required or on acceptable terms, we will be required to take actions to address our liquidity needs which may include the following:
1 unchanged sentence
As a result, our ability to achieve profitability or to respond to competitive pressures would be significantly limited and may have a material adverse effect on our business, results of operations, financial condition and/or our ability to fund our scheduled obligations on a timely basis or at all.
−Removed: If we or our counterparties do not comply with the terms of our settlement agreements with Medytox, Inc., or Medytox, and Allergan Limited, Allergan, Inc.
−Removed: and Allergan Pharmaceuticals Ireland, or, collectively, Allergan, we may face litigation or lose our ability to market and sell Jeuveau ® , which would materially and adversely affect our ability to carry out our business and our financial condition and ability to continue as a going concern.
−Removed: Effective February 18, 2021, we entered into a Settlement and License Agreement with Allergan and Medytox, which we refer to as the U.S.
−Removed: Settlement Agreement, and into another Settlement and License Agreement with Medytox only, which we refer to as the ROW Settlement Agreement.
−Removed: Collectively, we refer to the U.S.
−Removed: Settlement Agreement and the ROW Settlement Agreement as the Medytox/Allergan Settlement Agreements.
−Removed: Under the Medytox/Allergan Settlement Agreements we obtained (i) a license to commercialize, manufacture and to have manufactured for us certain products identified in the Medytox/Allergan Settlement Agreements, including Jeuveau ® (the
−Removed: “Licensed Products”), in the United States and other territories where we license Jeuveau ® , (ii) the dismissal of outstanding litigation against us, including the ITC Action, a rescission of the related remedial orders, and the dismissal of a civil case in the Superior Court of California against us, which we refer to together with any claims (including claims brought in Korean courts) with a common nexus of fact as the Medytox/Allergan Actions, and (iii) releases of claims against us for the Medytox/Allergan Actions.
−Removed: In exchange, we agreed to (i) make payments of $35.0 million in multiple payments over two years to Allergan and Medytox, of which we have paid $30.0 million, (ii) from December 16, 2020 to September 16, 2022, pay to Allergan and Medytox certain royalties on the sale of Jeuveau ® , based on a specified dollar amount per vial sold of the Licensed Products by or on behalf of the us in the United States, (iii) from December 16, 2020 to September 16, 2022, pay to Medytox a low-double digit royalty on net sales of Jeuveau ® sold by us or on our behalf in territories we have licensed outside the United States, (iv) from September 16, 2022 to September 16, 2032, pay to Medytox a mid-single digit royalty percentage on net sales of Jeuveau ® in the United States and all territories we have licensed outside the United States, (v) issue to Medytox 6,762,652 shares of our common stock, which we issued on February 18 2021, and (vi) enter into a Registration Rights Agreement pursuant to which we granted certain registration rights to Medytox with respect to such shares of common stock beginning as of March 31, 2022.
−Removed: In addition, under the Medytox/Allergan Settlement Agreements we made certain representations and warranties and agreed to positive and negative covenants.
−Removed: In the event we fail to comply with the terms of the Medytox/Allergan Settlement Agreements, subject to applicable cure periods, Allergan and Medytox would have the ability to terminate the Medytox/Allergan Settlement Agreements and thereby cancel the licenses granted to us and re-institute litigation against us.
+Added: If we or our counterparties do not comply with the terms of our settlement agreement with Medytox, we may face litigation or lose our ability to market and sell Jeuveau ® , which would materially and adversely affect our ability to carry out our business and our financial condition and ability to continue as a going concern.
+Added: Effective February 18, 2021, we entered into a Settlement and License Agreement with Medytox which we refer to as the Medytox Settlement Agreement.
+Added: Under the Medytox Settlement Agreement we obtained (i) a license to commercialize, manufacture and to have manufactured for us certain products identified in the Medytox Settlement Agreements, including Jeuveau ® (the “Licensed Products”), in the United States and other territories where we license Jeuveau ® , (ii) the dismissal of outstanding litigation against us, including the ITC Action, a rescission of the related remedial orders, and the dismissal of a civil case in the Superior Court of California against us, which we refer to together with any claims (including claims brought in Korean courts) with a common nexus of fact as the Medytox/Allergan Actions, and (iii) releases of claims against us for the Medytox/Allergan Actions.
+Added: Going forward we are obligated to pay to Medytox a mid-single digit royalty percentage on net sales of Jeuveau ® in the United States and all territories we have licensed outside the United States until September 16, 2032.
+Added: In addition, under the Medytox Settlement Agreement we made certain representations and warranties and agreed to certain customary positive and negative covenants.
+Added: In the event we fail to comply with the terms of the Medytox Settlement Agreement, subject to applicable cure periods, Medytox would have the ability to terminate the Medytox Settlement Agreement and thereby cancel the licenses granted to us and re-institute litigation against us.
Any litigation may result in remedies against our products, resulting in either an injunction prohibiting our sales, or with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, any of which would materially and adversely affect our ability to generate revenue from Jeuveau ® , to carry out our business, and to continue as a going concern.
−Removed: Additionally, if Medytox or Allergan fail to comply with the terms of the Medytox/Allergan Settlement Agreements and comply with the covenants and agreements under the Medytox/Allergan Settlement Agreements, it could materially and adversely affect our ability to generate revenue from Jeuveau ® , to carry out our business, and to continue as a going concern.
−Removed: We would also be required to engage in costly and time consuming litigation in order to enforce our rights under the Medytox/Allergan Settlement Agreements.
−Removed: The terms of the Medytox/Allergan Settlement Agreements will reduce our profitability until the royalty obligations expire, and may affect the extent of any discounts we may offer to our customers.
−Removed: As a result of the royalty payments that we are required to pay under the Medytox/Allergan Settlement Agreements, our profitability will be impacted for the period that we are required to pay royalties.
−Removed: We may be able to offset a portion of the loss of profitability by decreasing any discount to customers on Jeuveau ® as compared to discounts we provided to customers prior to the Medytox/Allergan Settlement Agreements.
+Added: Additionally, if Medytox fails to comply with the terms of the Medytox Settlement Agreement and comply with the covenants and agreements under the Medytox Settlement Agreement, it could materially and adversely affect our ability to generate revenue from Jeuveau ® , to carry out our business, and to continue as a going concern.
+Added: For example, as required by the Medytox Settlement Agreement, in February 2021 Medytox filed a document with the Korean court that its litigation with Daewoong would not affect Evolus’ right to have Jeuveau ® manufactured by Daewoong or exported to Evolus.
+Added: If Medytox were to breach the Medytox Settlement Agreement and rescind this filing and the Korean court issued a ruling against Daewoong, our supply of Jeuveau ® could be hindered.
+Added: We would also be required to engage in costly and time-consuming litigation in order to enforce our rights under the Medytox Settlement Agreement.
+Added: The terms of the Medytox Settlement Agreement will reduce our profitability until the royalty obligations expire, and may affect the extent of any discounts we may offer to our customers.
+Added: As a result of the royalty payments that we are required to pay under the Medytox Settlement Agreement, our profitability has and will be adversely impacted for the period that we are required to pay royalties.
+Added: We may be able to offset a portion of the loss of profitability by decreasing any discount to customers on Jeuveau ® as compared to discounts we provided to customers prior to the Medytox Settlement Agreement.
If we reduce discounts for any customers, their volume of purchases may decrease which would have a material and adverse effect on our business and results of operations.
−Removed: Our business, financial condition and operations have been, and may in the future be, adversely affected by the COVID-19 outbreak or other similar outbreaks.
−Removed: The outbreak and pandemic of the novel coronavirus that was first detected in 2019, known as COVID-19, has had, and may continue to have, material adverse effects on our business, financial condition, results of operations and cash flows.
−Removed: Other similar outbreaks of contagious diseases in the future could have a similar material adverse effect on our business.
−Removed: The COVID-19 outbreak, and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, has adversely affected our business in a number of ways.
−Removed: For example, the spread of COVID-19 in the United States has resulted in travel restrictions impacting our sales professionals and closures of our customers’ businesses, which adversely affected our sales and operations, particularly in 2020 and periods of 2021.
−Removed: If similar or other restrictions are imposed in the future in response COVID-19 outbreaks or outbreaks of other contagious disease, our sales and operations may be adversely affected.
−Removed: Additionally, surges of COVID-19 outbreaks or other outbreaks of contagious disease, including closures of our customers’ businesses, may impact our ability to enroll patients in our ongoing and future clinical programs.
−Removed: Other negative impacts of the COVID-19 outbreak or other similar outbreaks could include the availability of our key personnel, temporary closures of our office or the facilities of our business partners, customers, third party service providers or other vendors, and the interruption of our supply chain, distribution channels, liquidity and capital or financial markets, including increased inflation.
−Removed: Any of these events may result in a period of business disruption and in reduced sales and operations.
−Removed: In addition, any disruption and volatility in the global capital markets may increase our cost of capital and
−Removed: adversely affect our ability to access financing when and on terms that we desire.
−Removed: Any of these events could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: Moreover, Jeuveau ® is utilized in elective procedures, the costs of which are borne by the consumer and not third-party payors.
−Removed: As a result of the COVID-19 outbreak and restrictions to slow its spread, these elective procedures declined dramatically in 2020 due to closures of our customers’ businesses and as many customers are deferring their procedures.
−Removed: Even after the current COVID-19 pandemic subsides, we may continue to experience negative impacts to our business and financial results if consumers continue to defer or avoid altogether elective procedures to administer Jeuveau ® due to the continued perceived risk of infection or concern of a resurgence of the COVID-19 outbreak, including new and more contagious and/or vaccine resistant variants, as well as COVID-19’s global economic impact, including decreases in consumer discretionary spending and any economic slowdown or recession that may occur in the future.
+Added: We are subject to risks associated with a public health crisis, including the COVID-19 pandemic and other outbreaks of contagious diseases.
+Added: We are subject to risks associated with public health crises, including relating to the COVID-19 pandemic.
+Added: The COVID-19 pandemic had, and may continue to have, a material adverse effects on our business, financial condition, results of operations and cash flows.
+Added: Other public health crises, including any future outbreaks of contagious diseases, could have a similar material adverse effect on our business.
+Added: Financial and operational impacts that we experienced in connection with the COVID-19 pandemic, and may experience as a result of future COVID-19 outbreaks or other public health crises, include:
+Added: • a decline in the rates of elective procedures;
+Added: • difficulties in enrolling patients in clinical programs;
+Added: • changes in the availability of our key personnel;
+Added: • temporary closures of our facilities or the facilities of our business partners, customers, third party service providers or other vendors;
+Added: • interruptions to our supply chain and distribution channels;
+Added: • downstream economic effects, including disruptions capital or financial markets, increased inflation and rising interest rates.
+Added: Depending on the severity of the financial and operational impacts, our business, financial condition, and results of operations may be materially adversely impacted.
+Added: The extent to which any future public health crises may impact our business, results of operations, and financial condition depends on many factors which are highly uncertain and are difficult to predict.
+Added: These factors include, but are not limited to, the duration and spread of any outbreak, its severity, the actions to contain or address the impact of the outbreak, the timing, distribution, and efficacy of vaccines and other treatments, United States and foreign government actions to respond to possible reductions in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume.
Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.
−Removed: Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.
−Removed: Significant increases in unemployment stemming from the pandemic have also occurred which may impact consumer discretionary spending.
−Removed: Furthermore, the discretionary nature of aesthetic medical procedures may be particularly vulnerable to unfavorable economic conditions.
Because we do not expect Jeuveau ® for the treatment of glabellar lines to be reimbursed by any government or third-party payor, our only product is and will continue to be paid for directly by the consumer.
Demand for Jeuveau ® is accordingly tied to the discretionary spending levels of our targeted consumer population.
−Removed: A severe or prolonged economic downturn could result in a variety of risks to our business, including a decline in the discretionary spending of our target consumer population, which could lead to a weakened demand for Jeuveau ® or any future product candidates.
−Removed: A severe or prolonged economic downturn may also affect our ability to raise additional capital when needed on acceptable terms, if at all, and could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our products.
+Added: A severe or prolonged economic downturn or inflation in consumer prices, as we are currently experiencing, could result in a variety of risks to our business, including a decline in the discretionary spending of our target consumer population, which could lead to a weakened demand for Jeuveau ® or any future product candidates.
+Added: A severe or prolonged economic downturn may also affect our ability to raise additional capital when needed on acceptable terms, if at all.
+Added: A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our products.
Inflation in the markets we serve could similarly impact our revenues, as consumer spending power could decline.
Any of the foregoing could harm our business.
−Removed: Additionally, our business strategy was developed based on a number of important assumptions about the self-pay healthcare market.
+Added: In addition, our business strategy was developed based on a number of important assumptions about the self-pay healthcare market.
For example, we believe that the number of self-pay healthcare procedures will increase in the future.
4 unchanged sentences
The facial aesthetic market is highly competitive and dynamic and is characterized by rapid and substantial technological development and product innovations.
−Removed: We have received regulatory approval of Jeuveau ® for the treatment of glabellar lines and launched commercially in the United States and through a distribution partner in Canada.
+Added: We have received regulatory approval of Jeuveau ® for the treatment of glabellar lines and launched commercially in the United States, Great Britain, Germany and Austria and through a distribution partner in Canada.
We anticipate that Jeuveau ® will face significant competition from other facial aesthetic products, such as other injectable and topical botulinum toxins and dermal fillers.
5 unchanged sentences
These companies may also seek to compete based on their longer operating history.
−Removed: Larger companies may be better capitalized than us and, accordingly, are able to offer greater customer loyalty benefits to encourage repeat use of their products and finance a sustained global advertising campaign to compete with our commercialization efforts at launch.
−Removed: A number of our larger competitors also have access to a significant amount of studies and publications that they could use to compete with us.
+Added: Larger companies may be better capitalized than us and, accordingly, are able to offer greater customer loyalty benefits to encourage repeat use of their products and finance a sustained global advertising campaign to compete with our
+Added: commercialization efforts at launch.
+Added: A number of our larger competitors also have access to a significant number of studies and publications that they could use to compete with us.
In the long term, we expect to expand our focus to the broader self-pay healthcare market.
4 unchanged sentences
For example, Revance Therapeutics, Inc.
−Removed: has submitted a biologics license application, or BLA, to the FDA for an injectable botulinum toxin type A neurotoxin and in October 2021 received a Complete Response Letter from the FDA.
−Removed: Additionally, Hugel Inc., has submitted a BLA to the FDA for an injectable botulinum toxin type A neurotoxin.
−Removed: If either BLA is approved, we expect the competition in the U.S.
+Added: obtained approval for an injectable botulinum toxin type A neurotoxin on September 8, 2022, called “Daxxify.” Additionally, Hugel Inc., submitted a BLA to the FDA for an injectable botulinum toxin type A neurotoxin and received a Complete Response Letter from the FDA in March 2022.
+Added: With the approval of Revance Therapeutic’s BLA and the potential approval of Hugel, Inc.’s BLA, we expect the competition in the U.S.
injectable botulinum toxin market to further increase.
3 unchanged sentences
In the event that regulations applicable to reimbursed products are changed to apply to self-pay healthcare products, we would no longer have this flexibility and we may not be able to compete as effectively with our competitors which may have a material effect on our business, financial condition and results of operations.
−Removed: Additionally, as a result of the royalty payments that we are required to pay under the Medytox/Allergan Settlement Agreements, we may not be able to discount Jeuveau ® to the extent that we previously provided discounts to customers without impacting our gross profit margins.
+Added: Additionally, as a result of the royalty payments that we are required to pay under the Medytox Settlement Agreement, we may not be able to discount Jeuveau ® to the extent that we previously provided discounts to customers without impacting our gross profit margins.
If we increase prices for any customers, their volume of purchases may decrease which would have a material and adverse effect on our business and results of operations.
12 unchanged sentences
The degree and rate of physician adoption of Jeuveau ® and any future product candidates depend on a number of factors, including the cost, profitability to our customers, consumer demand, characteristics and effectiveness of the product.
−Removed: success will also depend our ability to create compelling marketing programs, training of our customers and ability to overcome any biases physicians or consumers may have toward the use, safety and efficacy of existing products over Jeuveau ® .
+Added: Our success will also depend our ability to create compelling marketing programs, training of our customers and ability to overcome any biases physicians or consumers may have toward the use, safety and efficacy of existing products over Jeuveau ® .
Moreover, our competitors may utilize negative selling efforts or offer more compelling marketing or discounting programs than we are able to offer, including by bundling multiple aesthetic products to provide a more comprehensive offering than we can as Jeuveau ® is currently our sole product.
5 unchanged sentences
The decision by a consumer to undergo treatment with Jeuveau ® for the treatment of glabellar lines or other aesthetic indications that we may pursue may be influenced by a number of factors, including the cost, efficacy, safety, perception, marketing programs for, and physician recommendations of Jeuveau ® versus competitive products or procedures.
−Removed: Moreover, consumer demand may fluctuate over time as a result of consumer sentiment about the benefits and risks of aesthetic procedures generally and Jeuveau ® in particular, changes in demographics and social trends, and general consumer confidence and consumer discretionary spending, which may be impacted by the COVID-19 outbreak, economic and political conditions.
+Added: Moreover, consumer demand may fluctuate over time as a result of consumer sentiment about the benefits and risks of aesthetic procedures generally and Jeuveau ® in particular, changes in demographics and social trends, rising inflation and general consumer confidence and consumer discretionary spending, which may be impacted by the COVID-19 outbreak, economic and political conditions.
If Jeuveau ® or any future product candidates fail to achieve the broad degree of physician adoption necessary for commercial success or the requisite consumer demand, our operating results and financial condition will be adversely affected, which may delay, prevent or limit our ability to generate revenue and continue our business.
8 unchanged sentences
As a result, we may not generate physician and consumer demand or approval of Jeuveau ® .
−Removed: We rely on our digital technology and applications and our business and operations would suffer in the event of computer system failures or breach by hackers.
+Added: We rely on our digital technology and applications and our business and operations would suffer in the event of computer system failures or breach.
We are reliant on our digital technology, including our Evolus Practice App, which allows customers to open a new account, order Jeuveau ® , pay invoices and engage with our customer experience team and medical affairs representatives.
2 unchanged sentences
If our digital technology is unavailable when customers attempt to access them, or if they do not load as quickly as expected, users may not use our technology as often in the future, or at all, and our ability to sell Jeuveau ® through a more limited sales force may be disrupted and we may not realize the efficiencies of leveraging our digital technology, any of which could adversely affect our business and financial performance.
−Removed: As the number of users of our digital technology continues to grow we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy our needs.
−Removed: It is possible that we may fail to continue to effectively scale and grow our technical infrastructure to accommodate
−Removed: these increased demands, which may adversely affect our customers’ experience with our digital technology which may decrease our revenue and harm our results of operations.
−Removed: Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to disruption or damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks or cyber intrusions, insider threats, persons who access our systems in an authorized manner, or inadvertent misconfiguration of our systems.
+Added: As the number of users of our digital technology continues to grow we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy our
+Added: It is possible that we may fail to continue to effectively scale and grow our technical infrastructure to accommodate these increased demands, which may adversely affect our customers’ experience with our digital technology which may decrease our revenue and harm our results of operations.
+Added: Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to disruption or damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks or cyber intrusions, insider threats, persons who access our systems in an unauthorized manner, or inadvertent misconfiguration of our systems.
The risk of a security incident or system disruption, particularly through cyberattacks or cyber intrusions, including by computer hackers, foreign governments and cybercriminals, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
4 unchanged sentences
Moreover, a computer security incident that affects our systems or results in the unauthorized access to financial information, personally identifiable information (PII), customer information or data, including credit card transaction data or other sensitive information, could materially damage our reputation.
−Removed: In addition, such a security incident may require notification to governmental agencies, the media or individuals pursuant to various international, federal and state privacy and security laws, including the General Data Protection Regulation (GDPR);
−Removed: the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Clinical Health Act of 2009, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.
+Added: In addition, such a security incident may require notification to governmental agencies, the media or individuals pursuant to various international, federal and state privacy and security laws, including the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Clinical Health Act of 2009, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.
Additionally, the regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve and a number of states have adopted laws and regulations that may affect our privacy and data security practices regarding the use, disclosure and protection of PII.
68 unchanged sentences
We may need to increase the size of our organization, including our sales and marketing capabilities, in order to further market and sell Jeuveau ® and we may experience difficulties in managing this growth.
−Removed: As of December 31, 2021, we had 167 employees, all of whom constituted full-time employees.
+Added: As of December 31, 2022, we had 215 employees, all of whom were full-time employees.
Our management and personnel, systems and facilities currently in place may not be adequate to support future growth.
−Removed: Our need to effectively execute our growth strategy requires that we identify, recruit, retain, incentivize and integrate any additional employees to effectively manage any future clinical trials, manage our internal development efforts effectively while carrying out our
−Removed: contractual obligations to third parties, and continue to improve our operational, financial and management controls, reporting systems and procedures.
+Added: Our need to effectively execute our growth strategy requires that we identify, recruit, retain, incentivize and integrate any additional employees to effectively manage any future clinical trials, manage our internal development efforts effectively while carrying out our contractual
+Added: obligations to third parties, and continue to improve our operational, financial and management controls, reporting systems and procedures.
We face risks in building and managing a sales organization whether internally or by utilizing third parties, including our ability to retain and incentivize qualified individuals, provide adequate training to sales and marketing personnel, generate sufficient sales leads, effectively manage a geographically dispersed sales and marketing team, adequately provide complementary products to be offered by sales personnel, which may otherwise put us at a competitive disadvantage relative to companies with more extensive product lines, and handle any unforeseen costs and expenses.
3 unchanged sentences
Any inability to manage growth could delay the execution of our development and strategic objectives or disrupt our operations.
+Added: Our business may be materially adversely affected by the impact of the ongoing military conflict between Russia and Ukraine on the global economy and capital markets and other geopolitical tensions may also adversely affect our business.
+Added: and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the ongoing military conflict between Russia and Ukraine.
+Added: Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions, which could continue.
+Added: Additionally, the recent military conflict in Ukraine has led to the imposition of sanctions and other penalties by the U.S., EU and other countries against Russia.
+Added: Russian military actions and the resulting sanctions have adversely affected the global economy and financial markets and could lead to further instability and lack of liquidity in capital markets, which could make it more difficult for us to obtain additional funds at terms favorable to us, or at all.
+Added: Although our business has not been materially impacted by the ongoing military conflict between Russia and Ukraine, it is impossible to predict the extent to which our operations, or those of our suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact our business.
+Added: The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.
Our international operations will expose us to risks, and failure to manage these risks may adversely affect our operating results and financial condition.
−Removed: We currently have operations in the United States and are planning to have international operations, including launching in Europe in 2022.
+Added: We currently have operations in the United States, Canada, and Europe, having launched in Great Britain in the third quarter of 2022 and in Germany and Austria in February 2023.
International operations are subject to a number of inherent risks, and our future results could be adversely affected by a number of factors, including differences in demand for our products due to local requirements or preferences, the difficulty of hiring and managing employees with cultural and geographic differences and the costs of complying with differing regulatory requirements.
Additionally, we may experience difficulties and increased costs due to differences in laws related to enforcing contracts, protecting intellectual property, taxes, tariffs and export regulations.
+Added: The current conflict between Ukraine and Russia may also impact European economies and consumer discretionary spending negatively.
+Added: We do not have significant international operations in Russia, Ukraine, or the surrounding regions that have been impacted by the conflict directly.
Our international operations will also subject us to risks related to multiple, conflicting and changing laws and regulations such as privacy regulations, including the GDPR, tax laws, export and import restrictions, employment laws, immigration laws, labor laws, regulatory requirements and other governmental approvals, permits and licenses.
1 unchanged sentence
These and other factors could harm our ability to gain future revenue and, consequently, materially impact our business, operating results and financial condition.
+Added: Fluctuations in currency exchange rates may negatively affect our financial condition and results of operation s.
+Added: Exchange rate fluctuations may affect the costs that we incur in our operations.
+Added: The main currencies to which we are exposed to such fluctuations are the British pound and the EU euro.
+Added: The exchange rates between these currencies and the U.S.
+Added: dollar in recent years have fluctuated significantly and may continue to do so in the future.
+Added: A depreciation of these currencies against the U.S.
+Added: dollar will decrease the U.S.
+Added: dollar equivalent of the amounts derived from foreign operations reported in our consolidated financial statements, and an appreciation of these currencies will result in a corresponding increase in such amounts.
+Added: The cost of certain items, such as raw materials, manufacturing, employee salaries and transportation and freight, required by our operations may be affected by changes in the value of the relevant currencies.
+Added: To the extent that we are required to pay for goods or services in foreign currencies, the appreciation of such currencies against the U.S.
+Added: dollar will tend to negatively affect our business.
+Added: There can be no assurance that foreign currency fluctuations will not have a material adverse effect on our business, financial condition and results of operations.
If we fail to attract and keep senior management and key scientific personnel, we may be unable to market and sell Jeuveau ® successfully, or any future products we develop.
Our success depends in part on our continued ability to attract, retain and motivate highly qualified management.
−Removed: We believe that our future success is highly dependent upon the contributions of our senior management, particularly David Moatazedi, our President, Chief Executive Officer and member of our board of directors, Lauren Silvernail, our Chief Financial Officer and Executive Vice President, Corporate Development, Rui Avelar, our Chief Medical Officer and Head of R&D, and Crystal Muilenburg, our Chief Marketing Officer, as well as other members of our senior management team.
+Added: We believe that our future success is highly dependent upon the contributions of our senior management, particularly David Moatazedi, our President, Chief Executive Officer and member of our board of directors, Sandra Beaver, our Chief Financial Officer, and Rui Avelar, our Chief Medical Officer and Head of R&D, as well as other members of our senior management team.
The loss of services of any of these individuals could delay or prevent the successful development of our product pipeline, completion of our planned clinical trials or the commercialization of Jeuveau ® or any future products we develop.
In addition, we could experience difficulties attracting and retaining qualified employees in the future.
−Removed: For example, competition for qualified personnel in the pharmaceuticals and aesthetic medicine field is intense due to the limited number of individuals who possess the skills and experience required by our industry.
+Added: For example, competition for qualified personnel in the pharmaceuticals and medical aesthetic field is intense due to the limited number of individuals who possess the skills and experience required by our industry.
We may not be able to attract and retain quality personnel on acceptable terms, or at all.
18 unchanged sentences
In some cases, these hazardous materials and various wastes resulting from their use are stored at Daewoong’s facilities pending their use and disposal.
−Removed: We and Daewoong cannot eliminate the risk of contamination, which could cause an interruption of Daewoong’s manufacturing processes, our commercialization efforts, business operations and environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, manufacture, storage, handling and disposal of these materials and specified waste products.
+Added: We and Daewoong cannot eliminate the risk of contamination, which could cause an interruption of Daewoong’s manufacturing processes, our commercialization efforts, business operations and environmental damage resulting in costly
+Added: clean-up and liabilities under applicable laws and regulations governing the use, manufacture, storage, handling and disposal of these materials and specified waste products.
Although we believe that the safety procedures utilized by Daewoong for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, this may not eliminate the risk of accidental contamination or injury from these materials.
2 unchanged sentences
We may use third-party collaborators to help us develop, validate or commercialize any new products, and our ability to commercialize such products could be impaired or delayed if these collaborations are unsuccessful.
−Removed: We may license or selectively pursue strategic collaborations for the development, validation and commercialization of Jeuveau ® and any future product candidates.
+Added: We may license or selectively pursue strategic collaborations for the development, validation and commercialization of Jeuveau ® and any future product candidates, such as the Collaboration Agreement entered into in June 2022.
In any third-party collaboration, we would be dependent upon the success of the collaborators in performing their responsibilities and their continued cooperation.
5 unchanged sentences
Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.
−Removed: Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to consumers, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such
−Removed: ownership without regard to the merits of the challenge and industry and market conditions generally.
+Added: Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to consumers, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate.
15 unchanged sentences
In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
−Removed: Planned discontinuation of LIBOR could have an adverse impact on operations.
+Added: The planned discontinuation of LIBOR could have an adverse impact on operations.
As of December 31, 2022, we had $71.9 million of outstanding indebtedness that bears interest at a floating rate using London Interbank Offered Rate ("LIBOR") as the applicable reference rate.
−Removed: LIBOR has been the subject of regulatory guidance and proposals for reform.
−Removed: In March 2021, the United Kingdom's Financial Conduct Authority, the authority that regulates LIBOR, and ICE Benchmark Administration (“IBA”), the authority that administers LIBOR, announced that the publication of one-week and two-month USD LIBOR maturities and the non-USD LIBOR maturities will cease immediately after December 31, 2021, with the publication of overnight, one-, three-, six-, and 12-month USD LIBOR ceasing immediately after June 30, 2023.
−Removed: The United States Federal Reserve also issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021.
−Removed: Changes in, or the planned discontinuation of, LIBOR would cause changes in how interest is calculated on our floating rate debt including our term loans.
−Removed: Recent proposals for LIBOR reforms may result in the establishment of new methods of calculating LIBOR or the establishment of one or more alternative benchmark rates.
−Removed: Our floating rate debt instruments, including our term loans, provide for alternate interest rate calculations if LIBOR is no longer widely available or should the alternative interest rate prove more favorable.
−Removed: At this time, no consensus exists as to what rate or rates will become accepted alternatives to LIBOR, although the U.S.
−Removed: Federal Reserve, in connection with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.
−Removed: financial institutions, is considering replacing U.S.
−Removed: dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”).
−Removed: In addition, recent New York state legislation effectively codified the use of SOFR as the alternative to LIBOR in the absence of another chosen replacement rate, which may affect contracts governed by New York state law, including our Credit Agreement.
−Removed: SOFR is calculated based on short-term repurchase agreements, backed by Treasury securities.
−Removed: SOFR is observed and backward looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members.
−Removed: Given the inherent differences between LIBOR and SOFR or any other alternative benchmark rate that may be established, there are many uncertainties regarding a transition from LIBOR, including, but not limited to, the need to amend our debt instruments with LIBOR as the referenced rate and how this will impact our cost of variable rate debt.
−Removed: We will also need to consider any new contracts and if whether they should reference an alternative benchmark rate or include suggested fallback language, as published by the Alternative Reference Rates Committee.
−Removed: The consequences of these
−Removed: developments with respect to LIBOR cannot be entirely predicted and span multiple future periods but could result in an increase in the cost of our variable rate debt which may be detrimental to our financial position or operating results.
+Added: LIBOR, the London interbank offered rate, is the interest rate benchmark used as a reference rate on our variable rate debt, including our Credit Facility.
+Added: On March 5, 2021, LIBOR’s regulator, the Financial Conduct Authority and administrator, ICE Benchmark Administration, announced that the publication of one-week and two-month USD LIBOR maturities and the non-USD LIBOR maturities will cease immediately after December 31, 2021, with the publication of overnight, one-, three-, six-, and 12-month USD LIBOR ceasing immediately after June 30, 2023.
+Added: On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR ACT”) was signed into law.
+Added: Under the LIBOR Act, the Board of Governors of the Federal Reserve System is directed to select the Secured Overnight Financing Rate (“SOFR”), published by the Federal Reserve Bank of New York, as the replacement rate for contracts that reference LIBOR as a benchmark rate and that do not contain either a specified replacement rate or a replacement mechanism after USD LIBOR ceases publication.
+Added: In addition, recent New York state legislation effectively codified the use of SOFR as the alternative to LIBOR in the absence of another chosen replacement rate, which may affect contracts governed by New York state law.
+Added: SOFR is calculated differently from LIBOR and the inherent differences between LIBOR and SOFR or any other alternative benchmark rate gives rise to many uncertainties, including the need to amend existing debt instruments and the need to choose alternative reference rates in new contracts.
+Added: Furthermore, uncertainty regarding whether or when SOFR or other alternative reference rates will be widely accepted by lenders as the replacement for LIBOR may impact the liquidity of the SOFR loan market, and SOFR itself.
+Added: Since the initial publication of SOFR, daily changes in the rate have, on occasion, been more volatile than daily changes in comparable benchmark or market rates, and SOFR over time may bear little or no relation to the historical actual or historical indicative data.
+Added: It is possible that the volatility of and uncertainty around SOFR as a LIBOR replacement rate and the applicable credit adjustment would result in higher borrowing costs for us, and would adversely affect our liquidity, financial condition, and earnings.
+Added: The consequences of these developments with respect to LIBOR cannot be entirely predicted and span multiple future periods but could result in an increase in the cost of our variable rate debt which may negatively impact our financial results.
Risks Related to Our Relationship with Daewoong
1 unchanged sentence
Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect our development or commercialization of Jeuveau ® .
−Removed: Pursuant to the Daewoong Agreement, as it has been amended from time to time, we have secured an exclusive license from Daewoong, a South Korean pharmaceutical manufacturer, to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau ® for aesthetic indications in the United States, EU, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, Russia, certain members of the Commonwealth of Independent States, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan.
+Added: Pursuant to the Daewoong Agreement, as it has been amended from time to time, we have secured an exclusive license from Daewoong, a South Korean pharmaceutical manufacturer, to import, distribute, promote, market, develop, offer for sale and otherwise commercialize and exploit Jeuveau ® for aesthetic indications in the United States, EU, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, certain members of the Commonwealth of Independent States, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan.
The Daewoong Agreement imposes on us obligations relating to exclusivity, territorial rights, development, commercialization, funding, payment, diligence, sublicensing, intellectual property protection and other matters.
3 unchanged sentences
If we fail to achieve minimum annual purchase targets of Jeuveau ® under the Daewoong Agreement, Daewoong may, at its sole option, elect to convert the exclusive license to a non-exclusive license.
−Removed: In light of the COVID-19 outbreak and the potential loss of our ability to discount the product to levels previously provided as a result of the Medytox/Allergan Settlement Agreements, it may become more difficult for us to achieve the minimum annual purchase targets for Jeuveau ® which may result in the license being converted to a non-exclusive license.
+Added: In light of the COVID-19 outbreak, any potential decline in consumer discretionary spending and the potential loss of our ability to discount the product to levels previously provided as a result of the Medytox Settlement Agreement, it may become more difficult for us to achieve the minimum annual purchase targets for Jeuveau ® which may result in the license being converted to a non-exclusive license.
The initial term of the Daewoong Agreement will expire on September 30, 2023 in any of the aforementioned territories.
11 unchanged sentences
Although alternative sources of supply may exist, the number of third-party suppliers with the necessary manufacturing and regulatory expertise and facilities is limited, and it could be expensive and take a significant amount of time to arrange for and qualify alternative suppliers, which could have a material adverse effect on our business.
−Removed: Suppliers of any new product candidate would be required to qualify under
−Removed: applicable regulatory requirements and would need to have sufficient rights under applicable intellectual property laws to the method of manufacturing the product candidate.
+Added: Suppliers of any new product candidate would be required to qualify under applicable regulatory requirements and would need to have sufficient rights under applicable intellectual property laws to the method of manufacturing the product candidate.
Obtaining the necessary FDA approvals or other qualifications under applicable regulatory requirements and ensuring non-infringement of third-party intellectual property rights could result in a significant interruption of supply and could require the new manufacturer to bear significant additional costs which may be passed on to us.
13 unchanged sentences
Moreover, Daewoong developed the manufacturing process for Jeuveau ® and manufactures Jeuveau ® in a recently constructed facility located in South Korea.
−Removed: If this facility were to be damaged, destroyed or otherwise unable to operate or comply with regulatory requirements, whether due to earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural disasters, public health emergencies (such as the COVID-19 outbreak) employee malfeasance, terrorist acts, power outages or otherwise, or if operations at the facility is disrupted for any other reason, such an event could jeopardize Daewoong’s ability to manufacture Jeuveau ® as promptly as we or our customers expect or possibly at all.
+Added: If this facility were to be damaged, destroyed or otherwise unable to operate or
+Added: comply with regulatory requirements, whether due to earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural disasters, public health emergencies (such as the COVID-19 outbreak) employee malfeasance, terrorist acts, power outages or otherwise, or if operations at the facility is disrupted for any other reason, such an event could jeopardize Daewoong’s ability to manufacture Jeuveau ® as promptly as we or our customers expect or possibly at all.
If Daewoong is unable to manufacture Jeuveau ® within a timeframe that meets our and our customers’ expectations, our business, prospects, financial results and reputation could be materially harmed.
8 unchanged sentences
In addition, our product will have fixed future expiration dates.
−Removed: If we overestimate requirements for Jeuveau ® , we will have excess inventory, which may have to be disposed of if such inventory exceeds approved expiration dates, which would result in lost revenues
−Removed: and increase our expenses.
+Added: If we overestimate requirements for Jeuveau ® , we will have excess inventory, which may have to be disposed of if such inventory exceeds approved expiration dates, which would result in lost revenues and increase our expenses.
If we underestimate requirements for Jeuveau ® , we may have inadequate inventory, which could interrupt, delay or prevent delivery of our products to our customers.
3 unchanged sentences
Our commercial success depends in part on our avoiding infringement of the proprietary rights of third parties.
−Removed: Competitors in the field of dermatology, aesthetic medicine and neurotoxins have developed large portfolios of patents and patent applications in fields relating to our business.
+Added: Competitors in the field of dermatology, medical aesthetic and neurotoxins have developed large portfolios of patents and patent applications in fields relating to our business.
In particular, there are patents held by third parties that relate to the treatment with neurotoxin-based products for the indication we are currently marketing.
13 unchanged sentences
In addition to claims of patent infringement, third parties may bring claims against us asserting misappropriation of proprietary technology or other information in the development, manufacture and commercialization of Jeuveau ® or any of our future product candidates.
−Removed: Defense of such a claim would require dedicated time and resources, which time and resources could otherwise be used by us toward the maintenance of our own intellectual property and the development and commercialization of Jeuveau ® and any of our future product candidates or by any of our current or future licensors for operational upkeep and manufacturing of our products.
−Removed: For example, prior to entering into the Medytox/Allergan Settlement Agreements, we were a defendant in a lawsuit brought by Medytox in the Superior Court of the State of California, or the Medytox Litigation, and a respondent in an action filed by Allergan and Medytox in the U.S.
+Added: Defense of such a claim would require dedicated time and resources, which time and resources
+Added: could otherwise be used by us toward the maintenance of our own intellectual property and the development and commercialization of Jeuveau ® and any of our future product candidates or by any of our current or future licensors for operational upkeep and manufacturing of our products.
+Added: For example, prior to entering into the Medytox Settlement Agreement, we were a defendant in a lawsuit brought by Medytox in the Superior Court of the State of California, or the Medytox Litigation, and a respondent in an action filed by Allergan and Medytox in the U.S.
International Trade Commission, each alleging, among other things, that Daewoong stole Medytox’s botulinum toxin bacterial strain, or the BTX strain, that Daewoong misappropriated certain trade secrets of Medytox, including the process used to manufacture Jeuveau ® (which Medytox claims is similar to its biopharmaceutical drug, Meditoxin) using the BTX strain, and that Daewoong thereby interfered with Medytox’s plan to license Meditoxin to us, or the Medytox Litigation.
−Removed: Each of the Medytox Litigation and the ITC Action diverted the attention of our senior management and were costly, in terms of legal costs and the ultimate payments and royalties to be paid under the Medytox/Allergan Settlement Agreements.
+Added: Each of the Medytox Litigation and the ITC Action diverted the attention of our senior management and were costly, in terms of legal costs and the ultimate payments and royalties to be paid under the Medytox Settlement Agreement.
Parties making claims against us or any of our current or future licensors may request and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates.
1 unchanged sentence
In the event of a successful claim of infringement, we or any of our current or future licensors may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties which may not be commercially or more available, pay royalties or redesign our infringing products or manufacturing processes, which may be impossible or require substantial time and monetary expenditure.
−Removed: Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research, manufacture clinical trial supplies or allow commercialization of Jeuveau ® or any future product
+Added: Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research, manufacture clinical trial supplies or allow commercialization of Jeuveau ® or any future product candidates.
We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.
16 unchanged sentences
With respect to patents that are issued to our licensors, or patents that may be issued on patent applications, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed or invalidated.
−Removed: As a licensee, we are reliant on Daewoong and our future licensors to defend any third-party claims.
+Added: As a licensee, we are reliant on Daewoong and our
+Added: future licensors to defend any third-party claims.
Our licensors may not defend or prosecute such actions as vigorously or in the manner that we would have if entitled to do so, and we will be subject to any judgment or settlement resulting from such actions.
8 unchanged sentences
Interference, derivation or other proceedings brought at the USPTO may be necessary to determine the priority or patentability of inventions with respect to any of our future patent applications or those of our licensors or collaborators.
−Removed: Litigation or USPTO proceedings brought by us or any of our current or future licensors may fail
−Removed: or may be invoked against us or our licensors by third parties.
+Added: Litigation or USPTO proceedings brought by us or any of our current or future licensors may fail or may be invoked against us or our licensors by third parties.
Even if we are successful, domestic or foreign litigation or USPTO or foreign patent office proceedings may result in substantial costs and distraction to our management or the management of any of our current or future licensors, including Daewoong.
16 unchanged sentences
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
−Removed: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
+Added: The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it
+Added: difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
7 unchanged sentences
Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
−Removed: Enforcing a claim that a party illegally disclosed or
−Removed: misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.
+Added: Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.
In addition, some courts within and outside the United States are less willing or unwilling to protect trade secrets.
17 unchanged sentences
Third parties may assert that we are using trademarks or trade names that are confusingly similar to their marks.
−Removed: If any third party were able to establish that our trademarks or trade names were infringing their marks, that third party may be able to block our ability to use the infringing trademark or trade name.
+Added: If any third party were able to establish that our trademarks or trade names were infringing their marks, that third party may be able to
+Added: block our ability to use the infringing trademark or trade name.
In addition, if a third party were to bring such a claim, we would be required to dedicate time and resources to fight the claim, which time and resources could otherwise be used toward the maintenance of our own intellectual property.
9 unchanged sentences
Daewoong is also subject to extensive regulation by the FDA and the South Korean regulatory authorities as well as other regulatory authorities.
−Removed: failure to comply with all applicable regulatory requirements, or Daewoong’s failure to comply with applicable regulatory requirements, including those promulgated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and the Controlled Substances Act, may subject us to operating restrictions and criminal prosecution, monetary penalties and other enforcement or administrative actions, including, sanctions, warnings, product seizures, recalls, fines, injunctions, suspension, revocation of approvals, or exclusion from future participation in the Medicare and Medicaid programs.
+Added: Our failure to comply with all applicable regulatory requirements, or Daewoong’s failure to comply with applicable regulatory requirements, including those promulgated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and the Controlled Substances Act, may subject us to operating restrictions and criminal prosecution, monetary penalties and other enforcement or administrative actions, including, sanctions, warnings, product seizures, recalls, fines, injunctions, suspension, revocation of approvals, or exclusion from future participation in the Medicare and Medicaid programs.
Following regulatory approval, we, and our direct and indirect suppliers, including Daewoong, remain subject to the periodic inspection of our plants and facilities, review of production processes, and testing of our products to confirm that we are in compliance with all applicable regulations.
16 unchanged sentences
• seize or detain products or require us to initiate a product recall.
+Added: Any of the foregoing could materially harm our business and reputation.
Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA, the EMA or other similar foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.
28 unchanged sentences
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business.
−Removed: If we fail to obtain regulatory approvals in foreign jurisdictions for Jeuveau ® or any future product candidates, we will be
−Removed: unable to market our products outside of the United States.
+Added: If we fail to obtain regulatory approvals in foreign jurisdictions for Jeuveau ® or any future product candidates, we will be unable to market our products outside of the United States.
In addition to regulations in the United States, we are and will be subject to a variety of foreign regulations governing manufacturing, clinical trials, commercial sales and distribution of our future products.
16 unchanged sentences
federal and most state laws intended to prevent health care fraud and abuse, we may in the future become subject to such laws.
−Removed: The Anti-Kickback Statute prohibits the offer, receipt, or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.
+Added: The Anti-Kickback Statute prohibits the offer, receipt, or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that
+Added: would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.
Remuneration has been broadly defined to include anything of value, including cash, improper discounts, and free or reduced price items and services.
7 unchanged sentences
If our marketing or other arrangements were determined to violate anti-kickback or related laws, including the FCA or an all-payor law, then we could be subject to penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual imprisonment or the curtailment or restructuring of our operations, any of which could materially and adversely affect our ability to operate our business and our financial results.
−Removed: State and federal authorities have aggressively targeted pharmaceutical companies for alleged violations of these anti-fraud statutes, based on improper research or consulting contracts with doctors, certain marketing arrangements with pharmacies and other healthcare providers that rely on volume-based pricing, off-label marketing schemes, and other improper
−Removed: promotional practices.
+Added: State and federal authorities have aggressively targeted pharmaceutical companies for alleged violations of these anti-fraud statutes, based on improper research or consulting contracts with doctors, certain marketing arrangements with pharmacies and other healthcare providers that rely on volume-based pricing, off-label marketing schemes, and other improper promotional practices.
Companies targeted in such prosecutions have paid substantial fines, have been ordered to implement extensive corrective action plans, and have in many cases become subject to consent decrees severely restricting the manner in which they conduct their business, among other consequences.
14 unchanged sentences
In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any future products would harm our business, financial condition and results of operations.
−Removed: Risks Related to Our Relationship with Alphaeon and Alphaeon 1, LLC
−Removed: Certain of our directors may have actual or potential conflicts of interest because of their ownership of debt and equity securities in AEON Biopharma, Inc., or AEON, and Alphaeon 1, LLC and their positions with AEON and Alphaeon 1, LLC.
−Removed: Prior to our initial public offering in 2018, we were wholly owned by AEON (previously known as ALPHAEON Corp.).
−Removed: In January 2020, AEON transferred all of their stock ownership in us to Alphaeon 1, LLC.
−Removed: As of December 31, 2021, Alphaeon 1, LLC owned 10.9% of our outstanding shares of common stock.
−Removed: Vikram Malik, Simone Blank, and Robert Hayman serve on our board of directors.
−Removed: Such directors or entities they are affiliated with currently own and may in the future own equity, debt or convertible debt of AEON and Alphaeon 1, LLC, which we refer to collectively as the Alphaeon entities.
−Removed: These individuals’ or entities’ holdings of debt or equity securities, options to purchase shares of Alphaeon entities or other equity awards in the Alphaeon entities may be significant for some of these persons or entities compared to these persons’ or entities’ total assets.
−Removed: Additionally, each of Mr.
−Removed: Malik, and Ms.
−Removed: Blank serve on the board of directors of Alphaeon and board of managers of Alphaeon 1, LLC.
−Removed: Their positions at the Alphaeon entities and the ownership of any Alphaeon entity equity, debt or equity awards may create, or may create the appearance of, conflicts of interest when these directors are faced with decisions that could have different implications for the Alphaeon entities than the decisions have for us.
−Removed: These decisions include corporate opportunities;
−Removed: the impact that operating decisions for our business may have on the Alphaeon entities’ consolidated financial statements;
−Removed: the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on the Alphaeon entities’ current or future indebtedness or the covenants under that indebtedness;
−Removed: the timing and amount of financing efforts, whether they are debt or equity, and the amount of resulting dilution to existing shareholders;
−Removed: business combinations involving us;
−Removed: our dividend policy;
−Removed: and management stock ownership.
−Removed: Furthermore, disputes may arise between Alphaeon entities and us relating to our past and ongoing relationship, and these potential conflicts of interest may make it more difficult for us to favorably resolve such disputes, including those related to:
−Removed: • indemnification and other matters arising from our initial public offering;
−Removed: • sales or other disposal by Alphaeon 1, LLC of all or a portion of its ownership interest in us;
−Removed: • business combinations involving us.
−Removed: We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated party.
−Removed: While we are not controlled by the Alphaeon entities, we may not have the leverage to negotiate amendments to these agreements, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.
−Removed: AEON and its directors and officers will have limited liability to us or you for breach of fiduciary duty.
−Removed: Our certificate of incorporation provides that, subject to any contractual provision to the contrary, AEON has no obligation to refrain from:
−Removed: engaging in the same or similar business activities or lines of business as we do;
−Removed: doing business with any of our clients or consumers;
−Removed: or employing or otherwise engaging any of our officers or employees.
−Removed: Our certificate of incorporation provides for the allocation of certain corporate opportunities between us and AEON.
−Removed: Under these provisions, neither AEON nor its other affiliates, nor any of their officers, directors, agents, stockholders, members, partners and subsidiaries, will have any obligation to present to us certain corporate opportunities.
−Removed: For example, a director or officer of our company who also serves as a director, officer or employee of AEON or any of its other affiliates may present to AEON certain acquisitions, in-licenses, potential development programs or other opportunities that may be complementary to our business, if he or she was not offered such corporate opportunity in his or her capacity as our director or officer, and, as a result, such opportunities may not be available to us.
−Removed: To the extent attractive corporate opportunities are allocated to AEON or its other affiliates instead of to us, we may not be able to benefit from these opportunities.
−Removed: In addition, under our certificate of incorporation, neither AEON nor any officer or director of AEON, except as provided in our certificate of incorporation, will be liable to us or to our stockholders for breach of any fiduciary or other duty by reason of any of these activities.
−Removed: As of December 31, 2021, AEON no longer held any shares of our stock.
Risks Related to Our Common Stock
15 unchanged sentences
The market price for our common stock may be influenced by many factors, some of which are beyond our control, including:
−Removed: • introductions and announcements of new technologies and products by us, any commercialization partners or our competitors, and the timing of these introductions and announcements;
+Added: • changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;
+Added: • the public’s reaction to our earnings releases, other public announcements and filings with the SEC or those of companies that are perceived to be similar to us;
• variations in our financial results or those of companies that are perceived to be similar to us;
−Removed: • success or failure of competitive products or medical aesthetic products generally;
−Removed: • announcements of results of clinical trials or regulatory approval or disapproval of product candidates;
−Removed: • changes in the structure of healthcare payment systems;
−Removed: • announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, new product approvals and introductions, joint ventures or capital commitments;
−Removed: • overall financial market conditions for the pharmaceutical and biopharmaceutical sectors and issuance of securities analysts’ reports or recommendations;
−Removed: • unanticipated safety concerns related to the use of Jeuveau ® or any of our future products;
• any termination or loss of rights under the Daewoong Agreement;
2 unchanged sentences
• adverse developments concerning our manufacturer or any future strategic partnerships;
−Removed: • adverse developments affecting our compliance with the Medytox/Allergan Settlement Agreements or Daewoong’s ability to satisfy its reimbursement obligations to us with respect to the royalties payable to Medytox and Allergan;
+Added: • adverse developments affecting our compliance with the Medytox Settlement Agreement;
• adverse developments concerning litigation pending against us;
−Removed: • changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;
−Removed: • the public’s reaction to our earnings releases, other public announcements and filings with the SEC;
+Added: • introductions and announcements of new technologies and products by us, any commercialization partners or our competitors, and the timing of these introductions and announcements;
+Added: • success or failure of competitive products or medical aesthetic products generally;
+Added: • announcements of results of clinical trials or regulatory approval or disapproval of product candidates;
+Added: • unanticipated safety concerns related to the use of Jeuveau ® or any of our future products;
+Added: • changes in the structure of healthcare payment systems;
+Added: • announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, new product approvals and introductions, joint ventures or capital commitments;
+Added: • overall financial market conditions for the pharmaceutical and biopharmaceutical sectors and issuance of securities analysts’ reports or recommendations;
• rumors and market speculation involving us or other companies in our industry;
3 unchanged sentences
• operating and stock performance of other companies that investors deem comparable to us and overall performance of the equity markets;
−Removed: • additions or departures of key personnel, including our Chief Executive Officer, Chief Financial Officer, Chief Medical Officer and Chief Marketing Officer;
+Added: • additions or departures of key personnel, including our Chief Executive Officer, Chief Financial Officer, and Chief Medical Officer;
• intellectual property, product liability or other litigation against us, our manufacturer or other parties on which we rely or litigation against our general industry;
1 unchanged sentence
• changes in accounting standards, policies, guidelines, interpretations or principles;
−Removed: • economic conditions in the markets in which we operate, including those related to COVID-19;
+Added: • economic conditions in the markets in which we operate, including those related to COVID-19 and the Russian-Ukrainian conflict;
• other factors described in this “Risk Factors” section.
7 unchanged sentences
Additionally, as discussed above, each of Medytox, Alphaeon 1, LLC and Daewoong owns a significant portion of our outstanding shares of common stock.
−Removed: Subject to the restrictions described in the paragraph below, future sales of these shares in the public market will be subject to certain contractual limitations in the case of shares of our common stock owned by Medytox and the volume and other restrictions of Rule 144 under the Securities Act for so long as Medytox or Alphaeon 1, LLC are deemed to be our affiliate, unless the shares to be sold are registered with the SEC.
+Added: Subject to the restrictions described in the paragraph below, future sales of these shares in the public market will be subject to certain contractual limitations in the case of shares of our common stock owned by Medytox and the volume and other restrictions of Rule 144 under the Securities Act for so long as Medytox, Alphaeon 1,
+Added: LLC or Daewoong are deemed to be our affiliate, unless the shares to be sold are registered with the SEC.
Additionally, the shares of common stock held by Medytox are subject to contractual restrictions on transfer that, subject to certain limited exceptions such as transfers to affiliates prohibit Medytox from transferring more than 25% of the shares it holds prior to September 16, 2023, more than 50% of the shares it holds prior to September 16, 2024 and more than 75% of the shares it holds prior to September 16, 2025, with such contractual restrictions terminating on September 16, 2025.
16 unchanged sentences
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
−Removed: In addition, we are subject to Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
+Added: In addition, we are subject to Section 203 of the General Corporation Law of the State of Delaware, or the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business
+Added: combinations with an interested stockholder who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
This provision could have the effect of delaying or preventing a change-of-control, whether or not it is desired by or beneficial to our stockholders.
5 unchanged sentences
The choice of forum provision in our certificate of incorporation will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
−Removed: This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our
−Removed: directors, officers, employees and agents even though an action, if successful, might benefit our stockholders.
+Added: This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders.
Stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware.
21 unchanged sentences
To the extent we take advantage of any of these exemptions, the information that we provide stockholders may be different than what is available with respect to other public companies.
−Removed: Investors may find our common stock less attractive because
−Removed: we will rely on these exemptions.
+Added: Investors may find our common stock less attractive because we will rely on these exemptions.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
2 unchanged sentences
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our trading price may be more volatile.
+Added: General Risk Factors
Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities.
5 unchanged sentences
We may choose to initiate, or may become subject to, litigation as a result of the proxy contest or matters arising from the proxy contest, which would serve as a further distraction to our board of directors and management and would require us to incur significant additional costs.
−Removed: In addition, actions such as those described above could cause significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
+Added: In addition, actions such as those described above could cause
+Added: significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
If securities or industry analysts publish unfavorable research about our business or decrease the frequency or cease to provide coverage of our company, our stock price and trading volume could decline.
10 unchanged sentences
The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.
−Removed: The Sarbanes-
−Removed: Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
+Added: The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required.
8 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.