Evolus, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosure About Market Risk. We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate and Market Risk We are exposed to market risks in the ordinary course of our business. Our cash and cash equivalents include cash in readily available checking and money market accounts. These securities are not dependent on interest rate fluctuations that could cause the principal amount of these assets to fluctuate and thus do not pose any interest rate risk to us. While we believe our cash and cash equivalents do not contain excessive risk, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in market value. We are exposed to risks related to fluctuations in interest rates on our outstanding variable rate for the Pharmakon Term Loans. As of December 31, 2024, we had $121.5 million outstanding on the term loan. We estimate that a 1% increase or decrease in underlying interest rates as of December 31, 2024 would not have a material impact on annual interest expense. Foreign Exchange Our operations are primarily conducted in the U.S. dollar. Exchange rate fluctuations may affect the costs that we incur in our operations. We conduct operations in foreign countries and are mainly exposed to fluctuations in the British pound and the EU euro. Transactional exposure arises when transactions occur in currencies other than the U.S. dollar. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction with the resulting liabilities being translated into the U.S. dollar at exchange rates prevailing at the balance sheet date. The resulting gains and losses, which were insignificant for the years ended December 31, 2024, 2023, and 2022, are included in other expenses in the consolidated statement of operations and comprehensive loss. 60 Table of Contents Item 8. Consolidated Financial Statements and Supplementary Data. Evolus, Inc. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 62 Consolidated Financial Statements: Consolidated Balance Sheets 64 Consolidated Statements of Operations and Comprehensive Loss 65 Consolidated Statements of Stockholders’ Equity (Deficit) 66 Consolidated Statements of Cash Flows 67 Notes to Consolidated Financial Statements 69 61 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Evolus, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Evolus, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 4, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. 62 Table of Contents Valuation of fair value of contingent royalty obligation Description of the Matter As discussed in Note 2 of the consolidated financial statements, the Company records payment obligations to its founders which consists of quarterly royalty payments of a low single digit percentage of net sales of Jeuveau®. The obligations terminate in the second quarter of 2029, which is the 10-year anniversary of the first commercial sale of Jeuveau® in the United States. The Company determines the fair value of the contingent royalty obligation at each reporting period end based on significant unobservable inputs using a discounted cash flows method. Auditing the Company’s contingent royalty obligation was challenging due to the effort required to evaluate the appropriateness of the significant unobservable inputs used in the fair value calculation, specifically the US projected net revenues of Jeuveau® during the payment period. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s contingent royalty obligation process. For example, we tested controls over management’s development of the above-described assumption used in the contingent royalty obligation. To test the estimated fair value of the contingent royalty obligation, we performed audit procedures that included, among others, assessing the terms of the arrangement, evaluating the methodology used, and testing the US projected net revenues of Jeuveau® used by the Company in its analysis. We also compared the US projected net revenues to current industry, market and economic trends and performed sensitivity analyses of other assumptions to evaluate the changes in the contingent royalty obligation that would result from changes in the assumptions. We also assessed the historical accuracy of management’s forecasts of US net revenues used in developing the estimate to assist in evaluating the reliability of the US projected net revenues of Jeuveau® utilized in the estimate. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2017. Irvine, California March 4, 2025 63 Table of Contents Evolus, Inc. Consolidated Balance Sheets (in thousands, except par value and share data) December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents $ 86,952 $ 62,838 Accounts receivable, net 47,682 30,529 Inventories 12,158 10,998 Prepaid expenses 3,349 5,700 Other current assets 1,201 2,356 Total current assets 151,342 112,421 Property and equipment, net 3,222 2,087 Operating lease right-of-use assets 7,185 5,763 Intangible assets, net 48,754 47,110 Goodwill 21,208 21,208 Other assets 858 409 Total assets $ 232,569 $ 188,998 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities Accounts payable $ 9,236 $ 4,271 Accrued expenses 40,791 33,813 Operating lease liabilities 1,718 1,377 Contingent royalty obligation payable to Evolus Founders 11,215 8,830 Total current liabilities 62,960 48,291 Operating lease liabilities 6,755 4,810 Contingent royalty obligation payable to Evolus Founders 33,550 36,200 Term loan, net of discount and issuance costs 121,506 120,359 Contingent milestone payment 2,270 — Deferred tax liability 6 27 Total liabilities $ 227,047 $ 209,687 Commitments and contingencies (Note 9) Stockholders’ equity (deficit) Preferred Stock, $ 0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2024 and 2023, respectively — — Common Stock, $ 0.00001 par value; 100,000,000 shares authorized; 63,497,548 and 57,820,621 shares issued and outstanding at December 31, 2024 and 2023, re spectively 1 1 Additional paid-in capital 615,825 538,716 Accumulated other comprehensive loss ( 905 ) ( 427 ) Accumulated deficit ( 609,399 ) ( 558,979 ) Total stockholders’ equity (deficit) 5,522 ( 20,689 ) Total liabilities and stockholders’ equity (deficit) $ 232,569 $ 188,998 See accompanying notes to consolidated financial statements. 64 Table of Contents Evolus, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) Year Ended December 31, 2024 2023 2022 Revenue: Product revenue, net $ 264,306 $ 199,721 $ 146,592 Service revenue 1,968 2,364 2,024 Total net revenues 266,274 202,085 148,616 Cost of goods sold 83,970 64,514 58,842 Gross profit 182,304 137,571 89,774 Operating expenses: Selling, general and administrative 198,025 164,944 141,840 Research and development 9,172 6,556 4,742 In-process research and development — 8,869 2,000 Revaluation of contingent royalty obligation payable to Evolus Founders 7,176 4,257 5,755 Depreciation and amortization 2,342 2,178 767 Total operating expenses 216,715 186,804 155,104 Loss from operations ( 34,411 ) ( 49,233 ) ( 65,330 ) Other income (expense): Interest income 3,263 860 119 Interest expense ( 18,735 ) ( 13,832 ) ( 9,097 ) Other income (expense), net 127 696 ( 9 ) Loss before income taxes: ( 49,756 ) ( 61,509 ) ( 74,317 ) Income tax expense 664 176 95 Net loss $ ( 50,420 ) $ ( 61,685 ) $ ( 74,412 ) Other comprehensive loss: Unrealized loss, net of tax ( 478 ) ( 90 ) ( 337 ) Comprehensive loss $ ( 50,898 ) $ ( 61,775 ) $ ( 74,749 ) Net loss per share, basic and diluted $ ( 0.81 ) $ ( 1.08 ) $ ( 1.33 ) Weighted-average shares outstanding used to compute basic and diluted net loss per share 62,016,853 56,918,721 56,065,297 See accompanying notes to consolidated financial statements. 65 Table of Contents Evolus, Inc. Consolidated Statements of Stockholders’ Equity (Deficit) (in thousands, except share data) Common Stock Additional Paid In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shares Amount Balance at December 31, 2021 55,576,988 $ 1 $ 504,757 $ — $ ( 422,882 ) $ 81,876 Issuance of common stock in connection with the incentive equity plan 683,582 — 539 — — 539 Stock-based compensation expense — — 10,833 — — 10,833 Net loss — — — — ( 74,412 ) ( 74,412 ) Other comprehensive loss — — — ( 337 ) — ( 337 ) Balance at December 31, 2022 56,260,570 $ 1 $ 516,129 $ ( 337 ) $ ( 497,294 ) $ 18,499 Issuance of common stock in connection with the incentive equity plan 950,051 — 224 — — 224 Issuance of common stock in connection with Symatese Europe Agreement 610,000 — 5,905 — — 5,905 Stock-based compensation — — 16,458 — — 16,458 Net loss — — — — ( 61,685 ) ( 61,685 ) Other comprehensive loss — — — ( 90 ) — ( 90 ) Balance at December 31, 2023 57,820,621 $ 1 $ 538,716 $ ( 427 ) $ ( 558,979 ) $ ( 20,689 ) Issuance of common stock in connection with the incentive equity plan 1,804,827 — 3,892 — — 3,892 Issuance of common stock upon follow-on offering, net of issuance costs 3,872,100 — 50,963 — — 50,963 Stock-based compensation — — 22,254 — — 22,254 Net loss — — — — ( 50,420 ) ( 50,420 ) Other comprehensive loss — — — ( 478 ) — ( 478 ) Balance at December 31, 2024 63,497,548 $ 1 $ 615,825 $ ( 905 ) $ ( 609,399 ) $ 5,522 See accompanying notes to consolidated financial statements. 66 Table of Contents Evolus, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities Net loss $ ( 50,420 ) $ ( 61,685 ) $ ( 74,412 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,297 5,133 3,722 Stock-based compensation 22,254 16,458 10,833 Provision for bad debts 2,449 1,440 1,598 Amortization of operating lease right-of-use assets 723 734 775 Amortization of debt discount and issuance costs 1,147 1,116 1,086 Deferred income taxes ( 21 ) 5 ( 18 ) Revaluation of contingent royalty obligation to Evolus Founders 7,176 4,257 5,755 Non-cash in-process research and development expense — 4,429 — Changes in assets and liabilities: Inventories 3,252 4,193 ( 10,688 ) Accounts receivable ( 19,602 ) ( 9,521 ) ( 9,389 ) Prepaid expenses 2,351 ( 1,798 ) 1,180 Other assets 706 ( 864 ) 4,854 Accounts payable 391 ( 1,017 ) 968 Accrued expenses 7,014 9,019 ( 5,199 ) Accrued litigation settlement — ( 5,000 ) ( 15,000 ) Operating lease liabilities ( 716 ) ( 907 ) ( 977 ) Net cash used in operating activities ( 17,999 ) ( 34,008 ) ( 84,912 ) Cash flows from investing activities Purchases of property and equipment ( 1,472 ) ( 473 ) ( 1,618 ) Additions to capitalized software ( 3,351 ) ( 1,154 ) ( 1,321 ) Net cash used in investing activities ( 4,823 ) ( 1,627 ) ( 2,939 ) Cash flows from financing activities Payment of contingent royalty obligation to Evolus Founders ( 7,441 ) ( 5,537 ) ( 4,185 ) Proceeds from issuance of long-term debt, net of discounts — 50,000 — Payments for debt issuance costs — ( 46 ) ( 500 ) Proceeds from follow-on offering, net of underwriting fees 51,211 — — Payments for offering costs ( 248 ) — — Cash proceeds from exercise of stock options 4,882 231 539 Tax withholding paid on behalf of employees for net share settlement ( 990 ) ( 7 ) — Net cash provided by (used in) financing activities 47,414 44,641 ( 4,146 ) Effect of exchange rates on cash and cash equivalents ( 478 ) ( 90 ) ( 337 ) Change in cash and cash equivalents 24,114 8,916 ( 92,334 ) Cash and cash equivalents, beginning of period 62,838 53,922 146,256 Cash and cash equivalents, end of period $ 86,952 $ 62,838 $ 53,922 See accompanying notes to consolidated financial statements. 67 Table of Contents Evolus, Inc. Consolidated Statements of Cash Flows (Continued) (in thousands) Year Ended December 31, 2024 2023 2022 Supplemental disclosure of cash flow information Cash paid for interest $ 17,545 $ 12,708 $ 7,999 Cash paid for income taxes 235 117 76 Non-cash investing and financing information Operating lease right-of-use assets obtained in exchange for operating lease liabilities 3,002 4,550 — Issuance of common stock in connection with Symatese Europe Agreement — 1,476 — See accompanying notes to consolidated financial statements. 68 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 1. Description of Business Description of Business Evolus, Inc., (“Evolus” or the “Company”) is a global performance beauty company focused on delivering products in the cash-pay aesthetic market. The Company received the approval of its first product Jeuveau ® (prabotulinumtoxinA-xvfs) from the U.S. Food and Drug Administration (the “FDA”) in February 2019. The product was also approved by Health Canada in August 2018, the European Commission (“EC”) in September 2019, the Australian Therapeutics Good Administration (“TGA”) in January 2023, and Swissmedic in November 2023. Jeuveau ® is a proprietary 900 kDa purified botulinum toxin type A formulation indicated for the temporary improvement in the appearance of moderate to severe glabellar lines, also known as “frown lines,” in adults. The Company commercially launched Jeuveau ® in the United States in May 2019, in Canada through a distribution partner in October 2019, and began its launch in Europe in September 2022. In 2023, the Company entered into an agreement to be the exclusive distributor of Evolysse™, a collection of hyaluronic acid gels currently in late-stage development in the U.S. and Europe. Regulatory approval has been received for the four Evolysse™ hyaluronic acid gel products in Europe under the brand name Estyme ® . The Company anticipates launching all four approved Evolysse™ products in Europe in the second half of 2025. In February 2025, the Company received approval from the U.S. Food and Drug Administration (the “FDA”) for Evolysse™ Form and Evolysse™ Smooth injectable hyaluronic acid gels for wrinkles and folds, such as nasolabial folds. The Company anticipates launching Evolysse™ Form and Evolysse™ Smooth in the United States in the second quarter of 2025. The Company anticipates two additional Evolysse™ products to be approved and launched in the United States in 2026 and 2027. The Company currently generates all of its net revenues from Jeuveau ® . The Company is headquartered in Newport Beach, California. Liquidity and Financial Condition The accompanying consolidated financial statements have been prepared on a basis that assumes that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of the Company’s liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects of the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Since inception, the Company has incurred recurring net operating losses and negative cash flows from operating activities; however, management anticipates achieving operating income and positive cash flows based on current projections for at least the next twelve months. The Company recorded loss from operations of $ 34,411 and a total net loss of $ 50,420 for the twelve months ended December 31, 2024. The Company used cash of $ 17,999 from operations during the twelve months ended December 31, 2024. As of December 31, 2024, the Company had $ 86,952 in cash and cash equivalents and an accumulated deficit of $ 609,399 . In March 2024, the Company completed a follow-on offering and issued 3,554,000 shares of its common stock, at a price to the public of $ 14.07 per share. The Company received net proceeds of $ 46,794 from the offering, after deducting underwriting discounts and commissions and other offering expenses. In addition, the Company granted the underwriters an option, exercisable for 30 days, to purchase up to 533,100 additional shares of common stock (the “option shares”) at the purchase price. In April 2024, the underwriters exercised their option to purchase 318,100 of the allotted option shares. The net proceeds to the Company from the sale of the option shares, after deducting the underwriters’ discounts and commissions, was $ 4,169 . On March 8, 2023, the Company entered into an “at-the-market” sales agreement (the “ATM Sales Agreement”) and filed a shelf registration statement on Form S-3 and corresponding prospectus with the Securities and Exchange Commission (“SEC”) to permit sales under the ATM Sales Agreement, which registration statement became effective on June 8, 2023. The Company has not sold any shares under the ATM Sales Agreement. See Note 10. Stockholders’ Equity for additional information. 69 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The Company believes that its current capital resources, which consist of cash and cash equivalents, will be sufficient to fund its operations through at least the next twelve months from the date the accompanying consolidated financial statements are issued based on its expected cash needs. The Company may need to raise additional capital to fund future operations or execute corporate development activities through entering into licensing or collaboration agreements with partners, grants or other sources of financing. Sufficient funds may not be available to the Company at all or on attractive terms when needed from equity or debt financings. If the Company is unable to obtain additional funding from these or other sources when needed, or to the extent needed, it may be necessary to reduce its scope of operations to reduce the current rate of spending through actions such as reductions in staff and delaying, scaling back, or suspending certain research and development, sales and marketing programs and other operational goals. Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Principles of Consolidation The Company’s consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned subsidiaries and have been prepared in conformity with GAAP. All intercompany transactions have been eliminated. Use of Estimates Management is required to make certain estimates and assumptions in order to prepare consolidated financial statements in conformity with GAAP. Such estimates and assumptions affect the reported consolidated financial statements. These estimates include, but are not limited to net revenues, allowance for doubtful accounts, fair value measurements and stock-based compensation, among others. Management bases estimates on historical experience and on assumptions that management believes are reasonable. The Company’s actual results could differ materially from those estimates. Risks and Uncertainties The Company is party to an agreement (the “Daewoong Agreement”) with Daewoong Pharmaceutical Co. Ltd. (“Daewoong”), pursuant to which the Company received an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, New Zealand, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan. Jeuveau ® is manufactured by Daewoong in a facility in South Korea. The Company also has the option to negotiate first with Daewoong to secure a distribution license for any product that Daewoong directly or indirectly develops or commercializes that is classified as an injectable botulinum toxin (other than Jeuveau ® ) in a territory covered by the Daewoong Agreement. The Company relies on Daewoong, its exclusive and sole supplier, to manufacture Jeuveau ® . Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect the Company’s commercialization of Jeuveau ® . See Note 9. Commitments and Contingencies for additional information. The Company commercially launched Jeuveau ® starting in the United States in May 2019 and in Canada through its distribution partner in October 2019. The Company also began commercially launching Jeuveau ® in Europe in 2022 and Australia in 2024 and, as such, has a limited history of sales in those markets. If any previously granted approval to market and sell Jeuveau ® is retracted or the Company is denied approval or approval is delayed by regulators in any other jurisdictions, it may have a material adverse impact on the Company’s business and its consolidated financial statements. The Company is also subject to risks common to companies in the pharmaceutical industry including, but not limited to, dependency on the commercial success of Jeuveau ® and Evolysse™ the Company’s approved products, significant competition within the medical aesthetics industry, its ability to maintain regulatory approval of Jeuveau ® , third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by aesthetic practitioners and patients, its ability to in-license, acquire or develop additional product candidates and to obtain the necessary approvals for those product candidates, and the need to scale manufacturing capabilities over time. 70 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Any disruption and volatility in the global capital markets, including caused by other events, such as public health crises, increased inflation and rising interest rates, increased tariffs, and geopolitical conflicts, including the military conflict between Russia and Ukraine and the ongoing conflict in the Middle East, may increase the Company’s cost of capital and adversely affect its ability to access financing when and on terms that the Company desires. Any of these events could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows. Segment Reporting The Company has determined that it operates in a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer who manages operations and reviews the financial information as a single operating segment for the purposes of allocating resources and evaluating its financial performance. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. Substantially all of the Company’s cash is held by financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. To date, the Company has not experienced any losses associated with this credit risk and continues to believe that this exposure is not significant. The Company invests, or plans to soon invest, its excess cash, in line with its investment policy, primarily in money market funds and debt instruments of U.S. government agencies. The Company’s accounts receivable is derived from customers located principally in the United States and Europe. Concentrations of credit risk with respect to trade receivables are limited due to the Company’s credit evaluation process. The Company does not typically require collateral from its customers. The Company continuously monitors customer payments and maintains an allowance for credit losses based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities at purchase of three months or less that can be liquidated without prior notice or penalty. Cash and cash equivalents may include deposits, money market funds and debt securities. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. Inventories and cost of goods sold Inventories consist of finished goods held for sale and distribution. Cost is determined using the first-in, first-out method. Inventory is measured at the lower of cost and net realizable value based on a number of factors including, but not limited to, damage, expiration, or changes in price level. For the year ended December 31, 2024, cost of goods sold, consisted of the inventory cost, amortization of distribution right intangible assets related to Jeuveau ® and certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox Settlement Agreements (as such term is defined in Note 11. Medytox Settlement Agreements ). The prior years Consolidated Statements of Operations and Comprehensive Loss has been adjusted to conform to this presentation. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in an orderly transaction between market participants in a principal market on the measurement date. The fair value hierarchy defines a three-tiered valuation hierarchy for disclosure of fair value measurement is classified and disclosed by the Company in one of the three categories as follows: • Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; 71 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3—Prices or valuation techniques that require inputs that are unobservable that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of approximately three to five years . Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the term of the related lease. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. The Company assesses goodwill for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The Company performs an annual qualitative assessment of its goodwill in the fourth quarter of each calendar year to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. For the purpose of impairment testing, the Company has determined that it has one reporting unit. There was no impairment of goodwill for any of the periods presented. In-process Research and Development Intangible assets acquired that are used for research and development, do not yet have regulatory approval for commercialization, and have no future alternative use are expensed as in-process research and development. Collaboration Agreement In June 2022, the Company entered into a License and Research Collaboration Agreement (the “Collaboration Agreement”) with a 3D printing company with biomaterial capabilities (the “Licensor”). Under the terms of the Collaboration Agreement, the Company was granted a license to the Licensor’s technology to develop and commercialize any aesthetic product or non-therapeutic product that is created through the use or practice of the Licensor’s patents. The Company paid $ 2,000 upon the signing of the Collaboration Agreement and has research funding, ongoing milestone and royalty payment obligations depending on the development plans, the success of such development and approval and commercialization of products. The upfront payment of $ 2,000 was recorded as in-process research and development expense. Symatese U.S. Agreement On May 9, 2023, the Company and Symatese Aesthetics S.A.S (“Symatese”), entered into a License, Supply and Distribution Agreement (the “Symatese U.S. Agreement”), pursuant to which Symatese granted to the Company an exclusive right to commercialize and distribute its five hyaluronic acid gel product candidates, including the products referred to as: (i) Form; (ii) Smooth; (iii) Sculpt; (iv) Lips; and (v) Eye (collectively, the “Products”) in the United States for use in the aesthetics and dermatological field of use. The Company also has the right of first negotiation to obtain a license from Symatese to commercialize and distribute any new products developed using the same technology as the Evolysse ™ collection of hyaluronic acid gels. As consideration for the rights granted under the Symatese U.S. Agreement, the Company is required to make up to € 16,200 in milestone payments to Symatese, including an initial payment of € 4,100 within 30 days of execution of the Symatese U.S. Agreement, and additional annual payments of € 1,600 in June 2025, € 4,100 in June 2026, € 3,200 in June 2027, and € 3,200 in 72 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) June 2028, in each case subject to three of the Products gaining approval prior to that date. In June 2023, the Company paid $ 4,441 as an upfront payment upon the signing of the Symatese U.S. Agreement and has developmental costs, ongoing milestone and royalty payment obligations. The Symatese U.S. Agreement is also subject to minimum purchase requirements and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. Additionally, the Company agreed to a specified cost-sharing agreement with Symatese related to the registration of the Lips and Eye Products with the FDA. The initial term of the Symatese U.S. Agreement is fifteen ( 15 ) years from the first FDA approval of a Product, with automatic renewals for successive five ( 5 )-year terms subject to the terms of the Symatese U.S. Agreement. The upfront payment of $ 4,441 was recorded as in-process research and development expense in the twelve months ended December 31, 2023. Symatese Europe Agreement On December 20, 2023, the Company entered into a License, Supply and Distribution Agreement (the “Symatese Europe Agreement”), pursuant to which Symatese granted to us an exclusive right to commercialize and distribute four hyaluronic acid gel product candidates, which are referred to as: (i) Form; (ii) Smooth; (iii) Sculpt and (iv) Lips in 50 countries in Europe for use in the aesthetics and dermatological fields. The initial agreement is for a term of fifteen ( 15 ) years, with automatic year renewal provisions. In exchange for the rights granted under the Symatese Europe Agreement, the Company issued 610,000 shares of common stock and is required to pay two milestone payments: (i) € 1,200 on the second anniversary of certain regulatory approvals, and (ii) € 1,900 on the earlier of the third anniversary of certain regulatory approvals or following a year in which the Company achieves € 25,000 in revenue in Europe; provided that the payment shall occur no later than December 2029. The Symatese Europe Agreement is also subject to minimum purchase requirements and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. Upon signing of the Symatese Europe Agreement and issuance of 610,000 shares, the Company recorded $ 4,429 in in-process research and development expense and $ 1,476 in intangible assets in the twelve months ended December 31, 2023 for the stock issuance of 610,000 shares. The intangible assets of $ 1,476 represents the value of the nasolabial fold product in Europe which was already approved at the time of signing the Symatese Europe Agreement and is amortized over its estimated useful life of 15 years. The remaining value recorded in in-process research and development expense relates to the distribution rights for the three remaining products that did not yet have regulatory approval as of the execution date. Intangible Assets The distribution right intangible asset related to Jeuveau ® is amortized over the period the asset is expected to contribute to the future cash flows of the Company. The Company determined the pattern of this intangible asset’s future cash flows could not be readily determined with a high level of precision. As a result, the distribution right intangible asset is being amortized on a straight-line basis over the estimated useful life of 20 years. A portion of the Symatese Europe Agreement represents the license and distribution right to Evolysse TM in Europe. The definite-lived distribution right intangible asset related to the Evolysse TM nasolabial fold product approved in Europe is amortized on a straight-line basis over the estimated useful life of 15 years. Pursuant to the Symatese Europe Agreement, the Company is required to pay two milestone payments: (i) € 1,200 on the second anniversary of certain regulatory approvals, and (ii) € 1,900 on the earlier of the third anniversary of certain regulatory approvals or following a year in which the Company achieves € 25,000 in revenue in Europe, provided that the payment shall occur no later than December 2029. In October 2024, the Company received European Union Medical Device Regulation (“MDR”) approval for the remaining three hyaluronic acid gel products. As a result, the two milestone payments have been triggered. The first milestone payment is payable in October 2026, the two-year anniversary of the approval. For the second milestone payment, the Company determined that it is probable the payment will be made no later than December 2029. As such, the Company recorded $ 1,035 and $ 1,200 in long-term liabilities for the first and second milestone payments, and $ 1,035 and $ 1,200 in intangible assets for the first and second milestone payments as of December 31, 2024. These amounts reflect the 73 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) application of a discount to account for the time value of money, which adjusts the present value of the liabilities and intangible assets based on the timing of future payments. The definite-lived distribution right intangible asset related to the Evolysse TM products approved in Europe is amortized on a straight-line basis over the remaining estimated useful life of 14 years and 2 months. The Company capitalizes certain internal-use software costs associated with the development of its mobile and web-based customer platforms. These costs include personnel expenses and external costs that are directly associated with the software projects. These costs are included as intangible assets in the accompanying consolidated balance sheets. The capitalized internal-use software costs are amortized on a straight-line basis over the estimated useful life of two years upon being placed in service. The Company reviews long-term and identifiable definite-lived intangible assets or asset groups for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset or an asset group, further impairment analysis is performed. An impairment loss is measured as the amount by which the carrying amount of the asset or asset groups exceeds the fair value for assets to be held and used or fair value less cost to sell for assets to be disposed of. The Company also reviews the useful lives of its assets periodically to determine whether events and circumstances warrant a revision to the remaining useful life. Changes in the useful life are adjusted prospectively by revising the remaining period over which the asset is amortized. There was no material impairment of long-lived assets for any periods presented. Leases At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, upon lease commencement, the Company records a lease liability which represents the Company’s obligation to make lease payments arising from the lease, and a corresponding right-of-use (“ROU”) asset which represents the Company’s right to use an underlying asset during the lease term. Operating lease assets and liabilities are included in ROU assets, current portion of operating lease liabilities and noncurrent operating lease liabilities in the accompanying consolidated balance sheets. Operating lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. The incremental borrowing rate, the ROU asset and the lease liability are reevaluated upon a lease modification. Operating lease ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received, if any. The Company determines the lease term as the noncancellable period of the lease and may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company’s leases do not contain any residual value guarantees. Leases with a term of 12 months or less are not recognized on the consolidated balance sheets. For operating leases, the Company recognized rent expense on a straight-line basis over the lease term. There were no significant finance leases as of December 31, 2024. 74 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Contingent Royalty Obligation Payable to Evolus Founders The Company was acquired by Strathspey Crown Holdings Group, LLC (“SCH”) in 2013 and subsequently by its subsidiary, Alphaeon Corporation (“Alphaeon”), by means of a stock purchase agreement (“Stock Purchase Agreement”) pursuant to which Alphaeon assumed certain payment obligations related to the acquisition. On December 14, 2017, the Stock Purchase Agreement was amended (“Amended Stock Purchase Agreement”), and, as a result, effective upon the closing of the Company’s initial public offering in February 2018, the Company assumed all of Alphaeon’s payment obligations under the Amended Stock Purchase Agreement. Payment obligations to the Evolus Founders consist of quarterly royalty payments of a low single digit percentage of net sales of Jeuveau ® . The obligations terminate in the second quarter of 2029, which is the 10-year anniversary of the first commercial sale of Jeuveau ® in the United States. Under the Amended Stock Purchase Agreement, the Company recorded the fair value of all revised payment obligations owed to the Evolus Founders. The Company determines the fair value of the contingent royalty obligation payable at each reporting period end based on Level 3 inputs using a discounted cash flows method. Changes in the fair value of the contingent royalty obligation payable are determined at each reporting period end and recorded in operating expenses in the accompanying consolidated statements of operations and comprehensive loss and as a liability in the accompanying consolidated balance sheets. Long-Term Debt Long-term debt represents the debt balance with Pharmakon (see Note 7. Term Loans ), net of discount and issuance costs. Debt issuance costs represent legal, lender and consulting costs or fees associated with debt financing. Debt discounts and issuance costs are amortized into interest expense over the term of the debt. Foreign Currency Translation The financial statements of foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated into U.S. dollars at current exchange rates as of balance sheet date, and income and expense items are translated into U.S. dollars using the average rates of exchange prevailing during the period. Gains and losses arising from translation are recorded in other comprehensive loss as a separate component of stockholders’ equity. Foreign currency gains or losses on transactions denominated in a currency other than the Company’s functional currency are recorded in other expenses, net in the accompanying consolidated statements of operations and comprehensive loss. Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. General The Company generates product revenue from the sale of Jeuveau ® in the United States, Europe, and Australia, and service revenue from the sale of Jeuveau ® through a distribution partner in Canada. For product revenue, the Company recognizes revenue when control of the promised goods under a contract is transferred to a customer, in an amount that reflects the consideration the Company expects to receive in exchange for those goods as specified in the customer contract. The transfer of control occurs upon receipt of the goods by the customer since that is when the customer has obtained control of the goods’ economic benefits. The Company does not provide any service-type warranties and does not accept product returns except under limited circumstances such as damages in transit or ineffective product. The Company also excludes any amounts related to taxes assessed by governmental authorities from revenue measurement. Shipping and handling costs associated with outbound product freight are accounted for as fulfillment costs 75 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) and are included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. For service revenue, the Company evaluated the arrangement with the distribution partner in Canada and determined that it acts as an agent in the distribution of Jeuveau ® in Canada as it does not control the product before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. Accordingly, the Company records the sale as service revenue on a net basis. Revenue from services is recognized in the period the service is performed for the amount of consideration expected to be received. Disaggregation of Revenue The Company’s disaggregation of revenue is consistent with its operating segment as disclosed above. Gross-to-Net Revenue Adjustments The Company provides customers with discounts, such as trade and volume discounts and prompt pay discounts, that are directly reflected in the invoice price. Revenues are recorded net of sales-related adjustments, wherever applicable, primarily for the volume based rebates, consumer loyalty programs and co-branded marketing programs. • Volume-Based Rebates — Volume-based rebates are contractually offered to certain customers. The rebates payable to each customer are determined based on the contract and quarterly purchase volumes. • Consumer Loyalty Program — The Company’s consumer loyalty program allows participating customers to earn rewards for qualifying treatments to their patients (i.e. consumers) using Jeuveau ® and redeem the rewards for Jeuveau ® in the future at no additional cost. The loyalty program represents a customer option that provides a material right and, accordingly, is a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward (“Reward”) that the customer might redeem in the future. The standalone selling price of the Reward is measured based on estimated average selling price of Jeuveau ® at the time of redemption and the expected redemption rate by customers based on historical sales data. The portion of invoice price allocated to the Reward is initially recorded as deferred revenue. Subsequently, when customers redeem the Reward and the related product is delivered, the deferred revenue is recognized in net revenues at that time. • Co-Branded Marketing Programs — The Company offers eligible customers with a certain level of Jeuveau ® purchases to receive advertising co-branded with the Company. The co-branded advertising represents a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the advertisement. The standalone selling price of the advertisement is measured based on the estimated market value of similar advertisement adjusted for the customer’s portion of the advertisement. The portion of invoice price allocated to the advertisement is initially recorded as deferred revenue. Subsequently, when the advertisement airs, the deferred revenue is recognized in net revenues at that time. Contract Balances A contract with a customer states the terms of the sale, including the description, quantity and price of each product purchased. Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. The Company does not have any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of December 31, 2024 and 2023, all amounts included in accounts receivable, net on the accompanying consolidated balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of December 31, 2024 or 2023. Sales commissions are included in selling, general and administrative expenses when incurred. Contract liabilities reflect estimated amounts that the Company is obligated to pay to customers or patients primarily under the rebate and deferred revenue associated with Rewards under the consumer loyalty program and co-branded marketing 76 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2024, 2023, and 2022, the accrued revenue contract liabilities, primarily related to volume-based rebates, consumer loyalty program and co-branded marketing programs, were $ 14,454 , $ 11,033 , and $ 9,011 ,respectively, which were recorded in accrued expenses in the accompanying consolidated balance sheets. For the years ended December 31, 2024, 2023, and 2022 provisions for rebate, consumer loyalty programs and co-branded marketing programs were $ 40,783 , $ 32,511 , and $ 22,759 ,respectively, which were offset by related payments, redemptions and adjustments of $ 37,362 , $ 30,489 , and $ 21,682 , respectively, which were recorded as adjustments to gross revenues in the accompanying consolidated statement of operations. During the years ended December 31, 2024, 2023, and 2022, the Company recognized $ 10,220 , $ 7,868 , and $ 7,566 , respectively, of revenue related to amounts included in contract liabilities at the beginning of the period and did not recognize any revenue related to changes in transaction prices regarding its contracts with customers from previous periods. Collectability Accounts receivable are recorded at the invoiced amount and do not bear interest. At the time of contract inception or new customer account set-up, the Company performs a collectability assessment of the customer’s creditworthiness. The Company assesses the probability that the Company will collect the entitled consideration in exchange for the goods sold, by considering the customer’s ability and intention to pay when consideration is due. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and periodic evaluation of customers’ receivables balances using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and are adjusted as necessary using the relevant information available. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of December 31, 2024, 2023, and 2022, allowance for credit losses was $ 2,714 , $ 1,490 , and $ 2,050 , respectively. For the years ended December 31, 2024, 2023, and 2022, provision for bad debts was $ 2,449 , $ 1,440 , and $ 1,598 , respectively, and the write-off amount was $ 1,225 , $ 2,000 , and $ 1,933 , respectively. Practical Expedients The Company expenses sales commissions when incurred as the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The Company does not adjust the amount of promised consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays within one year. Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs, costs associated with pre-clinical and clinical development activities, costs associated with and costs for prototype products that are manufactured prior to market approval for that prototype product, internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs, including allocated facility related expenses. Litigation Settlement In February 2021, upon entering into certain agreements to settle intellectual property disputes relating to Jeuveau ® , the Company agreed to pay to Allergan and Medytox $ 35,000 in multiple payments over two years , of which $ 15,000 was paid in the third quarter of 2021, $ 15,000 was paid in the first quarter of 2022, and $ 5,000 was paid in the first quarter of 2023, and issued 6,762,652 shares of its common stock to Medytox. As of December 31, 2024 and 2023, there were no liabilities recorded in the accompanying consolidated balance sheets related to the litigation settlement with Allergan and Medytox. 77 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) In addition, for the period from December 16, 2020 through September 16, 2022 (the “Restricted Period”), the Company agreed to pay to Allergan and Medytox a royalty on the sale of Jeuveau ® , based on a certain dollar amount per vial sold in the United States and a low-double digit royalty on net sales of Jeuveau ® sold in other Evolus territories. Royalties for sales during the Restricted Period ended in the third quarter of 2022. For the period from December 16, 2020 to September 16, 2022, Daewoong agreed to reimburse the Company certain amounts with respect to the royalties payable to Medytox and Allergan. This reimbursement was received quarterly and recorded as an offset to the related royalties to Medytox and Allergan in the cost of goods sold on the accompanying consolidated statements of operations and comprehensive loss. For the period from September 17, 2022 to September 16, 2032, the Company agreed to pay Medytox a mid-single digit royalty percentage on all net sales of Jeuveau ® . The royalty payments are made quarterly and recorded as cost of goods sold on the accompanying consolidated statements of operations and comprehensive loss in the periods the royalties are incurred. See Note 11. Medytox Settlement Agreements for the details of all litigation settlement agreements. Stock-Based Compensation The Company recognizes stock-based compensation expense for employees, consultants and members of the Board of Directors based on the fair value at the date of grant. The Company uses the Black-Scholes option pricing model to value stock option grants. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected life. The fair value of the Company’s restricted stock units (“RSUs”) is based on the fair value on the grant date of the Company’s common stock. The Company also evaluates the impact of modifications made to the original terms of equity awards when they occur. The Company uses a Monte Carlo simulation model to determine the fair value of performance units with market conditions at the grant date. The Monte Carlo simulation model involves the generation of a large number of possible stock price outcomes for the Company’s stock which is assumed to follow a Geometric Brownian Motion. The use of the Monte Carlo simulation model requires the input of a number of assumptions including expected volatility of the Company’s stock price, which is based on the historical volatility of its stock; risk-free interest rate, which is based on the treasury zero-coupon yield commensurate with the term of the performance unit as of the grant date; and expected dividends as applicable, which is zero , as the Company has never paid any cash dividends. The fair value of stock options and RSUs with service conditions that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation for RSUs with performance or market conditions is recorded over the requisite service period using the accelerated attribution method. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the consolidated balance sheets and in the selling, general and administrative or research and development expenses in the consolidated statements of operations and comprehensive loss. Advertising Costs Advertising costs are expensed as incurred and primarily include costs related to social media ads and co-branded marketing programs. Advertising costs are included in selling, general and administrative expenses. For the years ended December 31, 2024, 2023, and 2022, the Company incurred advertising costs of $ 8,698 , $ 7,490 , and $ 11,642 , respectively. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined on the basis of differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded against deferred tax assets to reduce the net carrying value when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation 78 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. Additionally, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the consolidated financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Accordingly, the Company establishes reserves for uncertain tax positions. The Company has not recognized interest or penalties in its consolidated statement of operations and comprehensive loss. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. An amount is accrued for the estimate of additional tax liability, including interest and penalties, for any uncertain tax positions taken or expected to be taken in an income tax return. The Company reviews and updates the accrual for uncertain tax positions as more definitive information becomes available. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company monitors changes to the tax laws in the states it conducts business and files corporate income tax returns. The Company does not expect changes to state tax laws through December 31, 2024 to materially impact its consolidated financial statements. Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period including contingently issuable shares. Diluted earnings per share is based on the treasury stock method and includes the effect from potential issuance of ordinary shares, such as shares issuable pursuant to the exercise of stock options and the vesting of restricted stock units. Because the impact of the options and non-vested RSUs are anti-dilutive during periods of net loss, there was no difference between the weighted-average number of shares used to calculate basic and diluted net loss per common share for the periods presented. Excluded from the dilutive net loss per share computation for the twelve months ended December 31, 2024, 2023, and 2022, were stock options of 6,151,069 , 5,753,466 , and 4,769,521 , respectively, and non-vested RSUs of 3,476,314 , 3,281,045 , and 2,663,320 , respectively. Although these securities were anti-dilutive for these periods, they could be dilutive in future periods. Recent Accounting Pronouncements Recently Adopted Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting - Improving Reportable Segment Disclosures (Topic 280) . The standard requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods. ASU 2023-07 is effective for annual reporting periods beginning after December 79 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 15, 2023 and interim reporting periods after December 15, 2024. The Company adopted this guidance on December 31, 2024 and updated its disclosures to conform to this new segment disclosure requirement. Recent Accounting Pronouncements Issued But Not Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU No. 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disaggregated disclosure of certain costs and expenses on an interim and annual basis. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adopting ASU No. 2024-03. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows. Note 3. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The fair value of these instruments was as follows: As of December 31, 2024 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 44,765 $ — $ — $ 44,765 As of December 31, 2023 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 45,030 $ — $ — $ 45,030 The Company did not transfer any assets or liabilities measured at fair value on a recurring basis between levels during the year ended December 31, 2024. The Company determines the fair value of the contingent royalty obligation payable to Evolus Founders based on Level 3 inputs using a discounted cash flows method. The significant unobservable input assumptions that can significantly change the fair value include (i) projected amount and timing of U.S. net revenues of Jeuveau ® during the payment period, which terminates at the end of the second quarter of 2029, (ii) the discount rate, and (iii) the timing of payments. During the years ended December 31, 2024 and 2023, the Company utilized discount rates between 14 % and 15 %, reflecting changes in the Company’s risk profile. Net revenue projections are also updated to reflect changes in the timing of expected sales. Significant increases (decreases) in the discount rate and to the projected net revenues would result in a significantly lower (higher) fair value measurement, which could materially impact their fair value reported on the consolidated balance sheet. 80 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Year Ended December 31, 2024 2023 2022 Fair value, beginning of period $ 45,030 $ 46,310 $ 44,740 Payments ( 7,441 ) ( 5,537 ) ( 4,185 ) Change in fair value recorded in operating expenses 7,176 4,257 5,755 Fair value, end of period $ 44,765 $ 45,030 $ 46,310 Other Financial Assets and Liabilities The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, lease liabilities, and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments. The Company estimates the fair value of long-term debt and operating lease liabilities using the discounted cash flow analysis based on the interest rates for similar rated debt securities (Level 2). As of December 31, 2024 and 2023, the fair value of long-term debt was $ 132,078 and $ 140,241 , respectively. The fair value of operating lease liabilities as of December 31, 2024 and 2023 approximated their carrying value. 81 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 4. Goodwill and Intangible Assets The table below shows the weighted-average life, original cost, accumulated amortization and net book value by major intangible asset classification: Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution rights $ 62,787 $ ( 17,580 ) $ 45,207 Capitalized software 13,317 ( 9,770 ) 3,547 Intangible assets, net 76,104 ( 27,350 ) 48,754 Indefinite-lived intangible asset Goodwill 21,208 — 21,208 Total as of December 31, 2024 $ 97,312 $ ( 27,350 ) $ 69,962 Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right $ 60,552 $ ( 14,500 ) $ 46,052 Capitalized software 9,804 ( 8,746 ) 1,058 Intangible assets, net 70,356 ( 23,246 ) 47,110 Indefinite-lived intangible asset Goodwill 21,208 — 21,208 Total as of December 31, 2023 $ 91,564 $ ( 23,246 ) $ 68,318 The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2024 that are subject to amortization: Fiscal year 2025 4,946 2026 4,855 2027 3,380 2028 3,211 2029 3,211 Thereafter 29,151 48,754 Distribution rights represent the license and associated distribution rights to Jeuveau ® and Evolysse TM . For the years ended December 31, 2024 and 2023, the Company capitalized $ 2,235 and $ 1,476 related to the license and distribution right to Evolysse TM nasolabial fold product in Europe, which is amortized on a straight-line basis over the estimated useful life of 15 years. For the years ended December 31, 2024 and 2023, the Company capitalized $ 3,513 and $ 1,168 , respectively, related to costs of computer software developed for internal use. The software is amortized over a two-year period using the straight-line method. For the years ended December 31, 2024, 2023, and 2022, total intangible assets amortization expense of $ 4,104 , $ 4,072 , and $ 3,350 , respectively, was recorded within depreciation and amortization on the accompanying consolidated statements of operations and comprehensive loss. 82 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 5. Accrued Expenses Accrued expenses consisted of: Year Ended December 31, 2024 2023 Accrued royalties under the Medytox Settlement Agreements $ 4,743 3,657 Accrued payroll and related benefits 14,127 13,433 Accrued revenue contract liabilities 14,454 11,033 Other accrued expenses 7,467 5,690 $ 40,791 $ 33,813 Note 6. Property, Plant and Equipment Property, plant and equipment consisted of the following: Year Ended December 31, 2024 2023 Equipment $ 452 81 Furniture 702 345 Leasehold Improvements 3,574 2,212 Computers 317 149 Marketing Fixtures 1,700 1,700 Total property, plant, and equipment $ 6,745 $ 4,487 Less: accumulated depreciation $ ( 3,523 ) $ ( 2,400 ) Property, plant and equipment, net $ 3,222 $ 2,087 For the years ended December 31, 2024, 2023, and 2022, depreciation expense was $ 1,194 , $ 1,001 , and $ 373 , respectively. Note 7. Term Loans Pharmakon Term Loans On December 14, 2021, the Company entered into a loan agreement with Pharmakon. Pursuant to the terms of the agreement, Pharmakon agreed to make term loans to the Company in two tranches (the “Pharmakon Term Loans”). The first tranche of $ 75,000 was funded on December 29, 2021. On December 5, 2022, the Company entered into a Second Amendment to the loan agreement to extend the Company’s option to draw down the second tranche of $ 50,000 until December 31, 2023, and paid an amendment fee of $ 500 to Pharmakon. The Pharmakon Term Loans will mature on the sixth year anniversary of the closing date of the first tranche (the “Maturity Date”). On May 9, 2023, the Company entered into the Third Amendment to the loan agreement. Under the Third Amendment, Pharmakon agreed to advance the second tranche of $ 50,000 to the Company in two installments: (i) $ 25,000 advanced on May 31, 2023 and (ii) $ 25,000 advanced on December 15, 2023. The Third Amendment amended the principal payment terms to seven quarterly payments, each in an amount equal to 1/12 th of the outstanding principal amount of the Pharmakon Term Loans following the 51 st-month anniversary of the closing date of the first tranche and the remaining principal balance of the Pharmakon Term Loans on the Maturity Date. The Third Amendment replaced the interest rates based on LIBOR with 83 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) interest rates based on the Secured Overnight Financing Rate (“SOFR”) throughout the remaining term of the Pharmakon Term Loans. Initially, the Pharmakon Term Loans accrued interest at a per annum rate equal to the 3-month U.S. Dollar LIBOR rate (subject to a LIBOR rate floor of 1.0 %) plus 8.5 % per annum. Beginning May 2023, the Pharmakon Term Loans accrue interest at a per annum rate equal to the 3-month SOFR rate (subject to a SOFR rate floor of 1.0 %) plus 8.5 % per annum. The Company may elect to prepay all amounts, not less than $ 20,000 , owed prior to the Maturity Date. Prepayments of the first tranche prior to the second anniversary of the closing date of the first tranche and prepayments of the second tranche prior to the second anniversary of the date on which the second tranche is drawn by the Company will be accompanied by a make whole amount equal to the sum of all interest that would have accrued through such second anniversary. Prepayments of the Pharmakon Term Loans will also be accompanied by a prepayment premium equal to the principal amount so prepaid multiplied by 3.0 % if made prior to the third anniversary of the closing date of the first tranche, 2.0 % if made on or after the third anniversary of the closing date of the first tranche but prior to the fourth anniversary of the closing date of the first tranche, and 1.0 % if made on or after the fourth anniversary of the closing date of the first tranche but prior to the Maturity Date. If the Pharmakon Term Loans are accelerated following the occurrence of an event of default, including a material adverse change, the Company is required to immediately pay Pharmakon an amount equal to the sum of all outstanding principal, unpaid interest, and applicable make whole and prepayment premiums. The Pharmakon Term Loans are secured by substantially all of the Company’s assets. The Pharmakon Term Loans contain customary affirmative and restrictive covenants and representations and warranties. The affirmative covenants include, among others, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. The restrictive covenants include, among others, incurring certain additional indebtedness, consummating certain change in control transactions, or incurring any non- permitted lien or other encumbrance on the Company’s assets, without Pharmakon’s prior written consent. The Pharmakon Term Loans do not contain covenants requiring the Company to maintain a minimum cash threshold or minimum revenues or earnings. As of December 31, 2024, the Company was in compliance with its debt covenants. At the closing date of the first tranche, the Company incurred $ 3,042 and $ 3,263 in debt discounts and issuance costs related to the Pharmakon Term Loans, respectively. Debt discounts and issuance costs related to the entire Pharmakon Term Loans have been allocated pro rata between the funded and unfunded portions. Debt discounts and issuance costs allocated to the first tranche of $ 75,000 have been presented as a deduction to the debt balance and amortized into interest expense using the effective interest method. Debt discounts and issuance costs associated with the unfunded second tranche are deferred as assets until the tranche is drawn and are amortized into interest expense using the straight-line method over the term of the debt. Upon the first draw of the second tranche in May 2023, debt discounts and issuance costs associated with the second tranche were reclassified from assets to debt as a deduction to the debt balance. As of December 31, 2024, the borrowings outstanding under the Pharmakon Term Loans were classified as long-term debt in the accompanying consolidated balance sheets. The overall effective interest rate was approximately 14.52 % and 13.21 % for the first and second tranche, respectively, as of December 31, 2024. As of December 31, 2024, the principal amounts of long-term debt maturities for each of the next five fiscal years are as follows: Fiscal year 2025 $ — 2026 41,667 2027 83,333 2028 — Total principal payments 125,000 Unamortized debt discounts and issuance costs ( 3,494 ) Long term debt, net of discounts and issuance costs $ 121,506 84 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 8. Operating Leases On May 15, 2019, the Company entered into a five-year non-cancelable operating lease (the “Lease Agreement”), which was set to expire January 31, 2025, for its corporate headquarters in Newport Beach, California. Lease payments increase each year on February 1 based on an annual rent escalation clause. The Company has an option to extend the term of the lease for an additional 60 months, which was not recognized as part of its ROU assets and lease liabilities. On July 27, 2023, the Company entered into the First Amendment to the Lease Agreement (the “First Lease Amendment”) for its corporate headquarters. The First Lease Amendment includes a lease extension to January 31, 2030 with a three-month rent abatement period and additional office space. On July 27, 2023, the effective date of the First Lease Amendment, the Company recognized additional ROU assets and lease liabilities in the amount of $ 4,550 . On August 1, 2024, the lease commencement date for the additional office space, the Company recognized additional ROU assets and lease liabilities in the amount of $ 3,002 . On October 16, 2024, the Company entered into the Second Amendment to the Lease Agreement (the “Second Lease Amendment”) to lease additional office space for its corporate headquarters. The lease is expected to commence on or around the second half of 2025 and is set to expire January 31, 2030. Fixed cash payments under this amendment are estimated to be $ 1,876 over the term of the lease. The Company expects to account for this lease an operating lease. The Company’s lease agreement does not contain any residual value guarantees or material restrictive covenants. The payments associated with the renewal will only be included in the measurement of the lease liability and ROU assets if the exercise of the renewal option is determined to be reasonably certain. The Company considers the timing of the renewal period and other economic factors such as the financial implications of a decision to extend or not to extend a lease in determining if the renewal option is reasonably certain to be exercised. The components of operating lease expense are as follows: Year Ended December 31, 2024 2023 2022 Fixed operating lease expense $ 1,526 $ 1,164 $ 1,084 Variable operating lease expense 150 183 91 $ 1,676 $ 1,347 $ 1,175 The weighted-average remaining lease term and discount rate are as follows: As of December 31, 2024 2023 2022 Weighted-average remaining lease term (years) 5.1 6.1 2.1 Weighted-average discount rate 9.7 % 11.0 % 9.4 % Cash paid for amounts included in the measurement of lease liabilities $ 1,433 $ 1,320 $ 1,265 Operating lease expenses were included in the selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. 85 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The following table presents the future minimum payments under the operating lease agreements with non-cancelable terms as of December 31, 2024: Fiscal year 2025 $ 1,718 2026 2,138 2027 2,212 2028 2,290 2029 2,370 Thereafter 198 Total operating lease payments 10,926 Less: imputed interest ( 2,453 ) Present value of operating lease liabilities $ 8,473 Note 9. Commitments and Contingencies Daewoong Agreement The Daewoong Agreement includes certain minimum annual purchases that the Company is required to make in order to maintain the exclusivity of the license. The Company may, however, meet these minimum purchase obligations by achieving certain market share in the licensed territories. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Total inventory payments to Daewoong were $ 62,233 , $ 50,770 , and $ 50,685 for the years ended December 31, 2024, 2023, and 2022, respectively. Symatese U.S. Agreement and Symatese Europe Agreement The Symatese U.S. Agreement and the Symatese Europe Agreement include certain minimum purchase requirements, and failure to meet such requirements may result in a reduction or termination of the Company’s exclusive rights, subject to certain exceptions. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and the Company’s future market share in various jurisdictions. Pursuant to the Symatese U.S. Agreement, the Company is required to make up to € 16,200 in milestone payments to Symatese, including an initial payment of € 4,100 within 30 days of execution of the Symatese U.S. Agreement, and additional annual payments of € 1,600 in June 2025, € 4,100 in June 2026, € 3,200 in June 2027, and € 3,200 in June 2028, in each case subject to three of the Products gaining approval prior to that date. In June 2023, the Company paid $ 4,441 as an upfront payment upon the signing of the Symatese U.S. Agreement and has developmental costs, ongoing milestone and royalty payment obligations. Pursuant to the Symatese Europe Agreement, the Company is required to pay two milestone payments: (i) € 1,200 on the second anniversary of certain regulatory approvals, and (ii) € 1,900 on the earlier of the third anniversary of certain regulatory approvals or following a year in which the Company achieves € 25,000 in revenue in Europe, provided that the payment shall occur no later than December 2029. In October 2024, the Company received European Union Medical Device Regulation (“MDR”) approval for the remaining three hyaluronic acid gel products. As a result, the two milestone payments have been triggered. The first milestone 86 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) payment is payable on the two-year anniversary of the approval. For the second milestone payment, the Company determined that it is probable the payment will be made no later than December 2029. Legal Proceedings Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming the Company and certain of its officers as defendants. The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to the Company’s acquisition of the right to sell Jeuveau ® , the complaint against the Company filed by Allergan and Medytox in the U.S. International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc. Securities Litigation , No. 1:20-cv-08647 (PGG). On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against the Company, three of its officers, and Alphaeon Corporation, the Company’s former majority shareholder. On January 18, 2022, the Company and the officer defendants served their motion to dismiss the amended complaint. On February 10, 2022, Alphaeon Corporation served its motion to dismiss the amended complaint. Both motions were fully briefed on June 16, 2022. On September 26, 2024, the court granted the Company’s motion to dismiss the amended complaint and on October 18, 2024, the court entered final judgment in favor of the defendants. Shareholder Derivative Lawsuit On November 27, 2020 and December 2, 2020, two putative Evolus shareholders filed substantially similar shareholder derivative actions in the U.S. District Court for the Southern District of New York against certain of the Company’s officers and directors as defendants. The complaints alleged substantially similar facts as those in the Securities Class Action and assert claims for, among other things, breach of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Exchange Act and for contribution under Sections 10(b) and 21(D) of the Exchange Act. On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation , No. 1:20-cv-09986-PPG, and adjourned defendants’ time to move, answer or otherwise respond to the complaints. On September 20, 2021, the court so-ordered the parties’ stipulated stay of the consolidated derivative suit pending the court’s decision on the defendants’ motion to dismiss the Securities Class Action. It is possible that additional suits will be filed, or additional allegations will be made by stockholders, with respect to these same or similar or other matters and also naming the Company and/or its officers and directors as defendants. The Company believes that the complaints are without merit and intends to vigorously defend against it. However, the outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Books and Records Demand On March 5, 2021, the Company received a letter from a putative stockholder demanding inspection of specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law. The Company was subsequently informed that the stockholder sold his shares of the Company’s common stock. On October 13, 2021, the Company received a substantially similar demand to inspect specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the putative securities class action and derivative complaints described above. The Company responded to the demand in December 2021. The outcome of this matter is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss with respect to this matter. Other Legal Matters 87 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The Company is, from time to time, involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation. These other matters may raise difficult and complex legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit or regulatory encounter is brought, and differences in applicable laws and regulations. Except as set forth above, the Company does not believe that these other matters would have a material adverse effect on its accompanying financial position, results of operations or cash flows. However, the resolution of one or more of the other matters in any reporting period could have a material adverse impact on the Company’s financial results for that period. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because they involve claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of December 31, 2024. Note 10. Stockholders’ Equity Preferred Stock The Company has 10,000,000 authorized shares of preferred stock with a par value of $ 0.00001 per share. As of December 31, 2024, no shares of its preferred stock were issued and outstanding. Common Stock The Company has 100,000,000 authorized shares of common stock with a par value of $ 0.00001 per share. As of December 31, 2024, 63,497,548 shares of its common stock were issued and outstanding. In March 2024, the Company completed a follow-on offering and issued 3,554,000 shares of its common stock, at a price to the public of $ 14.07 per share. Refer to Note 1. Description of Business for additional details regarding the follow-on offering. 2024 Employee Stock Purchase Plan (“ESPP”) On June 6, 2024, the Company approved the adoption of the 2024 Employee Stock Purchase Plan. The 2024 ESPP provides an opportunity to purchase shares of the Company’s common stock at a favorable price and upon favorable terms in consideration of the participating employees’ continued services. Eligible employees will be entitled to purchase, by means of payroll deductions, limited amounts of the Company’s common stock at a discount during periodic offering periods. There were 579,648 shares initially reserved for issuance under the 2024 ESPP, which shall automatically increase on March 5 of each calendar year, by an amount equal to the lesser of (i) 1.0 % of the total number of shares of common stock issued and outstanding on March 4 of the year in which such increase is to occur, (ii) 579,648 shares of common stock, or (iii) such number of shares of common stock as may be established by the Board of Directors. There were no shares issued under the 2024 ESPP during the twelve months ended December 31, 2024. “At-the-market” Offerings of Common Stock On March 8, 2023, the Company entered into the ATM Sales Agreement with Leerink Partners LLC (formerly known as SVB Securities LLC) (the “Sales Agent”) pursuant to which shares of the Company’s common stock can be sold from time to time for aggregate gross proceeds of up to $ 50,000 (the “ATM Program”). Under the ATM Sales Agreement, the Sales Agent is entitled to compensation, at a commission rate equal to 3.0 % of the gross proceeds from sales of the Company’s common shares under the ATM Program. The Company has not sold any shares under the ATM Sales Agreement. 2017 Omnibus Incentive Plan and Stock-based Compensation Allocation The Company’s 2017 Omnibus Incentive Plan (the “Plan”) provides for the grant of incentive options to employees of the Company, and for the grant of non-statutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company’s officers, directors, consultants 88 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) and employees of the Company. The maximum number of shares of common stock that may be issued under the Plan is 4,361,291 shares, plus an annual increase on November 21 of each year equal to 4.0 % of the total issued and outstanding shares of the Company’s common stock as of such anniversary (or such lesser number of shares as may be determined by the Company’s Board of Directors). On November 21, 2024, 2023, and 2022, an additional 2,535,476 , 2,287,649 , and 2,249,863 , shares, respectively, were reserved under the evergreen provision of the Plan. As of December 31, 2024, the Company had an aggregate of 3,605,334 shares of its common stock available for future issuance under the Plan. 2023 Inducement Incentive Plan In September 2023, the Company’s Board of Directors adopted the Company’s 2023 Inducement Incentive Plan (the “Inducement Plan”) in accordance with Nasdaq Listing Rule 5635(c)(4). The Company’s Inducement Plan provides for the grant of equity awards to selected individuals in connection with their commencing employment with the Company as an inducement material to their accepting such employment. The Board of Directors reserved 1,000,000 shares of common stock for issuance under the Inducement Plan. As of December 31, 2024, the Company had an aggregate of 105,788 shares of its common stock available for future issuance under the Inducement Plan. Inducement Grants From time to time, the Company has granted equity awards to its newly hired employees, including executives, in accordance with Nasdaq Listing Rule 5635(c)(4) and outside of the Company’s Plan and Inducement Plan. Such grants were made pursuant to a stand-alone nonstatutory stock option agreement and a stand-alone RSU agreement, which were approved by the Compensation Committee of the Board of Directors. Any shares underlying the inducement grants are not, upon forfeiture, cancellation or expiration, returned to a pool of shares reserved for future issuance. Stock Options Options to purchase the Company’s stock are granted at exercise prices based on the Company’s common stock price on the date of grant. The option grants generally vest over a one -to four-year period. The options have a contractual term of ten years . The fair value of options is estimated using the Black‑Scholes option pricing model, which has various inputs, including the grant date common share price, exercise price, risk‑free interest rate, volatility, expected life and dividend yield. The change of any of these inputs could significantly impact the determination of the fair value of the Company’s options as well as significantly impact its results of operations. The Company records stock-based compensation expense net of actual forfeitures when they occur. The significant assumptions used in the Black-Scholes option-pricing are as follows: • Expected Volatility. The expected volatility of common stock is estimated based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the stock options. • Expected Term. The expected term represents the period of time in which the options granted are expected to be outstanding. The Company estimates the expected term of options with consideration of vesting date, contractual term, and historical experience. The expected term of “plain vanilla” options is estimated based on the midpoint between the vesting date and the end of the contractual term under the simplified method permitted by the SEC implementation guidance. The weighted‑average expected term of the Company’s options is approximately six years . • Risk‑Free Rate. The risk‑free interest rate is selected based upon the implied yields in effect at the time of the option grant on U.S. Treasury zero‑coupon issues with a term approximately equal to the expected life of the option being valued. • Dividends. The Company does not anticipate paying cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield rate of zero . 89 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The assumptions used in determining the fair value of stock options granted were as follows: Year Ended December 31, 2024 2023 2022 Volatility 83.7 % 83.6 % 78.9 % Risk-free interest rate 4.1 % 3.7 % 2.1 % Expected life (years) 6.21 6.21 6.19 Dividend yield rate — % — % — % A summary of stock option activity for the year ended December 31, 2024, 2023, and 2022 is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding as of December 31, 2023 5,753,466 $ 9.46 6.69 $ 11,111 Granted 1,127,833 13.11 Exercised ( 537,293 ) 7.24 Cancelled/forfeited ( 192,937 ) 10.56 Outstanding as of December 31, 2024 6,151,069 $ 10.29 6.16 $ 10,691 Vested and expected to vest at December 31, 2024 6,151,069 $ 10.29 6.16 $ 10,691 Exercisable as of December 31, 2024 3,619,512 $ 9.95 4.64 $ 7,801 The weighted average grant date fair value per share of stock options granted during the years ended December 31, 2024, 2023, and 2022 was $ 9.71 , $ 7.73 , and $ 4.76 , respectively. The total intrinsic value of stock options that vested during the years ended December 31, 2024, 2023, and 2022 was $ 3,171 , $ 136 , and $ 55 , respectively. The aggregate intrinsic value of outstanding and exercisable options represents the excess of the fair market value of the Company’s common stock over the exercise price of underlying options as of December 31, 2024, 2023, and 2022. Restricted Stock Units RSU grants generally vest over a one - to four-year period. The fair value of RSU grants is determined at the grant date based on the common share price. A summary of RSU activity for the year ended December 31, 2024, 2023, and 2022, is presented below: Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2023 3,281,045 $ 8.88 Granted 1,571,280 13.02 Vested ( 1,131,101 ) 8.63 Forfeited ( 342,357 ) 9.73 Outstanding as of December 31, 2024 3,378,867 $ 10.80 90 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The total fair value of restricted stock units that vested during the years ended December 31, 2024, 2023, and 2022 was $ 15,740 , $ 7,593 , and $ 6,008 , respectively. Performance Restricted Stock Units In January 2023, the Company’s Board of Directors granted 292,349 shares of performance restricted stock units (“PRSUs”) to certain executive officers under the Plan. The PRSU awards function in the same manner as restricted stock units except that vesting terms are based on achievement of certain pre-established performance measures. In February 2024, the Company’s Board of Directors granted 219,485 shares of PRSUs to certain executive officers under the Plan. The PRSU awards are measured on a cumulative two-year period ending in 2025. The performance measure milestones have not been met, and all were outstanding as of December 31, 2024. As of December 31, 2024, the achievement of the performance measure milestones was considered probable. In December 2024, the Company’s Board of Directors granted 79,052 shares of PRSUs to an executive officer under the Plan. The PRSU awards are measured on regulatory approval ending in 2027. The performance measure milestones have not been met and all were outstanding as of December 31, 2024. As of December 31, 2024, one of the three achievement of the performance measure milestones was considered probable. A summary of PRSU activity for the year ended December 31, 2024 and 2023, is presented below: Performance Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2023 233,880 $ 10.25 Granted 298,537 $ 12.73 Vested ( 136,433 ) $ 10.25 Forfeited — $ — Outstanding as of December 31, 2024 395,984 $ 12.12 CEO Performance Award For RSUs granted to employees that vest based on market conditions, such as the trading price of the Company’s common stock exceeding certain price targets, the Company uses a Monte Carlo Simulation in estimating the fair value at grant date and recognizes compensation cost over the requisite service period. On May 8, 2023, the Company granted the Company’s Chief Executive Officer (“CEO”) an award of 560,000 PRSUs under the Plan. The stock units subject to the award are subject to both performance- and time-based vesting requirements. 40 % of the stock units subject to the award are eligible to vest if the average of the closing prices for a share of the Company’s common stock over a period of 20 consecutive trading days is $ 30 or more and an additional 60 % of the stock units subject to the award are eligible to vest if the average of the closing prices for a share of the Company’s common stock over a period of 20 consecutive trading days is $ 50 or more, in each case within five years after the grant of the award and while the CEO is employed by the Company (or, in certain circumstances, within 20 days following a termination of his employment). Any stock units that become eligible to vest based on stock price will vest, subject to the CEO’s continued service, over the four-year period after the grant date. The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $ 3,774 . Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied. 91 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The following table summarizes stock-based compensation expense: Year Ended December 31, 2024 2023 2022 Selling, general and administrative $ 21,172 $ 15,564 $ 10,565 Research and development 1,016 894 268 Total stock-based compensation expense $ 22,188 $ 16,458 $ 10,833 In addition to the amounts recorded in selling, general and administrative and research and development, the Company capitalized $ 66 of stock-based compensation expense as part of capitalized software during the year ended December 31, 2024. As of December 31, 2024, unrecognized compensation cost totaled $ 47,092 and will be recognized over a weighted-average period of 2.2 years. Note 11. Medytox Settlement Agreements U.S. Settlement Agreement Effective February 18, 2021, the Company, Allergan and Medytox entered into a Settlement and License Agreement (the “U.S. Settlement Agreement”), pursuant to which, among other things: (i) Allergan and Medytox agreed to file a petition requesting the remedial orders related to the ITC Action be rescinded with respect to the Company; (ii) Medytox agreed to dismiss substantially similar litigation in California against the Company; (iii) the Company, on the one hand, and Medytox and Allergan, on the other hand, agreed to mutually release certain claims they may have against one another and their respective affiliates; (iv) Allergan and Medytox granted to the Company and its agents a license to manufacture and commercialize certain products identified in the U.S. Settlement Agreement, including Jeuveau ® (the “Licensed Products”), in the United States during the 21 month period that, pursuant to the ITC Action, the Company was restricted from, among other things, selling, marketing, or promoting such imported Jeuveau ® in the United States (the “Restricted Period”); (v) the Company agreed to pay to Allergan and Medytox $ 35,000 in multiple payments over two years , of which the Company paid the first cash payment of $ 15,000 in the third quarter of 2021, the second cash payment of $ 15,000 in the first quarter of 2022, and the final cash payment of $ 5,000 in the first quarter of 2023; and (vi) during the Restricted Period, the Company agreed to pay to Allergan and Medytox certain confidential royalties on the sale of Licensed Products, calculated on dollar amount per vial sold of Licensed Products by or on behalf of the Company in the United States. Royalties for sales during the Restricted Period ended on September 16, 2022. ROW Settlement Agreement Effective February 18, 2021, the Company and Medytox entered into a Settlement and License Agreement (the “ROW Settlement Agreement” and, together with the U.S. Settlement Agreement, the “Medytox/Allergan Settlement Agreements”), pursuant to which, among other things: (i) the Company and Medytox agreed to mutually release certain claims they may have against one another and their respective affiliates; (ii) Medytox granted to the Company and its agents a license to manufacture and commercialize the Licensed Products, in Canada, the European Union, Switzerland, member countries and cooperating countries of the European Economic Area, certain members of the Commonwealth of Independent States, South Africa, Australia and Japan (the “ROW Territories”) during the Restricted Period; (iii) Medytox granted to the Company and its agents a fully paid up license to manufacture and commercialize the Licensed Products in the ROW Territories and the United States from the end of the Restricted Period (the “Medytox License Period”); (iv) the Company and Medytox agreed to enter into the Share Issuance Agreement (as defined below) pursuant to which the Company issued 6,762,652 shares (the “Settlement Shares”) of the Company’s common stock, par value $ 0.00001 per share, to Medytox; (v) the Company and Medytox agreed to enter into the Registration Rights Agreement (as defined below), pursuant to which the Company granted certain registration rights to Medytox with respect to the Settlement Shares; (vi) during the Restricted Period that ended September 16, 2022, the Company agreed to pay Medytox a confidential low-double digit royalty on net sales of the Licensed Products sold by or on behalf of the Company in the ROW Territories; and (vii) during the Medytox License Period from September 17, 2022 to September 16, 2032, the Company agreed to pay Medytox a mid-single digit royalty percentage on net sales of the Licensed Products sold by or on behalf of the Company in the United States and the ROW Territories. Share Issuance Agreement 92 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) In connection with the execution of the ROW Settlement Agreement, the Company and Medytox entered into a Share Issuance Agreement effective February 18, 2021 (the “Share Issuance Agreement”). Pursuant to the Share Issuance Agreement and subject to the terms and conditions set forth therein, among other things, the Company issued to Medytox the Settlement Shares to enter into the ROW Settlement Agreement and in consideration for Medytox’s representations, warranties, and other agreements set forth in the Share Issuance Agreement. The Settlement Shares are subject to contractual restrictions on transfer that, subject to certain limited exceptions such as transfers to affiliates, prevented Medytox from transferring any shares of common stock prior to February 16, 2022 or more than 25 % of the shares it held prior to September 16, 2023 and, thereafter, prohibit Medytox from transferring 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. As of December 31, 2024 and 2023, the Company accrued $ 4,743 and $ 3,657 for royalties under the Medytox Settlement Agreements. Note 12. Employee Benefit Plan The Company maintains a defined contribution 401(k) plan covering substantially all employees. Matching contributions totaled $ 2,023 , $ 1,582 , and $ 773 for the years ended December 31, 2024, 2023, and 2022, respectively. Note 13. Income Taxes The Company’s loss before income taxes was generated from its U.S. operations and foreign operations as follows: Year Ended December 31, 2024 2023 2022 United States $ 33,349 $ 51,004 $ 66,103 Foreign 16,407 10,505 8,214 Loss before taxes $ 49,756 $ 61,509 $ 74,317 The following table shows the expense (benefit) for income taxes: Year Ended December 31, 2024 2023 2022 Current provision: Federal $ — $ — $ — State 279 138 113 Foreign 406 33 — Total current provision $ 685 $ 171 $ 113 Deferred provision (benefit): Federal $ ( 18 ) $ 1 $ ( 8 ) State ( 3 ) 4 ( 10 ) Foreign — — — Total deferred (benefit) provision $ ( 21 ) $ 5 $ ( 18 ) Total provision for income taxes $ 664 $ 176 $ 95 As of December 31, 2024, the Company has federal net operating loss (“NOL”) carryforwards of $ 315,179 , of which $ 68,301 will begin to expire in 2034. The federal NOLs generated in 2018 and in the subsequent years in the amount of $ 246,877 have an indefinite carryforward period. As of December 31, 2024, the Company has state NOL carryforwards of $ 231,980 , which will begin to expire in 2024. As of December 31, 2024, the Company has foreign NOL carryforwards of $ 38,922 , which can be carried forward indefinitely. As of December 31, 2024, the Company has federal research and development 93 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) (“R&D”) credit carryforwards of $ 2,929 , which will begin to expire in 2034. The Company also has California R&D credit carryforwards of $ 2,918 , which has an indefinite carryforward period. In general, if a company experiences a greater than 50 percentage point aggregate change in ownership of certain significant stockholders over a three-year period, utilization of its pre-change NOL carryforwards and R&D credit carryforwards, and interest expense under section 163(j), is subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar state laws. The annual limitation may result in the expiration of the Company’s tax attribute carryforwards before utilization and may be material. The Company has completed a study to evaluate whether an ownership change, as defined by Section 382 of the Internal Revenue Code, occurred from the Company's formation through December 31, 2023. Based on the findings of this study, the Company has determined that several ownership changes have occurred. Consequently, the Company’s tax attribute carryforwards allocable to the periods preceding the ownership change are subject to limitation under Section 382. However, it is important to note that the Company’s tax attribute carryforwards, which include net operating losses (NOLs), research and development (R&D) credits, and interest expense under Section 163(j), are not anticipated to expire unused, solely due to the limitations under Section 382. The Company started but has not completed a study to determine whether its tax attribute carryforwards generated through December 31, 2024, are likely to be limited by Section 382 and 383. The Company’s net deferred income tax assets have been offset by a valuation allowance. Therefore, any resulting reduction to the Company’s tax attribute carryforwards once the analysis is completed will be offset by a corresponding reduction of the valuation allowance and there would be no impact on the Company’s consolidated balance sheet, statement of operations, or cash flows. The components of deferred tax assets and liabilities were as follows: As of December 31, 2024 2023 2022 Deferred income tax assets: Net operating losses $ 86,277 $ 83,257 $ 80,494 Stock compensation 7,808 5,442 5,168 Research and development credits 2,617 2,617 2,617 Accrued compensation 6,405 5,955 4,675 Operating lease liabilities 2,152 1,567 646 Accrued legal settlement 16,283 17,674 19,203 R&E capitalization 4,107 3,415 1,100 Fixed asset depreciation 26 183 — Other, net 8,382 5,126 2,135 Valuation allowance ( 124,895 ) ( 116,073 ) ( 103,695 ) Total deferred income tax assets 9,162 9,163 12,343 Deferred income tax liabilities: Intangible amortization ( 7,343 ) ( 7,730 ) ( 11,525 ) Operating lease right-of-use assets ( 1,825 ) ( 1,460 ) ( 495 ) Fixed asset depreciation — — ( 345 ) Total deferred income tax liabilities ( 9,168 ) ( 9,190 ) ( 12,365 ) Net deferred income taxes $ ( 6 ) $ ( 27 ) $ ( 22 ) 94 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) A reconciliation of the difference between the provision (benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows: Year Ended December 31, 2024 2023 2022 Income tax at statutory rate $ ( 10,413 ) $ ( 12,917 ) $ ( 15,607 ) State income taxes, net of federal benefit ( 753 ) ( 1,981 ) ( 2,673 ) Revaluation of contingent royalty obligation 1,823 1,078 1,462 Meals and entertainment 713 385 358 Change in state tax rate 50 218 ( 3 ) Officers' compensation 1,231 793 ( 1,529 ) Foreign Rate Differential 443 222 10 Stock compensation ( 1,377 ) 449 299 Other, net 125 ( 449 ) ( 391 ) Valuation allowance 8,822 12,378 18,169 Income tax provision $ 664 $ 176 $ 95 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2024 2023 2022 Beginning balance $ 2,924 $ 2,924 $ 2,924 Increases to prior year tax positions — — — Increases to current year tax positions — — — Ending balance $ 2,924 $ 2,924 $ 2,924 The Company has considered the amounts and probabilities of the outcomes that can be realized upon ultimate settlement with the tax authorities and determined unrecognized tax benefits primarily related to credits should be established as noted in the summary rollforward above. The Company’s effective income tax rate would not be impacted if the unrecognized tax benefits are recognized. Additional amounts in the summary rollforward could impact the Company’s effective tax rate if it did not maintain a full valuation allowance on its net deferred tax assets. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2024, 2023, and 2022. The Company’s tax returns for all years since inception are open for audit. The Internal Revenue Service (“IRS”) commenced an examination of our U.S. income tax returns for the tax year ended December 31, 2022, in the third quarter of 2024. The exam is still in progress. As of December 31, 2024, the IRS has not proposed any adjustments to our tax positions. Note 14. Segment Reporting The Company conducts business as a single operating segment, which is the business of performance beauty focused on delivering products in the cash-pay aesthetic market. The Company’s chief executive officer, who is the chief operating decision maker (“CODM”), reviews financial information on a consolidated basis for allocating and evaluating financial performance. The single operating segment is further based upon the Company’s organizational and management structure and other factors. The key measure of segment profit and loss that the CODM uses to allocate resources and assess performance is the Company’s net loss, which is utilized to evaluate the achievement of the Company’s business operations. The table below 95 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) shows the Company’s reconciliation of revenue and significant segment items to net loss, regularly provided to and reviewed by the CODM, as computed under U.S. GAAP: Year Ended December 31, 2024 2023 2022 Net revenues $ 266,274 $ 202,085 $ 148,616 Less: Product cost of goods sold 81,015 61,559 55,887 Amortization of distribution right 2,955 2,955 2,955 Selling, general and administrative 176,853 149,380 131,275 Research and development 8,156 5,662 4,474 In process research and development — 8,869 2,000 Revaluation of contingent royalty obligation 7,176 4,257 5,755 Stock-based compensation 22,188 16,458 10,833 Depreciation and amortization 2,342 2,178 767 Interest income ( 3,263 ) ( 860 ) ( 119 ) Interest expense 18,735 13,832 9,097 Other expense, net ( 127 ) ( 696 ) 9 Income tax provision 664 176 95 Net loss ( 50,420 ) ( 61,685 ) ( 74,412 ) Assets provided to the CODM are consistent with those reported on the Balance Sheets with particular emphasis on the Company’s available liquidity, including its cash and cash equivalents, and financial instruments owned, reduced by current liabilities. All long-lived assets are maintained in the United States of America. The product and service revenue attributed to foreign countries from which the Company derives product and service revenue is as follows: Year Ended December 31, 2024 2023 2022 Revenue by country, net United States $ 253,159 $ 195,424 $ 146,150 International 13,115 6,661 2,466 Total revenue by country, net 266,274 202,085 148,616 Note 15. Subsequent Events On February 13, 2025, the Company received FDA approval for Evolysse TM Form and Evolysse TM Smooth injectable hyaluronic acid gels for the treatment and improvement of moderate to severe nasolabial folds facial wrinkles. 96 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. 97 Table of Contents