Evolus, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Evolus, Inc. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 60 Consolidated Financial Statements: Consolidated Balance Sheets 62 Consolidated Statements of Operations and Comprehensive Loss 63 Consolidated Statements of Stockholders’ Equity (Deficit) 64 Consolidated Statements of Cash Flows 65 Notes to Consolidated Financial Statements 67 59 Table of Content s 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, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 3, 2026 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 consolidated 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 consolidated 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. 60 Table of Content s Valuation of fair value of contingent royalty obligation Description of the Matter As discussed in Notes 2 and 3 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 3, 2026 61 Table of Content s Evolus, Inc. Consolidated Balance Sheets (in thousands, except par value and share data) December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 53,826 $ 86,952 Accounts receivable, net 54,697 47,682 Inventories 26,963 12,158 Prepaid expenses 3,757 3,349 Other current assets 3,674 1,201 Total current assets 142,917 151,342 Property and equipment, net 5,371 3,222 Operating lease right-of-use assets 7,133 7,185 Intangible assets, net 48,040 48,754 Goodwill 21,208 21,208 Other assets 1,199 858 Total assets $ 225,868 $ 232,569 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities Accounts payable $ 23,360 $ 9,236 Accrued expenses 35,591 40,791 Current portion of operating lease liabilities 2,529 1,718 Current portion of contingent royalty obligation payable to Evolus Founders 12,523 11,215 Current portion of contingent milestone payment 1,302 — Total current liabilities 75,305 62,960 Long-term portion of operating lease liabilities 6,371 6,755 Long-term portion of contingent royalty obligation payable to Evolus Founders 19,659 33,550 Long-term portion of term loan, net of discount and issuance costs 146,096 121,506 Long-term portion of contingent milestone payment 1,515 2,270 Deferred tax liability 28 6 Total liabilities $ 248,974 $ 227,047 Commitments and contingencies (Note 9) Stockholders’ equity (deficit) Preferred Stock, $ 0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of December 31, 2025 and 2024, respectively — — Common Stock, $ 0.00001 par value; 100,000,000 shares authorized; 65,008,183 and 63,497,548 shares issued and outstanding as of December 31, 2025 and 2024, respectively 1 1 Additional paid-in capital 638,089 615,825 Accumulated other comprehensive loss ( 156 ) ( 905 ) Accumulated deficit ( 661,040 ) ( 609,399 ) Total stockholders’ equity (deficit) ( 23,106 ) 5,522 Total liabilities and stockholders’ equity (deficit) $ 225,868 $ 232,569 See accompanying notes to consolidated financial statements. 62 Table of Content s Evolus, Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Revenue: Product revenue, net $ 294,956 $ 264,306 $ 199,721 Service revenue 2,220 1,968 2,364 Total net revenues 297,176 266,274 202,085 Cost of goods sold 100,069 83,970 64,514 Gross profit 197,107 182,304 137,571 Operating expenses: Selling, general and administrative 220,786 198,025 164,944 Research and development 9,576 9,172 6,556 In-process research and development — — 8,869 Revaluation of contingent royalty obligation payable to Evolus Founders ( 6,381 ) 7,176 4,257 Depreciation and amortization 4,345 2,342 2,178 Restructuring costs 1,443 — — Total operating expenses 229,769 216,715 186,804 Loss from operations ( 32,662 ) ( 34,411 ) ( 49,233 ) Other income (expense): Interest income 1,931 3,263 860 Interest expense ( 19,694 ) ( 18,735 ) ( 13,832 ) Other income (expense), net ( 539 ) 127 696 Loss before income taxes ( 50,964 ) ( 49,756 ) ( 61,509 ) Income tax expense ( 677 ) ( 664 ) ( 176 ) Net loss $ ( 51,641 ) $ ( 50,420 ) $ ( 61,685 ) Other comprehensive income (loss), net of tax: Currency translation adjustment 749 ( 478 ) ( 90 ) Comprehensive loss $ ( 50,892 ) $ ( 50,898 ) $ ( 61,775 ) Net loss per share, basic and diluted $ ( 0.80 ) $ ( 0.81 ) $ ( 1.08 ) Weighted-average shares outstanding used to compute basic and diluted net loss per share 64,468,913 62,016,853 56,918,721 See accompanying notes to consolidated financial statements. 63 Table of Content s Evolus, Inc. Consolidated Statements of Stockholders’ Equity (Deficit) (in thousands, except share data) Common Stock Additional Paid In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount 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 Issuance of common stock in connection with the incentive equity plan and ESPP 1,510,635 — 1,468 — — 1,468 Stock-based compensation — — 20,796 — — 20,796 Net loss — — — — ( 51,641 ) ( 51,641 ) Other comprehensive income — — — 749 — 749 Balance at December 31, 2025 65,008,183 $ 1 $ 638,089 $ ( 156 ) $ ( 661,040 ) $ ( 23,106 ) See accompanying notes to consolidated financial statements. 64 Table of Content s Evolus, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities Net loss $ ( 51,641 ) $ ( 50,420 ) $ ( 61,685 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 7,506 5,297 5,133 Stock-based compensation 20,698 22,254 16,458 Provision for credit losses and inventory 6,515 2,449 1,440 Amortization of operating lease right-of-use assets 1,237 723 734 Amortization of debt discount and issuance costs 1,289 1,147 1,116 Deferred income taxes 21 ( 21 ) 5 Revaluation of contingent royalty obligation payable to Evolus Founders ( 6,381 ) 7,176 4,257 Non-cash in-process research and development expense — — 4,429 Other adjustments to operating activities 967 36 — Changes in operating assets and liabilities: Inventories ( 11,124 ) 3,252 4,193 Accounts receivable ( 11,509 ) ( 19,602 ) ( 9,521 ) Prepaid expenses ( 355 ) 2,351 ( 1,798 ) Accounts payable 10,103 391 ( 1,017 ) Accrued expenses ( 6,364 ) 6,978 9,019 Accrued litigation settlement — — ( 5,000 ) Operating lease liabilities ( 758 ) ( 716 ) ( 907 ) Other operating assets ( 2,469 ) 706 ( 864 ) Net cash used in operating activities ( 42,265 ) ( 17,999 ) ( 34,008 ) Cash flows from investing activities Purchases of property and equipment ( 3,441 ) ( 1,472 ) ( 473 ) Additions to capitalized software ( 5,011 ) ( 3,351 ) ( 1,154 ) Net cash used in investing activities ( 8,452 ) ( 4,823 ) ( 1,627 ) Cash flows from financing activities Payment of contingent royalty obligation to Evolus Founders ( 6,202 ) ( 7,441 ) ( 5,537 ) Proceeds from issuance and modification of debt instruments 25,000 — 50,000 Payments for debt modification fees and debt issuance costs ( 2,610 ) — ( 46 ) Proceeds from follow-on offering — 51,211 — Payments for offering costs — ( 248 ) — Issuance of common stock in connection with incentive equity plan 1,164 4,882 231 Payment of finance lease obligations ( 15 ) — — Tax withholding paid on behalf of employees for net share settlement — ( 990 ) ( 7 ) Net cash provided by financing activities 17,337 47,414 44,641 Effect of exchange rates on cash and cash equivalents 254 ( 478 ) ( 90 ) Net increase (decrease) in cash and cash equivalents ( 33,126 ) 24,114 8,916 Cash and cash equivalents, beginning of period 86,952 62,838 53,922 Cash and cash equivalents, end of period $ 53,826 $ 86,952 $ 62,838 See accompanying notes to consolidated financial statements. 65 Table of Content s Evolus, Inc. Consolidated Statements of Cash Flows (Continued) (in thousands) Year Ended December 31, 2025 2024 2023 Supplemental disclosure of cash flow information Cash paid for interest $ 14,792 $ 17,545 $ 12,708 Cash paid for income taxes 1,215 235 117 Non-cash investing and financing information Capital expenditures included in accounts payable and accrued expenses 695 252 43 Issuance of common stock in connection with Symatese Europe Agreement — — 1,476 See accompanying notes to consolidated financial statements. 66 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’s portfolio includes Jeuveau ® (prabotulinumtoxinA-xvfs), 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 and Evolysse™, a collection of injectable hyaluronic acid (“HA”) gels. Evolysse™ Form and Evolysse™ Smooth were launched in the United States in April 2025 indicated for wrinkles and folds, such as nasolabial folds, in adults. The Company expects to launch all four Evolysse™ products in Europe in the second quarter of 2026 and anticipates two additional Evolysse™ products, Evolysse™ Sculpt and Evolysse™ Lips, to be approved in the United States in 2026 and 2027, respectively. 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. The Company recorded loss from operations of $ 32,662 and net loss of $ 51,641 for the twelve months ended December 31, 2025. The Company used $ 42,265 of cash from operations during the twelve months ended December 31, 2025. As of December 31, 2025, the Company had $ 53,826 in cash and cash equivalents and an accumulated deficit of $ 661,040 . 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. Stock-Based Compensation and Stockholders’ Equity for additional information. The Company believes that its current capital resources, which consist of cash and cash equivalents, future cash generated from operations, availability of liquidity under the New Pharmakon Term Loans and the Revolving Credit Facility and existing liquidity, 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. On May 5, 2025, the Company entered into an Amended and Restated Loan Agreement (the “A&R Loan Agreement”) with Pharmakon (as defined below), pursuant to which Pharmakon agreed to provide the Company with a senior secured term loan of up to $ 250,000 in aggregate principal. The term loan is to be funded in three tranches, comprised of an initial $ 150,000 tranche funded upon the execution of the A&R Loan Agreement and two additional tranches of up to $ 50,000 each, available at the Company’s election no later than December 31, 2026. In addition, under the terms of the A&R Loan Agreement, the Company is permitted to incur additional indebtedness in the form of a working capital or revolving loan facility with a maximum credit line of no more than $ 40,000 at any time, subject to Pharmakon’s consent and certain terms and conditions customary for credit facilities of similar size and type. 67 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) On March 3, 2026, the Company entered into a Loan and Security Agreement dated as of March 3, 2026 (the “Revolving Credit Facility”) with Eclipse Business Capital LLC as administrative agent and the lenders thereto. The Revolving Credit Facility is comprised of an asset-based revolving credit facility with a $ 30,000 commitment and an uncommitted accordion feature of up to $ 10,000 (the “Accordion Facility”), which is exercisable, subject to lender consent and other conditions, in $ 5,000 increments or in its entirety. The Revolving Credit Facility has a minimum utilization requirement of $ 10,000 and a stated maturity three years from the date of closing with outstanding principal and interest fully due and payable at such time. Borrowings under the Revolving Credit Facility bear interest at a rate equal to adjusted term SOFR (subject to a floor of 2.0 %) plus an applicable margin of 4.25 %, which is subject to downward adjustments based on certain coverage ratio and excess availability. The Revolving Facility and the Accordion Facility are subject to a closing fee equal to 1.0 % and prepayment fees equal to 3.0 % during the first year, 2.0 % during the second year, and zero percent thereafter, subject to certain exceptions. Obligations under the Revolving Credit Facility are secured by a first priority lien on substantially all of the Company’s assets, including accounts receivable, inventory, cash and intellectual property and are guaranteed by the Company and its subsidiaries. The Revolving Credit Facility includes customary affirmative and negative covenants, including limitations on capital expenditures, indebtedness, liens, investments, asset dispositions, dividends and other restricted payments, as well as a minimum excess availability covenant and a change of control provision. Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned subsidiaries, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s consolidated financial position, results of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates Management is required to make certain estimates and assumptions in order to prepare the accompanying 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 and may result in material effects on the Company’s operating results and financial position. Risks and Uncertainties The Company is party to an agreement (as amended, 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, the 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 and Note 11. Medytox Settlement Agreements for additional information. The Company commercially launched Jeuveau ® 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. 68 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The Company is party to an agreement with Symatese Aesthetics S.A.S. (“Symatese”), pursuant to which Symatese granted to the Company an exclusive right to commercialize and distribute five injectable HA 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. In April 2025, the Company launched Evolysse™ Form and Evolysse™ Smooth in the United States. The Company relies on Symatese, its sole supplier, to manufacture Evolysse™. Any termination or loss of significant rights, including exclusivity, would materially and adversely affect the Company’s commercialization of Evolysse™. 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 ® and Evolysse™, 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. Any disruption and volatility in the global capital markets, including caused by other events, such as public health crises, high inflation and 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 operates as a single operating and reportable segment focused on delivering medical aesthetic products to the cash-pay aesthetic market. Under this organizational structure, the Chief Executive Officer, serving as the Chief Operating Decision Maker (“CODM”), assesses performance and manages the Company’s operations as one integrated business. The identification of a single operating and reportable segment is consistent with the management approach as the CODM regularly reviews consolidated financial information for the purpose of assessing performance and allocating resources. See Note 14. Segment Reporting and Customer Concentration for additional information. 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 maturities of three months or less on the date of acquisition 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 or net realizable value based on a number of factors including, but not limited to, 69 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) damage, expiration, or changes in price level . The Company evaluates inventory balances for excess quantities and obsolescence based on a number of factors including, but not limited to, the aforementioned factors and reduces inventories to net realizable value for excess and obsolete inventory based on this evaluation. For the years ended December 31, 2025 and 2024, cost of goods sold consisted of inventory cost, amortization of intangible asset relating to distribution right, and certain royalties on the sale of the Company’s products. The consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 has been recast to conform to this presentation. Fair Value of Financial Instruments The Company follows the authoritative guidance for fair value measurements with respect to assets and liabilities that are measured at fair value on a recurring basis and non-recurring basis. Under the standard, 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 standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy consists of the following three-levels for disclosure of fair value measurement: • Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • 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 recognized over the estimated useful lives of the assets using the straight-line method. The estimated useful lives of depreciable assets are three years for computers, three to five years for equipment, and five years for furniture and marketing fixtures. 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 is more likely than not that the fair value of a reporting unit is 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. If it is determined, based upon the qualitative assessment, that it is more likely than not that the reporting unit’s fair value is less than its carrying amount, then a quantitative impairment test is performed. Alternatively, the Company may bypass the qualitative assessment for a reporting unit and directly perform the 70 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) quantitative goodwill impairment test. For the purpose of goodwill 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 In-process research and development assets acquired in transactions accounted for as asset acquisitions that have no alternative future use are expensed as in-process research and development. Contingent Milestone Payment Symatese U.S. Agreement On May 9, 2023, the Company and 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 the Evolysse™ 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 injectable HA 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. The 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 are, in each case subject to and contingent on three of the Products gaining approval prior to the milestone payment dates. If regulatory approval of three of the Products is not achieved prior to the aforementioned milestone payment dates, then the related milestone payments will be due and payable to Symatese on the date of approval. 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. As of December 31, 2025, regulatory approval of three of the Products has not been achieved, and no annual milestone payments have been made. The Company, under 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 U.S. Food and Drug Administration (“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 year 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 the Company an exclusive right to commercialize and distribute four injectable HA 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 yearly 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 later of the third anniversary of certain regulatory approvals or December of any year in which the Company achieves US$ 25,000 of net revenue in Europe; provided that if the regulatory approvals are achieved the payment shall occur no later than December 2029 regardless of the revenue condition. The Company, under 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. The $ 1,476 in intangible assets represents the value of the nasolabial fold product in Europe that 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 71 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 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 that 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™ in Europe. The definite-lived distribution right intangible asset related to the Evolysse™ 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 later of the third anniversary of certain regulatory approvals or December of any year in which the Company achieves US$ 25,000 of net revenue in Europe, provided that if the regulatory approvals are achieved the payment shall occur no later than December 2029 regardless of the revenue condition. In October 2024, the Company received European Union Medical Device Regulation (“MDR”) approval for the remaining three injectable HA 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. The Company anticipates the second milestone payment will be made in December 2029. Upon receiving approval, 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. These amounts reflect the 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™ 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 classified 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, then 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, the contract contains a lease and 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 operating lease ROU assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities in the accompanying consolidated balance sheets. 72 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Operating lease ROU assets and lease liabilities are initially recognized based on the net 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 initial direct costs, 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. The Company accounts for lease and non-lease components together as a single lease component for all classes of underlying assets. For operating leases, the Company recognizes rent expense on a straight-line basis over the lease term. There were no significant finance leases as of December 31, 2025. Contingent Royalty Obligation Payable to Evolus Founders The Company was acquired by Strathspey Crown Holdings Group, LLC 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 measures the fair value of the contingent royalty obligation payable at each reporting period end using a discounted cash flows method with Level 3 inputs. The related changes in the fair value of the contingent royalty obligation payable are recognized in operating expenses in the accompanying consolidated statements of operations and comprehensive loss with corresponding adjustments to the 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 and Transactions 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 the 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 “Accumulated other comprehensive loss” in stockholders’ equity in the accompanying consolidated balance sheets. Foreign currency gains or losses related to transactions denominated in a currency other than the Company’s functional currency are recorded in “Other income (expense), 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. 73 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) General The Company generates product revenue from the sales of Jeuveau ® and Evolysse™ and service revenue from the sales 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 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. See Note 14. Segment Reporting and Customer Concentration for the Company’s revenue disaggregated by revenue source. 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 the Company’s products and redeem the rewards for the Company’s products 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. When the Company’s products are sold to participating customers, the invoice price is allocated between the product sold and the material right associated with the 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 the Company’s products at the time of redemption and the expected redemption rate by participating customers based on historical data. The portion of invoice price allocated to the Reward is initially recorded as deferred revenue. Subsequently, when participating customers redeem the Reward, the related deferred revenue is reversed and recognized in net revenues. • Co-Branded Marketing Programs — The Company offers eligible customers, with a certain levels of purchases, advertising co-branded with the Company. The co-branded advertising represents a performance obligation. When the products are 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 74 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 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, 2025 and 2024, 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 material contract assets or unbilled receivables as of December 31, 2025 and 2024. Sales commissions are included in selling, general and administrative expenses when incurred. Contract liabilities represent estimated amounts that the Company is obligated to pay to customers, primarily consist of customer rebates and deferred revenue arising from the Consumer Loyalty Program and Co-Branded Marketing Programs. These contract liabilities are included in accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2025 and 2024, accrued revenue contract liabilities, primarily related to volume-based rebates, consumer loyalty programs and co-branded marketing programs, were $ 11,548 and $ 14,454 , respectively. These amounts are included in accrued expenses in the accompanying consolidated balance sheets. For the years ended December 31, 2025, 2024, and 2023, provisions for rebates, consumer loyalty programs, and co-branded marketing programs were $ 45,822 , $ 40,783 , and $ 32,511 , respectively; these amounts were offset by related payments, redemptions and adjustments of $ 48,727 , $ 37,362 , and $ 30,489 , respectively. The provisions for rebates, consumer loyalty programs and co-branded marketing programs are recorded as reductions to gross revenues in the accompanying consolidated statements of operations and comprehensive loss for each of the respective periods. For the years ended December 31, 2025, 2024, and 2023, the Company recognized revenue of $ 14,293 , $ 10,220 , and $ 7,868 , respectively, related to amounts included in contract liabilities at the beginning of each period. The Company did not recognize any revenue related to changes in transaction prices for contracts with customers from previous periods. Collectability Accounts receivables are recorded at the net estimated realizable value 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 estimated 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, 2025 and 2024, allowance for credit losses was $ 5,289 and $ 2,714 , respectively. For the years ended December 31, 2025, 2024, and 2023, provision for bad debts was $ 4,962 , $ 2,449 , and $ 1,440 , respectively, and write-offs, net of recoveries, were $ 2,387 , $ 1,225 , and $ 2,000 , respectively. Practical Expedients The Company expenses sales commissions as incurred because the amortization period is one year or less. These costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The Company does not adjust the promised consideration for the effects of the time value of money for contracts in which the anticipated period between the transfer of goods or services to the customer and customer payment is one year or less. 75 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Restructuring Costs In August 2025, the Company announced plans to reduce its operating expenses. The related restructuring initiatives were completed by September 2025. The Company recognized $ 1,443 in restructuring costs primarily relating to one-time severance benefits. Amounts are included in “Restructuring costs” in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. 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 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 connection with a litigation settlement, the Company agreed to pay Medytox, Inc. (“Medytox”) a mid-single digit royalty percentage on all net sales of Jeuveau ® for the period from September 17, 2022 to September 16, 2032. Royalty payments are made on a quarterly basis and the associated expenses are included in cost of goods sold in 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 the 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 on 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 certain 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 of the Company’s common stock on the grant date. 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 on 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 its historical volatility; 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. The Company recognizes stock-based compensation for RSUs with performance conditions if it is probable that those performance conditions will be met. 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 to 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 consist of social media ads and co-branded marketing programs. Advertising costs are included in selling, general and administrative expenses in the accompanying consolidated statements 76 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) of operations and comprehensive loss. For the years ended December 31, 2025, 2024, and 2023, the Company incurred advertising costs of $ 7,610 , $ 8,698 , and $ 7,490 , 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 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 statements 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 upon 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 that 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 where it conducts business and files corporate income tax returns. The Company does not expect that changes to state tax laws through December 31, 2025 to materially affect its consolidated financial statements. The Internal Revenue Service reviewed the Company’s 2022 tax return during the first quarter of 2025 and accepted it as filed, but did not consider the year examined. Given the fact that the Company has generated net operating losses since inception, the Company’s tax returns for all years since inception are open, under the statute of limitations, for audit. One Big Beautiful Bill Act On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted in the United States. The legislation includes a broad range of tax reform provisions, including extension and modification of certain key Tax Cuts and Jobs Act provisions (both domestic and international), and provisions permitting accelerated tax deductions for qualified property and research expenditures. The legislation contains multiple effective dates, with certain provisions 77 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) that became effective in 2025 and others to be implemented through 2027. The enactment of the OBBBA did not have a material impact on the Company’s effective income tax rate or cash tax position. 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 computed 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 years ended December 31, 2025, 2024, and 2023, were stock options of 6,108,565 , 6,151,069 , and 5,753,466 , respectively, and non-vested RSUs of 4,038,946 , 3,476,314 , and 3,281,045 , respectively. Although these securities were anti-dilutive for these periods, they could be dilutive in future periods. Recently Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This update enhances annual income tax disclosures by requiring entities to disclose 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 adopted the provisions of this ASU for the year ended December 31, 2025. The Company applied the amendments of this ASU prospectively. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 on its consolidated financial statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets , which simplifies the application of the current expected credit loss model by providing a practical expedient and accounting policy election, permitting entities to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when measuring credit losses on current accounts receivable and current contract assets. The update is effective for interim and annual reporting periods beginning after December 15, 2025. Early adoption is permitted. The amendments must be applied prospectively. The Company is currently evaluating the impact of adopting ASU No. 2025-05 on its consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU No. 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which updates the threshold for when an entity is required to start capitalizing software costs. ASU No. 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods with early adoption permitted. The Company is currently evaluating the impact of adopting ASU No. 2025-06 on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-11 Interim Reporting (Topic 270), which clarifies interim disclosure requirements and enhances clarity in the application of Topic 270. ASU No. 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. The amendments of this ASU can be applied prospectively or retrospectively. The adoption of the amendments of this ASU is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures. 78 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 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, cash flows or disclosures. 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, 2025 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 32,182 $ — $ — $ 32,182 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 There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy for assets or liabilities measured at fair value on a recurring basis during the year ended December 31, 2025 or 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 in which cash flows anticipated over the term of the contract are discounted to their present value using an expected discount rate. The significant unobservable input assumptions that can significantly change the fair value include (i) projected amount and timing of Jeuveau ® net revenues during the payment period, which terminate at the end of the second quarter of 2029, (ii) the discount rate, and (iii) the timing of payments. As of December 31, 2025 and 2024, the Company utilized a discount rate of 13 % and 14 %, respectively, reflecting changes in the Company’s market risk premium. Net revenue projections are also updated to reflect changes in the timing of expected sales. Generally, increases (decreases) to the projected net revenues are accompanied by a directionally similar change to the estimated fair value of the contingent royalty obligation, while significant increases (decreases) in the discount rate would result in a significantly lower (higher) fair value measurement, which could materially impact the fair value reported in the consolidated financial statements. The following table provides a reconciliation of the beginning and ending fair value measurement of the contingent royalty obligation payable, which used significant unobservable inputs (Level 3): Year Ended December 31, 2025 2024 2023 Fair value, beginning of period $ 44,765 $ 45,030 $ 46,310 Payments ( 6,202 ) ( 7,441 ) ( 5,537 ) Change in fair value recorded in operating expenses ( 6,381 ) 7,176 4,257 Fair value, end of period $ 32,182 $ 44,765 $ 45,030 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. 79 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 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 of similar rated debt securities (Level 2). As of December 31, 2025 and 2024, the fair value of long-term debt was $ 148,828 and $ 132,078 , respectively. The fair value of operating lease liabilities as of December 31, 2025 and 2024 approximated its carrying value. Note 4. Goodwill and Intangible Assets The table below provides the 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 $ ( 20,805 ) $ 41,982 Capitalized software 18,876 ( 12,818 ) 6,058 Intangible assets, net 81,663 ( 33,623 ) 48,040 Indefinite-lived intangible asset Goodwill 21,208 — 21,208 Total as of December 31, 2025 $ 102,871 $ ( 33,623 ) $ 69,248 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 The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2025 that are subject to amortization: Fiscal year 2026 $ 7,505 2027 4,810 2028 3,378 2029 3,211 2030 3,211 Thereafter 25,925 $ 48,040 Distribution rights represent the license and associated distribution rights to Jeuveau ® and Evolysse™. For the year ended December 31, 2024, the Company capitalized $ 2,235 related to the license and distribution right to Evolysse™ nasolabial fold product in Europe, which is amortized on a straight-line basis over the estimated useful life of 15 years. No costs related to distribution rights were capitalized for the year ended December 31, 2025. For the years ended December 31, 2025 and 2024, the Company capitalized $ 5,619 and $ 3,513 , 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. 80 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) For the years ended December 31, 2025, 2024 and 2023, the Company recorded amortization expense related to intangible assets of $ 6,273 , $ 4,104 and $ 4,072 , respectively. These amounts were included in cost of goods sold and depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss. Note 5. Accrued Expenses Accrued expenses as of December 31, 2025 and 2024 consisted of the following: December 31, 2025 2024 Accrued revenue contract liabilities $ 11,548 $ 14,454 Accrued payroll and related benefits 10,788 14,127 Accrued royalties 5,846 4,743 Other accrued expenses (1) 7,409 7,467 Accrued expenses $ 35,591 $ 40,791 (1) No individual item in “Other accrued expenses” exceeds 5% of total current liabilities. Note 6. Property, Plant and Equipment Property, plant and equipment as of December 31, 2025 and 2024 consisted of the following: December 31, 2025 2024 Equipment $ 769 $ 452 Furniture 1,030 702 Leasehold improvements 6,100 3,574 Computers 531 317 Marketing fixtures 1,700 1,700 Total property, plant, and equipment 10,130 6,745 Less: accumulated depreciation ( 4,759 ) ( 3,523 ) Property, plant and equipment, net $ 5,371 $ 3,222 For the years ended December 31, 2025, 2024 and 2023, depreciation expense was $ 1,233 , $ 1,194 , and $ 1,001 , respectively. Note 7. Term Loans New Pharmakon Term Loans On May 5, 2025, the Company entered into the A&R Loan Agreement with Pharmakon, which amended and restated the Prior Pharmakon Loan Agreement in its entirety. Under the A&R Loan Agreement, Pharmakon agreed to make a senior secured term loan to the Company in an aggregate principal amount of up to $ 250,000 to be funded in three tranches comprised of a $ 150,000 tranche, which was funded upon the execution of the A&R Loan Agreement, and two additional tranches of up to $ 50,000 each, available at the Company’s election no later than December 31, 2026 (collectively, the “New Pharmakon Term Loans”). The New Pharmakon Term Loans accrue interest at a per annum rate equal to the 3-month Secured Overnight Financing Rate (“SOFR”) (subject to a SOFR floor of 3.5 %) plus 5.0 % per annum. Payments related to the New Pharmakon Term Loans are interest only with a balloon principal payment due on the maturity date, which is May 5, 2030. The initial tranche of $ 150,000 was released to the Company on May 5, 2025, which includes the $ 125,000 of principal amount relating to the Prior Pharmakon Term Loans and $ 25,000 of incremental borrowings. Total proceeds of $ 23,390 were received by the Company, net of discounts and fees paid to Pharmakon, from the funding of the initial tranche. The second and third tranches, each in the principal amount of up to $ 50,000 but no less than $ 25,000 , have a scheduled expiration date 81 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) of December 31, 2026 and are available to be advanced at the Company’s election, subject to the terms and conditions of the A&R Loan Agreement including payment of additional consideration of 1 % on drawn principal of each tranche. The Company has the option to prepay all or any portion of the amounts owed prior to the maturity date, and all prepayments of principal are subject to certain prepayment premium. Additionally, the New Pharmakon Term Loans are subject to customary mandatory prepayments clauses, and all prepayments and repayments of the New Pharmakon Term Loans are subject to an exit consideration premium equal to the amount of any principal repaid multiplied by 2.0 %. This transaction with Pharmakon and the New Pharmakon Term Loans issued under the A&R Loan Agreement are accounted for as a debt modification in accordance with ASC 470-50, Debt Modifications and Extinguishments. Upon closing of the first tranche, the Company incurred a total of $ 5,644 in lender fees and debt modification costs relating to the New Pharmakon Term Loans. These fees and costs have been allocated based on specific identification basis between the funded and unfunded tranches. Direct lender fees of $ 1,610 allocated to the initial tranche of the New Pharmakon Term Loans have been presented as a deduction to the debt principal balance and amortized into interest expense using the effective interest method. Debt modification costs of $ 1,000 associated with the unfunded second and third tranches are deferred as an asset and is amortized into interest expense on a straight-line basis until the tranches are drawn upon which the remaining asset balance would be reclassified as a deduction to the principal amount and be amortized using the effective interest method. The remaining debt modification costs of $ 3,034 allocated to the first tranche were expensed as incurred, which is included in “Interest expense” in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. The New Pharmakon Term Loans are secured by substantially all of the Company’s assets. The New 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, those that limit or restrict the Company’s ability to incur certain additional indebtedness, consummate certain change in control transactions, or incur any non-permitted lien or other encumbrance on the Company’s assets, without Pharmakon’s prior written consent. The New 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, 2025, the Company was in compliance with its debt covenants. The borrowings outstanding under the New Pharmakon Term Loans were classified as long-term in the accompanying consolidated balance sheets as of December 31, 2025. Term Loan obligations as of December 31, 2025 consisted of the following: December 31, 2025 Principal Balance Unamortized Debt Financing Costs Exit Consideration Balance, Net New Pharmakon Term Loans $ 150,000 $ ( 4,215 ) $ 311 $ 146,096 Total long-term portion of term loan as of December 31, 2025 $ 150,000 $ ( 4,215 ) $ 311 $ 146,096 Prior Pharmakon Term Loans On December 14, 2021, the Company entered into a loan agreement with BPCR Limited Partnership, BioPharma Credit Investments V (Master) LP, and Biopharma Credit PLC (collectively, “Pharmakon”), which was subsequently amended in December 2022 and May 2023 (as amended, the “Prior Pharmakon Loan Agreement”). Pursuant to the Prior Pharmakon Loan Agreement, Pharmakon made loans to the Company totaling $ 125,000 (the “Prior Pharmakon Term Loans”). From 82 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) May 2023 to the modification of the loan in May 2025, the Prior Pharmakon Term Loans accrued interest at a per annum rate equal to the 3-month SOFR (subject to a SOFR floor of 1.0 %) plus 8.5 % per annum. Term Loan obligations as of December 31, 2024 consisted of the following: December 31, 2024 Principal Balance Unamortized Debt Financing Costs Balance, Net Prior Pharmakon Term Loans $ 125,000 $ ( 3,494 ) $ 121,506 Total long-term portion of term loan as of December 31, 2024 $ 125,000 $ ( 3,494 ) $ 121,506 As of December 31, 2025 and 2024, the overall average effective interest rate of the Company’s outstanding term loans was approximately 10.15 % and 13.98 %, respectively. The following table presents a summary of the principal maturities of the New Pharmakon Term Loans for each of the annual periods subsequent to December 31, 2025: Fiscal year 2026 $ — 2027 — 2028 — 2029 — 2030 150,000 Thereafter — Total principal payments $ 150,000 Note 8. Operating Leases The Company’s operating leases are related to its corporate headquarters in Newport Beach, California and do not contain any residual value guarantees or material restrictive covenants. The minimum lease payments associated with lease 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. Certain of the Company’s operating leases include variable lease payments that are not determinable at lease commencement. Accordingly, these variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized as lease expense in the period in which they are incurred. 83 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The components of operating lease expense are as follows: Year Ended December 31, 2025 2024 2023 Fixed operating lease expense $ 2,129 $ 1,526 $ 1,164 Variable operating lease expense 354 150 183 Total operating lease expense $ 2,483 $ 1,676 $ 1,347 Supplemental information on operating leases is as follows: December 31, 2025 2024 2023 Weighted-average remaining lease term (years) 4.1 5.1 6.1 Weighted-average discount rate 9.9 % 9.7 % 11.0 % Cash paid for amounts included in the measurement of lease liabilities $ 1,781 $ 1,433 $ 1,320 ROU assets obtained in exchange for operating lease liabilities $ 1,185 $ 3,002 $ 4,550 Operating lease expenses are included in the selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. Operating lease ROU assets and related current and long-term operating lease liabilities are presented in the accompanying consolidated balance sheets. The following table presents the future minimum lease payments under operating lease agreements with non-cancelable terms as of December 31, 2025: Fiscal year 2026 $ 2,529 2027 2,617 2028 2,709 2029 2,805 2030 234 Thereafter — Total minimum lease payments $ 10,894 Less: imputed interest ( 1,994 ) Present value of operating lease liabilities $ 8,900 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 $ 76,477 , $ 62,233 and $ 50,770 for the years ended December 31, 2025, 2024 and 2023, respectively. 84 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 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. The 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 are, in each case, subject to and contingent on three of the Products gaining approval prior to the milestone payment dates. If regulatory approval of three of the Products is not achieved prior to the aforementioned milestone payment dates, then the related milestone payments will be due and payable to Symatese on the date of approval. 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 upfront payment of $ 4,441 was recorded as in-process research and development expense in the accompanying consolidated statements of operations and comprehensive loss for the year ended December 31, 2023. As of December 31, 2025, regulatory approval of three of the Products has not been achieved; as such, no annual milestone payments have been made. 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 later of the third anniversary of certain regulatory approvals or December of any year in which the Company achieves US$ 25,000 of net revenue in Europe, provided that if the regulatory approvals are achieved, the payment shall occur no later than December 2029 regardless of the revenue condition. In October 2024, the Company received European Union MDR approval for the remaining three injectable HA gel products. As a result, the two milestone payments have been triggered. The first milestone payment is payable on the two-year anniversary of the approval, which is October 2026. For the second milestone payment, the Company expects to make the payment in December 2029. Upon receiving approval, the Company recorded $ 1,035 and $ 1,200 in contingent milestone payment liabilities for the first and second milestone payments, respectively, and $ 1,035 and $ 1,200 in intangible assets for the first and second milestone payments, respectively. These amounts reflect the 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. Legal Proceedings The Company is, from time to time, involved in various litigation matters or regulatory encounters arising from 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, 2025. 85 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 10. Stock-Based Compensation and 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, 2025 and 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, 2025 and 2024, 65,008,183 and 63,497,548 shares of its common stock were issued and outstanding, respectively. 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 (“2024 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 numbers of the Company’s common stock at a discount during periodic offering periods, and the first offering period under the 2024 ESPP commenced on May 1, 2025. There were 579,648 shares initially reserved for issuance under the 2024 ESPP, which shall automatically increase on March 5th 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 4th 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. As of December 31, 2025, the Company had issued 55,670 shares under the 2024 ESPP. “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 an 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 stock under the ATM Program. The Company has not sold any shares under the ATM Sales Agreement. 2017 Omnibus Incentive Plan 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 and employees. 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 21st 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, 2025, 2024 and 2023, an additional 2,597,438 , 2,535,476 and 2,287,649 shares, respectively, were reserved pursuant to the evergreen provision of the Plan. As of December 31, 2025, the Company had an aggregate of 5,229,398 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 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 had reserved 1,000,000 shares of common stock for 86 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) issuance under the Inducement Plan. On December 12, 2024, an additional 1,000,000 shares were approved and reserved for issuance under the Inducement Plan. As of December 31, 2025, the Company had an aggregate of 659,991 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 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 model 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 of 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 . The weighted average assumptions used in determining the fair value of stock options granted were as follows: Year Ended December 31, 2025 2024 2023 Volatility 75.8 % 83.7 % 83.6 % Risk-free interest rate 4.1 % 4.1 % 3.7 % Expected life (years) 6.20 6.21 6.21 Dividend yield rate — % — % — % 87 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) A summary of stock option activities for the year ended December 31, 2025 is presented below: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Per Share Terms (Years) Value Outstanding as of December 31, 2024 6,151,069 $ 10.29 6.16 $ 10,691 Granted 1,110,760 12.40 Exercised ( 166,936 ) 6.97 Forfeited or expired ( 986,328 ) 11.47 Outstanding as of December 31, 2025 6,108,565 $ 10.57 5.54 $ 959 Vested and expected to vest at December 31, 2025 6,108,565 $ 10.57 5.54 $ 959 Exercisable as of December 31, 2025 3,914,353 $ 10.02 4.08 $ 750 The weighted average grant date fair value per share of stock options granted during the years ended December 31, 2025, 2024 and 2023 was $ 8.67 , $ 9.71 and $ 7.73 , respectively. The total intrinsic value of stock options that were exercised during the years ended December 31, 2025, 2024 and 2023 was $ 752 , $ 3,171 and $ 136 , respectively. The aggregate intrinsic value of outstanding and exercisable options represents the total excess of the fair market value of the Company’s common stock over the exercise price of the underlying options. Restricted Stock Units Service-Based Restricted Stock Units Service-based RSU grants generally vest over a one - to four-year period. The fair value of service-based RSU grants is determined based on the Company’s common stock price on the grant date. A summary of service-based RSU activities for the year ended December 31, 2025 is presented below: Weighted Average Restricted Grant Date Stock Fair Value Units Per Share Outstanding as of December 31, 2024 3,378,867 $ 10.80 Granted 1,436,074 11.36 Vested ( 1,194,953 ) 9.89 Forfeited ( 709,817 ) 11.42 Outstanding as of December 31, 2025 2,910,171 $ 11.30 The total fair value of service-based restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023 was $ 14,135 , $ 15,740 and $ 7,593 , respectively. 88 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Performance-Based Restricted Stock Units Under the Plan, the Company’s Board of Directors has granted performance restricted stock units (“PRSUs”) with various performance-based vesting terms to certain executive officers. The PRSUs function in the same manner as service-based restricted stock units except that vesting terms are based on the achievement of certain pre-established performance measures, if the grantee is in service to the Company upon the achievement of such performance hurdles. Compensation expense related to PRSUs is recognized when attainment of the performance milestones is deemed to be probable and over a period in which the Company estimates the performance hurdles will be achieved. A summary of PRSU activities for the year ended December 31, 2025 is presented below: Performance Weighted Average Restricted Grant Date Stock Fair Value Units Per Share Outstanding as of December 31, 2024 395,984 $ 12.12 Granted 353,663 13.58 Vested ( 93,076 ) 10.25 Forfeited ( 87,796 ) 12.66 Outstanding as of December 31, 2025 568,775 $ 13.25 Included in the table above are certain outstanding PRSUs that provide for vesting of up to 200 % of the target number of shares if the target performance conditions are exceeded. As of December 31, 2025, if all target performance conditions are fully achieved, the aggregate number of shares that could be issued upon vesting of all outstanding and unvested PRSUs would be 868,943 . CEO Performance Award - Market-Based Restricted Stock Units 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 Monte Carlo Simulation in estimating the fair value on the date of grant 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 market-based RSUs under the Plan. The stock units subject to the award are subject to both market- 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 the grant date fair value of $ 3,774 for the market-based awards. Compensation expense is recorded if the service condition is met regardless of whether the market condition is satisfied. The stock price market condition was not met during the year ended December 31, 2025; as a result, no vesting occurred. 89 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Stock-Based Compensation The following table summarizes stock-based compensation expense: Year Ended December 31, 2025 2024 2023 Selling, general and administrative $ 19,845 $ 21,172 $ 15,564 Research and development 853 1,016 894 Total stock-based compensation expense, excluding capitalized stock-based compensation expense 20,698 22,188 16,458 Capitalized stock-based compensation expense in Intangible assets, net 98 66 — Total stock-based compensation expense $ 20,796 $ 22,254 $ 16,458 As of December 31, 2025, there was $ 36,549 of total unrecognized compensation cost related to unvested shares subject to outstanding service-based stock options and RSUs. Unrecognized compensation costs associated with these stock options and restricted stock units are expected to be expensed over a weighted-average period of 2.1 and 2.4 years, respectively. As of December 31, 2025, total unrecognized compensation costs related to unvested shares subject to outstanding PRSUs and market-based RSUs were $ 1,159 and are expected to be expensed over a weighted-average period of 1.3 years. Note 11. Medytox Settlement Agreements Medytox Settlement Agreement In February 2021, the Company settled the certain litigation with Medytox, Inc. (‘Medytox”) related to Jeuveau ® by means of settlement and license agreements (the “Medytox Settlement Agreements”). From September 17, 2022 to September 16, 2032, the Company has paid and will pay Medytox a quarterly, mid-single digit royalty percentage on net sales of Jeuveau ® sold in Evolus territories pursuant to the Medytox Settlement Agreements. As of December 31, 2025 and 2024, the Company accrued $ 4,985 and $ 4,743 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. Company matching contributions totaled $ 2,387 , $ 2,023 and $ 1,582 for the years ended December 31, 2025, 2024 and 2023, 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, 2025 2024 2023 United States $ 30,131 $ 33,349 $ 51,004 Foreign 20,833 16,407 10,505 Loss before income taxes $ 50,964 $ 49,756 $ 61,509 90 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) The following table shows the expense (benefit) for income taxes: Year Ended December 31, 2025 2024 2023 Current provision: Federal $ — $ — $ — State 90 279 138 Foreign 566 406 33 Total current provision $ 656 $ 685 $ 171 Deferred provision (benefit): Federal $ 21 $ ( 18 ) $ 1 State — ( 3 ) 4 Foreign — — — Total deferred (benefit) provision $ 21 $ ( 21 ) $ 5 Total provision for income taxes $ 677 $ 664 $ 176 A reconciliation of the difference between the provision (benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate after the adoption of ASU 2023-09 is as follows: Year Ended December 31, 2025 U.S. Federal Statutory Rate $ ( 10,702 ) 21.00 % State and Local Taxes, Net of Federal Income Tax Benefit (1) 997 ( 1.96 ) % Foreign Tax Effects UK Change in Valuation Allowance 4,391 ( 8.62 ) % Other ( 67 ) 0.13 % Other Foreign Entities 617 ( 1.21 ) % Tax Credits 1,313 ( 2.58 ) % Change in Valuation Allowance 4,352 ( 8.54 ) % Nontaxable or Nondeductible Items Revaluation of Contingent Liabilities ( 1,340 ) 2.63 % Officers' Compensation 1,387 ( 2.72 ) % Share-based Compensation 678 ( 1.33 ) % Meals 595 ( 1.17 ) % Other 31 ( 0.06 ) % Changes in Unrecognized Tax Benefits ( 1,583 ) 3.11 % Other Adjustments 8 ( 0.02 ) % Income tax provision (benefit) $ 677 ( 1.34 ) % (1) The state of California made up the majority (greater than 50%) of the tax effect in this category. 91 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 before the adoption of ASU 2023-09 is as follows: Year Ended December 31, 2024 2023 Income tax at statutory rate $ ( 10,413 ) $ ( 12,917 ) State and local income taxes, net of federal income tax benefit ( 753 ) ( 1,981 ) Revaluation of contingent royalty obligation 1,823 1,078 Meals and entertainment 713 385 Change in state tax rate 50 218 Officers' compensation 1,231 793 Foreign Rate Differential 443 222 Stock compensation ( 1,377 ) 449 Other, net 125 ( 449 ) Valuation allowance 8,822 12,378 Income tax provision (benefit) $ 664 $ 176 The components of deferred tax assets and liabilities were as follows: As of December 31, 2025 2024 2023 Deferred income tax assets: Net operating losses $ 94,930 $ 86,277 $ 83,257 Stock compensation 7,890 7,808 5,442 Research and development credits 1,034 2,617 2,617 Operating lease liabilities 2,303 2,152 1,567 Accrued legal settlement 15,147 16,283 17,674 R&E capitalization 3,590 4,107 3,415 Carryforward of interest expense under Section 163(j) 11,471 8,325 5,072 Other, net 6,167 6,488 6,192 Valuation allowance ( 133,986 ) ( 124,895 ) ( 116,073 ) Total deferred income tax assets 8,546 9,162 9,163 Deferred income tax liabilities: Intangible amortization ( 6,728 ) ( 7,343 ) ( 7,730 ) Operating lease ROU assets ( 1,846 ) ( 1,825 ) ( 1,460 ) Total deferred income tax liabilities ( 8,574 ) ( 9,168 ) ( 9,190 ) Net deferred income taxes $ ( 28 ) $ ( 6 ) $ ( 27 ) As of December 31, 2025, the Company has federal net operating loss (“NOL”) carryforwards of $ 330,543 , of which $ 66,345 will begin to expire in 2034. The federal NOLs generated in 2018 and in the subsequent years in the amount of $ 264,198 have an indefinite carryforward period. As of December 31, 2025, the Company has state NOL carryforwards of $ 257,754 , which begin to expire in 2026. As of December 31, 2025, the Company has foreign NOL carryforwards of $ 59,259 , which can be carried forward indefinitely. As of December 31, 2025, the Company has federal research and development (“R&D”) credit carryforwards of $ 1,615 , which will begin to expire in 2039. The Company also has California R&D credit carryforwards of $ 573 , which has an indefinite carryforward period. 92 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 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, 2024. 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 NOLs, 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, 2025, 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. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2025 2024 2023 Beginning balance $ 2,924 $ 2,924 $ 2,924 Decreases to prior year tax positions ( 2,070 ) — — Increases to current year tax positions 241 — — Ending balance $ 1,095 $ 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’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, 2025, 2024, and 2023. The Internal Revenue Service (“IRS”) reviewed the Company’s 2022 tax return during the first quarter of 2025 and accepted it as filed but did not consider the year examined. The Company has incurred net operating losses since its inception; as such, the tax returns of all years remain open for audit. The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025: Year Ended December 31, 2025 Current: Federal $ — Foreign Australia 61 Netherlands 747 Spain 211 State and local 196 Total $ 1,215 The income taxes paid for the years ended December 31, 2024, and 2023 were $ 235 and $ 117 , respectively. 93 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 14. Segment Reporting and Customer Concentration The Company conducts business as a single operating and reportable segment focusing on the business of performance beauty by delivering breakthrough products to the cash-pay aesthetic market. Under this organizational structure, the CEO, serving as the CODM, assesses performance and manages the Company’s operations as one integrated business. The identification of a single operating and reportable segment is consistent with the management approach in that the CODM regularly reviews consolidated financial information for the purpose of assessing performance and allocating resources. The CODM regularly reviews (i) net revenues, (ii) gross profit, (iii) operating profit or loss and (iv) net income or loss and uses net income or loss as the key measure of segment profit or loss when allocating resources and assessing performance. The CODM compares net income or loss in prior periods with that of the current period, evaluates actual results against budget and forecast, identifies relevant business factors and trends, and evaluates the achievements of the Company’s established strategic goals. In April 2025, the Company launched Evolysse™ Form and Evolysse™ Smooth in the United States; as such, segment product net revenue has been recast in connection with the launch of Evolysse™. The table below presents selected financial information of the Company’s single reportable segment regularly provided to and reviewed by the CODM and a reconciliation of segment net loss to consolidated net loss as computed under U.S. GAAP: Year Ended December 31, 2025 2024 2023 Revenue: Jeuveau ® $ 272,323 $ 264,306 $ 199,721 Evolysse™ 22,633 — — Total product revenue, net 294,956 264,306 199,721 Service revenue 2,220 1,968 2,364 Total net revenues 297,176 266,274 202,085 Less: Cost of goods sold 100,069 83,970 64,514 Gross profit 197,107 182,304 137,571 Less: Research and development 9,576 9,172 6,556 In process research and development — — 8,869 Selling, general and administrative 220,786 198,025 164,944 Depreciation and amortization 4,345 2,342 2,178 Interest income ( 1,931 ) ( 3,263 ) ( 860 ) Interest expense 19,694 18,735 13,832 Income tax expense 677 664 176 Other segment items (1) ( 4,399 ) 7,049 3,561 Segment net loss $ ( 51,641 ) $ ( 50,420 ) $ ( 61,685 ) Reconciliation of profit and loss (Segment net loss/profit): Adjustments and reconciling items — — — Consolidated net loss $ ( 51,641 ) $ ( 50,420 ) $ ( 61,685 ) 94 Table of Contents Evolus, Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) (1) Other segment items include revaluation of contingent royalty obligation payable to Evolus Founders, Restructuring costs and Other (income) expense, net. Information of segment assets provided to the CODM is consistent with that reported in the accompanying consolidated balance sheets with particular emphasis on the Company’s available liquidity and working capital, including its cash and cash equivalents, accounts receivables, inventory and current liabilities. For the years ended December 31, 2025, 2024 and 2023, no single customer accounted for 10% or more of the Company’s total revenue. Note 15. Subsequent Events On March 3, 2026, the Company entered into a Loan and Security Agreement dated as of March 3, 2026 (the “Revolving Credit Facility”) with Eclipse Business Capital LLC as administrative agent and the lenders thereto. The Revolving Credit Facility is comprised of an asset-based revolving credit facility with a $ 30,000 commitment and an uncommitted accordion feature of up to $ 10,000 (the “Accordion Facility”), which is exercisable, subject to lender consent and other conditions, in $ 5,000 increments or in its entirety. The Revolving Credit Facility has a minimum utilization requirement of $ 10,000 and a stated maturity three years from the date of closing with outstanding principal and interest fully due and payable at such time. Borrowings under the Revolving Credit Facility bear interest at a rate equal to adjusted term SOFR (subject to a floor of 2.0 %) plus an applicable margin of 4.25 %, which is subject to downward adjustments based on certain coverage ratio and excess availability. The Revolving Facility and the Accordion Facility are subject to a closing fee equal to 1.0 % and prepayment fees equal to 3.0 % during the first year, 2.0 % during the second year, and zero percent thereafter, subject to certain exceptions. Obligations under the Revolving Credit Facility are secured by a first priority lien on substantially all of the Company’s assets, including accounts receivable, inventory, cash and intellectual property and are guaranteed by the Company and its subsidiaries. The Revolving Credit Facility includes customary affirmative and negative covenants, including limitations on capital expenditures, indebtedness, liens, investments, asset dispositions, dividends and other restricted payments, as well as a minimum excess availability covenant and a change of control provision. 95 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. 96 Table of Contents