Evolus Inc.
05/04/2026 | Press release | Distributed by Public on 05/04/2026 15:01
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion contains management's discussion and analysis of our financial condition and consolidated results of operations and should be read together with the unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 and other documents previously filed with the SEC. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in Item 1A "Risk Factors" in Part II of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read "Special Note Regarding Forward-Looking Statements" and Item 1A "Risk Factors" in Part II of this Quarterly Report on Form 10-Q.
Overview
We are a global performance beauty company delivering breakthrough products with a customer-centric approach in the cash-pay aesthetic market. Our current commercial product portfolio includes Jeuveau® (prabotulinumtoxinA-xvfs) and Evolysse®, a collection of injectable hyaluronic acid ("HA") gels. We currently sell Jeuveau® in the United States, Canada, certain European countries and Australia, and, in April 2025, we launched Evolysse® Form and Evolysse® Smooth in the United States, which are indicated for wrinkles and folds, such as nasolabial folds, in adults. We anticipate two additional Evolysse® products, Evolysse® Sculpt and Evolysse® Lips, to be approved in the United States in 2026 and 2027, respectively, and expect to launch all four Evolysse® products in Europe in the second quarter of 2026.
Our primary market is the cash-pay aesthetic market, which consists of medical products that consumers pay for directly out of pocket. Our customers are aesthetic practitioners who are properly licensed to deliver our products. By avoiding the regulatory burdens that accompany reimbursed products and pursuing an aesthetic-only non-reimbursed product strategy, we create flexibility to deliver a unique value proposition to our customers. We utilize this flexibility to drive customer adoption through programs such as our consumer loyalty program, co-branded marketing programs, portfolio bundles, promotional events and pricing strategies.
Market Trends and Uncertainties
The global economy has experienced heightened volatility and disruptions, including enacted and threatened tariffs. While inflation in the United States is moderating, job growth has been muted, and consumer confidence has generally been weakening.
Recently enacted tariffs by the United States have adversely affected and potentially will continue to adversely affect overall consumer sentiment and discretionary spending. As a result, lower consumer sentiment and discretionary spending have negatively impacted aesthetic procedures and our sales and may negatively impact our sales in the future. We cannot reasonably estimate the financial impact of current and threatened tariffs by the United States on our future financial condition, results of operations or cash flows.
The United States trade policy has been characterized by rapid changes in both the scope and legal basis of tariffs, including the imposition, invalidation and replacement of tariff regimes. Tariff policy remains subject to change, including through shifts in legal authority, scope, and duration, and any increases or additional tariffs could adversely affect consumer spending and our business.
On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"), creating the possibility that previously collected tariffs may be refunded by the U.S. government. In response, the U.S. government implemented new tariffs to replace certain of the IEEPA tariffs. We are pursuing potential refunds of previously paid IEEPA tariffs.
Additionally, on April 2, 2026, the White House issued a proclamation addressing imports of patented pharmaceuticals. The proclamation authorizes tariffs on certain imports, including from countries such as South Korea, subject to product scope, country treatment and company-specific arrangements, including potential exceptions, exclusions and reduced tariff rates. As Jeuveau® is manufactured and imported from South Korea, these measures may apply to Jeuveau®, although the scope, timing and applicability remain uncertain. We are evaluating actions to mitigate the impact of current and proposed tariffs.
Geopolitical tensions, including ongoing conflicts and instability in the Middle East, have contributed to increased economic, political, and market uncertainties. Any further escalation of hostilities in the region could result in further disruptions to
global energy markets, transportation networks, and supply chains. Such conditions may increase global energy prices, which could heighten inflationary pressures, and further weaken consumer sentiment and discretionary spending. The extent and duration of these potential risks remain uncertain and could materially affect our financial condition, results of operations, and cash flows.
As of March 31, 2026, the majority of our debt outstanding represents a long-term loan bearing variable rates of interest (see Note 7. Long-Term Debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information). Changes in market interest rates will affect the interest expense incurred from this outstanding debt instrument, increasing or decreasing our interest expense in future periods. Additionally, changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuance of short-term and long-term debt securities. See Part I, Item 3 of this Quarterly Report on Form 10-Q for more information.
Recent Key Developments
On March 3, 2026, we entered into a Loan and Security Agreement (the "Loan Agreement") with Eclipse Business Capital LLC, providing for a $30.0 million senior secured asset-based revolving credit facility with an uncommitted accordion feature of up to $10.0 million (collectively, the "Revolving Credit Facility"). The Revolving Credit Facility matures on March 3, 2029 and requires a minimum utilization of $10.0 million. Borrowings under the Revolving Credit Facility bear interest at adjusted term secured overnight financing rate ( "SOFR") (subject to a floor of 2.0%) plus 4.25%, subject to potential downward adjustments. The Revolving Credit Facility is secured by substantially all of our assets and is guaranteed by us and our subsidiaries. See "Liquidity and Capital Resources - The Revolving Credit Facility" below and Note 7. Long-Term Debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table summarizes our consolidated results of operations for the periods indicated:
|
Three Months Ended March 31, |
|||||||||||
|
(in thousands)
|
2026 | 2025 | |||||||||
| Revenue: | |||||||||||
| Product revenue, net | $ | 72,747 | $ | 68,074 | |||||||
| Service revenue | 390 | 448 | |||||||||
| Total net revenues | 73,137 | 68,522 | |||||||||
| Cost of goods sold | 24,240 | 21,867 | |||||||||
| Gross profit | 48,897 | 46,655 | |||||||||
| Gross profit margin | 66.9 | % | 68.1 | % | |||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative | 51,981 | 56,640 | |||||||||
| Research and development | 2,240 | 2,212 | |||||||||
| Revaluation of contingent royalty obligation payable to Evolus Founders | (14) | 2,151 | |||||||||
| Depreciation and amortization | 1,538 | 824 | |||||||||
| Total operating expenses | 55,745 | 61,827 | |||||||||
| Loss from operations | (6,848) | (15,172) | |||||||||
| Other income (expense): | |||||||||||
| Interest expense, net | (3,690) | (3,705) | |||||||||
| Other income (expense), net | 120 | 57 | |||||||||
| Loss before income taxes | (10,418) | (18,820) | |||||||||
| Income tax expense | (256) | (72) | |||||||||
| Net loss | $ | (10,674) | $ | (18,892) | |||||||
| Currency translation adjustment | (122) | 66 | |||||||||
| Comprehensive loss | $ | (10,796) | $ | (18,826) | |||||||
Net Revenues
We currently operate one reportable segment, and our net product revenues are derived from the sale of Jeuveau® and, beginning in April 2025, from the sale of Evolysse®. Net revenues consist of gross revenues, net of adjustments primarily relating to customer rebates, rewards associated with consumer loyalty program, and co-branded marketing programs. Revenues are recognized when the control of the promised goods is transferred to the customer in an amount that reflects the consideration allocated to the related performance obligations and to which we expect to be entitled in exchange for those products or services.
Net revenues increased by $4.6 million, or 6.7%, to $73.1 million in the three months ended March 31, 2026 from $68.5 million in the three months ended March 31, 2025, driven by the launch of Evolysse® in the United States and international growth of Jeuveau®. Net revenues in the three months ended March 31, 2026 and 2025 each contained $0.4 million of service revenue from sales of Jeuveau® through a distribution partner in Canada. We anticipate our continued sales growth will depend on (i) our ability to grow our customer base and to increase purchases by our current customers in the competitive aesthetic market, (ii) the continued success of Evolysse® Form and Evolysse® Smooth products in the United States, (iii) the success of the commercial launch of Evolysse® injectable HA gel collection in Europe and (iv) the regulatory approval for the Evolysse® Sculpt and Evolysse® Lips products in the United States.
Cost of Goods Sold
Cost of goods sold primarily consists of inventory cost, amortization of intangible asset relating to distribution right and certain royalties. Cost of goods sold increased by $2.4 million, or 10.9%, to $24.2 million in the three months ended March 31, 2026 from $21.9 million in the three months ended March 31, 2025, primarily attributable to higher volumes of products shipped to customers. We anticipate that our cost of goods sold will fluctuate due to changes in product and geographical mix and the impact of current and threatened tariffs.
Gross Profit Margin
Our gross profit margin was 66.9% and 68.1% in the three months ended March 31, 2026 and 2025, respectively. We anticipate that our gross profit margin will fluctuate due to changes in product and geographical mix, the effect of current and threatened tariffs, as well as the impact of promotional and incentive programs on our average selling prices.
Selling, General and Administrative
Selling, general and administrative expenses decreased by $4.7 million, or 8.2%, to $52.0 million in the three months ended March 31, 2026 from $56.6 million in the three months ended March 31, 2025, primarily attributable to lower selling, general and administrative expenses in the three months ended March 31, 2026 driven by our strategic cost structure optimization initiatives. Selling, general and administrative expenses may fluctuate in the future primarily driven by potential changes in marketing strategies, launches of new products and international expansion.
Research and Development
Research and development expenses remained relatively consistent at $2.2 million in the three months ended March 31, 2026 when compared with that in the three months ended March 31, 2025. We expect our research and development expenses to increase, if and when, we develop further product candidates and as we pursue regulatory approvals.
Revaluation of Contingent Royalty Obligation Payable to Evolus Founders
The change in the fair value of the contingent royalty obligation payable to the Evolus Founders is recorded in operating expenses in each reporting period. In the three months ended March 31, 2026, the change in the fair value of the contingent royalty obligation payable to the Evolus Founders was immaterial. In the three months ended March 31, 2025, we recognized an unrealized loss of $2.2 million. Changes to the fair value of the contingent royalty obligation payable to Evolus Founders are driven by changes in management assumptions relating to revenue forecasts, the discount rate used and the timing of cash flows.
Depreciation and Amortization
Depreciation and amortization increased by $0.7 million, or 86.7%, to $1.5 million in the three months ended March 31, 2026 from $0.8 million in the three months ended March 31, 2025, primarily due to an increase in amortization of internal use software and depreciation of leasehold improvements.
Interest Expense, Net
Interest expense, net, remained relatively consistent at $3.7 million in the three months ended March 31, 2026 and in the three months ended March 31, 2025. Interest on the Revolving Credit Facility and the New Pharmakon Term Loans (as defined below) is based on variable interest rates, which we expect will continue to fluctuate with the market. See "Liquidity and Capital Resources-The Pharmakon Term Loans" and "Liquidity and Capital Resources-The Revolving Credit Facility" for further information.
Income Tax Expense
There was minimal income tax expense in each of the three months ended March 31, 2026 and 2025.
Liquidity and Capital Resources
Liquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or maturity of investments or the acquisition of additional funds through capital management. Our financial position and liquidity are, and will continue to be, influenced by a variety of factors, including the level of our outstanding indebtedness and the related
principal and interest we are obligated to pay on our indebtedness; the amount and timing of any additional debt or equity financing we may pursue; our capital expenditure requirements; any merger, divestiture or acquisition activity; and our ability to generate cash flows from our operations. We expect cash provided by our operating activities to fluctuate as a result of a number of factors, including the amount and timing of our billing, collections and liability payments and our operating results and the factors that affect these results, including the amount and timing of our product sales; promotions, rebates and incentives; and changes in consumer sentiment and discretionary spending.
As of March 31, 2026 we had cash and cash equivalents of $49.8 million, positive working capital of $70.9 million and stockholders' deficit of $28.8 million.
Since inception, we have incurred recurring net operating losses and have an accumulated deficit of $671.7 million as of March 31, 2026 as a result of ongoing efforts to develop and commercialize our products, including providing selling, general and administrative support for our operations. We had net loss of $10.7 million and $18.9 million in the three months ended March 31, 2026 and 2025, respectively. We had a loss from operations of $6.8 million and $15.2 million in the three months ended March 31, 2026 and 2025, respectively. We used net cash of $10.0 million and $15.6 million for operating activities in the three months ended March 31, 2026 and 2025, respectively. We expect to continue to incur significant expenses for the foreseeable future as we continue the commercialization efforts for our products, prepare for commercial launch of Evolysse® Form, Evolysse® Smooth, Evolysse® Sculpt and Evolysse® Lips injectable HA gel products in Europe, and pursue regulatory approvals of Evolysse® Sculpt and Evolysse® Lips.
The Revolving Credit Facility
On March 3, 2026, we, as borrower, entered into a Loan and Security Agreement (the "Loan Agreement") with Eclipse Business Capital LLC, as administrative agent the lenders party thereto. Pursuant to the Loan Agreement, the lenders party provided a senior secured asset based revolving credit facility (the "Revolving Credit Facility") with a $30.0 million commitment and an uncommitted accordion feature of up to $10.0 million, which is exercisable, subject to lenders party consent and other conditions, in $5.0 million increments or in its entirety. The Revolving Credit Facility has a minimum utilization requirement of $10.0 million and matures on March 3, 2029 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. See Note 7. Long-Term Debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
The Pharmakon Term Loans
On May 5, 2025, we entered into an Amended and Restated Loan Agreement (the "A&R Loan Agreement") with Pharmakon, which amends and restates the Prior Pharmakon Loan Agreement (as defined below). Under the A&R Loan Agreement, Pharmakon (as defined below) agreed to make a senior secured term loan to us of an aggregate principal amount of up to $250.0 million to be funded in three tranches, comprised of an initial $150.0 million tranche funded upon the execution of the A&R Loan Agreement and two additional tranches of up to $50.0 million each, available at our election until December 31, 2026 (collectively, the "New Pharmakon Term Loans"). The initial tranche of $150.0 million was released on May 5, 2025, which includes the $125.0 million of outstanding principal amount related to the Prior Pharmakon Term Loans and $25.0 million of incremental borrowings. Total net proceeds of $23.4 million were received by us, net of discounts and fees paid to the lender, from the funding of the initial tranche. The New Pharmakon Term Loans accrue interest at a per annum rate equal to the 3-month SOFR (subject to a SOFR floor of 3.5%) plus 5.0% per annum. In addition, under the terms of the A&R Loan Agreement, we are 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 $40.0 million at any time, subject to Pharmakon's consent and certain terms and conditions customary for credit facilities of similar size and type. See Note 7. Long-Term Debt in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
In December 2021, we 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 in May 2023 (as amended, the "Prior Pharmakon Loan Agreement"). Pursuant to the terms of the Prior Pharmakon Loan Agreement, Pharmakon made loans to us totaling $125.0 million (the "Prior Pharmakon Term Loans"). The Prior Pharmakon Term Loans bore an annual interest rate equal to the 3-month SOFR (subject to a SOFR floor of 1.0%) plus 8.5% per annum.
Contingent Royalties to Evolus Founders
We are obligated to make quarterly royalty payments based on a low-single digit percentage of net sales of Jeuveau® to the Evolus Founders. These obligations terminate at the end of the second quarter of 2029. The fair value of the obligations is valued quarterly and is referred to in our condensed consolidated financial statements as the contingent royalty obligation.
As of March 31, 2026, we recorded an aggregate balance of $30.3 million in our condensed consolidated balance sheet for the future royalty payment obligation to the Evolus Founders.
Litigation Settlement
In February 2021, we settled litigation claims through settlement agreements with Medytox, Inc. which we refer to collectively as the "Medytox Settlement Agreements." From September 17, 2022 to September 16, 2032, we have paid and will pay to Medytox a quarterly, mid-single digit royalty on net sales of Jeuveau® sold in the United States and other Evolus territories.
Daewoong Agreement
Our agreement (as amended, the "Daewoong Agreement") with Daewoong Pharmaceutical Co. Ltd. ("Daewoong") provides us with an exclusive distribution license to Jeuveau® 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. The Daewoong Agreement includes certain minimum annual purchases which we are required to make in order to maintain the exclusivity of the license. We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territories. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share in various jurisdictions.
Symatese U.S. Agreement
Our agreement (the "Symatese U.S. Agreement") with Symatese Aesthetics S.A.S ("Symatese") provides us with an exclusive right to commercialize and distribute five injectable HA gel product candidates, Form, Smooth, Sculpt, Lips and Eye in the United States for use in the aesthetics and dermatological field of use. We also have 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. The Symatese U.S. Agreement includes certain milestone payments, development cost-sharing arrangements, and minimum annual purchases that we are required to make in order to maintain the exclusivity of the license. We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territory. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share.
Symatese Europe Agreement
Our agreement (the "Symatese Europe Agreement") with Symatese provides us with an exclusive right to commercialize and distribute four injectable HA gel product candidates, Form, Smooth, Sculpt and Lips in 50 countries in Europe for use in the aesthetics and dermatological fields. The Symatese Europe Agreement includes certain milestone payments and minimum annual purchases which we are required to make in order to maintain the exclusivity of the license. We may, however, meet these minimum purchase obligations by achieving certain market share in our licensed territory. These potential minimum purchase obligations are contingent upon the occurrence of future events, including receipt of governmental approvals and our future market share.
Operating Leases
Our corporate headquarters in Newport Beach, California is under a non-cancelable operating lease, which expires on January 31, 2030 with an option to extend the term for an additional 60 months. Lease payments increase based on an annual rent escalation clause that occurs on February 1st of each year during the lease term.
Current and Future Capital Requirements
We believe that our current capital resources, which consist of cash and cash equivalents, future cash generated from operations, availability of an additional $100.0 million in liquidity under the New Pharmakon Term Loans, and the recently closed Revolving Credit Facility, will be sufficient to satisfy our cash requirements for at least the next twelve months with respect to working capital that supports our daily operations and to meeting commitments under our contractual obligations
with third parties, although we may wish to access the debt and equity markets or other sources of financing to satisfy our long-term cash requirements as further discussed below.
We have based our projections of capital requirements on assumptions that may prove to be incorrect, and we may use all our available capital resources, which consist of cash and cash equivalents, cash generated from operations, and availability of liquidity under both the New Pharmakon Term Loans and the Revolving Credit Facility, sooner than we expect. Our cash requirements depend on numerous factors, including but not limited to, the impact of any potential disruptions to our supply chain, inflation or other economic conditions, and other long-term commitments and contingencies. Because of the numerous risks and uncertainties associated with research, development and commercialization of our products, we are unable to estimate the exact amount of our operating capital requirements, including our requirements beyond the next twelve months. In such case, we may be required to raise additional capital to fund future operations through the incurrence of debt, the entry into licensing or collaboration agreements with partners, sale of equity securities, grants or other sources of financing. However, there can be no assurance such financing or other alternatives will be available to us on acceptable terms, or at all. The global economy, including the financial and credit markets, has recently experienced significant volatility and disruptions, volatility in inflation and interest rates, new and threatened tariffs, declines in consumer confidence and uncertainty about economic stability. These conditions may adversely impact our ability to raise additional capital on acceptable terms, or at all.
Our future funding requirements will depend on many factors, including, but not limited to:
•the rate of revenue growth for Jeuveau® and Evolysse® in the markets in which they are launched;
•achieving sustainable profitability;
•the timing of regulatory approval for the additional Evolysse® products in the United States and Europe and our ability to successfully commercialize these products;
•development costs and milestone payments related to the Evolysse® products;
•our ability to forecast demand for our products, scale our supply to meet that demand and manage working capital effectively;
•corporate development activities including the purchase, license, or other acquisition of products and services to add to our product or service offerings;
•the number, characteristics, and development stage of any future product candidates we may develop or acquire;
•the timing and costs of any ongoing or future clinical programs we may conduct;
•the cost of manufacturing our product or any future product candidates and any products we successfully commercialize, including costs associated with our supply chain;
•the timing and amounts of the royalty and other payments payable in connection with the Medytox Settlement Agreements;
•the amounts of the royalty payable to the Evolus Founders;
•the cost of commercialization activities for Jeuveau®, the Evolysse® injectable HA gel product line or any future product candidates that are approved or cleared for sale, including marketing, sales and distribution costs;
•the cost of maintaining or increasing our sales force in the future, the productivity of that sales force, the market acceptance of our products and the actions and product introductions of our competitors;
•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into;
•any product liability or other lawsuits related to our products;
•the expenses needed to attract and retain skilled personnel;
•the costs associated with being a public company;
•the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property and any other future intellectual litigation we may be involved in; and
•the timing, receipt and amount of sales of any products approved or cleared in the future, if any.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
|
Three Months Ended March 31, |
|||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Net cash provided by (used in): | |||||||||||
|
Operating activities
|
$ | (9,952) | $ | (15,632) | |||||||
|
Investing activities
|
(1,691) | (1,861) | |||||||||
|
Financing activities
|
7,619 | (1,631) | |||||||||
| Effect of exchange rates on cash and cash equivalents | (10) | 66 | |||||||||
| Net decrease in cash and cash equivalents | (4,034) | (19,058) | |||||||||
| Cash and cash equivalents, beginning of period | 53,826 | 86,952 | |||||||||
| Cash and cash equivalents, end of period | $ | 49,792 | $ | 67,894 | |||||||
Operating Activities
Cash used in operating activities was $10.0 million in the three months ended March 31, 2026, compared to cash used in operating activities of $15.6 million in the three months ended March 31, 2025. The decrease in cash used in operating activities was mostly attributable to a lower operating loss driven by reduced operating expenses as a result of our strategic cost structure optimization initiatives. In addition, changes in working capital resulting from the timing of cash receipts, accruals and cash disbursements contributed to the decrease in cash used in operating activities in the three months ended March 31, 2026 when compared to the same period in 2025.
Investing Activities
Cash used in investing activities was $1.7 million in the three months ended March 31, 2026, compared to cash used in investing activities of $1.9 million in the three months ended March 31, 2025. The decrease in cash used in investing activities was primarily due to a $0.3 million decrease in expenditures related to capitalized internal-use software, partially offset by a $0.1 million increase in purchases of property and equipment.
Financing Activities
Cash provided by financing activities was $7.6 million in the three months ended March 31, 2026, compared to cash used in financing activities of $1.6 million in the three months ended March 31, 2025. The increase in cash provided by financing activities in the three months ended March 31, 2026 was primarily attributable to $9.5 million of net proceeds received from the Revolving Credit Facility.
Indebtedness
See "Liquidity and Capital Resources-The Pharmakon Term Loans" for a description of our New Pharmakon Term Loans and "Liquidity and Capital Resources-The Revolving Credit Facility" for a description of our Revolving Credit Facility.
Material Cash Requirements
Our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, primarily consist of (i) principal and interest payments related to our New Pharmakon Term Loans (future interest payments on our outstanding New Pharmakon Term Loans total approximately $54.0 million, with $13.2 million due within twelve months), (ii) principal and interest payments related to our Revolving Credit Facility (estimated future interest payments on our outstanding borrowings under the Revolving Credit Facility total approximately $2.4 million, with $0.8 million due within twelve months), (iii) quarterly royalty payments to the Evolus Founders based on a low single digit percentage of net sales of Jeuveau® (these obligations terminate in the quarter after the 10-year anniversary of the first commercial sale of Jeuveau® in the United States), (iv) quarterly royalty payments to Medytox based on a mid-single digit royalty on net sales of Jeuveau® sold in the United States and other Evolus territories (during the period from September 17, 2022 to September 16, 2032), (v) minimum purchase obligations under the Daewoong Agreement, (vi) €12.1 million of milestone payments under the Symatese U.S. Agreement, subject to FDA approval of three Evolysse® products, consisting of €1.6 million due on the date of FDA approval, €4.1 million in June 2026, €3.2 million in June 2027, and €3.2 million in June 2028, in each case subject to and contingent on three of the injectable HA gel products gaining approval prior to the milestone payment date, (vii) €3.1 million of milestone payments under the Symatese Europe Agreement consisting of €1.2 million on the second anniversary of certain regulatory approvals (payable in October 2026) and €1.9 million on the later of the third anniversary of certain regulatory approvals or December of any year in which we achieve US$25.0 million of net revenue in Europe for the injectable HA gel products, provided that if the regulatory approvals are achieved, the payment shall occur no later than December 2029, (viii) minimum purchase and royalty obligations for the injectable HA gel products, and (ix) obligations under operating leases related to our office space, which are described in more detail in Note 8. Operating Leases in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. In the three months ended March 31, 2026, there were no material changes to these obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2025, except as described above with respect to the Revolving Credit Facility.
Critical Accounting Policies and Estimates
Management's discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosure of contingent assets and liabilities, revenue and expenses at the date of the condensed consolidated financial statements as well as the revenue and expenses incurred during the reporting period. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates and such differences could be material to the financial position and results of operations. On an ongoing basis, we evaluate our estimates and assumptions in light of changes in circumstances, facts and experience.
There have been no material changes to our critical accounting policies and estimates as discussed in our Annual Report on Form 10-K filed for the year ended December 31, 2025.
Recently Issued Accounting Pronouncements and Recently Adopted Accounting Pronouncements
We describe the recently issued accounting pronouncements and recently adopted accounting pronouncements that apply to us in Note 2. Basis of Presentation and Summary of Significant Accounting Policies-Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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