Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38381 | ||
Entity Registrant Name | EVOLUS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-1385614 | ||
Entity Address, Address Line One | 520 Newport Center Dr., Suite 1200 | ||
Entity Address, City or Town | Newport Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92660 | ||
City Area Code | 949 | ||
Local Phone Number | 284-4555 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value per share | ||
Trading Symbol | EOLS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Smaller Reporting Company | true | ||
Entity Emerging Growth Company | true | ||
Entity Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 423.2 | ||
Entity Common Stock, Shares Outstanding | 55,694,452 | ||
Documents Incorporated by Reference | Portions of the registrant's Proxy Statement for the 2022 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2021. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity CIK | 0001570562 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Location | Irvine, California |
Auditor Name | Ernst & Young LLP |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 146,256 | $ 102,562 |
Short-term investments | 0 | 5,000 |
Accounts receivable, net | 14,657 | 9,680 |
Inventories | 1,762 | 3,354 |
Prepaid expenses | 5,082 | 4,828 |
Other current assets | 11,042 | 2,188 |
Total current assets | 178,799 | 127,612 |
Property and equipment, net | 1,371 | 1,297 |
Operating lease right-of-use assets | 2,722 | 3,414 |
Intangible assets, net | 50,625 | 55,297 |
Goodwill | 21,208 | 21,208 |
Other assets | 2,758 | 240 |
Total assets | 257,483 | 209,068 |
Current Liabilities | ||
Accounts payable | 6,091 | 9,615 |
Accrued expenses | 29,993 | 9,102 |
Accrued litigation settlement | 15,000 | 63,421 |
Operating lease liabilities | 1,265 | 1,212 |
Contingent royalty obligation payable to Evolus Founders | 5,314 | 3,446 |
Promissory note payable to Evolus Founders | 0 | 19,068 |
Term loan, net of discount and issuance costs | 0 | 74,384 |
Total current liabilities | 57,663 | 180,248 |
Accrued litigation settlement | 5,000 | 20,000 |
Operating lease liabilities | 2,256 | 3,147 |
Contingent royalty obligation payable to Evolus Founders | 39,426 | 38,100 |
Term loan, net of discount and issuance costs | 71,222 | 0 |
Convertible note | 0 | 40,506 |
Deferred tax liability | 40 | 25 |
Total liabilities | 175,607 | 282,026 |
Commitments and contingencies | ||
Stockholders’ equity (deficit) | ||
Preferred Stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Common Stock, $0.00001 par value; 100,000,000 shares authorized; 55,576,988 and 33,749,228 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 1 | 1 |
Additional paid-in capital | 504,757 | 303,113 |
Accumulated deficit | (422,882) | (376,072) |
Total stockholders’ equity (deficit) | 81,876 | (72,958) |
Total liabilities and stockholders’ equity (deficit) | $ 257,483 | $ 209,068 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (in shares) | 55,576,988 | 33,749,228 |
Common stock, shares, outstanding (in shares) | 55,576,988 | 33,749,228 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | ||
Total net revenues | $ 99,673 | $ 56,540 |
Operating expenses: | ||
Product cost of sales (excludes amortization of intangible assets) | 43,534 | 18,299 |
Settlement payment from daewoong | (25,500) | 0 |
Selling, general and administrative | 112,068 | 98,190 |
Research and development | 2,064 | 1,722 |
Revaluation of contingent royalty obligation to Evolus Founders | 6,290 | (2,007) |
Depreciation and amortization | 5,622 | 7,027 |
Litigation settlement expenses | 0 | 83,421 |
Restructuring costs | 0 | 2,956 |
Total operating expenses | 144,078 | 209,608 |
Loss from operations | (44,405) | (153,068) |
Other income (expense): | ||
Interest income | 1 | 635 |
Interest expense | (1,396) | (10,503) |
Loss from extinguishment of debts, net | (968) | 0 |
Loss before income taxes | (46,768) | (162,936) |
Income tax expense | 42 | 77 |
Net loss | (46,810) | (163,013) |
Other comprehensive gain: | ||
Unrealized loss on available-for-sale securities, net of tax | 0 | (6) |
Comprehensive loss | $ (46,810) | $ (163,019) |
Net loss per share, basic (in dollars per share) | $ (0.94) | $ (4.83) |
Net loss per share, diluted (in dollars per share) | $ (0.94) | $ (4.83) |
Weighted-average shares outstanding used to compute basic net loss per share (in shares) | 49,773,101 | 33,737,838 |
Weighted-average shares outstanding used to compute diluted net loss per share (in shares) | 49,773,101 | 33,737,838 |
Cost, Product and Service [Extensible Enumeration] | Product revenue, net | Product revenue, net |
Product revenue, net | ||
Revenue: | ||
Total net revenues | $ 98,971 | $ 55,802 |
Service revenue | ||
Revenue: | ||
Total net revenues | $ 702 | $ 738 |
Statements of Stockholders_ Equ
Statements of Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Follow-on Offering | A T M Sales Agreement | Preferred StockSeries A Preferred Stock | Common Stock | Common StockFollow-on Offering | Common StockA T M Sales Agreement | Additional Paid In Capital | Additional Paid In CapitalFollow-on Offering | Additional Paid In CapitalA T M Sales Agreement | Accumulated Other Comprehensive Gain (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 33,562,665 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ 79,457 | $ 0 | $ 1 | $ 292,509 | $ 6 | $ (213,059) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock (in shares) | 186,563 | |||||||||||
Issuance of common stock | 0 | 0 | ||||||||||
Stock-based compensation expense | 10,604 | 10,604 | ||||||||||
Net loss | (163,013) | (163,013) | ||||||||||
Other comprehensive loss | (6) | (6) | ||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 0 | 33,749,228 | ||||||||||
Ending balance at Dec. 31, 2020 | (72,958) | $ 0 | $ 1 | 303,113 | 0 | (376,072) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock in connection with litigation settlement | 48,421 | 48,421 | ||||||||||
Issuance of common stock for conversion of convertible note (in shares) | 3,136,869 | |||||||||||
Issuance of common stock for conversion of convertible note | 39,808 | 39,808 | ||||||||||
Issuance of common stock (in shares) | 643,872 | 10,350,000 | 934,367 | |||||||||
Issuance of common stock | 655 | $ 92,212 | $ 10,910 | 655 | $ 92,212 | $ 10,910 | ||||||
Stock-based compensation expense | 9,638 | 9,638 | ||||||||||
Net loss | (46,810) | (46,810) | ||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | 55,576,988 | ||||||||||
Ending balance at Dec. 31, 2021 | $ 81,876 | $ 0 | $ 1 | $ 504,757 | $ 0 | $ (422,882) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (46,810) | $ (163,013) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,622 | 7,027 |
Stock-based compensation | 9,576 | 10,584 |
Provision for bad debts | 589 | 2,066 |
Amortization of discount on short-term investments | 272 | (427) |
Amortization of operating lease right-of-use assets | 692 | 654 |
Amortization of debt discount and issuance costs | 941 | 2,691 |
Paid-in-kind interest on convertible note | 0 | 506 |
Deferred income taxes | 15 | 25 |
Revaluation of contingent royalty obligation to Evolus Founders | 6,290 | (2,007) |
Loss from extinguishment of debts, net | 968 | 0 |
Non-cash portion of accrued settlement expenses | 0 | 48,421 |
Changes in assets and liabilities: | ||
Inventories | (2,979) | 4,542 |
Accounts receivable | (5,566) | (1,085) |
Prepaid expenses and other current assets | (7,264) | (1,690) |
Accounts payable | (787) | 2,320 |
Accrued expenses | 20,891 | (4,248) |
Accrued litigation settlement | (15,000) | 35,000 |
Operating lease liabilities | (838) | (734) |
Other assets | 0 | 1,497 |
Net cash used in operating activities | (33,388) | (57,871) |
Cash flows from investing activities | ||
Purchases of property and equipment | (393) | (815) |
Additions to capitalized software | (577) | (2,323) |
Purchases of short-term investments | 0 | (74,668) |
Maturities of short-term investments | 5,000 | 90,000 |
Net cash provided by investing activities | 4,030 | 12,194 |
Cash flows from financing activities | ||
Repayments of Debt | (76,323) | 0 |
Repayment of promissory note payable to Evolus Founders | (20,000) | 0 |
Payment of contingent royalty obligation to Evolus Founders | (3,097) | (1,130) |
Proceeds from issuance of convertible note | 0 | 40,000 |
Proceeds from issuance of long-term debt, net of discounts | 71,958 | 0 |
Payments for debt issuance costs | (3,263) | 0 |
Payment for debt obligation | 0 | (523) |
Payments for offering costs | (214) | 0 |
Issuance of common stock in connection with incentive equity plan | 655 | 0 |
Net cash provided by financing activities | 73,052 | 38,347 |
Change in cash and cash equivalents | 43,694 | (7,330) |
Cash and cash equivalents, beginning of period | 102,562 | 109,892 |
Cash and cash equivalents, end of period | 146,256 | 102,562 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 138 | 7,244 |
Cash paid for income taxes | 14 | 65 |
Non-cash investing and financing information | ||
Conversion of convertible note to equity | 39,808 | 0 |
Issuance of common stock in exchange for litigation settlement expense | 48,421 | 0 |
Capitalized software recorded in accounts payable and accrued expenses | 10 | 0 |
Follow-on Offering | ||
Cash flows from financing activities | ||
Proceeds from follow-on offering, net of underwriting fees | 92,426 | 0 |
A T M Sales Agreement | ||
Cash flows from financing activities | ||
Proceeds from follow-on offering, net of underwriting fees | $ 10,910 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Description of Business Evolus, Inc., (“Evolus” or the “Company”) is a performance beauty company focused on delivering products in the self-pay aesthetic market. The Company received the approval of its first product Jeuveau ® (prabotulinumtoxinA-xvfs) from the U.S. Food and Drug Administration (the “FDA”) in February 2019. The product was also approved by Health Canada in August 2018 and the European Commission (“EC”) in September 2019. Jeuveau ® is a proprietary 900 kDa purified botulinum toxin type A formulation indicated for the temporary improvement in the appearance of moderate to severe glabellar lines, also known as “frown lines,” in adults. The Company commercially launched Jeuveau ® in the United States in May 2019 and in Canada through a distribution partner in October 2019. The Company currently generates all of its net revenues from Jeuveau ® . The Company is headquartered in Newport Beach, California. Liquidity and Financial Condition The accompanying financial statements have been prepared on a basis that assumes that the Company will continue as a going concern, and do not include any adjustments that may result from the outcome of this uncertainty. 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 and management expects operating losses and negative cash flows to continue for at least the next 12 months. As of December 31, 2021, the Company had $146,256 in cash and cash equivalents and an accumulated deficit of $422,882. In December 2021, the Company entered into a $125,000 Term Loan agreement with BPCR Limited Partnership, BioPharma Credit Investments V (Master) LP, and Biopharma Credit PLC (collectively, “Pharmakon”). The first tranche of $75,000 was funded on December 29, 2021. The second tranche of $50,000 may be drawn at the Company’s election no later than December 31, 2022, subject to the terms and conditions of the loan agreement. As of December 31, 2021, the Company has not drawn the second tranche. The Company received net proceeds of approximately $68,695 from Pharmakon, after issuance costs and debt discounts. See Note 6. Term Loans for additional information. In January 2021, the Company and Oxford Finance LLC (“Oxford”) entered into an agreement, pursuant to which the Company paid Oxford $76,447 to pay off the Oxford Term Loan. See Note 6. Term Loans for additional information. In February 2021, the Company, Medytox, Inc. (“Medytox”), Allergan, Inc. and Allergan Limited (together, “Allergan”) entered into settlement agreements in connection with the International Trade Commission (“ITC”) action, for which the Company agreed to pay $15,000 in 2021, $15,000 in 2022 and $5,000 in 2023 with additional terms including specified royalty payments as described below and in Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement . In March 2021, the Company and Daewoong entered into certain agreements, pursuant to which Daewoong (1) paid the Company $25,500 in April 2021 and (2) agreed to reimburse the Company certain amounts with respect to the royalties payable to Medytox and Allergan, among other terms. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for additional information. In addition, in March 2021 the outstanding Daewoong Convertible Note (as such term is defined in Note 7. Daewoong Convertible Note ), including accrued interest, in the amount of $40,779 was converted into 3,136,869 shares of the Company’s common stock. See Note 7. Daewoong Convertible Note for additional information. In April 2021, the Company completed a follow-on public offering and issued 10,350,000 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase an additional 1,350,000 shares of common stock, at a price to the public of $9.50 per share. The Company received net proceeds of approximately $92,426 from the offering, after deducting underwriting discounts and commissions, excluding other offering expenses. In June, July and August 2021, the Company sold 934,367 common shares at the prevailing market prices for total net proceeds of $10,910 under the existing “at-the-market” sales agreement. See Note 10. Stockholders’ Equity for additional details. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Reclassifications Certain comparative amounts for prior year have been reclassified to conform to current year presentations. Such reclassifications did not affect net income or retained earnings. Use of Estimates Management is required to make certain estimates and assumptions in order to prepare financial statements in conformity with GAAP. Such estimates and assumptions affect the reported financial statements. The Company’s most significant estimates relate to net revenues, allowance for doubtful accounts, fair value measurements, goodwill and long-lived asset valuations and impairment assessments, inventory valuations, income tax valuations, stock-based compensation and royalty obligations, 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. Additionally, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. However, where possible, management has made appropriate accounting estimates with respect to certain accounting matters, which include the fair value of royalty obligations, allowance for doubtful accounts, inventory valuation and impairment assessments of goodwill and other long-lived assets, based on the facts and circumstances available as of the reporting date. The Company’s future assessment of the magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in material impacts to the Company’s financial statements in future reporting periods. Risks and Uncertainties In 2013, Evolus and Daewoong Pharmaceutical Co. Ltd. (“Daewoong”) entered into an agreement (the “Daewoong Agreement”), pursuant to which the Company received an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, Russia, certain members of the Commonwealth of Independent States, 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/Allergan Settlement Agreements and Daewoong Arrangement 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 and, as such, has a limited history of sales. If any previously granted approval is retracted or the Company is denied approval or approval is delayed by any other regulators, it may have a material adverse impact on the Company’s business and its financial statements. The Company is also subject to risks common to companies in the pharmaceutical industry including, but not limited to, dependency on the commercial success of Jeuveau ® , the Company’s sole commercial product, significant competition within the medical aesthetics industry, its ability to maintain regulatory approval of Jeuveau ® , third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by physicians 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. The COVID-19 outbreak and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have adversely affected the Company’s business in a number of ways, which have resulted, and may continue to result, in a period of business disruption and in reduced sales and operations. In addition, any disruption and volatility in the global capital markets 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 Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker. The Company has determined that it operates in a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer who manages operations and reviews the financial information as a single operating segment for purposes of allocating resources and evaluating its financial performance. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments 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 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. 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. Credit losses historically have not been material. The Company continuously monitors customer payments and maintains an allowance for doubtful accounts based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities at purchase of three months or less that can be liquidated without prior notice or penalty. Cash and cash equivalents may include deposits, money market funds and debt securities. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. Short-Term Investments Short-term investments consist of available-for-sale U.S. Treasury securities with original maturities greater than three months and remaining maturities of less than twelve months. These investments are recorded at fair value based on quoted prices in active markets, with unrealized gains and losses reported in other comprehensive gain (loss) in the Company’s statements of operations and comprehensive loss. Purchase premiums and discounts are recognized in interest expense using the effective interest method over the terms of the securities. Realized gains and losses and declines in fair value that are deemed to be other than temporary are reflected in the statements of operations and comprehensive loss using the specific-identification method. The Company periodically reviews all available-for-sale securities for other than temporary declines in fair value below the cost basis whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company also evaluates whether it has plans or is required to sell short-term investments before recovery of their amortized cost bases. To date, the Company has not identified any other than temporary declines in fair value of its short-term investments. Inventories Inventories consist of finished goods held for sale and distribution. Cost is determined based on the estimated amount payable to the Company’s supplier after accounting for any reimbursement receivable pursuant to the Daewoong Settlement Agreement (as such term is defined, and such agreement is discussed, in Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ), usin g the first-in, first-out method with prioritization of the items with the earliest expiration dates. Inventory valuation reserves are established based on a number of factors including, but not limited to, finished goods not meeting product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves may require judgment. No material inventory valuation reserves have been recorded for the periods presented. Adverse changes in assumptions utilized in the Company’s inventory reserve calculations could result in an increase to its inventory valuation reserves. Product cost of sales, excluding amortization of intangible assets, consisted of the inventory cost, and, for periods on or after December 16, 2020, included certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox/Allergan Settlement Agreements (as such term is defined in Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ), as partially offset by reimbursement receivable from Daewoong pursuant to the Daewoong Settlement Agreement with respect to such royalties. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in an orderly transaction between market participants in a principal market on the measurement date. The fair value hierarchy defines a three-tiered valuation hierarchy for disclosure of fair value measurement is classified and disclosed by the Company in one of the three categories as follows: • Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3—Prices or valuation techniques that require inputs that are unobservable that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of approximately five years. Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the term of the related lease. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company performs an annual qualitative assessment of its goodwill in the fourth quarter of each calendar year to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If further testing is required, the Company performs a two-step process. The first step involves comparing the fair value of the Company’s reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. For the purpose of impairment testing, the Company has determined that it has one reporting unit. There was no impairment of goodwill for any of the periods presented. Intangible Assets Upon FDA approval of Jeuveau ® in February 2019, the in process research and development (“IPR&D”) related to Jeuveau ® was evaluated as completed and reclassified to a definite-lived distribution right intangible asset, which is amortized over the period the asset is expected to contribute to the future cash flows of the Company. The Company determined the pattern of this intangible asset’s future cash flows could not be readily determined with a high level of precision. As a result, the distribution right intangible asset is being amortized on a straight-line basis over the estimated useful life of 20 years. The Company capitalizes certain internal-use software costs associated with the development of its mobile and web-based customer platforms. These costs include personnel expenses and external costs that are directly associated with the software projects. These costs are included as intangible assets in the accompanying balance sheets. The capitalized internal-use software costs are amortized on a straight-line basis over the estimated useful life of two years upon being placed in service. The Company reviews long-term and identifiable definite-lived intangible assets or asset groups for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset or an asset group, further impairment analysis is performed. An impairment loss is measured as the amount by which the carrying amount of the asset or asset groups exceeds the fair value for assets to be held and used or fair value less cost to sell for assets to be disposed of. The Company also reviews the useful lives of its assets periodically to determine whether events and circumstances warrant a revision to the remaining useful life. Changes in the useful life are adjusted prospectively by revising the remaining period over which the asset is amortized. There was no material impairment of long-lived assets for any periods presented. Leases In accordance with Accounting Standards Codification 842, Leases (“ASC 842”), at the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, upon lease commencement, the Company records a lease liability which represents the Company’s obligation to make lease payments arising from the lease, and a corresponding right-of-use (“ROU”) asset which represents the Company’s right to use an underlying asset during the lease term. Operating lease assets and liabilities are included in ROU assets, current portion of operating lease liabilities and noncurrent operating lease liabilities in the accompanying balance sheets. Operating lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. Operating lease ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received, if any. The Company determines the lease term as the noncancelable 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 balance sheets. For operating leases, the Company recognized rent expense on a straight-line basis over the lease term. There were no significant finance leases as of December 31, 2021. Contingent Royalty Obligation Payable to the Evolus Founders The Company determines the fair value of the contingent royalty obligation payable at each reporting period end based on Level 3 inputs using a discounted cash flows method. Changes in the fair value of the contingent royalty obligation payable are determined at each reporting period end and recorded in operating expenses in the accompanying statements of operations and comprehensive loss and as a liability in the accompanying balance sheets. Promissory Note Payable to the Evolus Founders On February 12, 2018, the Company recognized a promissory note payable at present value using a discount rate for similar rated debt securities. Discount amortization related to the promissory note is recorded in interest expense in the accompanying statements of operations and comprehensive loss with a corresponding increase to the liabilities in the accompanying balance sheets. Long-term Debt Long-term debt represents the debt balance with Pharmakon as of December 31, 2021 and Oxford as of December 31, 2020 (see Note 6. Term Loans ) , net of debt 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. Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. General The Company generates product revenue from the sale of Jeuveau ® in the United States and service revenue from the sale of Jeuveau ® through a distribution partner in Canada. For product revenue, the Company recognizes revenue when control of the promised goods under a contract is transferred to a customer, in an amount that reflects the consideration the Company expects to receive in exchange for those goods as specified in the customer contract. The transfer of control occurs upon receipt of the goods by the customer since that is when the customer has obtained control of the goods’ economic benefits. The Company does not provide any service-type warranties and does not accept product returns except under limited circumstances such as damages in transit or ineffective product. The Company also excludes any amounts related to taxes assessed by governmental authorities from revenue measurement. Shipping and handling costs associated with outbound product freight are accounted for as fulfillment costs and are included in selling, general and administrative expenses in the accompanying 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. For the years ended December 31, 2021 and 2020, the Company recognized $702 and $738, respectively, of revenues related to international sales. Disaggregation of Revenue The Company’s disaggregation of revenue is consistent with its operating segment as disclosed above. Gross-to-Net Revenue Adjustments The Company provides customers with discounts, such as trade and volume discounts and prompt pay discounts, that are directly reflected in the invoice price. Revenues are recorded net of sales-related adjustments, wherever applicable, primarily for the volume based rebates, coupons, 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. • Coupons — The Company issued customers coupons redeemable into gift cards funded by the Company for the benefit of patients. The coupons were accounted for as variable consideration. The Company estimated coupon redemption rates based on historical data and future expectations. The coupons were accrued based on estimated redemption rates and the volume of products purchased and were recorded as a reduction to revenues on product delivery. All issued coupons expired on June 30, 2020. • Consumer Loyalty Program — In May 2020, the Company launched a consumer loyalty program, which allows participating customers to earn rewards for qualifying treatments to their patients (i.e. consumers) using Jeuveau ® and redeem the rewards for Jeuveau ® in the future at no additional cost. The loyalty program represents a customer option that provides a material right and, accordingly, is a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward (“Reward”) that the customer might redeem in the future. The standalone selling price of the Reward is measured based on historical sales data, estimated average selling price of Jeuveau ® at the time of redemption, expected customer and consumer participation rates in the loyalty program, and estimated number of qualifying treatments to be performed by customers. The portion of invoice price allocated to the Reward is initially recorded as deferred revenue. Subsequently, when customers redeem the Reward and the related product is delivered, the deferred revenue is recognized in net revenues at that time. • Co-Branded Marketing Programs — The Company offers eligible customers with a certain level of Jeuveau ® purchases to receive advertising co-branded with the Company. The co-branded advertising represents a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the advertisement. The standalone selling price of the advertisement is measured based on the estimated market value of similar advertisement adjusted for the customer’s portion of the advertisement. The portion of invoice price allocated to the advertisement is initially recorded as deferred revenue. Subsequently, when the advertisement airs, the deferred revenue is recognized in net revenues at that time. Contract balances A contract with a customer states the terms of the sale, including the description, quantity and price of each product purchased. Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. The Company does not have any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of December 31, 2021 and 2020, all amounts included in accounts receivable, net on the accompanying balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of December 31, 2021 or 2020. Sales commissions are included in selling, general and administrative expenses when incurred. Contract liabilities reflect estimated amounts that the Company is obligated to pay to customers or patients primarily under the rebate and coupon programs and deferred revenue associated with Rewards under the consumer loyalty program and co- branded marketing programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying balance sheets. As of December 31, 2021 and 2020, the accrued revenue contract liabilities, primarily related to volume-based rebates, consumer loyalty program, and co-branded media programs, were $7,934 and $3,081, respectively, which were recorded in accrued expenses in the accompanying balance sheets. For the years ended December 31, 2021 and 2020, provisions for rebate, coupon, consumer loyalty programs, and co-branded media programs were $16,139 and $16,896, respectively, which were offset by related payments, redemptions and adjustments of $11,286 and $15,524, respectively. During the years ended December 31, 2021 and 2020, the Company recognized $2,802 and $0, respectively, of revenue related to amounts included in contract liabilities at the beginning of the period and did not recognize any revenue related to changes in transaction prices regarding its contracts with customers from previous periods. Collectability Accounts receivable are recorded at the invoiced amount and do not bear interest. At the time of contract inception or new customer account set-up, the Company performs a collectability assessment of the customer’s creditworthiness. The Company assesses the probability that the Company will collect the entitled consideration in exchange for the goods sold, by considering the customer’s ability and intention to pay when consideration is due. On a recurring basis, the Company estimates the amount of receivables considered uncollectable to reflect an allowance for doubtful accounts. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of December 31, 2021 and 2020, allowance for doubtful accounts was $2,385 and $2,118, respectively. For the years ended December 31, 2021 and 2020, provision for bad debts was $589 and $2,066, respectively, and the write-off amount was $322 and $335, respectively. Practical Expedients The Company expenses sales commissions when incurred as the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the accompanying statements of operations and comprehensive loss. The Company does not adjust the amount of promised consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays within one year. Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs, costs associated with pre-clinical and clinical development activities, costs associated with and costs for prototype products that are manufactured prior to market approval for that prototype product, internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs, including allocated facility related expenses. Litigation Settlement In February 2021, upon entering into certain agreements to settle intellectual property disputes relating to Jeuveau ® , the Company agreed to pay to Allergan and Medytox $35,000 in multiple payments over two years, of which $15,000 was paid in the third quarter of 2021 and $15,000 was paid in the first quarter of 2022, and issued 6,762,652 shares of its common stock to Medytox. In addition, for the period from December 16, 2020 to September 16, 2022, the Company agreed to pay to Allergan and Medytox a royalty on the sale of Jeuveau ® , based on a certain dollar amount per vial sold in the United States and a low-double digit royalty on net sales of Jeuveau ® sold in other Evolus territories. For the period from September 17, 2022 to September 16, 2032, the Company agreed to pay to Medytox a mid-single digit royalty percentage on all net sales of Jeuveau ® . The royalty payments are made quarterly and recorded as product cost of sales on the accompanying statements of operations and comprehensive loss in the periods the royalties are incurred. The settlement agreements resulted in an $83,421 charge for the year ended December 31, 2020, which consisted of $35,000 in deferred cash payments and $48,421 from the issuance of 6,762,652 shares of the Company’s common stock in February 2021. In the year ended December 31, 2021, the Company made cash payments of $15,000 to Medytox and Allergan. As of December 31, 2021, a current liability of $15,000 and non-current liability of $5,000 were recorded in the accompanying balance sheets. Separately, in March 2021, Daewoong and the Company entered into certain agreements, pursuant to which Daewoong agreed to pay the Company an amount equal to $25,500, which was recorded as a settlement payment from Daewoong and included as part of cost of sales on the accompanying statements of operations and comprehensive loss for the year ended December 31, 2021. For the period from December 16, 2020 to September 16, 2022, Daewoong also agreed to reimburse the Company certain amounts with respect to the royalties payable to Medytox and Allergan. This reimbursement is received quarterly and recorded as an offset to the related royalties to Medytox and Allergan in the product cost of sales on the accompanying statements of operations and comprehensive loss. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for the details of all litigation settlement agreements. Stock-Based Compensation The Company recognizes stock-based compensation expense for employees, consultants and members of the Board of Directors based on the fair value at the date of grant. The Company uses the Black-Scholes option pricing model to value stock option grants. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected life. The fair value of the Company’s restricted stock units (“RSUs”) is based on the fair value on the grant date of the Company’s common stock. The Company also evaluates the impact of modifications made to the original terms of equity awards when they occur. The fair value of equity awards that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to addit |
Fair Value Measurements and Sho
Fair Value Measurements and Short-Term Investments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Short-Term Investments | Fair Value Measurements and Short-Term Investments Short-Term Investments As of December 31, 2021, the Company did not hold any short-term investments. As of December 31, 2020, all of the Company’s investments had remaining maturities of less than 12 months. The following is a summary of the Company’s short-term investments, considered available-for-sale, as of December 31, 2020: As of December 31, 2020 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities U.S treasury securities $ 5,000 $ — $ — $ 5,000 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, 2021 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 44,740 $ — $ — $ 44,740 As of December 31, 2020 Fair Value Level 1 Level 2 Level 3 Available-for-sale debt securities U.S treasury securities $ 5,000 $ 5,000 $ — $ — Liabilities Contingent royalty obligation payable to Evolus Founders $ 41,546 $ — $ — $ 41,546 The Company did not transfer any assets or liabilities measured at fair value on a recurring basis between levels during the year ended December 31, 2021. The Company determines the fair value of the contingent royalty obligation payable to the Evolus Founders based on Level 3 inputs using a discounted cash flows method. The significant unobservable input assumptions that can significantly change the fair value include (i) projected amount and timing of net revenues during the payment period, which terminates in the quarter following the 10-year anniversary of the first commercial sale of Jeuveau ® in the United States, (ii) the discount rate and (iii) the timing of payments. During the years ended December 31, 2021 and 2020, the Company utilized discount rates between 13.0% and 20.0%, reflecting changes in the Company’s risk profile. Net revenue projections are also updated to reflect changes in the timing of expected sales. Significant increases (decreases) in the discount rate would result in a significantly lower (higher) fair value measurement, which could materially impact the fair value reported on the balance sheet. The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Year Ended December 31, 2021 2020 Fair value, beginning of period $ 41,546 $ 44,683 Payments (3,097) (1,130) Change in fair value recorded in operating expenses 6,290 (2,007) Fair value, end of period $ 44,740 $ 41,546 Other Financial Assets and Liabilities The Company’s financial instruments consist primarily of cash and cash equivalents, short-term available-for-sale debt securities, accounts receivable, accounts payable, accrued expenses, lease liabilities, and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments. The Company estimates the fair value of the promissory note payable to the Evolus Founders, long-term debt and operating lease liabilities using the discounted cash flow analysis based on the interest rates for similar rated debt securities (Level 2). As of December 31, 2021, the fair value of the long-term debt was $75,448. As of December 31, 2020, the fair value of the contingent promissory note and long-term debt was estimated to be $19,284 and $76,368, respectively. The fair value of operating lease liabilities as of December 31, 2021 and 2020 approximated their carrying value. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The table below shows the weighted-average life, original cost, accumulated amortization and net book value by major intangible asset classification: Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (8,589) $ 50,487 Capitalized software 2 7,314 (7,176) 138 Intangible assets, net 66,390 (15,765) 50,625 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2021 $ 87,598 $ (15,765) $ 71,833 Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (5,650) $ 53,426 Capitalized software 2 6,681 (4,810) 1,871 Intangible assets, net 65,757 (10,460) 55,297 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2020 $ 86,965 $ (10,460) $ 76,505 * Intangible assets with indefinite lives have an indeterminable average life. The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2021 that are subject to amortization: Fiscal year 2022 3,016 2023 3,034 2024 2,955 2025 2,955 2026 2,955 Thereafter 35,710 $ 50,625 Distribution right represents the license and associated distribution right to develop Jeuveau ® , the initial term of which expires in September 2023 and is automatically extended for unlimited additional three-year terms provided that the Company meets certain performance requirements. Additionally, upon FDA approval of Jeuveau ® on February 1, 2019, the IPR&D project was completed and reclassified as a definite-lived distribution right intangible asset, which is amortized on a straight-line basis over the estimated useful life of 20 years. The Company paid Daewoong a $2,000 milestone payment, pursuant to the Daewoong Agreement, which increased the cost basis of the distribution. In connection with EU approval of Jeuveau ® , the Company paid a $1,000 milestone payment to Daewoong in the fourth quarter of fiscal year 2019, which increased the cost basis of the distribution right. Under the Daewoong Arrangement (as defined in Note 11. ), there is no additional cash consideration due to Daewoong. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for additional information. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of: Year Ended December 31, 2021 2020 Accrued royalties under the Medytox/Allergan Settlement Agreements $ 12,447 $ — Accrued payroll and related benefits 6,856 4,076 Accrued revenue contract liabilities 7,934 3,081 Accrued professional services 595 895 Other accrued expenses 2,161 1,050 $ 29,993 $ 9,102 |
Term Loans
Term Loans | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Term Loans | Term Loans Pharmakon Term Loans On December 14, 2021, the Company entered into a loan agreement with Pharmakon. Pursuant to the terms of the agreement, Pharmakon agreed to make term loans to the Company in two tranches (“Pharmakon Term Loans”). The first tranche of $75,000 was funded on December 29, 2021. The second tranche of $50,000 may be drawn at the Company’s election no later than December 31, 2022. As of December 31, 2021, the Company has not drawn the second tranche. The Pharmakon Term Loans will mature on the sixth year anniversary of the closing date of the first tranche (“Maturity Date”). The Pharmakon Term Loans accrue interest at a per annum rate equal to the 3-month U.S. Dollar LIBOR rate (subject to a LIBOR rate floor of 1.0%) plus 8.5% per annum; provided that, upon a public statement or publication of information in certain circumstances that LIBOR has ceased or will cease to be provided or be representative or the occurrence of an early opt-in determination by the collateral agent, the Pharmakon Term Loans will be amended to provide for an alternative to the 3-month U.S. Dollar LIBOR rate established by the lenders holding a majority of the outstanding Pharmakon Term Loans, giving due consideration to the selection or recommendation of a replacement rate or mechanism for determining such rate by any applicable governmental authority or the then-prevailing market conventions. The Company agreed to make 12 equal quarterly payments of principal on the outstanding Pharmakon Term Loans commencing on or immediately following the 39th-month anniversary of the funding date of the first tranche continuing through the Maturity Date. The Company may elect to prepay all amounts, not less than $20,000, owed prior to the Maturity Date. Prepayments of the first tranche prior to the second anniversary of the closing date of the first tranche and prepayments of the second tranche prior to the second anniversary of the date on which the second tranche is drawn by the Company will be accompanied by a make whole amount equal to the sum of all interest that would have accrued through such second anniversary. Prepayments of the Pharmakon Term Loans will also be accompanied by a prepayment premium equal to the principal amount so prepaid multiplied by 3.0% if made prior to the third anniversary of the closing date of the first tranche, 2.0% if made on or after the third anniversary of the closing date of the first tranche but prior to the fourth anniversary of the closing date of the first tranche, and 1.0% if made on or after the fourth anniversary of the closing date of the first tranche but prior to the Maturity Date. If the Pharmakon Term Loans are accelerated following the occurrence of an event of default, including a material adverse change, the Company is required to immediately pay Pharmakon an amount equal to the sum of all outstanding principal, unpaid interest, and applicable make whole and prepayment premiums. The Pharmakon Term Loans are secured by substantially all of the Company’s assets. The Pharmakon Term Loans contain customary affirmative and restrictive covenants and representations and warranties. The affirmative covenants include, among others, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. The restrictive covenants include, among others, incurring certain additional indebtedness, consummating certain change in control transactions, or incurring any non- permitted lien or other encumbrance on the Company’s assets, without Pharmakon’s prior written consent. The Pharmakon Term Loans do not contain covenants requiring the Company to maintain a minimum cash threshold or minimum revenues or earnings. As of December 31, 2021, the Company was in compliance with its debt covenants. At the closing date of the first tranche, the Company incurred $3,042 and $3,263 in debt discounts and issuance costs related to the Pharmakon Term Loans, respectively. Debt discounts and issuance costs related to the entire Pharmakon Term Loans have been allocated pro rata between the funded and unfunded portions. Debt discounts and issuance costs allocated to the first tranche of $75,000 have been presented as a deduction to the debt balance and are amortized into interest expense using the effective interest method. As of December 31, 2021, the borrowings outstanding under the Pharmakon Term Loans were classified as long-term debt in the accompanying balance sheets. Debt discounts and issuance costs associated with the unfunded tranche are deferred as assets until the tranche is drawn and are amortized into interest expense using the straight-line method over the term of the debt. The overall effective interest rate was approximately 10.89% as of December 31, 2021. As of December 31, 2021, the principal amounts of long-term debt maturities for each of the next five fiscal years are as follows: Fiscal year 2022 $ — 2023 — 2024 — 2025 25,000 2026 25,000 Thereafter 25,000 Total principal payments 75,000 Unamortized debt discounts and issuance costs (3,778) Long term debt, net of discounts and issuance costs $ 71,222 Oxford Term Loans On March 15, 2019, the Company entered into a Loan and Security Agreement with Oxford (the “Loan Agreement”), providing for a credit facility of up to $100,000. Pursuant to the terms of the credit facility, the lender extended term loans (the “Oxford Term Loan”), available in two advances, to the Company. The first tranche of $75,000 was funded on the closing date. The second tranche of $25,000 was not drawn. The credit facility bore an annual interest rate equal to the greater of 9.5%, or the 30-day U.S. Dollar LIBOR rate plus 7.0%. The Company agreed to pay interest-only for the first 36 months until May 2022, followed by a 23 months amortization period. At the closing date, the Company incurred $1,094 and $2,205 in debt discounts and issuance costs related to the Oxford Term Loan, respectively. Debt discounts and issuance costs related to the entire Oxford Term Loan have been allocated pro rata between the funded and unfunded portions. Debt discounts and issuance costs related to the Oxford Term Loan have been presented as a deduction to the debt balance and are amortized into interest expense using the effective interest method. The overall effective interest rate was approximately 11.6% as of December 31, 2020. Upon the earliest to occur of the maturity date, the acceleration of the Oxford Term Loan, or the prepayment of the Oxford Term Loan, the Company was required to pay to Oxford a final payment of 5.5% of the full principal amount of the Oxford Term Loan funded (“Final Payment”). The Company could elect to prepay all amounts owed prior to the maturity date, provided that a prepayment fee was also paid, which would be equal to 2.0% of the amount prepaid if the prepayment occurred after March 15, 2020 and on or prior to March 15, 2021, or 1.0% of the amount prepaid if the prepayment occurred thereafter (“Prepayment Fee”). On July 6, 2020, the Company entered into a Convertible Promissory Note Purchase Agreement with Daewoong for the principal amount of $40,000 (the “Daewoong Convertible Note”), which was funded on July 30, 2020. Additionally, on July 6, 2020, the Company, Daewoong and Oxford entered into a Subordination Agreement pursuant to which the Daewoong Convertible Note was subordinated to the Company’s obligations under the Loan Agreement. The Daewoong Convertible Note bore interest at a rate of 3.0% payable semi-annually in arrears on June 30th and December 31st of each year and was to mature on July 30, 2025, subject to earlier conversion as provided below. Interest was initially paid in kind by adding the accrued amount thereof to the outstanding principal amount on a semi-annual basis on June 30th and December 31st of each calendar year for so long as any principal amount under the Oxford Term Loan remained outstanding and the Subordination Agreement was not terminated. Interest became payable in cash after the Oxford Term Loan was repaid in full, and the Subordination Agreement was terminated on January 4, 2021. On March 23, 2021, the outstanding principal balance including all accrued and unpaid interest thereon, of $40,779 was converted into 3,136,869 shares of the Company’s common stock under the Conversion Agreement at the conversion price of $13.00 per share. The conversion was accounted for as an extinguishment of debt resulting in a gain of $971, which is recorded in loss from extinguishment of debts, net on the accompanying statements of operations and comprehensive loss. The Daewoong Convertible Note was not registered, and the shares of the Company’s common stock issued upon conversion of the Daewoong Convertible Note have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for the details of the Conversion Agreement. |
Daewoong Convertible Note
Daewoong Convertible Note | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Daewoong Convertible Note | Term Loans Pharmakon Term Loans On December 14, 2021, the Company entered into a loan agreement with Pharmakon. Pursuant to the terms of the agreement, Pharmakon agreed to make term loans to the Company in two tranches (“Pharmakon Term Loans”). The first tranche of $75,000 was funded on December 29, 2021. The second tranche of $50,000 may be drawn at the Company’s election no later than December 31, 2022. As of December 31, 2021, the Company has not drawn the second tranche. The Pharmakon Term Loans will mature on the sixth year anniversary of the closing date of the first tranche (“Maturity Date”). The Pharmakon Term Loans accrue interest at a per annum rate equal to the 3-month U.S. Dollar LIBOR rate (subject to a LIBOR rate floor of 1.0%) plus 8.5% per annum; provided that, upon a public statement or publication of information in certain circumstances that LIBOR has ceased or will cease to be provided or be representative or the occurrence of an early opt-in determination by the collateral agent, the Pharmakon Term Loans will be amended to provide for an alternative to the 3-month U.S. Dollar LIBOR rate established by the lenders holding a majority of the outstanding Pharmakon Term Loans, giving due consideration to the selection or recommendation of a replacement rate or mechanism for determining such rate by any applicable governmental authority or the then-prevailing market conventions. The Company agreed to make 12 equal quarterly payments of principal on the outstanding Pharmakon Term Loans commencing on or immediately following the 39th-month anniversary of the funding date of the first tranche continuing through the Maturity Date. The Company may elect to prepay all amounts, not less than $20,000, owed prior to the Maturity Date. Prepayments of the first tranche prior to the second anniversary of the closing date of the first tranche and prepayments of the second tranche prior to the second anniversary of the date on which the second tranche is drawn by the Company will be accompanied by a make whole amount equal to the sum of all interest that would have accrued through such second anniversary. Prepayments of the Pharmakon Term Loans will also be accompanied by a prepayment premium equal to the principal amount so prepaid multiplied by 3.0% if made prior to the third anniversary of the closing date of the first tranche, 2.0% if made on or after the third anniversary of the closing date of the first tranche but prior to the fourth anniversary of the closing date of the first tranche, and 1.0% if made on or after the fourth anniversary of the closing date of the first tranche but prior to the Maturity Date. If the Pharmakon Term Loans are accelerated following the occurrence of an event of default, including a material adverse change, the Company is required to immediately pay Pharmakon an amount equal to the sum of all outstanding principal, unpaid interest, and applicable make whole and prepayment premiums. The Pharmakon Term Loans are secured by substantially all of the Company’s assets. The Pharmakon Term Loans contain customary affirmative and restrictive covenants and representations and warranties. The affirmative covenants include, among others, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. The restrictive covenants include, among others, incurring certain additional indebtedness, consummating certain change in control transactions, or incurring any non- permitted lien or other encumbrance on the Company’s assets, without Pharmakon’s prior written consent. The Pharmakon Term Loans do not contain covenants requiring the Company to maintain a minimum cash threshold or minimum revenues or earnings. As of December 31, 2021, the Company was in compliance with its debt covenants. At the closing date of the first tranche, the Company incurred $3,042 and $3,263 in debt discounts and issuance costs related to the Pharmakon Term Loans, respectively. Debt discounts and issuance costs related to the entire Pharmakon Term Loans have been allocated pro rata between the funded and unfunded portions. Debt discounts and issuance costs allocated to the first tranche of $75,000 have been presented as a deduction to the debt balance and are amortized into interest expense using the effective interest method. As of December 31, 2021, the borrowings outstanding under the Pharmakon Term Loans were classified as long-term debt in the accompanying balance sheets. Debt discounts and issuance costs associated with the unfunded tranche are deferred as assets until the tranche is drawn and are amortized into interest expense using the straight-line method over the term of the debt. The overall effective interest rate was approximately 10.89% as of December 31, 2021. As of December 31, 2021, the principal amounts of long-term debt maturities for each of the next five fiscal years are as follows: Fiscal year 2022 $ — 2023 — 2024 — 2025 25,000 2026 25,000 Thereafter 25,000 Total principal payments 75,000 Unamortized debt discounts and issuance costs (3,778) Long term debt, net of discounts and issuance costs $ 71,222 Oxford Term Loans On March 15, 2019, the Company entered into a Loan and Security Agreement with Oxford (the “Loan Agreement”), providing for a credit facility of up to $100,000. Pursuant to the terms of the credit facility, the lender extended term loans (the “Oxford Term Loan”), available in two advances, to the Company. The first tranche of $75,000 was funded on the closing date. The second tranche of $25,000 was not drawn. The credit facility bore an annual interest rate equal to the greater of 9.5%, or the 30-day U.S. Dollar LIBOR rate plus 7.0%. The Company agreed to pay interest-only for the first 36 months until May 2022, followed by a 23 months amortization period. At the closing date, the Company incurred $1,094 and $2,205 in debt discounts and issuance costs related to the Oxford Term Loan, respectively. Debt discounts and issuance costs related to the entire Oxford Term Loan have been allocated pro rata between the funded and unfunded portions. Debt discounts and issuance costs related to the Oxford Term Loan have been presented as a deduction to the debt balance and are amortized into interest expense using the effective interest method. The overall effective interest rate was approximately 11.6% as of December 31, 2020. Upon the earliest to occur of the maturity date, the acceleration of the Oxford Term Loan, or the prepayment of the Oxford Term Loan, the Company was required to pay to Oxford a final payment of 5.5% of the full principal amount of the Oxford Term Loan funded (“Final Payment”). The Company could elect to prepay all amounts owed prior to the maturity date, provided that a prepayment fee was also paid, which would be equal to 2.0% of the amount prepaid if the prepayment occurred after March 15, 2020 and on or prior to March 15, 2021, or 1.0% of the amount prepaid if the prepayment occurred thereafter (“Prepayment Fee”). On July 6, 2020, the Company entered into a Convertible Promissory Note Purchase Agreement with Daewoong for the principal amount of $40,000 (the “Daewoong Convertible Note”), which was funded on July 30, 2020. Additionally, on July 6, 2020, the Company, Daewoong and Oxford entered into a Subordination Agreement pursuant to which the Daewoong Convertible Note was subordinated to the Company’s obligations under the Loan Agreement. The Daewoong Convertible Note bore interest at a rate of 3.0% payable semi-annually in arrears on June 30th and December 31st of each year and was to mature on July 30, 2025, subject to earlier conversion as provided below. Interest was initially paid in kind by adding the accrued amount thereof to the outstanding principal amount on a semi-annual basis on June 30th and December 31st of each calendar year for so long as any principal amount under the Oxford Term Loan remained outstanding and the Subordination Agreement was not terminated. Interest became payable in cash after the Oxford Term Loan was repaid in full, and the Subordination Agreement was terminated on January 4, 2021. On March 23, 2021, the outstanding principal balance including all accrued and unpaid interest thereon, of $40,779 was converted into 3,136,869 shares of the Company’s common stock under the Conversion Agreement at the conversion price of $13.00 per share. The conversion was accounted for as an extinguishment of debt resulting in a gain of $971, which is recorded in loss from extinguishment of debts, net on the accompanying statements of operations and comprehensive loss. The Daewoong Convertible Note was not registered, and the shares of the Company’s common stock issued upon conversion of the Daewoong Convertible Note have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for the details of the Conversion Agreement. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company’s corporate headquarters in Newport Beach, California is leased under a five-year non-cancelable operating lease, which expires on January 31, 2025. Lease payments increase each year on February 1 based on an annual rent escalation clause. The Company may, under certain circumstances, terminate the lease on the 36-month anniversary of the lease commencement date by providing a written notice 12 months prior to such anniversary and paying a termination fee equal to six months basic rent plus certain other expenses. The Company has an option to extend the term of the lease for an additional 60 months, which is not recognized as part of its ROU assets and lease liabilities. The Company’s lease agreement does not contain any residual value guarantees or material restrictive covenants. The payments associated with the renewal will only be included in the measurement of the lease liability and ROU assets if the exercise of the renewal option is determined to be reasonably certain. The Company considers the timing of the renewal period and other economic factors such as the financial implications of a decision to extend or not to extend a lease in determining if the renewal option is reasonably certain to be exercised. The components of operating lease expense are as follows: Year Ended December 31, 2021 2020 Fixed operating lease expense $ 1,065 $ 1,080 Variable operating lease expense 64 40 Short-term operating lease expense — 168 $ 1,129 $ 1,288 The weighted-average remaining lease term and discount rate are as follows: As of December 31, 2021 2020 Weighted-average remaining lease term (years) 3.1 4.1 Weighted-average discount rate 9.4% 9.4% Operating lease expenses were included in the selling, general and administrative expenses in the accompanying statements of operations and comprehensive loss. Operating lease right-of-use assets and related current and noncurrent operating lease liabilities are presented in the accompanying balance sheets. The following table presents the future minimum payments under the operating lease agreements with non-cancelable terms as of December 31, 2021: Fiscal year 2022 1,265 2023 1,320 2024 1,377 2025 115 Total operating lease payments 4,077 Less: imputed interest (556) Present value of operating lease liabilities $ 3,521 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments As of December 31, 2021, the Company has entered into commitments to purchase services and products for an aggregate amount of approximately $2,012. Certain minimum purchase commitments related to the purchase of Jeuveau ® are described below. License and Supply 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 its covered 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. Legal Proceedings 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 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, 2021 and 2020. Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming the Company and certain of its officers as defendants. The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to the Company’s acquisition of the right to sell Jeuveau ® , the complaint against the Company filed by Allergan and Medytox in the U.S. International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc. Securities Litigation , No. 1:20-cv-08647 (PGG). On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against the Company, three of its officers, and Alphaeon Corporation, the Company’s former majority shareholder. On January 18, 2022, the Company and the officer defendants served their motion to dismiss the amended complaint, which is scheduled to be fully briefed on June 16, 2022. Shareholder Derivative Lawsuit On November 27, 2020 and December 2, 2020, two putative Evolus shareholders filed substantially similar shareholder derivative actions in the U.S. District Court for the Southern District of New York against certain of the Company’s officers and directors as defendants. The complaints alleged substantially similar facts as those in the Securities Class Action and assert claims for, among other things, breach of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Exchange Act and for contribution under Sections 10(b) and 21(D) of the Exchange Act. On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation , No. 1:20-cv-09986-PPG, and adjourned defendants’ time to move, answer or otherwise respond to the complaints. On September 20, 2021, the court so-ordered the parties’ stipulated stay of the consolidated derivative suit pending the court’s decision on the defendants’ motion to dismiss the Securities Class Action. It is possible that additional suits will be filed, or additional allegations will be made by stockholders, with respect to these same or similar or other matters and also naming the Company and/or its officers and directors as defendants. The Company believes that the complaints are without merit and intends to vigorously defend against it. However, the outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss and accordingly has not accrued any liability associated with this action. Books and Records Demand On March 5, 2021, the Company received a letter from a putative stockholder demanding inspection of specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law. The Company was subsequently informed that the stockholder sold his shares of the Company’s common stock. On October 13, 2021, the Company received a substantially similar demand to inspect specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the putative securities class action and derivative complaints described above. The Company responded to that demand on December 17, 2021. Other Legal Matters The Company is, from time to time, involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation. These other matters may raise difficult and complex legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit or regulatory encounter is brought, and differences in applicable laws and regulations. Except as set forth above, the Company does not believe that these other matters would have a material adverse effect on its accompanying financial position, results of operations or cash flows. However, the resolution of one or more of the other matters in any reporting period could have a material adverse impact on the Company’s financial results for that period. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because they involve claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of December 31, 2021. Medytox/Allergan Settlement Agreements U.S. Settlement Agreement Effective February 18, 2021, the Company, Allergan and Medytox entered into a Settlement and License Agreement (the “U.S. Settlement Agreement”), pursuant to which, among other things: (i) Allergan and Medytox agreed to file a petition requesting the remedial orders related to the ITC Action be rescinded with respect to the Company; (ii) Medytox agreed to dismiss substantially similar litigation in California against the Company; (iii) the Company, on the one hand, and Medytox and Allergan, on the other hand, agreed to mutually release certain claims they may have against one another and their respective affiliates, (iv) Allergan and Medytox granted to the Company and its agents a license to manufacture and commercialize certain products identified in the U.S. Settlement Agreement, including Jeuveau ® (the “Licensed Products”), in the United States during the 21 month period that, pursuant to the ITC Action, the Company was restricted from, among other things, selling, marketing, or promoting such imported Jeuveau ® in the United States (the “Restricted Period”); (v) the Company agreed to pay to Allergan and Medytox $35,000 in multiple payments over two years, of which the Company paid the first cash payment of $15,000 in the third quarter of 2021 and the second payment of $15,000 in the first quarter of 2022; and (vi) during the Restricted Period, the Company agreed to pay to Allergan and Medytox certain confidential royalties on the sale of Licensed Products, calculated on dollar amount per vial sold of Licensed Products by or on behalf of the Company in the United States. ROW Settlement Agreement Effective February 18, 2021, the Company and Medytox entered into a Settlement and License Agreement (the “ROW Settlement Agreement” and, together with the U.S. Settlement Agreement, the “Medytox/Allergan Settlement Agreements”), pursuant to which, among other things: (i) the Company and Medytox agreed to mutually release certain claims they may have against one another and their respective affiliates; (ii) Medytox granted to the Company and its agents a license to manufacture and commercialize the Licensed Products, in Canada, the European Union, Switzerland, member countries and cooperating countries of the European Economic Area, Russia, certain members of the Commonwealth of Independent States, South Africa, Australia and Japan (the “ROW Territories”) during the Restricted Period; (iii) Medytox granted to the Company and its agents a fully paid up license to manufacture and commercialize the Licensed Products in the ROW Territories and the United States from the end of the Restricted Period (the “Medytox License Period”); (iv) the Company and Medytox agreed to enter into the Share Issuance Agreement (as defined below) pursuant to which the Company issued 6,762,652 shares (the “Settlement Shares”) of the Company’s common stock, par value $0.00001 per share, to Medytox; (v) the Company and Medytox agreed to enter into the Registration Rights Agreement (as defined below), pursuant to which the Company granted certain registration rights to Medytox with respect to the Settlement Shares; (vi) during the Restricted Period, the Company agreed to pay Medytox a confidential low-double digit royalty on net sales of the Licensed Products sold by or on behalf of the Company in the ROW Territories; and (vii) during the Medytox License Period, the Company agreed to pay Medytox a confidential mid-single digit royalty percentage on net sales of the Licensed Products sold by or on behalf of the Company in the United States and the ROW Territories. Share Issuance Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox entered into a Share Issuance Agreement effective February 18, 2021 (the “Share Issuance Agreement”). Pursuant to the Share Issuance Agreement and subject to the terms and conditions set forth therein, among other things, the Company issued to Medytox the Settlement Shares to enter into the ROW Settlement Agreement and in consideration for Medytox’s representations, warranties, and other agreements set forth in the Share Issuance Agreement. The Settlement Shares are subject to contractual restrictions on transfer that, subject to certain limited exceptions such as transfers to affiliates, prevented Medytox from transferring any shares of common stock prior to February 16, 2022 and, thereafter, prohibit Medytox from transferring more than 25% of the shares it holds prior to September 16, 2023, more than 50% of the shares it holds prior to September 16, 2024 and more than 75% of the shares it holds prior to September 16, 2025, with such contractual restrictions terminating on September 16, 2025. Registration Rights Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox also entered into a Registration Rights Agreement effective February 18, 2021 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, among other things, the Company agreed, after March 31, 2022, (i) to comply with certain requests by Medytox to register for sale, under the Securities Act, the Settlement Shares, and (ii) to include the Settlement Shares in certain registrations by the Company of its securities for sale under the Securities Act, to the extent requested by Medytox, in each case subject to certain customary conditions, exceptions and limitations as set forth in the Registration Rights Agreement. In addition, Medytox’s registration rights under the Registration Rights Agreement will terminate at such time that Medytox is able to sell all of the Settlement Shares over a three-month period, or less, pursuant to an exemption to registration under the Securities Act. Daewoong Arrangement Daewoong Arrangement On March 23, 2021, the Company and Daewoong entered into a Confidential Settlement and Release Agreement (the “Daewoong Arrangement”), pursuant to which, among other things: (i) Daewoong agreed to (a) pay to the Company an amount equal to $25,500, which the Company received in April 2021, (b) pay certain legal fees incurred by the Company’s litigation counsel in connection with its defense of the ITC Action (including any appeal of the resulting remedial orders), (c) cancel all remaining milestone payments, totaling $10,500 in aggregate, and (d) reimburse the Company certain amounts (calculated on a dollar amount per vials sold basis in the United States) for sales of certain products with respect to which the Company is required to pay Medytox and Allergan royalties pursuant to the U.S. Settlement Agreement; and (ii) the Company agreed to (a) release, on behalf of itself and certain of its affiliates and representatives, certain claims they may have against Daewoong related to the allegations made in or the subject matter of the Medytox/Allergan Actions, or any orders, remedies and losses resulting from the Medytox/Allergan Actions, and (b) coordinate with Daewoong on certain matters related to the Medytox/Allergan Actions. Conversion Agreement In connection with the execution of the Daewoong Arrangement, the Company and Daewoong also entered into a Convertible Promissory Note Conversion Agreement (the “Conversion Agreement”), pursuant to which, among other things, (i) the principal balance under the Daewoong Convertible Note, together with all accrued and unpaid interest thereon, in the amount of $40,779 was converted into 3,136,869 shares of Common Stock at the conversion price of $13.00 per share (the “Conversion Shares”); and (ii) the Daewoong Convertible Note was deemed cancelled and satisfied in full in connection with such conversion. After the conversion, shares owned by Daewoong, together with its affiliates and attribution parties, did not exceed 9.99% of the Company’s then outstanding common shares immediately following such issuance, as required under the terms of the Daewoong Convertible Note. Daewoong Agreement Amendment In connection with the execution of the Daewoong Arrangement, on March 23, 2021, the Company and Daewoong also entered into the Third Amendment to the Supply Agreement (the “Daewoong Agreement Amendment”). Pursuant to the Daewoong Agreement Amendment, the parties amended the Daewoong Agreement to (i) expand the territory within which the Company may distribute Jeuveau ® to certain countries in Europe, (ii) reduce the period of time with respect to which the Company is required to deliver binding forecasts to Daewoong; (iii) introduce certain limitations on Daewoong’s ability to convert the Company’s exclusive license for certain territories to a non-exclusive license in the event the Company fails to meet certain minimum purchase requirements for such territory; (iv) adjust the minimum purchase requirements and reduce the transfer price per vial of Jeuveau ® applicable to various territories, (v) require that any Jeuveau ® supplied by Daewoong match certain shelf-life thresholds, and (vi) prohibit the Company from sharing certain confidential information of Daewoong with Medytox or its affiliates or representatives. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | 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, 2021, 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, 2021, 55,576,988 shares of its common stock were issued and outstanding. On February 28, 2021, the Company issued 6,762,652 shares of its common stock to Medytox pursuant to the Share Issuance Agreement. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for additional information. On March 25, 2021, the Company issued 3,136,869 shares of its common stock to Daewoong in connection with the conversion of Daewoong Convertible Note. See Note 7. Daewoong Convertible Note for additional information. In April 2021, the Company completed a follow-on public offering and issued 10,350,000 shares of its common stock, which included the exercise in full by the underwriters of their option to purchase an additional 1,350,000 shares of common stock, at a price to the public of $9.50 per share. The Company received net proceeds of approximately $92,426 from the offering, after deducting underwriting discounts and commissions, excluding other offering expenses. “At-the-market” Offerings of Common Stock On March 26, 2021, the Company entered into an “at-the-market” sales agreement with SVB Leerink LLC (the “Sales Agent”) pursuant to which shares of the Company’s common stock may be sold from time to time for aggregate gross proceeds of up to $75,000 (the “ATM Program”). The Sales Agent is entitled to compensation, at a commission rate equal to 3.0% of the gross proceeds from sales of the Company’s common shares under the ATM Program. For the year ended December 31, 2021, the Company sold a total of 934,367 shares of its common stock pursuant to the ATM Program at the prevailing market prices for total net proceeds of $10,910 and paid total commissions of $337 to the Sales Agent. 2017 Omnibus Incentive Plan and Stock-based Compensation Allocation The Company’s 2017 Omnibus Incentive Plan (the “Plan”) provides for the grant of incentive options to employees of the Company, and for the grant of non-statutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company’s officers, directors, consultants and employees of the Company. The maximum number of shares of common stock that may be issued under the Plan is 4,361,291 shares, plus an annual increase on each anniversary of November 21, 2017 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, 2021 and 2020, an additional 2,223,080 shares and 1,349,969 shares, respectively, were reserved under the evergreen provision of the Plan. As of December 31, 2021, the Company had an aggregate of 3,361,247 shares of its common stock available for future issuance under the Plan. Stock-Based Award Activity and Balances Options are granted at exercise prices based on the Company’s common stock price on the date of grant. The options and RSU grants generally vest over a one The significant assumptions used in the Black-Scholes option-pricing are as follows: • Expected Volatility. The Company has limited data regarding company‑specific historical or implied volatility of its share price. Consequently, the Company estimates its volatility based on the average historical volatility of the stock price from a set of peer companies and its own stock performance, since our shares do not have sufficient trading history. Management considers factors such as stage of life cycle, competitors, size, market capitalization and financial leverage in the selection of similar entities. • Expected Term. The expected term represents the period of time in which the options granted are expected to be outstanding. The Company estimates the expected term of options with consideration of vesting date, contractual term, and historical experience. The expected term of “plain vanilla” options is estimated based on the midpoint between the vesting date and the end of the contractual term under the simplified method permitted by the SEC implementation guidance. The weighted‑average expected term of the Company’s options is approximately six years. • Risk‑Free Rate. The risk‑free interest rate is selected based upon the implied yields in effect at the time of the option grant on U.S. Treasury zero‑coupon issues with a term approximately equal to the expected life of the option being valued. • Dividends. The Company does not anticipate paying cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield rate of zero. The weighted-averages for assumptions used in determining the fair value of stock options granted were as follows: Year Ended December 31, 2021 2020 Volatility 78.9% 61.2% Risk-free interest rate 1.2% 1.4% Expected life (years) 6.25 6.14 Dividend yield rate —% —% A summary of stock option activity under the Plan for the year ended December 31, 2021 and 2020, is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding as of December 31, 2019 3,977,401 14.07 8.51 $ 7,198 Granted 1,322,119 8.89 Exercised — Cancelled/forfeited (892,022) 15.62 Outstanding as of December 31, 2020 4,407,498 $ 12.20 7.66 $ 50 Granted 357,125 9.18 Exercised (99,435) 9.81 Cancelled/forfeited (742,902) 16.21 Outstanding as of December 31, 2021 3,922,286 $ 11.23 7.10 $ 455 Exercisable as of December 31, 2021 2,316,637 $ 11.44 6.67 $ 98 Vested and expected to vest as of December 31, 2021 3,922,286 $ 11.23 7.10 $ 455 The aggregate intrinsic value of outstanding and exercisable options represents the excess of the fair market value of our common stock over the exercise price of underlying options as of December 31, 2021 and 2020. The total intrinsic value of options exercised during the year ended December 31, 2021 was $200. There were no options exercised during the year ended December 31, 2020. During the years ended December 31, 2021 and 2020, the Company recorded expenses related to stock options of $5,302 and $7,968, respectively. As of December 31, 2021, there was $6,358 of total unrecognized compensation cost, net of actual forfeitures, related to stock option-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted-average period of 1.68 years. A summary of RSU activity under the Plan for the year ended December 31, 2021 and 2020, is presented below: Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2019 229,870 $ 15.89 Granted 1,301,439 5.88 Vested (186,870) 13.6 Forfeited (170,698) 7.21 Outstanding as of December 31, 2020 1,173,741 $ 6.42 Granted 1,850,243 7.94 Vested (566,788) 5.08 Forfeited (530,729) 7.22 Outstanding as of December 31, 2021 1,926,467 $ 8.06 During the years ended December 31, 2021 and 2020, the Company recorded expenses related to restricted stock units of $4,274 and $2,615, respectively. Total fair value of RSUs vested during the years ended December 31, 2021 and 2020 was $5,892 and $1,980, respectively. As of December 31, 2021, there was $11,768 of total unrecognized compensation cost, net of actual forfeitures, related to RSU-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted-average period of 2.87 years. The following table summarizes stock-based compensation expense arising from the above Plan: Year Ended December 31, 2021 2020 Selling, general and administrative $ 9,372 $ 10,408 Research and development 204 176 Total stock-based compensation expense $ 9,576 $ 10,584 In addition, during the years ended December 31, 2021 and 2020, the Company capitalized $63 and $21, respectively, of stock-based compensation expense in capitalized software. Capitalized software is a component of intangible assets and is presented in the accompanying balance sheets. See Note 4. Goodwill and Intangible Assets |
Medytox_Allergan Settlement Agr
Medytox/Allergan Settlement Agreements and Daewoong Arrangement | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Medytox/Allergan Settlement Agreements and Daewoong Arrangement | Commitments and Contingencies Purchase Commitments As of December 31, 2021, the Company has entered into commitments to purchase services and products for an aggregate amount of approximately $2,012. Certain minimum purchase commitments related to the purchase of Jeuveau ® are described below. License and Supply 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 its covered 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. Legal Proceedings 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 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, 2021 and 2020. Securities Class Action Lawsuit On October 16 and 28, 2020, two putative securities class action complaints were filed in the U.S. District Court for the Southern District of New York by Evolus shareholders Armin Malakouti and Clinton Cox, respectively, naming the Company and certain of its officers as defendants. The complaints assert violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, claiming that the defendants made false and materially misleading statements and failed to disclose material adverse facts related to the Company’s acquisition of the right to sell Jeuveau ® , the complaint against the Company filed by Allergan and Medytox in the U.S. International Trade Commission related to Jeuveau ® (the “ITC Action”), and risks related to the ITC Action. The complaints assert a putative class period of February 1, 2019 to July 6, 2020. The court consolidated the actions on November 13, 2020, under the caption In re Evolus Inc. Securities Litigation , No. 1:20-cv-08647 (PGG). On September 17, 2021, the court appointed a lead plaintiff and lead counsel. On November 17, 2021, the lead plaintiff filed an amended class action complaint against the Company, three of its officers, and Alphaeon Corporation, the Company’s former majority shareholder. On January 18, 2022, the Company and the officer defendants served their motion to dismiss the amended complaint, which is scheduled to be fully briefed on June 16, 2022. Shareholder Derivative Lawsuit On November 27, 2020 and December 2, 2020, two putative Evolus shareholders filed substantially similar shareholder derivative actions in the U.S. District Court for the Southern District of New York against certain of the Company’s officers and directors as defendants. The complaints alleged substantially similar facts as those in the Securities Class Action and assert claims for, among other things, breach of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Exchange Act and for contribution under Sections 10(b) and 21(D) of the Exchange Act. On December 29, 2020, the plaintiffs filed a joint stipulation to consolidate their actions and on February 5, 2021, the court consolidated the action under the caption In re Evolus, Inc. Derivative Litigation , No. 1:20-cv-09986-PPG, and adjourned defendants’ time to move, answer or otherwise respond to the complaints. On September 20, 2021, the court so-ordered the parties’ stipulated stay of the consolidated derivative suit pending the court’s decision on the defendants’ motion to dismiss the Securities Class Action. It is possible that additional suits will be filed, or additional allegations will be made by stockholders, with respect to these same or similar or other matters and also naming the Company and/or its officers and directors as defendants. The Company believes that the complaints are without merit and intends to vigorously defend against it. However, the outcome of the legal proceeding is uncertain at this point. Based on information available to the Company at present, management cannot reasonably estimate a range of loss and accordingly has not accrued any liability associated with this action. Books and Records Demand On March 5, 2021, the Company received a letter from a putative stockholder demanding inspection of specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law. The Company was subsequently informed that the stockholder sold his shares of the Company’s common stock. On October 13, 2021, the Company received a substantially similar demand to inspect specified categories of the Company’s books and records under Section 220 of the Delaware General Corporations Law from another putative stockholder. The subject of the demand is substantially similar to the allegations in the putative securities class action and derivative complaints described above. The Company responded to that demand on December 17, 2021. Other Legal Matters The Company is, from time to time, involved in various litigation matters or regulatory encounters arising in the ordinary course of business that could result in unasserted or asserted claims or litigation. These other matters may raise difficult and complex legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit or regulatory encounter is brought, and differences in applicable laws and regulations. Except as set forth above, the Company does not believe that these other matters would have a material adverse effect on its accompanying financial position, results of operations or cash flows. However, the resolution of one or more of the other matters in any reporting period could have a material adverse impact on the Company’s financial results for that period. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because they involve claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. No amounts were accrued as of December 31, 2021. Medytox/Allergan Settlement Agreements U.S. Settlement Agreement Effective February 18, 2021, the Company, Allergan and Medytox entered into a Settlement and License Agreement (the “U.S. Settlement Agreement”), pursuant to which, among other things: (i) Allergan and Medytox agreed to file a petition requesting the remedial orders related to the ITC Action be rescinded with respect to the Company; (ii) Medytox agreed to dismiss substantially similar litigation in California against the Company; (iii) the Company, on the one hand, and Medytox and Allergan, on the other hand, agreed to mutually release certain claims they may have against one another and their respective affiliates, (iv) Allergan and Medytox granted to the Company and its agents a license to manufacture and commercialize certain products identified in the U.S. Settlement Agreement, including Jeuveau ® (the “Licensed Products”), in the United States during the 21 month period that, pursuant to the ITC Action, the Company was restricted from, among other things, selling, marketing, or promoting such imported Jeuveau ® in the United States (the “Restricted Period”); (v) the Company agreed to pay to Allergan and Medytox $35,000 in multiple payments over two years, of which the Company paid the first cash payment of $15,000 in the third quarter of 2021 and the second payment of $15,000 in the first quarter of 2022; and (vi) during the Restricted Period, the Company agreed to pay to Allergan and Medytox certain confidential royalties on the sale of Licensed Products, calculated on dollar amount per vial sold of Licensed Products by or on behalf of the Company in the United States. ROW Settlement Agreement Effective February 18, 2021, the Company and Medytox entered into a Settlement and License Agreement (the “ROW Settlement Agreement” and, together with the U.S. Settlement Agreement, the “Medytox/Allergan Settlement Agreements”), pursuant to which, among other things: (i) the Company and Medytox agreed to mutually release certain claims they may have against one another and their respective affiliates; (ii) Medytox granted to the Company and its agents a license to manufacture and commercialize the Licensed Products, in Canada, the European Union, Switzerland, member countries and cooperating countries of the European Economic Area, Russia, certain members of the Commonwealth of Independent States, South Africa, Australia and Japan (the “ROW Territories”) during the Restricted Period; (iii) Medytox granted to the Company and its agents a fully paid up license to manufacture and commercialize the Licensed Products in the ROW Territories and the United States from the end of the Restricted Period (the “Medytox License Period”); (iv) the Company and Medytox agreed to enter into the Share Issuance Agreement (as defined below) pursuant to which the Company issued 6,762,652 shares (the “Settlement Shares”) of the Company’s common stock, par value $0.00001 per share, to Medytox; (v) the Company and Medytox agreed to enter into the Registration Rights Agreement (as defined below), pursuant to which the Company granted certain registration rights to Medytox with respect to the Settlement Shares; (vi) during the Restricted Period, the Company agreed to pay Medytox a confidential low-double digit royalty on net sales of the Licensed Products sold by or on behalf of the Company in the ROW Territories; and (vii) during the Medytox License Period, the Company agreed to pay Medytox a confidential mid-single digit royalty percentage on net sales of the Licensed Products sold by or on behalf of the Company in the United States and the ROW Territories. Share Issuance Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox entered into a Share Issuance Agreement effective February 18, 2021 (the “Share Issuance Agreement”). Pursuant to the Share Issuance Agreement and subject to the terms and conditions set forth therein, among other things, the Company issued to Medytox the Settlement Shares to enter into the ROW Settlement Agreement and in consideration for Medytox’s representations, warranties, and other agreements set forth in the Share Issuance Agreement. The Settlement Shares are subject to contractual restrictions on transfer that, subject to certain limited exceptions such as transfers to affiliates, prevented Medytox from transferring any shares of common stock prior to February 16, 2022 and, thereafter, prohibit Medytox from transferring more than 25% of the shares it holds prior to September 16, 2023, more than 50% of the shares it holds prior to September 16, 2024 and more than 75% of the shares it holds prior to September 16, 2025, with such contractual restrictions terminating on September 16, 2025. Registration Rights Agreement In connection with the execution of the ROW Settlement Agreement, the Company and Medytox also entered into a Registration Rights Agreement effective February 18, 2021 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, among other things, the Company agreed, after March 31, 2022, (i) to comply with certain requests by Medytox to register for sale, under the Securities Act, the Settlement Shares, and (ii) to include the Settlement Shares in certain registrations by the Company of its securities for sale under the Securities Act, to the extent requested by Medytox, in each case subject to certain customary conditions, exceptions and limitations as set forth in the Registration Rights Agreement. In addition, Medytox’s registration rights under the Registration Rights Agreement will terminate at such time that Medytox is able to sell all of the Settlement Shares over a three-month period, or less, pursuant to an exemption to registration under the Securities Act. Daewoong Arrangement Daewoong Arrangement On March 23, 2021, the Company and Daewoong entered into a Confidential Settlement and Release Agreement (the “Daewoong Arrangement”), pursuant to which, among other things: (i) Daewoong agreed to (a) pay to the Company an amount equal to $25,500, which the Company received in April 2021, (b) pay certain legal fees incurred by the Company’s litigation counsel in connection with its defense of the ITC Action (including any appeal of the resulting remedial orders), (c) cancel all remaining milestone payments, totaling $10,500 in aggregate, and (d) reimburse the Company certain amounts (calculated on a dollar amount per vials sold basis in the United States) for sales of certain products with respect to which the Company is required to pay Medytox and Allergan royalties pursuant to the U.S. Settlement Agreement; and (ii) the Company agreed to (a) release, on behalf of itself and certain of its affiliates and representatives, certain claims they may have against Daewoong related to the allegations made in or the subject matter of the Medytox/Allergan Actions, or any orders, remedies and losses resulting from the Medytox/Allergan Actions, and (b) coordinate with Daewoong on certain matters related to the Medytox/Allergan Actions. Conversion Agreement In connection with the execution of the Daewoong Arrangement, the Company and Daewoong also entered into a Convertible Promissory Note Conversion Agreement (the “Conversion Agreement”), pursuant to which, among other things, (i) the principal balance under the Daewoong Convertible Note, together with all accrued and unpaid interest thereon, in the amount of $40,779 was converted into 3,136,869 shares of Common Stock at the conversion price of $13.00 per share (the “Conversion Shares”); and (ii) the Daewoong Convertible Note was deemed cancelled and satisfied in full in connection with such conversion. After the conversion, shares owned by Daewoong, together with its affiliates and attribution parties, did not exceed 9.99% of the Company’s then outstanding common shares immediately following such issuance, as required under the terms of the Daewoong Convertible Note. Daewoong Agreement Amendment In connection with the execution of the Daewoong Arrangement, on March 23, 2021, the Company and Daewoong also entered into the Third Amendment to the Supply Agreement (the “Daewoong Agreement Amendment”). Pursuant to the Daewoong Agreement Amendment, the parties amended the Daewoong Agreement to (i) expand the territory within which the Company may distribute Jeuveau ® to certain countries in Europe, (ii) reduce the period of time with respect to which the Company is required to deliver binding forecasts to Daewoong; (iii) introduce certain limitations on Daewoong’s ability to convert the Company’s exclusive license for certain territories to a non-exclusive license in the event the Company fails to meet certain minimum purchase requirements for such territory; (iv) adjust the minimum purchase requirements and reduce the transfer price per vial of Jeuveau ® applicable to various territories, (v) require that any Jeuveau ® supplied by Daewoong match certain shelf-life thresholds, and (vi) prohibit the Company from sharing certain confidential information of Daewoong with Medytox or its affiliates or representatives. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company maintains a defined contribution 401(k) plan covering substantially all employees. Matching contributions totaled $481 and $524 for the years ended December 31, 2021 and 2020, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s loss before income taxes was entirely generated from its U.S. operations. The current and deferred expense is as follows: Year Ended December 31, 2021 2020 Current provision: Federal $ — $ — State 27 52 Total current provision 27 52 Deferred (benefit) provision: Federal 20 — State (5) 25 Total deferred provision (benefit) 15 25 Total provision (benefit) for income taxes $ 42 $ 77 As of December 31, 2021, the Company has federal net operating loss (“NOL”) carryforwards of $273,776, of which $72,579 will begin to expire in 2034. The federal NOLs generated in 2018 and in the subsequent years in the amount of $201,197 have an indefinite carryforward period. As of December 31, 2021, the Company has state NOL carryforwards of $169,332, which will begin to expire in 2038. As of December 31, 2021, the Company has federal research and development (“R&D”) credit carryforwards of $2,929, which will begin to expire in 2034. The Company also has California R&D credit carryforwards of $2,918, which has an indefinite carryforward period. The NOL and the R&D credit carryforwards generated by the Company in tax years ended February 11, 2018 and prior have been included in the consolidated and unitary income tax returns of Alphaeon Corporation (“Alphaeon”). After the Company left Alphaeon consolidated and unitary income tax group on February 11, 2018, the Company files its own standalone income tax returns. Deferred tax assets in the accompanying financial statements reflect the Company's standalone tax attributes that are reportable on its own income tax returns. 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 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 generally is determined by multiplying the value of the Company’s stock at the time of such ownership change, subject to certain adjustments, by the applicable long-term tax-exempt rate. The annual limitations may result in the expiration of NOL and R&D credit carryforwards before utilization and may be material. The Company has started but has not completed an analysis to determine whether its NOL and R&D credits generated through December 31, 2021 are likely to be limited by Section 382 and 383. The Company anticipates that an ownership change as defined under Section 382 may have occurred and that the resulting limitation would significantly reduce the Company’s ability to utilize its NOL and R&D credit carryforwards before they expire. Additionally, future ownership changes under Section 382 and 383 may also limit the Company's ability to fully utilize any remaining tax benefits. The Company’s net deferred income tax assets have been offset by a valuation allowance. Therefore, any resulting reduction to the Company’s NOL and R&D credit carryforwards once the analysis is complete will be offset by a corresponding reduction of the valuation allowance and there would be no impact on the Company’s balance sheet, statement of operations, or cash flows. The components of deferred tax assets and liabilities were as follows: As of December 31, 2021 2020 Deferred income tax assets: Net operating losses $ 67,039 $ 60,083 Stock compensation 2,839 3,938 Other deferred assets 2,617 2,617 Accrued compensation 4,017 2,559 Operating lease liabilities 893 1,114 Accrued legal settlement 20,276 21,318 Other, net 216 21 Valuation allowance (85,527) (78,313) Total deferred income tax assets 12,370 13,337 Deferred income tax liabilities: Intangible amortization (11,528) (12,240) Operating lease right-of-use assets (690) (873) Fixed asset depreciation (192) (249) Total deferred income tax liabilities (12,410) (13,362) Net deferred income taxes $ (40) $ (25) A reconciliation of the difference between the provision (benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows: As of December 31, 2021 2020 Income tax at statutory rate $ (9,832) $ (34,217) State income taxes, net of Federal benefit (1,872) (7,232) Revaluation of contingent royalty obligation 1,595 (513) Meals and entertainment 230 366 Change in state tax rate 129 (242) Officers' compensation 2,076 133 Stock compensation (17) 616 Research and development tax credit — (147) Promissory note - debt discount 120 (145) Other, net 399 117 Valuation allowance 7,214 41,341 Income tax provision (benefit) $ 42 $ 77 A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: As of December 31, 2021 2020 Beginning balance $ 2,924 $ 2,761 Increases to current year tax positions — 163 Ending balance $ 2,924 $ 2,924 The Company has considered the amounts and probabilities of the outcomes that can be realized upon ultimate settlement with the tax authorities and determined unrecognized tax benefits primarily related to credits should be established as noted in the summary rollforward above. The Company’s effective income tax rate would not be impacted if the unrecognized tax benefits are recognized. Additional amounts in the summary rollforward could impact the Company’s effective tax rate if it did not maintain a full valuation allowance on its net deferred tax assets. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2021 and 2020. The Company’s tax returns for all years since inception are open for audit. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. There was no material impact on its financial position, results of operations, or cash flows related to the CARES Act. On December 27, 2020, the United States enacted the Consolidated Appropriations Act, which extended many of the benefits of the CARES Act that were scheduled to expire. The Company noted no material impacts due to the Consolidated Appropriations Act on its financial statements and related disclosures. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Payment Obligations Related to the Acquisition by Alphaeon The Company was acquired by Strathspey Crown Holdings Group, LLC (“SCH”) in 2013 and subsequently by its subsidiary, Alphaeon Corporation (“Alphaeon”), by means of a stock purchase agreement (“Stock Purchase Agreement”) pursuant to which Alphaeon assumed certain payment obligations related to the acquisition. On December 14, 2017, the Stock Purchase Agreement was amended (“Amended Stock Purchase Agreement”), and, as a result, effective upon the closing of the Company’s IPO, the Company assumed all of Alphaeon’s payment obligations under the Amended Stock Purchase Agreement. Under the Amended Stock Purchase Agreement, the payment obligations to the Evolus founders consists of: quarterly royalty payments of a low single digit percentage of net sales of Jeuveau ® . The obligations terminate in the quarter following the 10-year anniversary of the first commercial sale of Jeuveau ® in the United States. In November 2021, we paid $20,000 to satisfy in full a promissory note that matured in November 2021. Under the Amended Stock Purchase Agreement, the Company recorded the fair value of all revised payment obligations owed to the Evolus Founders. See Note 3. Fair Value Measurements and Short-Term Investments for more information about the Company’s accounting thereof. Other Related Party Transactions On February 18, 2021, the Company and Medytox entered into a Settlement and License Agreement (the “ROW Settlement Agreement” and, together with the U.S. Settlement Agreement, the “Medytox/Allergan Settlement Agreements”), pursuant to which, among other things, the Company issued 6,762,652 shares (the “Settlement Shares”) of the Company’s common stock, par value $0.00001 per share, to Medytox. See Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement for more information about the Company’s accounting thereof. On March 23, 2021, the Company and Daewoong entered into a Confidential Settlement and Release Agreement (the “Daewoong Settlement Agreement”) and a Convertible Promissory Note Conversion Agreement (the “Conversion Agreement”). Pursuant to the Conversion Agreement, among other things, (i) the principal balance under the Daewoong Convertible Note, together with all accrued and unpaid interest thereon, in the amount of $40,779 was converted, at the conversion price of $13.00 per share, into 3,136,869 shares of Common Stock (the “Conversion Shares”); and (ii) the Daewoong Convertible Note was deemed cancelled and satisfied in full in connection with such conversion. See Note 11. Daewoong Arrangement for more information about the Company’s accounting thereof. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Reclassifications | Reclassifications Certain comparative amounts for prior year have been reclassified to conform to current year presentations. Such reclassifications did not affect net income or retained earnings. |
Use of Estimates | Use of Estimates Management is required to make certain estimates and assumptions in order to prepare financial statements in conformity with GAAP. Such estimates and assumptions affect the reported financial statements. The Company’s most significant estimates relate to net revenues, allowance for doubtful accounts, fair value measurements, goodwill and long-lived asset valuations and impairment assessments, inventory valuations, income tax valuations, stock-based compensation and royalty obligations, 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. Additionally, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. However, where possible, management has made appropriate accounting estimates with respect to certain accounting matters, which include the fair value of royalty obligations, allowance for doubtful accounts, inventory valuation and impairment assessments of goodwill and other long-lived assets, based on the facts and circumstances available as of the reporting date. The Company’s future assessment of the magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in material impacts to the Company’s financial statements in future reporting periods. |
Risks and Uncertainties and Concentration of Credit Risk | Risks and Uncertainties In 2013, Evolus and Daewoong Pharmaceutical Co. Ltd. (“Daewoong”) entered into an agreement (the “Daewoong Agreement”), pursuant to which the Company received an exclusive distribution license to Jeuveau ® from Daewoong for aesthetic indications in the United States, European Union, United Kingdom, members of the European Economic Area, Switzerland, Canada, Australia, Russia, certain members of the Commonwealth of Independent States, 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/Allergan Settlement Agreements and Daewoong Arrangement 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 and, as such, has a limited history of sales. If any previously granted approval is retracted or the Company is denied approval or approval is delayed by any other regulators, it may have a material adverse impact on the Company’s business and its financial statements. The Company is also subject to risks common to companies in the pharmaceutical industry including, but not limited to, dependency on the commercial success of Jeuveau ® , the Company’s sole commercial product, significant competition within the medical aesthetics industry, its ability to maintain regulatory approval of Jeuveau ® , third party litigation and challenges to its intellectual property, uncertainty of broad adoption of its product by physicians 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. The COVID-19 outbreak and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have adversely affected the Company’s business in a number of ways, which have resulted, and may continue to result, in a period of business disruption and in reduced sales and operations. In addition, any disruption and volatility in the global capital markets 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. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments 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 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. 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. Credit losses historically have not been material. The Company continuously monitors customer payments and maintains an allowance for doubtful accounts 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. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker. The Company has determined that it operates in a single operating and reportable segment. The Company’s chief operating decision maker is its Chief Executive Officer who manages operations and reviews the financial information as a single operating segment for purposes of allocating resources and evaluating its financial performance. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with remaining maturities at purchase of three months or less that can be liquidated without prior notice or penalty. Cash and cash equivalents may include deposits, money market funds and debt securities. Amounts receivable from credit card issuers are typically converted to cash within two to four days of the original sales transaction and are considered to be cash equivalents. |
Short-Term Investments | Short-Term Investments Short-term investments consist of available-for-sale U.S. Treasury securities with original maturities greater than three months and remaining maturities of less than twelve months. These investments are recorded at fair value based on quoted prices in active markets, with unrealized gains and losses reported in other comprehensive gain (loss) in the Company’s statements of operations and comprehensive loss. Purchase premiums and discounts are recognized in interest expense using the effective interest method over the terms of the securities. Realized gains and losses and declines in fair value that are deemed to be other than temporary are reflected in the statements of operations and comprehensive loss using the specific-identification method. |
Inventories | Inventories Inventories consist of finished goods held for sale and distribution. Cost is determined based on the estimated amount payable to the Company’s supplier after accounting for any reimbursement receivable pursuant to the Daewoong Settlement Agreement (as such term is defined, and such agreement is discussed, in Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ), usin g the first-in, first-out method with prioritization of the items with the earliest expiration dates. Inventory valuation reserves are established based on a number of factors including, but not limited to, finished goods not meeting product specifications, product excess and obsolescence, or application of the lower of cost or net realizable value concepts. The determination of events requiring the establishment of inventory valuation reserves, together with the calculation of the amount of such reserves may require judgment. No material inventory valuation reserves have been recorded for the periods presented. Adverse changes in assumptions utilized in the Company’s inventory reserve calculations could result in an increase to its inventory valuation reserves. Product cost of sales, excluding amortization of intangible assets, consisted of the inventory cost, and, for periods on or after December 16, 2020, included certain royalties on the sale of Jeuveau ® payable to Medytox and Allergan pursuant to the Medytox/Allergan Settlement Agreements (as such term is defined in Note 11. Medytox/Allergan Settlement Agreements and Daewoong Arrangement ), as partially offset by reimbursement receivable from Daewoong pursuant to the Daewoong Settlement Agreement with respect to such royalties. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in an orderly transaction between market participants in a principal market on the measurement date. The fair value hierarchy defines a three-tiered valuation hierarchy for disclosure of fair value measurement is classified and disclosed by the Company in one of the three categories as follows: • Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • 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 EquipmentProperty and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of approximately five years. Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the term of the related lease. |
Goodwill | GoodwillGoodwill 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 reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The Company performs an annual qualitative assessment of its goodwill in the fourth quarter of each calendar year to determine if any events or circumstances exist, such as an adverse change in business climate or a decline in the overall industry demand, that would indicate that it would more likely than not reduce the fair value of a reporting unit below its carrying amount, including goodwill. If events or circumstances do not indicate that the fair value of a reporting unit is below its carrying amount, then goodwill is not considered to be impaired and no further testing is required. If further testing is required, the Company performs a two-step process. The first step involves comparing the fair value of the Company’s reporting unit to its carrying value, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. For the purpose of impairment testing, the Company has determined that it has one reporting unit. |
Intangible Assets | Intangible Assets Upon FDA approval of Jeuveau ® in February 2019, the in process research and development (“IPR&D”) related to Jeuveau ® was evaluated as completed and reclassified to a definite-lived distribution right intangible asset, which is amortized over the period the asset is expected to contribute to the future cash flows of the Company. The Company determined the pattern of this intangible asset’s future cash flows could not be readily determined with a high level of precision. As a result, the distribution right intangible asset is being amortized on a straight-line basis over the estimated useful life of 20 years. The Company capitalizes certain internal-use software costs associated with the development of its mobile and web-based customer platforms. These costs include personnel expenses and external costs that are directly associated with the software projects. These costs are included as intangible assets in the accompanying 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. |
Leases | Leases In accordance with Accounting Standards Codification 842, Leases (“ASC 842”), at the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, upon lease commencement, the Company records a lease liability which represents the Company’s obligation to make lease payments arising from the lease, and a corresponding right-of-use (“ROU”) asset which represents the Company’s right to use an underlying asset during the lease term. Operating lease assets and liabilities are included in ROU assets, current portion of operating lease liabilities and noncurrent operating lease liabilities in the accompanying balance sheets. Operating lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the underlying asset unless the implicit rate is readily determinable. Operating lease ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received, if any. The Company determines the lease term as the noncancelable period of the lease and may include options to extend or terminate the lease |
Contingent Royalty Obligation Payable and Promissory Note Payable to the Evolus Founders | Contingent Royalty Obligation Payable to the Evolus Founders The Company determines the fair value of the contingent royalty obligation payable at each reporting period end based on Level 3 inputs using a discounted cash flows method. Changes in the fair value of the contingent royalty obligation payable are determined at each reporting period end and recorded in operating expenses in the accompanying statements of operations and comprehensive loss and as a liability in the accompanying balance sheets. Promissory Note Payable to the Evolus Founders On February 12, 2018, the Company recognized a promissory note payable at present value using a discount rate for similar rated debt securities. Discount amortization related to the promissory note is recorded in interest expense in the accompanying statements of operations and comprehensive loss with a corresponding increase to the liabilities in the accompanying balance sheets. |
Long-term Debt | Long-term Debt Long-term debt represents the debt balance with Pharmakon as of December 31, 2021 and Oxford as of December 31, 2020 (see Note 6. Term Loans ) , net of debt 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. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when the Company satisfies the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. General The Company generates product revenue from the sale of Jeuveau ® in the United States and service revenue from the sale of Jeuveau ® through a distribution partner in Canada. For product revenue, the Company recognizes revenue when control of the promised goods under a contract is transferred to a customer, in an amount that reflects the consideration the Company expects to receive in exchange for those goods as specified in the customer contract. The transfer of control occurs upon receipt of the goods by the customer since that is when the customer has obtained control of the goods’ economic benefits. The Company does not provide any service-type warranties and does not accept product returns except under limited circumstances such as damages in transit or ineffective product. The Company also excludes any amounts related to taxes assessed by governmental authorities from revenue measurement. Shipping and handling costs associated with outbound product freight are accounted for as fulfillment costs and are included in selling, general and administrative expenses in the accompanying 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. For the years ended December 31, 2021 and 2020, the Company recognized $702 and $738, respectively, of revenues related to international sales. Disaggregation of Revenue The Company’s disaggregation of revenue is consistent with its operating segment as disclosed above. Gross-to-Net Revenue Adjustments The Company provides customers with discounts, such as trade and volume discounts and prompt pay discounts, that are directly reflected in the invoice price. Revenues are recorded net of sales-related adjustments, wherever applicable, primarily for the volume based rebates, coupons, 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. • Coupons — The Company issued customers coupons redeemable into gift cards funded by the Company for the benefit of patients. The coupons were accounted for as variable consideration. The Company estimated coupon redemption rates based on historical data and future expectations. The coupons were accrued based on estimated redemption rates and the volume of products purchased and were recorded as a reduction to revenues on product delivery. All issued coupons expired on June 30, 2020. • Consumer Loyalty Program — In May 2020, the Company launched a consumer loyalty program, which allows participating customers to earn rewards for qualifying treatments to their patients (i.e. consumers) using Jeuveau ® and redeem the rewards for Jeuveau ® in the future at no additional cost. The loyalty program represents a customer option that provides a material right and, accordingly, is a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the estimated material right reward (“Reward”) that the customer might redeem in the future. The standalone selling price of the Reward is measured based on historical sales data, estimated average selling price of Jeuveau ® at the time of redemption, expected customer and consumer participation rates in the loyalty program, and estimated number of qualifying treatments to be performed by customers. The portion of invoice price allocated to the Reward is initially recorded as deferred revenue. Subsequently, when customers redeem the Reward and the related product is delivered, the deferred revenue is recognized in net revenues at that time. • Co-Branded Marketing Programs — The Company offers eligible customers with a certain level of Jeuveau ® purchases to receive advertising co-branded with the Company. The co-branded advertising represents a performance obligation. At the time Jeuveau ® product is sold to customers, the invoice price is allocated between the product sold and the advertisement. The standalone selling price of the advertisement is measured based on the estimated market value of similar advertisement adjusted for the customer’s portion of the advertisement. The portion of invoice price allocated to the advertisement is initially recorded as deferred revenue. Subsequently, when the advertisement airs, the deferred revenue is recognized in net revenues at that time. Contract balances A contract with a customer states the terms of the sale, including the description, quantity and price of each product purchased. Amounts are recorded as accounts receivable when the Company’s right to consideration becomes unconditional. The Company does not have any significant financing components in customer contracts given the expected time between transfer of the promised products and the payment of the associated consideration is less than one year. As of December 31, 2021 and 2020, all amounts included in accounts receivable, net on the accompanying balance sheets are related to contracts with customers. The Company did not have any contract assets nor unbilled receivables as of December 31, 2021 or 2020. Sales commissions are included in selling, general and administrative expenses when incurred. Contract liabilities reflect estimated amounts that the Company is obligated to pay to customers or patients primarily under the rebate and coupon programs and deferred revenue associated with Rewards under the consumer loyalty program and co- branded marketing programs. The Company’s contract liabilities are included in accounts payable and accrued expenses in the accompanying balance sheets. As of December 31, 2021 and 2020, the accrued revenue contract liabilities, primarily related to volume-based rebates, consumer loyalty program, and co-branded media programs, were $7,934 and $3,081, respectively, which were recorded in accrued expenses in the accompanying balance sheets. For the years ended December 31, 2021 and 2020, provisions for rebate, coupon, consumer loyalty programs, and co-branded media programs were $16,139 and $16,896, respectively, which were offset by related payments, redemptions and adjustments of $11,286 and $15,524, respectively. During the years ended December 31, 2021 and 2020, the Company recognized $2,802 and $0, respectively, of revenue related to amounts included in contract liabilities at the beginning of the period and did not recognize any revenue related to changes in transaction prices regarding its contracts with customers from previous periods. Collectability Accounts receivable are recorded at the invoiced amount and do not bear interest. At the time of contract inception or new customer account set-up, the Company performs a collectability assessment of the customer’s creditworthiness. The Company assesses the probability that the Company will collect the entitled consideration in exchange for the goods sold, by considering the customer’s ability and intention to pay when consideration is due. On a recurring basis, the Company estimates the amount of receivables considered uncollectable to reflect an allowance for doubtful accounts. The Company writes off accounts receivable balances when it is determined that there is no possibility of collection. As of December 31, 2021 and 2020, allowance for doubtful accounts was $2,385 and $2,118, respectively. For the years ended December 31, 2021 and 2020, provision for bad debts was $589 and $2,066, respectively, and the write-off amount was $322 and $335, respectively. Practical Expedients The Company expenses sales commissions when incurred as the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the accompanying statements of operations and comprehensive loss. The Company does not adjust the amount of promised consideration for the effects of the time value of money for contracts in which the anticipated period between when the Company transfers the goods or services to the customer and when the customer pays within one year. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Research and development expenses include personnel-related costs, costs associated with pre-clinical and clinical development activities, costs associated with and costs for prototype products that are manufactured prior to market approval for that prototype product, internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings, and overhead costs, including allocated facility related expenses. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes stock-based compensation expense for employees, consultants and members of the Board of Directors based on the fair value at the date of grant. The Company uses the Black-Scholes option pricing model to value stock option grants. The Black-Scholes option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, expected risk-free interest rate, and the option’s expected life. The fair value of the Company’s restricted stock units (“RSUs”) is based on the fair value on the grant date of the Company’s common stock. The Company also evaluates the impact of modifications made to the original terms of equity awards when they occur. The fair value of equity awards that are expected to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recognized net of actual forfeitures when they occur, as an increase to additional paid-in capital in the balance sheets and in the selling, general and administrative or research and development expenses in the statements of operations and comprehensive loss. |
Advertising Costs | Advertising CostsAdvertising costs are expensed as incurred and primarily include costs related to social media ads and co-branded marketing programs. Advertising costs are included in selling, general and administrative expenses. |
Income Taxes | 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 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 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 statement of operations and comprehensive loss. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. An amount is accrued for the estimate of additional tax liability, including interest and penalties, for any uncertain tax positions taken or expected to be taken in an income tax return. The Company reviews and updates the accrual for uncertain tax positions as more definitive information becomes available. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. The Company monitors changes to the tax laws in the states it conducts business and files corporate income tax returns. The Company does not expect that changes to state tax laws through December 31, 2021 to materially impact its financial statements. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period including contingently issuable shares. Diluted earnings per share is based on the treasury stock method and includes the effect from potential issuance of ordinary shares, such as shares issuable pursuant to the exercise of stock options and the vesting of restricted stock units. The dilutive effect of stock options and restricted stock units is computed under the treasury stock method. The dilutive effect of the Daewoong Convertible Note is computed under the if-converted method. Potentially dilutive securities are excluded from the computations of diluted net loss per share if their effect would be antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes . FASB issued this update as part of its Simplification Initiative to improve areas of GAAP and reduce cost and complexity while maintaining usefulness. The main provisions remove certain exceptions including the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, the amendments simplify income tax accounting in the areas such as income based franchise taxes, eliminating the requirements to allocate consolidated current and deferred tax expense in certain instances and a requirement that an entity reflects the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For public companies, the standard is effective for fiscal years beginning after December 15, 2020 and interim periods therein. The Company has adopted the guidance on the effective date of January 1, 2021. There are no material impacts to the financial statements as a result of this adoption. Recent Accounting Pronouncements Issued But Not Adopted In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The update simplifies the accounting for goodwill impairment by removing step two of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will be the amount by which a reporting unit’s carrying amount, including goodwill, exceeds its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. As amended by ASU No. 2019-10, the updated guidance is effective for the Company as a smaller reporting company beginning January 1, 2023. The standard requires prospective application. Early adoption is permitted. The Company does not expect adoption of this guidance will have a material impact on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The new standard requires the use of forward-looking expected credit loss models based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. Subsequent to the issuance of ASU No. 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses . This ASU does not change the core principle of the guidance in ASU No. 2016-13, instead these amendments are intended to clarify and improve operability of certain topics included within the credit losses standard. The FASB also subsequently issued ASU No. 2019-04 which did not change the core principle of the guidance in ASU No. 2016-13 but clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed amounts previously written off and expected to be written off. As amended by ASU No. 2019-10, the updated guidance is effective for the Company as a smaller reporting company beginning January 1, 2023. The Company is in the process of determining the effects the adoption will have on its financial statements and reviewing credit loss models to assess the impact of the adoption of the standard on the financial statements. Based on initial assessments, the Company believes that while adoption will modify the way it analyzes financial instruments, it does not expect adoption of this guidance will have a material impact to its financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”). Both ASU No. 2020-04 and ASU No. 2021-01 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU No. 2020-04 and ASU No. 2021-01 are effective upon issuance for contract modifications and hedging relationships, and the Company is allowed to elect to apply the amendments prospectively through December 31, 2022. The Company does not expect adoption of this guidance will have a material impact on its financial statements. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update will increase transparency of government assistance received by most business entities by requiring the disclosure of: (1) the types of transactions; (2) the accounting for the transactions; and, (3) the effect of the transactions on a business entity’s financial statements. ASU No. 2021-10 is effective for financial statements issued for annual periods beginning after December 15, 2021, with early application permitted. The Company does not expect adoption of this guidance will have a material impact on its financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows. |
Fair Value Measurements and S_2
Fair Value Measurements and Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Short-term Investments Available-for-sale | As of December 31, 2020, all of the Company’s investments had remaining maturities of less than 12 months. The following is a summary of the Company’s short-term investments, considered available-for-sale, as of December 31, 2020: As of December 31, 2020 Amortized Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities U.S treasury securities $ 5,000 $ — $ — $ 5,000 |
Schedule Assets and Liabilities Measured on 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, 2021 Fair Value Level 1 Level 2 Level 3 Liabilities Contingent royalty obligation payable to Evolus Founders $ 44,740 $ — $ — $ 44,740 As of December 31, 2020 Fair Value Level 1 Level 2 Level 3 Available-for-sale debt securities U.S treasury securities $ 5,000 $ 5,000 $ — $ — Liabilities Contingent royalty obligation payable to Evolus Founders $ 41,546 $ — $ — $ 41,546 |
Schedule of Reconciliation of Fair Value Measurement for Contingent Royalty Obligation Payable | The following table shows a reconciliation of the beginning and ending fair value measurements of the contingent royalty obligation payable: Year Ended December 31, 2021 2020 Fair value, beginning of period $ 41,546 $ 44,683 Payments (3,097) (1,130) Change in fair value recorded in operating expenses 6,290 (2,007) Fair value, end of period $ 44,740 $ 41,546 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The table below shows the weighted-average life, original cost, accumulated amortization and net book value by major intangible asset classification: Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (8,589) $ 50,487 Capitalized software 2 7,314 (7,176) 138 Intangible assets, net 66,390 (15,765) 50,625 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2021 $ 87,598 $ (15,765) $ 71,833 Weighted-Average Life (Years) Original Cost Accumulated Amortization Net Book Value Definite-lived intangible assets Distribution right 20 $ 59,076 $ (5,650) $ 53,426 Capitalized software 2 6,681 (4,810) 1,871 Intangible assets, net 65,757 (10,460) 55,297 Indefinite-lived intangible asset Goodwill * 21,208 — 21,208 Total as of December 31, 2020 $ 86,965 $ (10,460) $ 76,505 * Intangible assets with indefinite lives have an indeterminable average life. |
Schedule of Estimated Future Amortization Expense of Intangible Assets | The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2021 that are subject to amortization: Fiscal year 2022 3,016 2023 3,034 2024 2,955 2025 2,955 2026 2,955 Thereafter 35,710 $ 50,625 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of: Year Ended December 31, 2021 2020 Accrued royalties under the Medytox/Allergan Settlement Agreements $ 12,447 $ — Accrued payroll and related benefits 6,856 4,076 Accrued revenue contract liabilities 7,934 3,081 Accrued professional services 595 895 Other accrued expenses 2,161 1,050 $ 29,993 $ 9,102 |
Term Loans (Tables)
Term Loans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | As of December 31, 2021, the principal amounts of long-term debt maturities for each of the next five fiscal years are as follows: Fiscal year 2022 $ — 2023 — 2024 — 2025 25,000 2026 25,000 Thereafter 25,000 Total principal payments 75,000 Unamortized debt discounts and issuance costs (3,778) Long term debt, net of discounts and issuance costs $ 71,222 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Composition of Lease Expense and Other Quantitative Information | he components of operating lease expense are as follows: Year Ended December 31, 2021 2020 Fixed operating lease expense $ 1,065 $ 1,080 Variable operating lease expense 64 40 Short-term operating lease expense — 168 $ 1,129 $ 1,288 The weighted-average remaining lease term and discount rate are as follows: As of December 31, 2021 2020 Weighted-average remaining lease term (years) 3.1 4.1 Weighted-average discount rate 9.4% 9.4% |
Schedule of Maturity of Operating Lease Liabilities | The following table presents the future minimum payments under the operating lease agreements with non-cancelable terms as of December 31, 2021: Fiscal year 2022 1,265 2023 1,320 2024 1,377 2025 115 Total operating lease payments 4,077 Less: imputed interest (556) Present value of operating lease liabilities $ 3,521 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Key Assumptions Used to Determine Fair Value of Options Granted | The weighted-averages for assumptions used in determining the fair value of stock options granted were as follows: Year Ended December 31, 2021 2020 Volatility 78.9% 61.2% Risk-free interest rate 1.2% 1.4% Expected life (years) 6.25 6.14 Dividend yield rate —% —% |
Schedule of Stock Options Activity | A summary of stock option activity under the Plan for the year ended December 31, 2021 and 2020, is presented below: Weighted Weighted Average Average Remaining Aggregate Stock Exercise Contractual Intrinsic Options Per Share Terms (Years) Value Outstanding as of December 31, 2019 3,977,401 14.07 8.51 $ 7,198 Granted 1,322,119 8.89 Exercised — Cancelled/forfeited (892,022) 15.62 Outstanding as of December 31, 2020 4,407,498 $ 12.20 7.66 $ 50 Granted 357,125 9.18 Exercised (99,435) 9.81 Cancelled/forfeited (742,902) 16.21 Outstanding as of December 31, 2021 3,922,286 $ 11.23 7.10 $ 455 Exercisable as of December 31, 2021 2,316,637 $ 11.44 6.67 $ 98 Vested and expected to vest as of December 31, 2021 3,922,286 $ 11.23 7.10 $ 455 |
Schedule of RSUs Activity | A summary of RSU activity under the Plan for the year ended December 31, 2021 and 2020, is presented below: Weighted Restricted Average Stock Grant Date Units Fair Value Outstanding as of December 31, 2019 229,870 $ 15.89 Granted 1,301,439 5.88 Vested (186,870) 13.6 Forfeited (170,698) 7.21 Outstanding as of December 31, 2020 1,173,741 $ 6.42 Granted 1,850,243 7.94 Vested (566,788) 5.08 Forfeited (530,729) 7.22 Outstanding as of December 31, 2021 1,926,467 $ 8.06 |
Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense arising from the above Plan: Year Ended December 31, 2021 2020 Selling, general and administrative $ 9,372 $ 10,408 Research and development 204 176 Total stock-based compensation expense $ 9,576 $ 10,584 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Current and Deferred Income Tax Expense | The current and deferred expense is as follows: Year Ended December 31, 2021 2020 Current provision: Federal $ — $ — State 27 52 Total current provision 27 52 Deferred (benefit) provision: Federal 20 — State (5) 25 Total deferred provision (benefit) 15 25 Total provision (benefit) for income taxes $ 42 $ 77 |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities were as follows: As of December 31, 2021 2020 Deferred income tax assets: Net operating losses $ 67,039 $ 60,083 Stock compensation 2,839 3,938 Other deferred assets 2,617 2,617 Accrued compensation 4,017 2,559 Operating lease liabilities 893 1,114 Accrued legal settlement 20,276 21,318 Other, net 216 21 Valuation allowance (85,527) (78,313) Total deferred income tax assets 12,370 13,337 Deferred income tax liabilities: Intangible amortization (11,528) (12,240) Operating lease right-of-use assets (690) (873) Fixed asset depreciation (192) (249) Total deferred income tax liabilities (12,410) (13,362) Net deferred income taxes $ (40) $ (25) |
Schedule of Effective Income Tax | A reconciliation of the difference between the provision (benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows: As of December 31, 2021 2020 Income tax at statutory rate $ (9,832) $ (34,217) State income taxes, net of Federal benefit (1,872) (7,232) Revaluation of contingent royalty obligation 1,595 (513) Meals and entertainment 230 366 Change in state tax rate 129 (242) Officers' compensation 2,076 133 Stock compensation (17) 616 Research and development tax credit — (147) Promissory note - debt discount 120 (145) Other, net 399 117 Valuation allowance 7,214 41,341 Income tax provision (benefit) $ 42 $ 77 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: As of December 31, 2021 2020 Beginning balance $ 2,924 $ 2,761 Increases to current year tax positions — 163 Ending balance $ 2,924 $ 2,924 |
Description of Business (Detail
Description of Business (Details) | Mar. 25, 2021shares | Jan. 04, 2021USD ($) | Apr. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021shares | Jan. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Aug. 31, 2021USD ($)shares | Dec. 31, 2023USD ($) | Dec. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 23, 2021USD ($) | Jul. 06, 2020USD ($) |
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Cash and cash equivalents | $ 146,256,000 | $ 102,562,000 | |||||||||||
Accumulated deficit | 422,882,000 | 376,072,000 | |||||||||||
Payments for legal settlements | $ 48,421,000 | ||||||||||||
Settlement payment from daewoong | $ 25,500,000 | 25,500,000 | |||||||||||
Public Stock Offering | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Number of shares issued in transaction (in shares) | shares | 10,350,000 | ||||||||||||
Offering price per share (in dollar per share) | $ / shares | $ 9.50 | ||||||||||||
Aggregate net proceeds from stock offering | $ 92,426,000 | ||||||||||||
Underwriters Option | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Number of shares issued in transaction (in shares) | shares | 1,350,000 | ||||||||||||
A T M Sales Agreement | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Number of shares issued in transaction (in shares) | shares | 934,367 | ||||||||||||
Aggregate net proceeds from stock offering | $ 10,910,000 | ||||||||||||
Intellectual Property Disputes, Jeuveau | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Payments for legal settlements | $ 15,000,000 | 15,000,000 | |||||||||||
Intellectual Property Disputes, Jeuveau | Forecast | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Payments for legal settlements | $ 5,000,000 | $ 15,000,000 | |||||||||||
Pharmakon Term Loans | Term Loan | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Debt instrument, face amount | 125,000,000 | ||||||||||||
Tranche A Loan | Term Loan | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Debt instrument, face amount | 75,000,000 | ||||||||||||
Proceeds from issuance of secured debt | 68,695,000 | ||||||||||||
Tranche B Loan | Term Loan | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Debt instrument, face amount | $ 50,000,000 | ||||||||||||
Oxford Term Loan Facility | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Repayments of long-term lines of credit | $ 76,447,000 | $ 76,447,000 | |||||||||||
Daewoong Convertible Note | Convertible Debt | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Debt instrument, face amount | $ 40,000,000 | ||||||||||||
Convertible debt | $ 40,779,000 | ||||||||||||
Daewoong Convertible Note | Convertible Debt | Common Stock | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Conversion of common shares (in shares) | shares | 3,136,869 | 3,136,869 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | Feb. 28, 2021USD ($)shares | Feb. 18, 2021USD ($) | Feb. 01, 2019 | Apr. 30, 2021USD ($) | Mar. 31, 2022USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($)reporting_unitshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) |
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, useful life | 5 years | ||||||||
Settlement payment from daewoong | $ 25,500,000 | $ 25,500,000 | |||||||
Number of reporting units | reporting_unit | 1 | ||||||||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | ||||||
Impairment of intangible assets | 0 | 0 | $ 0 | ||||||
Revenues | 99,673,000 | 56,540,000 | |||||||
Accrued revenue contract liabilities | 7,934,000 | 3,081,000 | |||||||
Rebates and coupons, credits and payments | 16,139,000 | 16,896,000 | |||||||
Payments for provisions for accrued volume-based rebate and coupon liability | 11,286,000 | 15,524,000 | |||||||
Contract with customer, liability, revenue recognized | 2,802,000 | 0 | |||||||
Loss contingency accrual | 0 | 0 | |||||||
Litigation settlement expenses | 0 | 83,421,000 | |||||||
Payments for legal settlements | 48,421,000 | ||||||||
Accrued litigation settlement | 15,000,000 | 63,421,000 | |||||||
Accrued litigation settlement | 5,000,000 | 20,000,000 | |||||||
Advertising costs | 16,391,000 | 4,979,000 | |||||||
Allowance for doubtful accounts | 2,385,000 | 2,118,000 | |||||||
Provision for bad debts | 589,000 | 2,066,000 | |||||||
Allowance for credit loss, writeoff | $ 322,000 | $ 335,000 | |||||||
Common Stock | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Issuance of common stock in connection with litigation settlement (in shares) | shares | 6,762,652 | ||||||||
Common stock options | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 3,922,286 | 4,407,498 | |||||||
RSUs | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 1,926,467 | 1,173,741 | |||||||
Convertible Debt Securities | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Securities excluded from the computation of diluted net loss per share (in shares) | shares | 0 | 3,076,923 | |||||||
Intellectual Property Disputes, Jeuveau | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Loss contingency accrual | $ 35,000,000 | $ 35,000,000 | $ 35,000,000 | ||||||
Settlement agreement, payment terms (in years) | 2 years | ||||||||
Loss contingency accrual, payments | $ 15,000 | ||||||||
Payments for legal settlements | $ 15,000,000 | $ 15,000,000 | |||||||
Intellectual Property Disputes, Jeuveau | Subsequent Event | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Loss contingency accrual, payments | $ 15,000 | ||||||||
Payments for legal settlements | $ 15,000 | ||||||||
Service revenue | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Revenues | 702,000 | 738,000 | |||||||
Service revenue | CANADA | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Revenues | $ 702,000 | $ 738,000 | |||||||
Distribution right | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Useful lives of intangible assets | 20 years | 20 years | 20 years | ||||||
Software development | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Useful lives of intangible assets | 2 years |
Fair Value Measurements and S_3
Fair Value Measurements and Short-Term Investments - Short-term Investments Available for Sale (Details) - U.S treasury securities $ in Thousands | Dec. 31, 2020USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Amortized Cost | $ 5,000 |
Gross Unrealized | |
Gains | 0 |
Losses | 0 |
Estimated Fair Value | $ 5,000 |
Fair Value Measurements and S_4
Fair Value Measurements and Short-Term Investments - Narrative (Details) $ in Thousands | Dec. 31, 2021USD ($)year | Dec. 31, 2020USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 75,448 | $ 76,368 |
Contingent promissory note payable | $ 19,284 | |
Contingent Royalty Obligation | Measurement Input, Expected Term | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | year | 10 | |
Contingent Royalty Obligation | Measurement Input, Discount Rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.130 | 0.130 |
Contingent Royalty Obligation | Measurement Input, Discount Rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.200 | 0.200 |
Fair Value Measurements and S_5
Fair Value Measurements and Short-Term Investments - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | $ 44,740 | $ 41,546 | $ 44,683 |
Contingent royalty obligation payable to Evolus Founders | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | 44,740 | 41,546 | |
Contingent royalty obligation payable to Evolus Founders | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | 0 | 0 | |
Contingent royalty obligation payable to Evolus Founders | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | 0 | 0 | |
Contingent royalty obligation payable to Evolus Founders | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent royalty obligation payable to Evolus Founders | $ 44,740 | 41,546 | |
U.S treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities | 5,000 | ||
U.S treasury securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities | 5,000 | ||
U.S treasury securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities | 0 | ||
U.S treasury securities | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities | $ 0 |
Fair Value Measurements and S_6
Fair Value Measurements and Short-Term Investments - Reconciliation of Fair Value Measurement of Contingent Royalty Obligation Payable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, beginning of period | $ 41,546 | $ 44,683 |
Payments | (3,097) | (1,130) |
Change in fair value recorded in operating expenses | 6,290 | (2,007) |
Fair value, end of period | $ 44,740 | $ 41,546 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Definite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Feb. 01, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Definite-lived intangible assets | |||
Original Cost | $ 66,390 | $ 65,757 | |
Accumulated Amortization | (15,765) | (10,460) | |
Net Book Value | 50,625 | 55,297 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Goodwill | 21,208 | 21,208 | |
Intangible assets, gross (including goodwill) | 87,598 | 86,965 | |
Total net book value | $ 71,833 | $ 76,505 | |
Distribution right | |||
Definite-lived intangible assets | |||
Weighted-Average Life (Years) | 20 years | 20 years | 20 years |
Original Cost | $ 59,076 | $ 59,076 | |
Accumulated Amortization | (8,589) | (5,650) | |
Net Book Value | $ 50,487 | $ 53,426 | |
Capitalized software | |||
Definite-lived intangible assets | |||
Weighted-Average Life (Years) | 2 years | 2 years | |
Original Cost | $ 7,314 | $ 6,681 | |
Accumulated Amortization | (7,176) | (4,810) | |
Net Book Value | $ 138 | $ 1,871 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Estimated Future Amortization Expense of Intangibles (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 3,016 | |
2023 | 3,034 | |
2024 | 2,955 | |
2025 | 2,955 | |
2026 | 2,955 | |
Thereafter | 35,710 | |
Net Book Value | $ 50,625 | $ 55,297 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Feb. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Capitalized computer software | $ 633 | $ 2,266 | ||
Amortization expense | $ 5,305 | $ 3,635 | ||
Distribution right | ||||
Business Acquisition [Line Items] | ||||
Useful lives of intangible assets | 20 years | 20 years | 20 years | |
Milestone payment | $ 1,000 | |||
Capitalized software | ||||
Business Acquisition [Line Items] | ||||
Useful lives of intangible assets | 2 years | 2 years | ||
Amortization period | 2 years | |||
SCH | Evolus, Inc. | ||||
Business Acquisition [Line Items] | ||||
Extension period | 3 years | |||
Milestone payment for intangible assets | $ 2,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued royalties under the Medytox/Allergan Settlement Agreements | $ 12,447 | $ 0 |
Accrued payroll and related benefits | 6,856 | 4,076 |
Accrued revenue contract liabilities | 7,934 | 3,081 |
Accrued professional services | 595 | 895 |
Other accrued expenses | 2,161 | 1,050 |
Accrued expenses | $ 29,993 | $ 9,102 |
Term Loans - Pharmakon Term Loa
Term Loans - Pharmakon Term Loans (Details) | Dec. 14, 2021USD ($)paymenttranche | Mar. 15, 2019 | Dec. 31, 2021USD ($) |
Term Loan | |||
Debt Instrument [Line Items] | |||
Interest rate on debt | 9.50% | ||
Debt instrument, prepayment amount threshold | $ 20,000 | ||
Term Loan | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 7.00% | ||
Pharmakon Term Loans | |||
Debt Instrument [Line Items] | |||
Number of tranches | tranche | 2 | ||
Pharmakon Term Loans | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 125,000,000 | ||
Interest rate on debt | 1.00% | ||
Number of periodic payments | payment | 12 | ||
Debt discount | $ 3,042,000 | ||
Debt issuance costs | $ 3,263,000 | ||
Interest rate, effective percentage | 10.89% | ||
Pharmakon Term Loans | Term Loan | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 8.50% | ||
Tranche A Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 75,000,000 | ||
Anniversary period | 39 months | ||
Tranche A Loan | Term Loan | Prior to the 3rd anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, percentage of principal amount, prepaid multiplied | 3.00% | ||
Tranche A Loan | Term Loan | After the 3rd anniversary but prior to the 4th anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, percentage of principal amount, prepaid multiplied | 2.00% | ||
Tranche A Loan | Term Loan | After the 4th anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument, percentage of principal amount, prepaid multiplied | 1.00% | ||
Tranche B Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 50,000,000 |
Term Loans - Schedule of Long T
Term Loans - Schedule of Long Term Debt Maturities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 25,000 |
2026 | 25,000 |
Thereafter | 25,000 |
Long-term Debt, Gross | 75,000 |
Unamortized debt discounts and issuance costs | (3,778) |
Long term debt, net of discounts and issuance costs | $ 71,222 |
Term Loans - Oxford Term Loans
Term Loans - Oxford Term Loans (Details) | Jan. 04, 2021USD ($) | Mar. 15, 2019USD ($)advance | Jan. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||
Loss from extinguishment of debts, net | $ 968,000 | $ 0 | |||
Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Percentage of final payment of full principal amount | 5.50% | ||||
Prepayment fee percentage, year two | 2.00% | ||||
Prepayment fee percentage, thereafter | 1.00% | ||||
Oxford Term Loans | |||||
Debt Instrument [Line Items] | |||||
Debt discount | $ 1,094,000 | ||||
Debt issuance costs | 2,205,000 | ||||
Interest rate, effective percentage | 11.60% | ||||
Oxford Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Repayments of long-term lines of credit | $ 76,447,000 | $ 76,447,000 | |||
Debt instrument fee amount comprised | 4,300,000 | ||||
Debt instrument of principal amount payment | 2,800,000 | ||||
Debt instrument prepayment fee amount | 1,500,000 | ||||
Loss from extinguishment of debts, net | $ 1,939,000 | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Contingent promissory note payable | $ 100,000,000 | ||||
Number of advances | advance | 2 | ||||
Interest rate on debt | 9.50% | ||||
Period of interest only payments | 36 months | ||||
Amortization period | 23 months | ||||
Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 7.00% | ||||
Term Loan | First tranche | |||||
Debt Instrument [Line Items] | |||||
Contingent promissory note payable | $ 75,000,000 | ||||
Term Loan | Term Loan Facility, Tranche Two | |||||
Debt Instrument [Line Items] | |||||
Contingent promissory note payable | $ 25,000,000 |
Daewoong Convertible Note (Deta
Daewoong Convertible Note (Details) | Mar. 25, 2021shares | Mar. 31, 2021USD ($)shares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 23, 2021USD ($)$ / shares | Jul. 06, 2020USD ($) |
Short-term Debt [Line Items] | ||||||
Loss from extinguishment of debts, net | $ (968,000) | $ 0 | ||||
Daewoong Convertible Note | Convertible Debt | ||||||
Short-term Debt [Line Items] | ||||||
Debt instrument, face amount | $ 40,000,000 | |||||
Interest rate on debt | 3.00% | |||||
Convertible debt | $ 40,779,000 | |||||
Conversion price (in dollars per share) | $ / shares | $ 13 | |||||
Loss from extinguishment of debts, net | $ 971,000 | |||||
Daewoong Convertible Note | Convertible Debt | Common Stock | ||||||
Short-term Debt [Line Items] | ||||||
Conversion of common shares (in shares) | shares | 3,136,869 | 3,136,869 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating lease, term of contract | 5 years |
Operating lease, termination period | 36 months |
Operating lease, period to provide written notice to terminate contract | 12 months |
Operating lease, equivalent rent termination period | 6 months |
Operating lease, renewal term | 60 months |
Operating Leases - Components o
Operating Leases - Components of Lease Expense and Other Quantitative Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Fixed operating lease expense | $ 1,065 | $ 1,080 |
Variable operating lease expense | 64 | 40 |
Short-term operating lease expense | 0 | 168 |
Lease, cost | $ 1,129 | $ 1,288 |
Operating Leases - Weighted-Ave
Operating Leases - Weighted-Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted-average remaining lease term (years) | 3 years 1 month 6 days | 4 years 1 month 6 days |
Weighted-average discount rate | 9.40% | 9.40% |
Operating Leases - Maturity of
Operating Leases - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 1,265 |
2023 | 1,320 |
2024 | 1,377 |
2025 | 115 |
Total operating lease payments | 4,077 |
Less: imputed interest | (556) |
Present value of operating lease liabilities | $ 3,521 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | Dec. 02, 2020plaintiff | Oct. 28, 2020complaint | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||||
Purchase commitment, amount | $ 2,012,000 | |||
Loss contingency accrual | $ 0 | $ 0 | ||
Loss contingency, new claims filed, number | complaint | 2 | |||
Loss contingency, number of plaintiffs | plaintiff | 2 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | Mar. 26, 2021USD ($) | Mar. 25, 2021shares | Feb. 28, 2021shares | Nov. 21, 2017shares | Apr. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021shares | Aug. 31, 2021USD ($)shares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Nov. 21, 2021shares | Nov. 21, 2020shares |
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||||||
Common stock, shares, issued (in shares) | 55,576,988 | 33,749,228 | |||||||||
Common stock, shares, outstanding (in shares) | 55,576,988 | 33,749,228 | |||||||||
Issuance of common stock | $ | $ 655 | $ 0 | |||||||||
Maximum number of shares authorized under the plan (in shares) | 4,361,291 | ||||||||||
Annual increase percentage of maximum shares outstanding (equal to) | 4.00% | ||||||||||
Additional shares reserved for issuance (in shares) | 2,223,080 | 1,349,969 | |||||||||
Shares reserved for issuance (in shares) | 3,361,247 | ||||||||||
Intrinsic Value | $ | $ 200 | ||||||||||
Stock-based compensation expense | $ | 9,576 | 10,584 | |||||||||
Capitalized share-based compensation expense | $ | $ 63 | $ 21 | |||||||||
Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of common stock in connection with litigation settlement (in shares) | 6,762,652 | ||||||||||
Issuance of common stock (in shares) | 643,872 | 186,563 | |||||||||
Additional Paid In Capital | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of common stock | $ | $ 655 | $ 0 | |||||||||
Daewoong Convertible Note | Convertible Debt | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Conversion of common shares (in shares) | 3,136,869 | 3,136,869 | |||||||||
A T M Sales Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued in transaction (in shares) | 934,367 | ||||||||||
Aggregate net proceeds from stock offering | $ | $ 10,910 | ||||||||||
Maximum consideration receivable | $ | $ 75 | ||||||||||
Sale of stock, commission payment upon gross proceeds | 3.00% | ||||||||||
Issuance of common stock | $ | 10,910 | ||||||||||
Aggregate net proceeds from stock offering | $ | $ 337 | ||||||||||
A T M Sales Agreement | Common Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of common stock (in shares) | 934,367 | ||||||||||
A T M Sales Agreement | Additional Paid In Capital | |||||||||||
Class of Stock [Line Items] | |||||||||||
Issuance of common stock | $ | $ 10,910 | ||||||||||
Public Stock Offering | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued in transaction (in shares) | 10,350,000 | ||||||||||
Offering price per share (in dollar per share) | $ / shares | $ 9.50 | ||||||||||
Aggregate net proceeds from stock offering | $ | $ 92,426 | ||||||||||
Underwriters Option | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of shares issued in transaction (in shares) | 1,350,000 | ||||||||||
RSUs | |||||||||||
Class of Stock [Line Items] | |||||||||||
Restricted stock units granted (in shares) | 1,850,243 | 1,301,439 | |||||||||
Stock-based compensation expense | $ | $ 4,274 | $ 2,615 | |||||||||
Weighted average period for unrecognized costs to be recognized | 2 years 10 months 13 days | ||||||||||
Total fair value of awards vested | $ | $ 5,892 | $ 1,980 | |||||||||
Unrecognized costs other than options | $ | $ 11,768 | ||||||||||
RSUs Performance Conditions | |||||||||||
Class of Stock [Line Items] | |||||||||||
Restricted stock units granted (in shares) | 0 | 0 | |||||||||
RSUs Market Conditions | |||||||||||
Class of Stock [Line Items] | |||||||||||
Restricted stock units granted (in shares) | 0 | 0 | |||||||||
Common stock options | |||||||||||
Class of Stock [Line Items] | |||||||||||
Contractual term of options | 10 years | ||||||||||
Weighted average expected term of options | 6 years | ||||||||||
Expected dividend yield rate of options | 0.00% | 0.00% | |||||||||
Exercised (in shares) | (99,435) | 0 | |||||||||
Stock-based compensation expense | $ | $ 5,302 | $ 7,968 | |||||||||
Unrecognized stock option costs | $ | $ 6,358 | ||||||||||
Weighted average period for unrecognized costs to be recognized | 1 year 8 months 4 days | ||||||||||
Minimum | RSUs | |||||||||||
Class of Stock [Line Items] | |||||||||||
Award vesting period | 1 year | ||||||||||
Maximum | RSUs | |||||||||||
Class of Stock [Line Items] | |||||||||||
Award vesting period | 4 years |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions (Details) - Common stock options | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 78.90% | 61.20% |
Risk-free interest rate | 1.20% | 1.40% |
Expected life (years) | 6 years 3 months | 6 years 1 month 20 days |
Dividend yield rate | 0.00% | 0.00% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Option Activity (Details) - Common stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Options | |||
Beginning balance (in shares) | 4,407,498 | 3,977,401 | |
Granted (in shares) | 357,125 | 1,322,119 | |
Stock options exercised | 99,435 | 0 | |
Cancelled/forfeited (in shares) | (742,902) | (892,022) | |
Ending balance (in shares) | 3,922,286 | 4,407,498 | 3,977,401 |
Stock Options, Exercisable (in shares) | 2,316,637 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 12.20 | $ 14.07 | |
Granted (in dollars per share) | 9.18 | 8.89 | |
Exercised (in dollars per share) | 9.81 | ||
Cancelled/forfeited (in dollars per share) | 16.21 | 15.62 | |
Ending balance (in dollars per share) | 11.23 | $ 12.20 | $ 14.07 |
Weighted Average Exercise Price, Exercisable (in dollars per share) | $ 11.44 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Outstanding | 7 years 1 month 6 days | 7 years 7 months 28 days | 8 years 6 months 3 days |
Weighted Average Remaining Contractual Term , Exercisable (Years) | 6 years 8 months 1 day | ||
Aggregate Intrinsic Value | |||
Beginning balance | $ 50 | $ 7,198 | |
Ending balance | 455 | $ 50 | $ 7,198 |
Aggregate Intrinsic Value, Exercisable | $ 98 | ||
Vested and expected to vest | |||
Outstanding (in shares) | 3,922,286 | ||
Weighted average exercise price (in dollars per share) | $ 11.23 | ||
Average remaining contractual term (Years) | 7 years 1 month 6 days | ||
Aggregate intrinsic value | $ 455 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Restricted Stock Unit Activity (Details) - RSUs - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Stock Unit | ||
Beginning balance (in shares) | 1,173,741 | 229,870 |
Granted (in shares) | 1,850,243 | 1,301,439 |
Vested (in shares) | (566,788) | (186,870) |
Forfeited (in shares) | (530,729) | (170,698) |
Ending balance (in shares) | 1,926,467 | 1,173,741 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 6.42 | $ 15.89 |
Granted (in dollars per share) | 7.94 | 5.88 |
Vested (in dollars per share) | 5.08 | 13.6 |
Forfeited (in dollars per share) | 7.22 | 7.21 |
Ending balance (in dollars per share) | $ 8.06 | $ 6.42 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 9,576 | $ 10,584 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 9,372 | 10,408 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 204 | $ 176 |
Medytox_Allergan Settlement A_2
Medytox/Allergan Settlement Agreements and Daewoong Arrangement (Details) | Mar. 25, 2021shares | Mar. 23, 2021USD ($)$ / shares | Feb. 28, 2021USD ($)shares | Feb. 18, 2021USD ($)$ / shares | Mar. 31, 2021shares | Mar. 31, 2022USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2023USD ($) | Dec. 31, 2022USD ($) | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($)$ / shares | Sep. 15, 2025 | Sep. 15, 2024 | Sep. 15, 2023 |
Loss Contingencies [Line Items] | ||||||||||||||
Loss contingency accrual | $ 0 | $ 0 | ||||||||||||
Payments for legal settlements | $ 48,421,000 | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||||||
Forecast | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Share issuance agreement, percentage of share dispose per year | 75.00% | 50.00% | 25.00% | |||||||||||
Common Stock | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Issuance of common stock in connection with litigation settlement (in shares) | shares | 6,762,652 | |||||||||||||
Daewoong Agreement | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Long-term purchase commitment, amount | $ 25,500,000 | |||||||||||||
Contingent milestone payment | 10,500,000 | |||||||||||||
Daewoong Convertible Note | Convertible Debt | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Convertible debt | $ 40,779,000 | |||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 13 | |||||||||||||
Daewoong Convertible Note | Convertible Debt | Maximum | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Common stock shares beneficially own percentage | 0.0999 | |||||||||||||
Daewoong Convertible Note | Convertible Debt | Common Stock | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Conversion of common shares (in shares) | shares | 3,136,869 | 3,136,869 | ||||||||||||
Intellectual Property Disputes, Jeuveau | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Loss contingency accrual | $ 35,000,000 | $ 35,000,000 | $ 35,000,000 | |||||||||||
Settlement agreement, payment terms (in years) | 2 years | |||||||||||||
Payments for legal settlements | $ 15,000,000 | $ 15,000,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | |||||||||||||
Intellectual Property Disputes, Jeuveau | Subsequent Event | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payments for legal settlements | $ 15,000 | |||||||||||||
Intellectual Property Disputes, Jeuveau | Forecast | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payments for legal settlements | $ 5,000,000 | $ 15,000,000 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Defined contributions to 401(k) plan | $ 481 | $ 524 |
Income Taxes - Components of Cu
Income Taxes - Components of Current and Deferred Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current provision: | ||
Federal | $ 0 | $ 0 |
State | 27 | 52 |
Total current provision | 27 | 52 |
Deferred (benefit) provision: | ||
Federal | 20 | 0 |
State | (5) | 25 |
Total deferred provision (benefit) | 15 | 25 |
Total provision (benefit) for income taxes | $ 42 | $ 77 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Tax Credit Carryforward [Line Items] | ||
Accrued interest and penalties related to income tax matters | $ 0 | $ 0 |
Federal | ||
Tax Credit Carryforward [Line Items] | ||
NOL carryforwards | 273,776,000 | |
Operating loss carryforwards, subject to expiration | 72,579,000 | |
Operating loss carryforwards, not subject to expiration | 201,197,000 | |
Federal | R&D | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | 2,929,000 | |
State | ||
Tax Credit Carryforward [Line Items] | ||
NOL carryforwards | 169,332,000 | |
State | R&D | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | $ 2,918,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred income tax assets: | ||
Net operating losses | $ 67,039 | $ 60,083 |
Stock compensation | 2,839 | 3,938 |
Other deferred assets | 2,617 | 2,617 |
Accrued compensation | 4,017 | 2,559 |
Operating lease liabilities | 893 | 1,114 |
Accrued legal settlement | 20,276 | 21,318 |
Other, net | 216 | 21 |
Valuation allowance | (85,527) | (78,313) |
Total deferred income tax assets | 12,370 | 13,337 |
Deferred income tax liabilities: | ||
Intangible amortization | (11,528) | (12,240) |
Operating lease right-of-use assets | (690) | (873) |
Fixed asset depreciation | (192) | (249) |
Total deferred income tax liabilities | (12,410) | (13,362) |
Net deferred income taxes | $ (40) | $ (25) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax at statutory rate | $ (9,832) | $ (34,217) |
State income taxes, net of Federal benefit | (1,872) | (7,232) |
Revaluation of contingent royalty obligation | 1,595 | (513) |
Meals and entertainment | 230 | 366 |
Change in state tax rate | 129 | (242) |
Officers' compensation | 2,076 | 133 |
Stock compensation | (17) | 616 |
Research and development tax credit | 0 | (147) |
Promissory note - debt discount | 120 | (145) |
Other, net | 399 | 117 |
Valuation allowance | 7,214 | 41,341 |
Total provision (benefit) for income taxes | $ 42 | $ 77 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 2,924 | $ 2,761 |
Increases to current year tax positions | 0 | 163 |
Ending balance | $ 2,924 | $ 2,924 |
Related Party Transactions (Det
Related Party Transactions (Details) $ / shares in Units, $ in Thousands | Mar. 25, 2021shares | Feb. 28, 2021shares | Dec. 14, 2017 | Nov. 30, 2021USD ($) | Mar. 31, 2021shares | Dec. 31, 2021$ / shares | Mar. 23, 2021USD ($)$ / shares | Feb. 18, 2021$ / shares | Dec. 31, 2020$ / shares |
Related Party Transaction [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | |||||||
Daewoong Convertible Note | Convertible Debt | |||||||||
Related Party Transaction [Line Items] | |||||||||
Convertible debt | $ | $ 40,779 | ||||||||
Conversion price (in dollars per share) | $ 13 | ||||||||
Intellectual Property Disputes, Jeuveau | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ 0.00001 | ||||||||
Common Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Issuance of common stock in connection with litigation settlement (in shares) | shares | 6,762,652 | ||||||||
Common Stock | Daewoong Convertible Note | Convertible Debt | |||||||||
Related Party Transaction [Line Items] | |||||||||
Conversion of common shares (in shares) | shares | 3,136,869 | 3,136,869 | |||||||
Evolus, Inc. | SCH | |||||||||
Related Party Transaction [Line Items] | |||||||||
Period of termination of first commercial sale | 10 years | ||||||||
Related party transaction amount in period | $ | $ 20,000 |