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Delaware
|
2834
|
46-1385614
|
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification Number)
|
|
Copies to:
|
|
Michael A. Hedge
Jason C. Dreibelbis
Alexa M. Ekman
K&L Gates LLP
1 Park Plaza, Twelfth Floor
Irvine, California 92614
(949) 253-0900
|
Jeffrey J. Plumer
Vice President, Legal
Evolus, Inc.
17901 Von Karman Avenue, Suite 150
Irvine, California 92614
(949) 284-4555
|
Michael J. Zeidel
Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
(212) 735-3000
|
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
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||||
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
|
||||
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
|
||||
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
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||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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||||
Large accelerated filer
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☐
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Accelerated filer
|
☐
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Non-accelerated filer
|
☒ (Do not check if a smaller reporting company)
|
Smaller reporting company
|
☐
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|
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Emerging Growth Company
|
☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.
☒
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Title of Each Class of Securities to be Registered
|
Amount to be Registered
(1)
|
Proposed Maximum Offering Price Per Share
(2)
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Proposed Maximum Aggregate Offering Price
(1)(2)
|
Amount of
Registration Fee
|
Common Stock, $0.00001 par value per share
|
5,750,000
|
$26.09
|
$150,017,500
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$18,678
|
(1)
|
Includes 750,000 shares that the underwriters have the option to purchase.
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(2)
|
Estimated solely for purposes of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, on the basis of the average high and low sales price of the Registrant’s common stock as reported by the Nasdaq Global Market on
July 13, 2018
.
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PER SHARE
|
|
TOTAL
|
|
|
Public Offering Price
|
$
|
|
$
|
|
|
Underwriting Discounts and Commissions
(1)
|
|
|
|
|
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Proceeds to Evolus, Inc. (before expenses)
|
|
|
|
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Proceeds to Selling Stockholder (before expenses)
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(1)
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See “Underwriting” beginning on page 82 of this prospectus for a description of compensation payable to the underwriters.
|
Cantor
|
Mizuho Securities
|
SunTrust Robinson Humphrey
|
JMP Securities
|
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Page
|
•
|
DWP-450 will offer the U.S. market the first known 900 kDa neurotoxin alternative to BOTOX
. Both DWP-450 and BOTOX manufacturing start with a 900 kDa complex, include adding the excipients human serum albumin and sodium chloride, and are finished by vacuum drying. If approved, DWP-450 is expected to be the only known neurotoxin product in the United States with a 900 kDa neurotoxin complex other than BOTOX. We believe an important component of competitiveness in the neurotoxin market relates to the characteristics associated with the 900 kDa complex and the potential of the accessory proteins to increase the effectiveness of the active toxin portion of the complex.
|
•
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DWP-450 may be easily integrated into existing aesthetic physician practices.
DWP-450 was clinically tested with one DWP-450 unit compared to one BOTOX unit in our
EU Phase III clinical trial
. In the study, both products were stored, prepared and injected identically. We believe aesthetic physicians’ familiarity with the 900 kDa neurotoxin complex’s handling, preparation and dosing will more easily facilitate incorporation of DWP-450 into their practices.
|
•
|
Enhanced level of physician-customer interaction through an aesthetic-only marketing strategy.
We have elected to specifically target the self-pay aesthetic market. With a reduced regulatory burden compared to third-party payor reimbursed markets, we believe we will achieve a number of benefits that market participants in reimbursed markets are unable to achieve, such as an enhanced level of interaction with our physician-customers. It is expected that upon approval by the FDA, DWP-450 will be the only U.S. neurotoxin without a therapeutic indication. We believe pursuing an aesthetic-only non-reimbursed product strategy will allow for meaningful strategic advantages in the United States, including pricing and marketing flexibility. We intend to utilize this flexibility to drive market adoption through programs such as promotional events, sampling programs and pricing strategies.
|
•
|
Our management team has significant experience and expertise in medical aesthetics
. Our management team has extensive experience in self-pay healthcare markets, in the development, market launch and commercialization of major medical products, execution and integration of business development transactions, identification of and partnerships with aesthetic key opinion leaders, or KOLs, and understanding of the regulatory environment of the healthcare markets. Key members of our leadership team have also served in relevant senior leadership positions with leading aesthetic companies.
|
•
|
Achieve regulatory approval of DWP-450;
|
•
|
Launch the first known 900 kDa neurotoxin in the United States since BOTOX was launched in April 2002;
|
•
|
Pursue an aesthetic-only marketing strategy;
|
•
|
Leverage our strong KOL relationships in medical aesthetics for our commercial launch;
|
•
|
Build a commercialization infrastructure with specialized sales and marketing functions; and
|
•
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Establish a leading medical aesthetics company by in-licensing technology, developing partnerships and potentially acquiring or distributing products.
|
•
|
We have a limited operating history and have incurred significant losses since our inception, and anticipate that we will continue to incur losses for the foreseeable future. We have only one product
|
•
|
We currently depend entirely on the successful and timely regulatory approval and commercialization of our only product candidate,
DWP
-450. DWP-450 may not receive regulatory approval or, if it does receive regulatory approval, we may not be able to successfully commercialize it.
|
•
|
We may be unable to obtain regulatory approval for DWP-450 or any future product candidates under applicable regulatory requirements. The FDA, EMA and other similar regulatory authorities have substantial discretion in the approval process, as evidenced by our receipt of a CRL related to our BLA submission for DWP-450, including the ability to delay, limit or deny approval of product candidates. The delay, limitation or denial of any regulatory approval would delay commercialization and have a material and adverse effect on our potential to generate revenue, our business and our operating results.
|
•
|
We rely on the Daewoong Agreement to provide us exclusive rights to distribute DWP-450 in certain territories. Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement, whether as a result of litigation or otherwise, would materially and adversely affect our development or commercialization of DWP-450, which in turn would have a material and adverse effect on our business, operating results and prospects. We could lose our exclusive rights to distribute DWP-450 if we fail to meet certain performance requirements, if Daewoong terminates the Daewoong Agreement as a result of our breach or if the Daewoong Agreement is otherwise terminated or not renewed.
|
•
|
We currently rely solely on Daewoong to manufacture DWP-450, and as such, any production or other problems with Daewoong could
adversely
affect us. Any failure or refusal by Daewoong to supply DWP-450 or by any future manufacturer to supply any other product candidates or products that we may develop could delay, prevent or impair our clinical development or commercialization efforts.
|
•
|
We may require additional financing to fund our future operations, and a failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations.
|
•
|
Even if DWP-450 or future product candidates, if any, receive regulatory approval, they may fail to achieve the broad degree of physician adoption and use necessary for commercial success.
The commercial success of DWP-450 and any of our future product candidates, if approved, will depend significantly on the broad adoption and use of the resulting product by physicians for approved indications, including, in the case of DWP-450, the treatment of glabellar lines.
|
•
|
Even if DWP-450 is approved for commercialization, if there is not sufficient patient demand for DWP-450, our financial results and future prospects will be harmed.
In addition, we have not pursued regulatory approval of DWP-450 for indications other than for the treatment of glabellar lines, which may also limit adoption of DWP-450, and if we are unable to obtain approval for indications in addition to our anticipated approval for glabellar lines, our marketing efforts for DWP-450 will be limited.
|
•
|
We will face significant competition in the aesthetic neurotoxin and broader self-pay healthcare market and our failure to effectively compete may prevent us from achieving significant market penetration and expansion.
Many of our potential competitors are large, experienced companies that enjoy significant competitive advantages, such as substantially greater financial, research and development, manufacturing, personnel and marketing resources, greater brand recognition and more experience and expertise in obtaining marketing approvals from the FDA and other regulatory authorities.
|
•
|
If we are unable to
establish
sales and marketing capabilities on our own or through third parties, we will be unable to successfully commercialize DWP-450 or any other future product candidates, if approved, or generate product revenue.
|
•
|
If we or any of our current or future licensors,
including
Daewoong, are unable to maintain, obtain or protect intellectual property rights related to DWP-450 or any of our future product candidates
,
we may no
t
be able to compete effectively in our market.
|
•
|
The loss of key
management
personnel, including our Chief Executive Officer and Chief Financial Officer, could adversely affect our business.
|
•
|
ALPHAEON controls the direction of our business, and the concentrated ownership of our common stock and certain contractual rights of ALPHAEON may prevent you and other stockholders from influencing significant decisions.
In addition, we may take actions that stockholders other than ALPHAEON do not view as beneficial. This voting control may also discourage transactions involving a change-of-control of our company. Furthermore, ALPHAEON has granted a lien and security interest in its ownership of our capital stock as collateral under its outstanding notes. Upon certain events of default, these secured lenders may take possession, hold, collect, sell, lease, deliver, grant options to purchase or otherwise retain, liquidate or dispose of all or a portion of the collateral and, as a result, a change-of-control of our company may result.
|
•
|
an aging population consisting of both Generation X, comprised of individuals between the ages of 35 and 50, and Baby Boomers, comprised of individuals between the ages of 51 and 64;
|
•
|
individuals between the ages of 19 and 34, whom we refer to as Millennials, seeking to prophylactically delay the appearance of aging and utilizing neurotoxins as an entry point for aesthetic procedures due to its minimally invasive nature;
|
•
|
an increasing life expectancy, which is resulting in patients with a desire for improved appearance and well-being;
|
•
|
rising disposable income, with the U.S. Bureau of Economic Analysis reporting that real disposable income in the United States increased approximately 17% from March 2012 to March 2017;
|
•
|
growing awareness, utilization and acceptance of elective or minimally invasive aesthetic procedures; and
|
•
|
continued innovation and improved accessibility to these treatments due to an increase in the number of physicians who perform these procedu
res.
|
•
|
being permitted to have only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations disclosure;
|
•
|
an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended,
or the Sarbanes-Oxley Act
;
|
•
|
reduced disclosure about executive compensation arrangements in our periodic reports, registration statements and proxy statements; and
|
•
|
exemptions from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
|
•
|
1,598,840 shares of our common stock issuable upon the exercise of outstanding stock options under
our 2017 Omnibus Incentive Plan, or the 2017 plan;
|
•
|
230,516 shares of our common stock issuable upon the vesting and settlement of restricted stock units outstanding under the 2017 plan; and
|
•
|
2,531,935
shares of our common stock reserved for future issuance under the 2017 plan
.
|
|
Year Ended December 31,
|
|
Three Months Ended
March 31, |
||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2017
|
|
2018
|
||||||||||
|
|
|
|
|
|
|
(unaudited)
|
||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
$
|
20,681
|
|
|
$
|
12,607
|
|
|
$
|
6,689
|
|
|
$
|
2,651
|
|
|
$
|
1,678
|
|
General and administrative
|
9,883
|
|
|
7,033
|
|
|
4,819
|
|
|
1,215
|
|
|
3,467
|
|
|||||
Revaluation of contingent royalty obligation payable to related party
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
900
|
|
|||||
Depreciation and amortization
|
416
|
|
|
326
|
|
|
218
|
|
|
111
|
|
|
-
|
|
|||||
Total operating expenses
|
30,980
|
|
|
19,966
|
|
|
11,726
|
|
|
3,977
|
|
|
6,045
|
|
|||||
Loss from operations
|
(30,980
|
)
|
|
(19,966
|
)
|
|
(11,726
|
)
|
|
(3,977
|
)
|
|
(6,045
|
)
|
|||||
Other expense, net
|
39
|
|
|
6
|
|
|
5
|
|
|
1
|
|
|
107
|
|
|||||
Loss before taxes
|
(31,019
|
)
|
|
(19,972
|
)
|
|
(11,731
|
)
|
|
(3,978
|
)
|
|
(6,152
|
)
|
|||||
Provision (benefit) for income taxes
|
93
|
|
|
93
|
|
|
(7,251
|
)
|
|
20
|
|
|
10
|
|
|||||
Net loss and comprehensive loss
|
$
|
(31,112
|
)
|
|
$
|
(20,065
|
)
|
|
$
|
(4,480
|
)
|
|
$
|
(3,998
|
)
|
|
$
|
(6,162
|
)
|
Net loss per share, basic and diluted
(1)
|
$
|
(1.88
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.30
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
(1)
|
16,527,000
|
|
|
16,527,000
|
|
|
16,527,000
|
|
|
16,527,000
|
|
|
20,226,460
|
|
|||||
Pro forma net loss per share, basic and diluted
(2)
(unaudited)
|
|
|
|
|
$
|
(0.24
|
)
|
|
|
|
|
|
|||||||
Pro forma weighted-average shares used to compute basic and diluted net loss per share
(2)
(unaudited)
|
|
|
|
|
18,592,875
|
|
(3)
|
|
|
|
(1)
|
See (i) Note 2 to our financial statements in our 2017 Annual Report and (ii) Note 2 to our unaudited financial statements included in our 2018 Quarterly Report, each of which is incorporated by reference in this prospectus, for an explanation of the method used to calculate basic and diluted net loss per common share and the shares used in the computation of the per share amounts.
|
(2)
|
The pro forma net loss per share of common stock, basic and diluted, does not give effect to the issuance of shares of our common stock in this offering nor do they give effect to potential dilutive securities where the impact would be anti-dilutive.
|
(3)
|
The pro forma net loss per share of common stock, basic and diluted, for the year ended December 31, 2017 reflects the automatic conversion of all outstanding shares of our Series A preferred stock into 2,065,875 shares of common stock in connection with the completion of our initial public offering.
|
|
As of March 31, 2018
|
||||||
|
Actual
|
|
As Adjusted
(1)(2)
|
||||
|
(unaudited)
|
|
(unaudited)
|
||||
Balance Sheet Data:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
49,570
|
|
|
$
|
110,718
|
|
Intangible asset
|
56,076
|
|
|
56,076
|
|
||
Goodwill
|
21,208
|
|
|
21,208
|
|
||
Deferred tax liability
|
15,000
|
|
|
15,000
|
|
||
Contingent royalty obligation payable to related party
|
40,600
|
|
|
40,600
|
|
||
Contingent promissory note payable to related party
|
16,149
|
|
|
16,149
|
|
||
Preferred Stock
|
—
|
|
|
—
|
|
||
Common stock
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
134,301
|
|
|
195,449
|
|
||
Accumulated deficit
|
(82,320
|
)
|
|
(82,320
|
)
|
||
Total stockholders’ equity
|
51,982
|
|
|
113,130
|
|
(1)
|
The as adjusted column reflects the receipt of the net proceeds from the sale of shares of our common stock by us in this offering at an assumed public offering price of
$26.17
per share, which is the last reported sale price of our common stock on the Nasdaq Global Market on
July 13, 2018
, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive proceeds from the sale of the shares by the selling stockholder; accordingly, there is no impact upon the as adjusted consolidated balance sheet data for such sale
.
|
(2)
|
A $1.00 increase (decrease) in the assumed public offering price of
$26.17
per share, which is the last reported sale price of our common stock on the Nasdaq Global Market on
July 13, 2018
, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $
2.4 million
, assuming the number of shares offered by us as stated on the cover page of this prospectus remains unchanged and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by
$24.6 million
, assuming that the assumed public offering price of
$26.17
per share, which is the last reported sale price of our common stock on the Nasdaq Global Market on
July 13, 2018
, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
|
•
|
whether we are required by the FDA, EMA or other similar regulatory authorities to conduct additional clinical trials or meet other requirements to support the approval of DWP-450;
|
•
|
our success in educating physicians and consumers about the benefits, administration and use of DWP-450, if approved;
|
•
|
the prevalence, duration and severity of potential side effects experienced with DWP-450;
|
•
|
the timely receipt of necessary marketing approvals from the FDA, EMA and other similar regulatory authorities;
|
•
|
achieving and maintaining compliance with all regulatory requirements applicable to DWP-450;
|
•
|
the ability to raise additional capital on acceptable terms, or at all, if needed, to support the commercial launch of DWP-450;
|
•
|
the acceptance by physicians and consumers of the safety and efficacy of DWP-450, if approved;
|
•
|
our ability to successfully commercialize DWP-450, if approved, whether alone or in collaboration with others;
|
•
|
the ability of our current manufacturer and any third parties with whom we may contract to manufacture DWP-450 to remain in good standing with regulatory agencies and develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP requirements; and
|
•
|
the availability, perceived advantages, relative cost, relative safety and relative efficacy of competing products.
|
•
|
the FDA, the EMA or other similar regulatory authorities may disagree with the design or implementation of one or more clinical trials;
|
•
|
the FDA, the EMA or other similar regulatory authorities may not deem a product candidate safe and effective for its proposed indication or may deem a product candidate’s safety or other perceived risks to outweigh its clinical or other benefits;
|
•
|
the FDA, the EMA or other similar regulatory authorities may not find the data from preclinical studies and clinical trials sufficient to support approval, or the results of clinical trials may not meet the level of statistical or clinical significance required by the FDA, the EMA or any similar regulatory authorities for approval;
|
•
|
the FDA, the EMA or other similar regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials performed by us or third parties;
|
•
|
the data collected from clinical trials may not be sufficient to support the submission of a BLA, an MAA, an NDS, or other applicable regulatory filing;
|
•
|
the FDA, the EMA or other similar regulatory authorities may require additional preclinical studies or clinical trials;
|
•
|
the FDA, the EMA or other similar regulatory authorities may identify deficiencies in the formulation, quality control, labeling or specifications of DWP-450 or future product candidates;
|
•
|
the FDA, the EMA or other similar regulatory authorities may grant approval contingent on the performance of costly additional post approval clinical trials;
|
•
|
the FDA, the EMA or other similar regulatory authorities may approve DWP-450 or any future product candidates for a more limited indication or a narrower patient population than we originally requested;
|
•
|
the FDA’s, the EMA’s or other similar regulatory authority’s failure to approve the manufacturing processes or facilities of third-party manufacturers with which we contract;
|
•
|
the FDA, the EMA or other similar regulatory authorities may change their approval policies or adopt new regulations in a manner rendering our clinical data or regulatory filings insufficient for approval; or
|
•
|
the FDA, the EMA or other similar regulatory authorities may not approve the labeling that we believe is necessary or desirable for the successful commercialization of our product candidates.
|
•
|
the timing of, and the costs involved in, obtaining regulatory approvals for DWP-450 or any future product candidates;
|
•
|
the cost of commercialization activities if DWP-450 or any future product candidates are approved for sale, including marketing, sales and distribution costs;
|
•
|
the scope, progress, results and costs of researching and developing any future product candidates, and conducting preclinical and clinical trials;
|
•
|
our ability to accurately forecast demand for our products and the ability of our third-party manufacturers to scale production to meet that demand.
|
•
|
costs under our third-party manufacturing and supply arrangements for our current and any future product candidates and any products we commercialize;
|
•
|
our ability to establish and maintain strategic collaborations, licensing or other arrangements and the terms of and timing of such arrangements;
|
•
|
the degree and rate of market acceptance of DWP-450 or any future approved products;
|
•
|
the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products;
|
•
|
costs of operating as a public company; and
|
•
|
costs associated with any acquisition or in-license of products and product candidates, technologies or businesses.
|
•
|
the effectiveness, ease of use, and safety of DWP-450 and any future product candidates as compared to existing products or treatments;
|
•
|
physician and consumer willingness to adopt DWP-450 to treat glabellar lines or other aesthetic indications we may pursue over products and brands with which consumers and physicians may have more familiarity or recognition
or additional approved uses
;
|
•
|
overcoming any biases physicians or consumers may have toward the use, safety and efficacy of existing products or treatments
and successful marketing of the benefits of a 900 kDa botulinum toxin type A complex
;
|
•
|
the cost of DWP-450 and any future product candidates in relation to alternative products or treatments and willingness to pay for the product or treatment, if approved, on the part of consumers;
|
•
|
proper training and administration of DWP-450 and any future product candidates by physicians and medical staff;
|
•
|
consumer satisfaction with the results and administration of DWP-450 and any future product candidates and overall treatment experience;
|
•
|
changes in pricing, promotional
and bundling efforts by competitors;
|
•
|
consumer demand for the treatment of glabellar lines or other aesthetic indications that may be approved in the future;
|
•
|
the willingness of consumers to pay for DWP-450 and any future product candidates relative to other discretionary items, especially during economically challenging times;
|
•
|
the revenue and profitability that DWP-450 and any future product candidates may offer a physician as compared to alternative products or treatments;
|
•
|
the effectiveness of our sales, marketing and distribution efforts and our ability to develop our brand awareness;
|
•
|
any adverse impact on our brand resulting from key opinion leader relationships with our parent organizations, whether or not related to us;
|
•
|
our ability to compete with our competitors’ product bundling offerings as we plan to initially launch DWP-450 as a stand-along product; and
|
•
|
adverse publicity about our product candidates, competitive products, or the industry as a whole, or favorable publicity about competitive products.
|
•
|
the success of any sales and marketing programs that we, or any third parties we engage, undertake, and as to which we have limited experience and are still in the process of planning and developing;
|
•
|
the extent to which physicians recommend DWP-450 to their patients;
|
•
|
the extent to which DWP-450 satisfies consumer expectations
and overcoming consumer loyalty with existing products and brands
;
|
•
|
our ability to properly train physicians in the use of DWP-450 such that their consumers do not experience excessive discomfort during treatment or adverse side effects;
|
•
|
the cost, safety and effectiveness of DWP-450 versus other aesthetic treatments;
|
•
|
the development and
availability of alternative products and treatments that seek to address similar goals;
|
•
|
consumer sentiment about the benefits and risks of aesthetic procedures generally and DWP-450 in particular;
|
•
|
the success of any direct-to-consumer marketing efforts that we may initiate;
|
•
|
the ability and ease with which physicians are able to incorporate DWP-450 into their practices;
|
•
|
changes in demographic and social trends; and
|
•
|
general consumer confidence
, which may be impacted by economic and political conditions.
|
•
|
regulatory authorities may withdraw their approval of the product;
|
•
|
regulatory authorities may require a recall of the product or we may voluntarily recall a product;
|
•
|
regulatory authorities may require the addition of warnings or contraindications in the product labeling, narrowing of the indication in the product label or issuance of field alerts to physicians and pharmacies;
|
•
|
regulatory authorities may require us to create a medication guide outlining the risks of such side effects for distribution to patients or institute a
Risk Evaluation and Mitigation Strategies, or
REMS;
|
•
|
we may be subject to limitations as to how we market or promote the product;
|
•
|
we may be required to change the way the product is administered or modify the product in some other way;
|
•
|
regulatory authorities may require additional clinical trials or costly post-marketing testing and surveillance to monitor the safety or efficacy of the product;
|
•
|
sales of the product may decrease significantly;
|
•
|
we could be sued and held liable for harm caused to patients; and
|
•
|
our brand and
reputation may suffer.
|
•
|
manage any of our future clinical trials effectively;
|
•
|
identify, recruit, retain, incentivize and integrate additional employees;
|
•
|
manage our internal development efforts effectively while carrying out our contractual obligations to third parties; and
|
•
|
continue to improve our operational, financial and management controls, reporting systems and procedures.
|
•
|
requirements or preferences for domestic products or solutions, which could reduce demand for our products;
|
•
|
differing existing or future regulatory and certification requirements;
|
•
|
management communication and integration problems resulting from cultural and geographic dispersion;
|
•
|
greater difficulty in collecting accounts receivable and longer collection periods;
|
•
|
difficulties in enforcing contracts;
|
•
|
difficulties and costs of staffing and managing non-U.S. operations;
|
•
|
the uncertainty of protection for intellectual property rights in some countries;
|
•
|
tariffs and trade barriers, export regulations and other regulatory and contractual limitations on our ability to sell our products;
|
•
|
more stringent data protection standards in some countries;
|
•
|
greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including export and antitrust regulations, the U.S. Foreign Corrupt Practices Act, or FCPA, quality assurance and other healthcare regulatory requirements and any trade regulations ensuring fair trade practices;
|
•
|
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
|
•
|
foreign currency exchange rates;
|
•
|
potentially adverse tax consequences, including multiple and possibly overlapping tax structures and difficulties relating to repatriation of cash; and
|
•
|
political and economic
instability, political unrest and terrorism.
|
•
|
decreased demand for DWP-450 or any future product candidates or products we develop;
|
•
|
termination of clinical trial sites or entire trial programs;
|
•
|
injury to our reputation and significant negative media attention;
|
•
|
withdrawal of clinical trial participants or cancellation of clinical trials;
|
•
|
significant costs to defend the related litigation;
|
•
|
a diversion of management’s time and our resources;
|
•
|
substantial monetary awards to trial participants or patients;
|
•
|
regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;
|
•
|
loss of revenue;
|
•
|
the inability to commercialize any products we develop; and
|
•
|
a decline in our share price.
|
•
|
impose restrictions on the marketing or manufacturing of the product, suspend or withdraw product approvals or revoke necessary licenses;
|
•
|
issue warning letters, show cause notices or untitled letters describing alleged violations, which may be publicly available;
|
•
|
mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;
|
•
|
require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
|
•
|
commence criminal investigations and prosecutions;
|
•
|
impose injunctions;
|
•
|
impose other civil or criminal penalties;
|
•
|
suspend any ongoing clinical trials;
|
•
|
delay or refuse to approve pending applications or supplements to approved applications filed by us;
|
•
|
refuse to permit drugs or active ingredients to be imported or exported;
|
•
|
suspend or impose restrictions on operations, including costly new manufacturing requirements; or
|
•
|
seize or detain products or require us to initiate a product recall.
|
•
|
a product candidate may not be deemed safe, effective, pure or potent;
|
•
|
the data from preclinical studies and clinical trials may not be deemed sufficient;
|
•
|
the FDA or other regulatory authorities might not approve our third-party manufacturers’ processes or facilities;
|
•
|
deficiencies in the formulation, quality control, labeling, or specifications of a product candidate or in response to citizen petitions or similar documents filed in connection with the product candidate;
|
•
|
general requirements intended to address risks associated with a class of drugs, such as a new REMS requirement for neurotoxins;
|
•
|
the enactment of new laws or promulgation of new regulations that change the approval requirements; or
|
•
|
the FDA or other regulatory authorities may change their approval policies or adopt new regulations.
|
•
|
restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;
|
•
|
fines, warning letters or holds on clinical trials;
|
•
|
refusal by the FDA, EMA or other similar regulatory authorities to approve pending applications or supplements to approved applications filed by us or our strategic collaborators or suspension or revocation of product license approvals;
|
•
|
product seizure or detention or refusal to permit the import or export of products; and
|
•
|
injunctions or the imposition of civil or criminal penalties.
|
•
|
changes to manufacturing or marketing methods;
|
•
|
changes to product labeling or promotional materials;
|
•
|
recall, replacement, or discontinuance of one or more of our products; and
|
•
|
additional recordkeeping.
|
•
|
the requirement that a majority of our board of directors consist of independent directors;
|
•
|
the requirement that our nominating and corporate governance committee be comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
|
•
|
the requirement that our compensation committee be comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
•
|
the requirement for an annual performance evaluation of our corporate governance and compensation committees.
|
•
|
corporate opportunities;
|
•
|
the impact that operating decisions for our business may have on ALPHAEON’s consolidated financial statements;
|
•
|
the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on ALPHAEON’s current or future indebtedness or the covenants under that indebtedness;
|
•
|
business combinations involving us;
|
•
|
our dividend policy;
|
•
|
management stock ownership; and
|
•
|
the related party services and agreements between ALPHAEON and us.
|
•
|
indemnification and other matters arising from our initial public offering;
|
•
|
the nature, quality and pricing of services ALPHAEON agrees to provide to us;
|
•
|
sales or other disposal by ALPHAEON of all or a portion of its ownership interest in us; and
|
•
|
business combinations involving us.
|
•
|
engaging in the same or similar business activities or lines of business as we do;
|
•
|
doing business with any of our clients or consumers; or
|
•
|
employing or otherwise engaging any of our officers or employees.
|
•
|
announcements of regulatory approval or disapproval of DWP-450, such as our receipt of a CRL related to our BLA submission for DWP-450 or any future product candidates;
|
•
|
adverse results from or delays in clinical trials of any of our future product candidates;
|
•
|
unanticipated safety concerns related to the use of DWP-450 or any of our future products;
|
•
|
any termination or loss of rights under the Daewoong Agreement;
|
•
|
FDA or other U.S. or foreign regulatory or legal actions or changes affecting us or our industry;
|
•
|
adverse developments concerning our manufacturer or any future strategic partnerships;
|
•
|
introductions and announcements of new technologies and products by us, any commercialization partners or our competitors, and the timing of these introductions and announcements;
|
•
|
variations in our financial results or those of companies that are perceived to be similar to us;
|
•
|
success or failure of competitive products or medical aesthetic products generally;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, new product approvals and introductions, joint ventures or capital commitments;
|
•
|
market conditions in the pharmaceutical and biopharmaceutical sectors and issuance of securities analysts’ reports or recommendations;
|
•
|
quarterly variations in our results of operations or those of our future competitors;
|
•
|
changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;
|
•
|
the public’s reaction to our earnings releases, other public announcements and filings with the SEC;
|
•
|
rumors and market speculation involving us or other companies in our industry;
|
•
|
sales of substantial amounts of our stock by ALPHAEON or other significant stockholders or our insiders, or the expectation that such sales might occur;
|
•
|
general economic, industry and market conditions, including the size and growth, if any, of the medical aesthetics market;
|
•
|
news reports relating to trends, concerns and other issues in medical aesthetics market or the pharmaceutical or biopharmaceutical industry;
|
•
|
operating and stock performance of other companies that investors deem comparable to us and overall performance of the equity markets;
|
•
|
additions of key personnel or departures of key personnel, including our Chief Executive Officer and Chief Financial Officer;
|
•
|
intellectual property, product liability or other litigation against us, our manufacturer or other parties on which we rely or litigation against our general industry;
|
•
|
announcements or actions taken by ALPHAEON as our principal stockholder, including sales of substantial amounts of our common stock by ALPHAEON;
|
•
|
changes in our capital structure, such as future issuances of securities and the incurrence of additional debt;
|
•
|
changes in accounting standards, policies, guidelines, interpretations or principles; and
|
•
|
other factors described in this “Risk Factors” section.
|
•
|
our historical financial data reflects expense allocations for certain support functions that are provided on a centralized basis within ALPHAEON, such as expenses for business technology, facilities, legal, finance, human resources and business development, that may be higher or lower than the comparable expenses that we would have actually incurred, or will incur in the future, as a stand-alone company; and
|
•
|
significant increases will occur in our cost structure as a result of our completed initial public offering, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act.
|
•
|
permit our board of directors to issue shares of preferred stock, with any rights, preferences and privileges as they may designate, without stockholder approval, which could be used to dilute the ownership of a hostile bidder significantly;
|
•
|
provide that the authorized number of directors may be changed only by resolution of our board of directors and that, from and after the date on which ALPHAEON no longer beneficially owns a majority of the voting power of all of the then-outstanding shares of our capital stock, a director may only be removed for cause by the affirmative vote of the holders of at least 66 2/3% of our voting stock;
|
•
|
provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
|
•
|
divide our board of directors into three classes, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
|
from and after the date on which ALPHAEON no longer beneficially owns a majority of the voting power of all of the then-outstanding shares of our capital stock, require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;
|
•
|
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company;
|
•
|
prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and
|
•
|
provide that special meetings of our stockholders may be called only by the chairman of the board, our Chief Executive Officer or by our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors, which may delay the ability of our stockholders to force consideration by our company of a take-over proposal or to take certain corporate actions, including the removal of directors.
|
•
|
We will indemnify our directors and officers for serving us in those capacities, or for serving as a director, officer, employee or agent of other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that we may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interest and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
|
•
|
We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.
|
•
|
We will be required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
|
•
|
The rights conferred in our bylaws will not be exclusive. We may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
|
•
|
being permitted to have only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations disclosure;
|
•
|
an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;
|
•
|
reduced disclosure about executive compensation arrangements in our periodic reports, registration statements and proxy statements; and
|
•
|
exemptions from the requirements to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
|
•
|
our ability to adequately and timely respond to the deficiencies cited by the FDA in the CRL related to our BLA;
|
•
|
our ability to obtain and maintain regulatory approval of DWP-450, and any related restrictions, limitations and/or warnings in the label of DWP-450;
|
•
|
our ability to successfully commercialize DWP-450, if approved;
|
•
|
the potential market size, opportunity and growth potential for DWP-450, if approved;
|
•
|
the attractiveness of DWP-450’s characteristics (including the benefits of a 900 kDa botulinum toxin type A complex) and the rate and degree of physician and patient acceptance of DWP-450, if approved;
|
•
|
our ability to build our own sales and marketing capabilities, or seek collaborative partners, to commercialize DWP-450, if approved;
|
•
|
the pricing of DWP-450, if approved, and the flexibility of our pricing and marketing strategy compared to our competitors;
|
•
|
the performance of our third-party licensors, suppliers, manufacturers and distributors;
|
•
|
our expectations regarding our future development of DWP-450 for other indications;
|
•
|
the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
|
•
|
the timing or likelihood of regulatory filings and approvals or clearances for DWP-450;
|
•
|
regulatory and legislative developments in the United States, EU, Canada and other countries;
|
•
|
developments and projections relating to our competitors and our industry, including competing products and procedures;
|
•
|
the loss of key management personnel;
|
•
|
our future financial performance and our ability to continue as a going concern;
|
•
|
the results of the Medytox Litigation, the Citizen Petition and any future legal proceedings;
and
|
•
|
our use of the net proceeds from this offering.
|
•
|
to conduct pre-commercial launch activities, including building our commercialization infrastructure to hire, train, deploy and support our specialty sales force and developing physician education, brand awareness campaigns and other marketing efforts; and
|
•
|
the remainder for working capital, research and development and general corporate purposes.
|
|
High
|
|
Low
|
Year Ending December 31, 2018
|
|
|
|
First Quarter (beginning February 8, 2018)
|
$12.97
|
|
$8.05
|
Second Quarter
|
$39.50
|
|
$6.75
|
Third Quarter (through July 13, 2018)
|
$30.40
|
|
$23.51
|
•
|
on an actual basis; and
|
•
|
on an as adjusted basis, giving effect to the sale by us of
2,500,000
shares of our common stock in this offering at an assumed public offering price of
$26.17
per share, which is the last reported sale price on the Nasdaq Global Market on
July 13, 2018
, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
|
|
As of March 31, 2018
|
||||||
|
Actual
|
|
As Adjusted
(1)
|
||||
|
(unaudited)
|
|
|
||||
Cash and cash equivalents
|
$
|
49,570
|
|
|
$
|
110,718
|
|
Contingent royalty obligation payable to related party
|
40,600
|
|
|
40,600
|
|
||
Contingent promissory note payable to related party
|
16,149
|
|
|
16,149
|
|
||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued and outstanding, actual and as adjusted
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value; 100,000,000 shares authorized and 23,640,389 shares issued and outstanding, actual; and 26,140,389 shares issued and outstanding, as adjusted
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
134,301
|
|
|
195,449
|
|
||
Accumulated deficit
|
(82,320
|
)
|
|
(82,320
|
)
|
||
Total stockholders’ equity
|
51,982
|
|
|
113,130
|
|
||
Total capitalization
|
$
|
108,731
|
|
|
$
|
169,879
|
|
(1)
|
A $1.00 increase (decrease) in the assumed public offering price of
$26.17
per share, which is the last reported sale price of our common stock on the Nasdaq Global Market on
July 13, 2018
, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $
2.4 million
, assuming the number of shares offered by us as stated on the cover page of this prospectus remains unchanged and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by
$24.6 million
, assuming the assumed public offering price of
$26.17
per share, which is the last reported sale price of our common stock on the Nasdaq Global Market on
July 13, 2018
, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
|
•
|
1,598,840 shares of our common stock issuable upon the exercise of outstanding stock options under
the 2017 plan:
|
•
|
230,516 shares of our common stock issuable upon the vesting and settlement of restricted stock units outstanding under the 2017 plan; and
|
•
|
2,531,935
shares of our common stock reserved for future issuance under the 2017 plan
.
|
Assumed public offering price per share
|
|
|
$
|
26.17
|
|
||
Historical net tangible book value (deficit) per share as of March 31, 2018
|
$
|
(1.07
|
)
|
|
|
||
Increase in net tangible book value (deficit) per share attributable to new investors participating in this offering
|
$
|
2.44
|
|
|
|
||
As adjusted net tangible book value (deficit) per share after this offering
|
|
|
$
|
1.37
|
|
||
Dilution in net tangible book value (deficit) per share to investors purchasing in this offering
|
|
|
$
|
24.80
|
|
•
|
1,598,840 shares of our common stock issuable upon the exercise of outstanding stock options under
the 2017 plan;
|
•
|
230,516 shares of our common stock issuable upon the vesting and settlement of restricted stock units outstanding under the 2017 plan; and
|
•
|
2,531,935
shares of our common stock reserved for future issuance under the 2017 plan
.
|
|
Year Ended December 31,
|
|
Three Months Ended
March 31, |
||||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2017
|
|
2018
|
||||||||||
|
|
|
|
|
|
|
(unaudited)
|
||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
$
|
20,681
|
|
|
$
|
12,607
|
|
|
$
|
6,689
|
|
|
$
|
2,651
|
|
|
$
|
1,678
|
|
General and administrative
|
9,883
|
|
|
7,033
|
|
|
4,819
|
|
|
1,215
|
|
|
3,467
|
|
|||||
Revaluation of contingent royalty obligation payable to related party
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
900
|
|
|||||
Depreciation and amortization
|
416
|
|
|
326
|
|
|
218
|
|
|
111
|
|
|
-
|
|
|||||
Total operating expenses
|
30,980
|
|
|
19,966
|
|
|
11,726
|
|
|
3,977
|
|
|
6,045
|
|
|||||
Loss from operations
|
(30,980
|
)
|
|
(19,966
|
)
|
|
(11,726
|
)
|
|
(3,977
|
)
|
|
(6,045
|
)
|
|||||
Other expense, net
|
39
|
|
|
6
|
|
|
5
|
|
|
1
|
|
|
107
|
|
|||||
Loss before taxes
|
(31,019
|
)
|
|
(19,972
|
)
|
|
(11,731
|
)
|
|
(3,978
|
)
|
|
(6,152
|
)
|
|||||
Provision (benefit) for income taxes
|
93
|
|
|
93
|
|
|
(7,251
|
)
|
|
20
|
|
|
10
|
|
|||||
Net loss and comprehensive loss
|
$
|
(31,112
|
)
|
|
$
|
(20,065
|
)
|
|
$
|
(4,480
|
)
|
|
$
|
(3,998
|
)
|
|
$
|
(6,162
|
)
|
Net loss per share, basic and diluted
(1)
|
$
|
(1.88
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.30
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
(1)
|
16,527,000
|
|
|
16,527,000
|
|
|
16,527,000
|
|
|
16,527,000
|
|
|
20,226,460
|
|
|||||
Pro forma net loss per share, basic and diluted
(1)(2)
(unaudited)
|
|
|
|
|
$
|
(0.24
|
)
|
|
|
|
|
|
|||||||
Pro forma weighted-average shares used to compute basic and diluted net loss per share
(1)(2)
(unaudited)
|
|
|
|
|
18,592,875
|
|
|
|
|
|
(1)
|
See (i) Note 2 to our financial statements in our 2017 Annual Report and (ii) Note 2 to our unaudited financial statements included in our 2018 Quarterly Report, each of which is incorporated by reference in this prospectus, for an explanation of the method used to calculate basic and diluted net loss per common share and the shares used in the computation of the per share amounts.
|
(2)
|
The pro forma net loss per share of common stock, basic and diluted, for the year ended December 31, 2017 reflects the automatic conversion of all outstanding shares of our Series A preferred stock into 2,065,875 shares of common stock in connection with the completion of our initial public offering. The pro forma net loss per share of common stock, basic and diluted, does not give effect to the issuance of shares from the proposed public offering nor do they give effect to potential dilutive securities where the impact would be anti-dilutive.
|
|
As of December 31,
|
|
As of March 31, 2018
|
||||||||
|
2016
|
|
2017
|
|
|||||||
|
|
|
|
|
(unaudited)
|
||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,570
|
|
Restricted cash
|
187
|
|
|
—
|
|
|
—
|
|
|||
Intangible asset
|
56,076
|
|
|
56,076
|
|
|
56,076
|
|
|||
Goodwill
|
21,208
|
|
|
21,208
|
|
|
21,208
|
|
|||
Related party receivable
|
—
|
|
|
72,639
|
|
|
—
|
|
|||
Related party borrowings
|
59,760
|
|
|
72,639
|
|
|
—
|
|
|||
Contingent royalty obligation payable to related party
|
—
|
|
|
—
|
|
|
40,600
|
|
|||
Contingent promissory note payable to related party
|
—
|
|
|
—
|
|
|
16,149
|
|
|||
Deferred tax liability
|
21,245
|
|
|
14,990
|
|
|
15,000
|
|
|||
Note obligation
|
—
|
|
|
138,687
|
|
|
—
|
|
|||
Series A preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock
|
—
|
|
|
—
|
|
|
1
|
|
|||
Additional paid-in capital
|
59,700
|
|
|
—
|
|
|
134,301
|
|
|||
Accumulated deficit
|
(66,806
|
)
|
|
(75,543
|
)
|
|
(82,320
|
)
|
|||
Total stockholder’s equity (deficit)
|
(7,106
|
)
|
|
(75,543
|
)
|
|
51,982
|
|
•
|
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock;
|
•
|
each of our directors;
|
•
|
each of our named executive officers;
|
•
|
all of our executive officers and directors as a group; and
|
•
|
the selling stockholder, which is indicated by the stockholder shown as having shares listed in the column “Shares Being Offered.”
|
(1)
|
The address of ALPHAEON is 4040 MacArthur Blvd., Suite 210, Newport Beach, California 92660. ALPHAEON’s voting and investment decisions are made by its board of directors which, as of the date of this prospectus, consists of Simone Blank, Jost Fischer, Juliet Tammenoms Bakker, Bosun Hau, Robert Grant, Vikram Malik and Richard Taketa. These members of ALPHAEON’s board of directors may be deemed to share voting, investment or dispositive power over the shares held by ALPHAEON.
|
•
|
100,000,000 shares of common stock, par value $0.00001 per share; and
|
•
|
10,000,000 shares of preferred stock, par value $0.00001 per share.
|
•
|
the number of shares constituting the series and the distinctive designation of the series;
|
•
|
the dividend rate on the shares of the series, whether dividends will be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of the series;
|
•
|
whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights;
|
•
|
whether the series will have conversion privileges and, if so, the terms and conditions of conversion;
|
•
|
whether or not the shares of the series will be redeemable or exchangeable, and, if so, the dates, terms and conditions of redemption or exchange, as the case may be;
|
•
|
whether the series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of the sinking fund; and
|
•
|
the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series.
|
•
|
prior to such time the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
•
|
at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
|
•
|
subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
•
|
1% of the number of shares of our common stock then outstanding, which will equal approximately
261,404
shares immediately after this offering; or
|
•
|
the average weekly trading volume of our common stock on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
•
|
banks, financial institutions, or insurance companies;
|
•
|
tax-exempt organizations;
|
•
|
tax-qualified retirement plans;
|
•
|
broker-dealers and traders in securities, commodities or currencies;
|
•
|
certain former citizens or long-term residents of the United States;
|
•
|
persons that own, or are deemed to own, more than 5% of our common stock (except to the extent specifically set forth below);
|
•
|
regulated investment companies or real estate investment trusts;
|
•
|
“controlled foreign corporations,” “passive foreign investment companies,” or corporations that accumulate earnings to avoid U.S. federal income tax;
|
•
|
persons that hold our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment or risk reduction strategy;
|
•
|
holders deemed to sell our common stock under the constructive sale provisions of the Code;
|
•
|
holders who hold or receive our common stock pursuant to the exercise of employee stock options or otherwise as compensation;
|
•
|
holders who are subject to the alternative minimum tax or Medicare contribution tax; or
|
•
|
partnerships and other pass-through entities, and investors in such pass-through entities or entities that are treated as disregarded entities for U.S. federal income tax purposes (regardless of their places of organization or formation).
|
Underwriter
|
Number of
Shares
|
|
Cantor Fitzgerald & Co.
|
|
|
Mizuho Securities USA LLC
|
|
|
SunTrust Robinson Humphrey, Inc.
|
|
|
JMP Securities LLC
|
|
|
Total
|
5,000,000
|
|
|
Per Share
|
|
Total
|
||||
|
Without Option to Purchase Additional Shares
|
|
With Option to Purchase Additional Shares
|
|
Without Option to Purchase Additional Shares
|
|
With Option to Purchase Additional Shares
|
Public offering price
|
$
|
|
$
|
|
$
|
|
$
|
Underwriting discounts and commissions paid by us
|
$
|
|
$
|
|
$
|
|
$
|
Underwriting discounts and commissions paid by the selling stockholder
|
$
|
|
$
|
|
$
|
|
$
|
Proceeds to us, before expenses
|
$
|
|
$
|
|
$
|
|
$
|
Proceeds to the selling stockholder, before expenses
|
$
|
|
$
|
|
$
|
|
$
|
•
|
sell, offer, contract, lend or grant any option to sell (including any short sale), pledge, transfer, establish an open “put equivalent position” within the meaning of Rule 16a-l(h) under the Exchange Act, or
|
•
|
otherwise dispose of any shares of common stock, options or warrants to acquire shares of common stock, or securities exchangeable or exercisable for or convertible into shares of common stock currently or hereafter owned either of record or beneficially, or
|
•
|
file any registration statement under the Securities Act, or
|
•
|
publicly announce an intention to do any of the foregoing for a period of (i) in the case of us, our officers or directors a period, 90 days and (ii) in the case of the selling stockholder 180 days after the date of this prospectus without the prior written consent of Cantor Fitzgerald & Co.
|
•
|
To any legal entity that is a qualified investor as defined in the Prospectus Directive;
|
•
|
To fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the relevant underwriters; or
|
•
|
In any other circumstances falling within Article 3(2) of the Prospectus Directive;
|
•
|
our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 29, 2018;
|
•
|
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 10, 2018; and
|
•
|
our Current Reports on Form 8-K filed with the SEC on February 12, 2018, March 29, 2018, May 10, 2018, May 16, 2018 and June 1, 2018.
|
Cantor
|
Mizuho Securities
|
||
SunTrust Robinson Humphrey
|
JMP Securities
|
|
Amount to be paid
|
||
SEC registration fee
|
|
$18,678
|
|
FINRA filing fee
|
|
$23,003
|
|
Printing and engraving expenses
|
|
$15,000
|
|
Legal fees and expenses
|
|
$175,000
|
|
Accounting fees and expenses
|
|
$100,000
|
|
Transfer agent and registrar fees and expenses
|
|
$7,500
|
|
Miscellaneous expenses
|
|
$12,000
|
|
Total
|
|
$351,181
|
|
•
|
transaction from which the director derives an improper personal benefit;
|
•
|
act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
|
•
|
willful or negligent violations of Delaware law governing the authorizations of dividends, stock repurchases, and redemptions, as provided in Section 174 of the DGCL; or
|
•
|
breach of a director’s duty of loyalty to the corporation or its stockholders.
|
1.
|
On January 6, 2018,
we issued to
certain of our directors, officers and employees
an aggregate of 230,516 restricted stock units to be settled in shares of our common stock under our
2017 Omnibus Incentive Plan
, or the 2017 plan.
|
2.
|
On January 6, 2018, we granted to certain of our directors, officers, and employees options to purchase an aggregate of
1,496,005
shares of common stock with a per share exercise price of $9.98 under the 2017 plan.
|
(a)
|
Exhibits.
|
i.
|
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
|
ii.
|
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit Number
|
|
Exhibit Title
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
(x)
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
S-1
|
|
333-222478
|
|
2.1
|
|
1/9/18
|
|
|
||
|
|
8-K
|
|
001-38381
|
|
3.1
|
|
2/12/18
|
|
|
||
|
|
8-K
|
|
001-38381
|
|
3.2
|
|
2/12/18
|
|
|
||
|
|
S-1/A
|
|
333-222478
|
|
4.1
|
|
1/25/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
4.2
|
|
1/9/18
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
S-1
|
|
333-222478
|
|
10.1
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.2
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.3
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.4
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.5
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.6
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.7
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.8
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.9
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.10
|
|
1/9/18
|
|
|
||
|
|
S-1/A
|
|
333-222478
|
|
10.11
|
|
1/25/18
|
|
|
||
|
|
S-1/A
|
|
333-222478
|
|
10.12
|
|
1/25/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.13
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.14
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.15
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.16
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.17
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.18
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.19
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.20
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.21
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.22
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.23
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.24
|
|
1/9/18
|
|
|
||
|
|
S-1
|
|
333-222478
|
|
10.25
|
|
1/9/18
|
|
|
||
|
|
S-1/A
|
|
333-222478
|
|
10.26
|
|
1/25/18
|
|
|
||
|
|
S-1/A
|
|
333-222478
|
|
10.27
|
|
1/25/18
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
S-1
|
|
333-222478
|
|
21.1
|
|
1/9/18
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
+
|
Indicates management contract or compensatory plan.
|
†
|
The Registrant has received confidential treatment with respect to certain omitted portions of this exhibit.
|
EVOLUS, INC.
|
|
|
/s/ David Moatazedi
|
By:
|
David Moatazedi
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David Moatazedi
|
|
President, Chief Executive Officer and
Member of the Board of Directors
(Principal Executive Officer)
|
|
July 16, 2018
|
David Moatazedi
|
|
|
||
|
|
|
|
|
/s/ Lauren Silvernail
|
|
Chief Financial Officer and Executive Vice President, Corporate Development (Principal Financial Officer)
|
|
July 16, 2018
|
Lauren Silvernail
|
|
|
||
|
|
|
|
|
/s/ Vikram Malik
|
|
Chairman of the Board of Directors
|
|
July 16, 2018
|
Vikram Malik
|
|
|
||
|
|
|
|
|
/s/ Simone Blank
|
|
Director
|
|
July 16, 2018
|
Simone Blank
|
|
|
||
|
|
|
|
|
/s/ Bosun Hau
|
|
Director
|
|
July 16, 2018
|
Bosun Hau
|
|
|
||
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/s/ Kristine Romine, M.D.
|
|
Director
|
|
July 16, 2018
|
Kristine Romine, M.D.
|
|
|
||
|
|
|
|
|
/s/ Robert Hayman
|
|
Director
|
|
July 16, 2018
|
Robert Hayman
|
|
|
||
|
|
|
|
|
/s/ David Gill
|
|
Director
|
|
July 16, 2018
|
David Gill
|
|
|
Very truly yours,
|
|
|
|
EVOLUS, INC.
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
|
|
ALPHAEON Corporation
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
CANTOR FITZGERALD & CO.
|
|
MIZUHO SECURITIES USA LLC
|
|
Acting individually and as Representatives
|
|
of the several Underwriters named in
|
|
the attached Schedule A.
|
|
|
|
CANTOR FITZGERALD & CO.
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
|
|
MIZUHO SECURITIES USA LLC
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
Underwriters
|
|
Number of Firm Shares to be Purchased
|
Cantor Fitzgerald & Co.
|
|
[●]
|
Mizuho Securities USA LLC
|
|
[●]
|
JMP Securities LLC
|
|
[●]
|
SunTrust Robinson Humphrey, Inc.
|
|
[●]
|
Total
|
|
[●]
|
1.
|
[●]
|
•
|
Sell or Offer to Sell any Shares or Related Securities currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the undersigned or such Family Member,
|
•
|
enter into any Swap,
|
•
|
make any demand for, or exercise any right with respect to, the registration under the Securities Act of the offer and sale of any Shares or Related Securities, or cause to be filed a registration statement, prospectus or prospectus supplement (or an amendment or supplement thereto) with respect to any such registration, or
|
•
|
publicly announce any intention to do any of the foregoing.
|
(i)
|
to the transfer of Shares or Related Securities by gift, or by will or intestate succession to a Family Member or to a trust whose beneficiaries consist exclusively of one or more of the undersigned and/or a Family Member;
|
(ii)
|
if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, to (1) transfers of Shares or Related Securities to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate (as defined under Rule 12b-2 of the Exchange Act) of the undersigned or (2) distributions of Shares or Related Securities to limited partners, limited liability company members or stockholders of the undersigned or holders of similar equity interests in the undersigned; provided that, in each case, such transfer or distribution shall not involve a disposition for value;
|
(iii)
|
if the undersigned is a trust, to transfers to the beneficiary of such trust;
|
(iv)
|
to transfers to any investment fund or other entity controlled or managed by the undersigned;
|
(v)
|
to transfers to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (iv);
|
(vi)
|
to transfers to the Company (1) pursuant to the exercise, in each case on a “cashless” or “net exercise” basis, of any option to purchase Shares granted by the Company pursuant to any employee benefit plans or arrangements described in or filed as an exhibit to the registration statement with respect to the Offering, where any Shares received by the undersigned upon any such exercise will be subject to the terms of this lock-up agreement, or (2) for the purpose of satisfying any withholding taxes (including estimated taxes) due as a result of the exercise of any option to purchase Shares or the vesting of any restricted stock awards granted by the Company pursuant to employee benefit plans or arrangements described in or filed as an exhibit to the registration statement with respect to the Offering, in each case on a “cashless” or “net exercise” basis, where any Shares received by the undersigned upon any such exercise or vesting will be subject to the terms of this lock-up agreement; provided that in the case of any transfer to the Company pursuant this clause, any filing under Section 16(a) of the Exchange Act shall state that such transfer to the Company relates to a “cashless” or “net exercise” of stock options or a tax withholding of shares in connection with the exercise of stock options or the vesting of a restricted stock award, as applicable, and that any Shares received by the undersigned upon any such exercise or vesting and not transferred to the Company will be continue to be subject to the terms of this lock-up agreement;
|
(vii)
|
to transfers pursuant to an order of a court or regulatory agency; provided that in the case of any transfer pursuant this clause, any filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of Shares, shall state that such transfer is pursuant to an order of a court or regulatory agency, unless such a statement would be prohibited by any applicable law, regulation or order of a court or regulatory authority;
|
(viii)
|
to transfers of Shares acquired in open market transactions after the completion of the Offering;
|
(ix)
|
in response to a bona fide third-party takeover bid made to all holders of Shares or any other, merger, consolidation, stock exchange or other similar transaction whereby all or substantially all of the Shares are acquired by a third party;
|
(x)
|
to transfers of Shares to Longitude Venture Partners II, L.P. or Dental Innovations BVBA, as collateral agent, or any successors, transferees and assigns, upon default under, and pursuant to the terms of, certain pledge and security agreements between Alphaeon Corporation and each of Longitude Venture Partners II, L.P. and Dental Innovations BVBA, as collateral agent; provided that the undersigned shall promptly notify Cantor of any such default and transfer
1
;
|
|
(xi)
|
to transfers of Shares to Longitude Venture Partners II, L.P. and certain other holders of convertible promissory notes of Alphaeon Corporation outstanding as of the date hereof, in satisfaction of all or a portion of its outstanding indebtedness to such holders
2
; and
|
(xii)
|
to the undersigned’s exercise of its rights requiring the Company to file a registration statement under the Securities Act for the offer and sale of any Shares or Related Securities; provided, that such draft registration statement shall be confidentially submitted with the Securities and Exchange Commission and no public filing of such registration statement shall be permitted during the Lock-Up Period
3
;
|
(I)
|
each transferee executes and delivers to Cantor and Mizuho or already has in effect an agreement in form and substance satisfactory to Cantor stating that such transferee is receiving and holding such Shares and/or Related Securities subject to the provisions of this letter agreement and agrees not to Sell or Offer to Sell such Shares and/or Related Securities, engage in any Swap or engage in any other activities restricted under this letter agreement except in accordance with this letter agreement (as if such transferee had been an original signatory hereto), and
|
(II)
|
prior to the expiration of the Lock-up Period, no public disclosure or filing under the Exchange Act by any party to the transfer (donor, donee, transferor or transferee) shall be required, or made voluntarily, reporting a reduction in beneficial ownership of Shares in connection with such transfer.
|
|
•
|
“
Call Equivalent Position
”
shall have the meaning set forth in Rule 16a-1(b) under the Exchange Act.
|
•
|
“
Exchange Act
”
shall mean the Securities Exchange Act of 1934, as amended.
|
•
|
“
Family Member
” shall mean the spouse of the undersigned, an immediate family member of the undersigned or an immediate family member of the undersigned’s spouse, in each case living in the undersigned’s household or whose principal residence is the undersigned’s household (regardless of whether such spouse or family member may at the time be living elsewhere due to educational activities, health care treatment, military service, temporary internship or employment or otherwise). “
Immediate family member
” as used above shall have the meaning set forth in Rule 16a-1(e) under the Exchange Act.
|
•
|
“
Lock-up Period
” shall mean the period beginning on the date hereof and continuing through the close of trading on the date that is 90 days after the date of the Prospectus (as defined in the Underwriting Agreement)[; provided that the Lock-up Period for the Selling Stockholder shall mean the period beginning on the date hereof and continuing through the close of trading on the date that is 180 days after the date of the Prospectus].
|
•
|
“
Put Equivalent Position
” shall have the meaning set forth in Rule 16a-1(h) under the Exchange Act.
|
•
|
“
Related Securities
” shall mean any options or warrants or other rights to acquire Shares or any securities exchangeable or exercisable for or convertible into Shares, or to acquire other securities or rights ultimately exchangeable or exercisable for or convertible into Shares.
|
•
|
“
Securities Act
” shall mean the Securities Act of 1933, as amended.
|
•
|
“
Sell or Offer to Sell
” shall mean to:
|
-
|
sell, offer to sell, contract to sell or lend,
|
-
|
effect any short sale or establish or increase a Put Equivalent Position or liquidate or decrease any Call Equivalent Position
|
-
|
pledge, hypothecate or grant any security interest in, or
|
-
|
in any other way transfer or dispose of,
|
•
|
“
Swap
” shall mean any swap, hedge or similar arrangement or agreement that transfers, in whole or in part, the economic risk of ownership of Shares or Related Securities, regardless of whether any such transaction is to be settled in securities, in cash or otherwise.
|
|
K&L GATES LLP
1 PARK PLAZA
TWELFTH FLOOR
IRVINE, CA 92614
T 949.253.0900 F 949.253.0902 klgates.com
|
|
1.
|
Separation
. I agree that my roles as Chief Executive Officer and President of Company and as a member of Company’s Board of Directors (and positions I hold at any subsidiary or affiliate of Company) ceased effective May 6, 2018. I will continue to assist Company in a transitionary capacity as a non-executive employee and my employment status with Company will cease effective May 21, 2018 (my “
Termination Date
”).
|
2.
|
Return of Property
. I warrant and represent that I have or will on my Termination Date have returned all Company property, including identification cards or badges, access codes or devices, keys, laptops, computers, telephones, mobile phones, hand-held electronic devices, credit cards, electronically stored documents or files, physical files, and any other Company property in my possession.
|
3.
|
Severance
. In exchange for my entering into this Agreement, Company will provide me with each of the following after my Termination Date:
|
3.1.
|
Cash Severance
. Company will pay Employee a severance amount equal to (i) 12 months of base salary, which will be paid periodically pursuant to Company’s regularly scheduled pay periods and subject to customary payroll deductions and (ii) $193,150.69 (representing a prorated portion of Employee’s 2018 annual cash bonus), which will be paid in a lump sum on the Termination Date and subject to customary payroll deductions (collectively, the “
Severance Amount
”).
|
3.2.
|
Option Vesting
. Employee was granted an option to purchase 688,625 shares of Company common stock (“
Common Stock
”) on January 6, 2018 pursuant to a Dueling Option Award Agreement (the “
Stock Option
”) under the Evolus, Inc. 2017 Omnibus Incentive Plan (the “
Plan
”). Upon Employee’s Termination Date the Stock Option shall not be exercisable as to any portion of the Common Stock underlying the Stock Option. The Stock Option will remain outstanding and will continue to become exercisable as though Employee remained in service through January 6, 2019 (such that on January 6, 2019, the Stock Option will vest as to 172,156 shares of Common Stock). These vested options shall be exercisable at any time prior to February 6, 2020 and may be exercised through the surrender of shares with a price equal to the Stock Option exercise price or cashless exercise as provided in the Plan. Except as set forth herein, the terms and conditions covering the Stock Option will remain unchanged.
|
3.3.
|
RSU Earning
. Employee was granted 100,224 restricted stock units on January 6, 2018 pursuant to a RSU Award Agreement under the Plan (the “
RSUs
”). The earning and payment of the RSUs will continue according to the schedule in the RSU Award
|
3.4.
|
Continuation of Benefits
. Company will provide continuation of health benefits through the end of the 12-month anniversary of the Termination Date for Employee and his dependents.
|
3.5.
|
Payment of Expenses
. Company will pay to Employee all business expenses submitted in accordance with Company’s expense reimbursement policies.
|
4.
|
General Release
. In return for the promises in Section 3 above, I, on my own behalf, and on behalf of my heirs, grantees, agents, representatives, devisees, trustees, assigns, assignors, attorneys, and any other entities or persons in which I have an interest (collectively “
Releasors
”) hereby release and forever discharge Company and each of its past and present agents, employees, representatives, officers, directors, members, managers, attorneys, accountants, insurers, advisors, consultants, assigns, successors, heirs, predecessors in interest, joint ventures, affiliates, subsidiaries, parents, and commonly-controlled entities (collectively “
Releasees
”) from all liabilities, causes of action, charges, complaints, suits, claims, obligations, costs, losses, damages, rights, judgments, attorneys’ fees, expenses, bonds, bills, penalties, fines, and all other legal responsibilities of any form whatsoever, whether known or unknown, whether suspected or unsuspected, whether fixed or contingent, liquidated or unliquidated that I had or may claim to have against any of the Releasees, including Company, up through and including the date this Agreement is executed by me, including any and all claims arising under any theory of law, whether common, constitutional, statutory or other of any jurisdiction, foreign or domestic, whether known or unknown, whether in law or in equity, which I had or may claim to have against Company or any of the other Releasees. This general release is intended to have the broadest possible application and releases any tort, contract, common law, constitutional, statutory, and other type of claim I had or may claim to have against Company and/or any of the other Releasees. This general release also includes, but is not limited to, (i) all claims of any kind related to my employment with, compensation by and separation from Company, as well as (ii) all claims relating to any acts or omissions occurring prior to or on the date of this Agreement between me and Company as well as between me and any of the other Releasees. Releasors specifically release, among other things, claims under all applicable state and federal laws of any kind, including, but not limited to, any claims based on age, sex, pregnancy, race, color, national origin, marital status, religion, veteran status, disability, sexual orientation, medical condition, or other anti-discrimination laws of any type, including, without limitation, Title VII of the Civil Rights Act of 1964 as amended, the Age Discrimination in Employment Act (Title 29, United States Code, Sections 621, et seq.) (“
ADEA
”), the Americans with Disabilities Act, the Fair Labor Standards Act, the Family Medical Leave Act, the California Fair Employment and Housing Act, the California Workers’
|
5.
|
Release of Age Discrimination Claims
. I understand that the general release in Section 4 above includes a waiver of any and all rights and claims I had or may claim to have against Company as well as any of the other Releasees, including any rights and claims which I may claim to have arising under the ADEA. I admit that this Agreement satisfies the requirements of 29 U.S.C. § 626(f). I also acknowledge and agree that I have read and understand the terms of this Agreement. I represent that I have been advised in writing by this Agreement to consult with an attorney of my choosing regarding the waiver of rights and claims under the ADEA. I also acknowledge that I have obtained and considered such legal counsel as I deem necessary, such that I am entering into this Agreement freely, knowingly, and voluntarily. I further acknowledge that I have been given at least 21 days in which to consider whether or not to enter into this Agreement. I understand that, at my option, I may elect not to use the full 21-day period. I also understand that this Agreement shall not become enforceable until the eighth day after I sign it. If I do not revoke my acceptance within the seven-day period after this Agreement is executed by me, I understand this Agreement shall become binding and enforceable on the eighth day. I further understand that I am not waiving any rights or claims under the ADEA that may arise after the effective date of this Agreement.
|
6.
|
Waiver
. I understand and agree that all of my rights under California Civil Code Section 1542 are expressly waived. I understand that Section 1542 provides as follows:
|
6.1.
|
I understand that waiving my rights under Civil Code Section 1542 means that even if I should eventually suffer some damage arising out of my employment and/or separation from employment with Company or any of the other Releasees, that I will not be able to make any claims for those damages, even as to claims which may now exist, but which I do not know exist, and which if known would have affected my decision to sign this Agreement. I acknowledge that I may discover facts or law different from, or in addition to, the facts or law that I know or believe to be true with respect to the claims released in this Agreement and agree, nonetheless, that this Agreement and the releases contained in it shall be and remain effective in all respects notwithstanding such different or additional facts or the discovery of them. I further declare and represent that I intend this Agreement to be complete and not subject to any claim of mistake, and that the releases herein express full and complete releases by me and the other Releasors, and that I intend that the general release by me herein shall be final and complete with respect to Company as well as all other Releasees. I have executed this Agreement with the full knowledge that the general release in Section 4 combined with my waiver of any rights under Civil Code Section 1542 cover all possible claims against Company and any of the other Releasees, to the fullest extent permitted by law.
|
7.
|
No Assignment
. I warrant and represent that I have not assigned or transferred to any person any released matter or any right to the payment or other consideration provided by this Agreement. I agree to defend, indemnify and hold Company and any of the other Releasees harmless from any and all claims based on or in connection with or arising out of any such assignment or transfer made, purported or claimed.
|
8.
|
No Wrongdoing
. I understand that, by signing this Agreement, Company does not admit any wrongdoing and makes no admission that it or any of the other Releasees has engaged, or is now engaging, in any unlawful conduct. I am also admitting no wrongdoing by signing this Agreement. Company and I agree that this Agreement may never be treated as an admission of liability by any party for any purpose. Company and I also agree that no use of this Agreement or any comments made by either party during the discussions or negotiations regarding this Agreement will be used by a party or their representatives in connection with any subsequent legal action except for an action to enforce this Agreement.
|
9.
|
Confidential Information
. I understand that my obligations under the confidentiality provisions in
EXHIBIT A
remain in effect and survive the termination of my employment with Company.
|
10.
|
Non-Disparagement
. In addition to any other non-disparagement agreement to which I may be bound, I expressly agree that I will not in any way disparage or otherwise cause to be published or disseminated any negative statements, remarks, comments or information regarding Company or any of the other Releasees. Notwithstanding the foregoing, I shall not be restrained or prohibited, and it shall not be a breach of this Agreement by me if I make any statements in any letters, legal filings or other related documents or proceedings in each case
|
11.
|
General
. I acknowledge that I have carefully read and fully understand the nature of this Agreement, that I have been advised to consult with an attorney of my choosing before executing this Agreement, that I have had the opportunity to consider this Agreement, and that all of my questions concerning this Agreement have been answered to my satisfaction. I also agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not apply in the interpretation of this Agreement. The provisions of this Agreement set forth the entire agreement between me and Company concerning my severance pay and benefits and my termination of employment. Any other contrary promises, written or oral, are replaced by this Agreement, and are no longer effective unless they are contained in this document or are expressly deemed to survive the cessation of my employment with Company in accordance with the terms of the written document in which they are contained. The validity, interpretation and performance of this Agreement shall be construed and interpreted according to the laws of the State of California. Any action arising out of or relating to this Agreement shall be brought in a court of competent jurisdiction located in the County of Orange, State of California. I acknowledge that I have received all compensation to which I am currently entitled from Company and any of the other Releasees through my separation date, including, without limitation, salary, bonuses and vacation pay.
|
12.
|
Attorneys’ Fees
. In the event that any proceeding or action is brought by either party to enforce or interpret the terms of this Agreement, the prevailing party in such proceeding or action shall be entitled to recover its costs of suit, including reasonable attorney’s fees.
|
13.
|
Representations and Warranties
.
|
13.1.
|
This Agreement in all respects has been voluntarily and knowingly entered into by me.
|
13.2.
|
I had an opportunity to seek legal advice from legal counsel of my choice with respect to the advisability of executing this Agreement
|
13.3.
|
I have made such investigation of the facts pertaining to this Agreement as I deem necessary.
|
13.4.
|
The terms of this Agreement are the result of negotiations between me and Company and are entered into in good faith by us in accordance with California law.
|
13.5.
|
This Agreement has been carefully read by me and the contents hereof are known and understood by me.
|
1.
|
POSITION AND RESPONSIBILITIES
|
2.
|
COMPENSATION AND BENEFITS
|
3.
|
AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
|
4.
|
TERMINATION BY EMPLOYEE
|
5.
|
TERMINATION OBLIGATIONS
|
6.
|
INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION
|
7.
|
ARBITRATION
|
8.
|
AMENDMENTS; WAIVERS; REMEDIES
|
9.
|
ASSIGNMENT; BINDING EFFECT
|
11.
|
NOTICES
|
12.
|
SEVERABILITY
|
13.
|
TAX MATTERS
|
i.
|
Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, Employee under any other Company plan or agreement (such payments or benefits are collectively referred to as the “
Benefits
”) would be subject to the excise tax (the “
Excise Tax
”) imposed under Section 4999 of the Code, the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is referred to hereinafter as the “
Limited Benefit Amount
”). Unless Employee shall have given prior written notice specifying a different order to the Company to effectuate the Limited Benefit Amount, any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Benefits by first reducing or eliminating amounts which are payable from any cash severance, then from any payment in respect of an equity award that is not covered by Treas. Reg. Section 1.280G-1 Q/A-24(b) or (c), then from any payment in respect of an equity award that is covered by Treas. Reg. Section 1.280G-1 Q/A-24(c), in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as defined below). Any notice given by Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing Employee’s rights and entitlements to any benefits or compensation.
|
14.
|
GOVERNING LAW
|
15.
|
INTERPRETATION
|
16.
|
OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT
|
17.
|
COUNTERPARTS
|
18.
|
AUTHORITY
|
19.
|
ENTIRE AGREEMENT
|
20.
|
EMPLOYEE ACKNOWLEDGEMENT
|
1.
|
Proprietary Information
.
|
2.
|
Interference with Business
.
|
3.
|
Inventions
.
|
(2)
|
Result from any work performed by the employee for the employer.”
|
4.
|
Former or Conflicting Agreements
.
|
5.
|
Termination
.
|
6.
|
No Implied Employment Rights
.
|
7.
|
Remedies
.
|
8.
|
Miscellaneous Provisions
.
|
Date:
__5/5/2018_________
|
David Motazedi
|
Date:
_5/5/2018_______
|
David Moatazedi
|
1.
|
POSITION AND RESPONSIBILITIES
|
2.
|
COMPENSATION AND BENEFITS
|
3.
|
AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
|
4.
|
TERMINATION BY EMPLOYEE
|
5.
|
TERMINATION OBLIGATIONS
|
6.
|
INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION
|
7.
|
ARBITRATION
|
8.
|
ATTORNEYS’ FEES AND COSTS
|
9.
|
AMENDMENTS; WAIVERS; REMEDIES
|
10.
|
ASSIGNMENT; BINDING EFFECT
|
11.
|
NOTICES
|
12.
|
SEVERABILITY
|
13.
|
TAX MATTERS
|
14.
|
GOVERNING LAW
|
15.
|
INTERPRETATION
|
16.
|
OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT
|
17.
|
COUNTERPARTS
|
18.
|
AUTHORITY
|
19.
|
ENTIRE AGREEMENT
|
20.
|
EMPLOYEE ACKNOWLEDGEMENT
|
1.
|
Proprietary Information
.
|
2.
|
Interference with Business
.
|
3.
|
Inventions
.
|
(2)
|
Result from any work performed by the employee for the employer.”
|
4.
|
Former or Conflicting Agreements
.
|
5.
|
Termination
.
|
6.
|
No Implied Employment Rights
.
|
7.
|
Remedies
.
|
8.
|
Miscellaneous Provisions
.
|
Date:
May 29, 2018_____
______
|
Lauren Silvernail
|
Date: May 29, 2018
|
Lauren Silvernail
Employee Name
|
1.
|
POSITION AND RESPONSIBILITIES
|
2.
|
COMPENSATION AND BENEFITS
|
3.
|
AT-WILL EMPLOYMENT; TERMINATION BY COMPANY
|
4.
|
TERMINATION BY EMPLOYEE
|
5.
|
TERMINATION OBLIGATIONS
|
6.
|
INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION
|
7.
|
ARBITRATION
|
8.
|
ATTORNEYS’ FEES AND COSTS
|
9.
|
AMENDMENTS; WAIVERS; REMEDIES
|
10.
|
ASSIGNMENT; BINDING EFFECT
|
11.
|
NOTICES
|
12.
|
SEVERABILITY
|
13.
|
TAX MATTERS
|
14.
|
GOVERNING LAW
|
15.
|
INTERPRETATION
|
16.
|
OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT
|
17.
|
COUNTERPARTS
|
18.
|
AUTHORITY
|
19.
|
ENTIRE AGREEMENT
|
20.
|
EMPLOYEE ACKNOWLEDGEMENT
|
/s/ Ernst & Young LLP
|
Irvine, California
|
July 16, 2018
|
|