Item 1.01
Entry into a Material Definitive Agreement.
Lease Agreement
As previously reported, Evolus, Inc. (the “Company”) is a party to a sublease (the “Sublease”) for approximately 17,758 rentable square feet consisting of the twelfth floor of the building located at 520 Newport Center Drive, Newport Beach, California 92660 (the “Premises”).
On May 15, 2019, the Company entered into a lease (the “Lease”) with 520 Newport Center Drive LLC (the “Landlord”) for the Premises which will commence on February 1, 2020 and expire on January 31, 2025 (the “Initial Term”), with a right, under certain circumstances, to extend the term of the Lease for an additional 60 month term.
The Company will pay a basic rent ranging from $93,439 to $111,422 over the Initial Term of the Lease (the “Basic Rent”). In connection with the execution of the Sublease, the Company delivered to the Landlord a cash security deposit in the amount of $222,564.
The Company may, under certain circumstances, terminate the Lease on the 36 month anniversary of the Lease by providing written notice 12 months prior to such anniversary and paying a termination fee equal to (i) 6 months Basic Rent at the rate payable in effect as of the calendar month following the effective date of termination; plus (ii) the unamortized portion (based upon a constant amortization over a 5 year period with 7% interest) as of the effective date of termination of (A) brokerage commissions paid by Landlord in connection with this Lease, and (B) tenant improvement costs funded by Landlord.
The Lease also contains a right of first offer in favor of the Company for space on certain floors above and below the Premises.
The foregoing summary of the Lease is not complete and is qualified in its entirety by reference to the full text of the Lease, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1.
Underwriting Agreement
On May 15, 2019, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with ALPHAEON Corporation (the “Selling Stockholder”) and Morgan Stanley & Co. LLC (the “Underwriter”), relating to the sale of 4,000,000 shares (the “Shares”) of the Company’s common stock, $0.00001 par value per share by the Selling Stockholder to the Underwriter at a price of $19.25 per share (the “Offering”). The Company did not receive any proceeds from the sale of the Shares. Certain expenses related to the Offering will be payable by the Company. The Offering closed on May 20, 2019.
The Offering was made pursuant to a prospectus supplement, dated May 15, 2019, to the prospectus included in the Company’s registration statement on Form S-3 (File No. 333-230466), which was filed on March 22, 2019, amended on April 10, 2019 and became effective on April 15, 2019.
The Underwriting Agreement contains customary representations, warranties, and agreements by the Company, the Selling Stockholder and the Underwriter and also provides for customary indemnification by the Company, the Selling Stockholder and the Underwriter. In addition, pursuant to the terms of the Underwriting Agreement, the Company and certain of its officers, directors and the Selling Stockholder have entered into “lock-up” agreements with the Underwriter that, subject to certain exceptions, generally prohibit the sale, transfer, or other disposition of securities of the Company for a period of 60 days from the date of the Underwriting Agreement. A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report and is incorporated herein by reference. The foregoing description of the terms of the Underwriting Agreement is qualified in its entirety by the Underwriting Agreement. The opinion of K&L Gates LLP regarding the legality of the Shares is filed as Exhibit 5.1 to this Current Report.