UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterquarterly period ended September 30, 2020

March 31, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to

__________.

Commission file number: File Number: 001-39565

Vesper Healthcare Acquisition Corp.
The Beauty Health Company
(Exact name of registrant as specified in its charter)
Delaware85-1908962
(Exact Name of Registrant as Specified in Its Charter) 

Delaware85-1908962

(State or other jurisdiction of


incorporation or organization)

(I.R.S. Employer

Identification No.)

1819 West Avenue

Bay 2

Miami Beach, FL 33139

(Address of principal executive offices)

(786) 216-7037

(Issuer’s telephone number)

2165 Spring Street
Long Beach, CA 90806
(800) 603-4996
(Address of principal executive offices, including zip code)Registrant's telephone number, including area code
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock and one-third of one Redeemable WarrantVSPRUThe Nasdaq Stock Market LLC
Class A Common Stock, par value $0.0001 per shareSKINVSPRThe Nasdaq StockCapital Market LLC
Warrants, each exercisable for one share of Class A Common Stock at a price of $11.50VSPRWThe Nasdaq Stock Market LLC

Check

Indicate by check mark whether the issuerregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐


Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐


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 definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer☐☒Accelerated filer☐
Non-accelerated filer☒☐Smaller reporting company☒☐
Emerging growth company☒☐

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 pursuant to Section 13(a) of the Exchange Act. ☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒☐ No ☐

☒


As of November 16, 2020,May 6, 2024, there were 46,000,000123,632,222 shares of Class A common stock, par value $0.0001 per share, and 11,500,000 shares of Class B common stock,Common Stock, par value $0.0001 per share issued and outstanding.


VESPER HEALTHCARE ACQUISITION CORP.



THE BEAUTY HEALTH COMPANY
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2020

MARCH 31, 2024

TABLE OF CONTENTS


Page
PART I—FINANCIAL INFORMATION
Item 1.
3
3
4
5
6
7
Condensed Balance Sheet as of September 30, 20201
Condensed Statement of Operations for the period from July 8, 2020 (inception) through September 30, 20202
Condensed Statement of Changes in Stockholder’s Equity for the period from July 8, 2020 (inception) through September 30, 20203
Condensed Statement of Cash Flows for the period from July 8, 2020 (inception) through September 30, 20204
Notes to Unaudited Condensed Financial Statements5
Item 2.13
21
Item 3.15
28
Item 4.15
28
Part II. Other InformationPART II—OTHER INFORMATION
Item 1.
30
Item 1. Legal Proceedings1A.16
30
Item 1A. Risk Factors16
Item 2.16
30
Item 3.16
30
Item 4.16
30
Item 5.16
30
Item 6.17
31
18

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2

PART I -I— FINANCIAL INFORMATION


Item 1. Interim Financial Statements.

VESPER HEALTHCARE ACQUISITION CORP.


THE BEAUTY HEALTH COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2020

(UNAUDITED)

ASSETS   
Current asset – Cash $25,000 
Deferred offering costs  412,609 
TOTAL ASSETS $437,609 
     
LIABILITIES AND STOCKHOLDER’S EQUITY    
Current liabilities    
Accrued expenses $1,000 
Accrued offering costs  179,236 
Advance from related party  228,723 
Promissory note – related party  5,190 
Total Liabilities  414,149 
     
Commitments    
     
Stockholder’s Equity    
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding  — 
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; no issued and outstanding  — 
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 11,500,000 shares issued and outstanding (1)  1,150 
Additional paid-in capital  23,850 
Accumulated deficit  (1,540)
Total Stockholder’s Equity  23,460 
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY $437,609 

(1)Included an aggregate of 1,500,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full (see Note 5).

SHEETS

(in thousands, except for share amounts)
(Unaudited)

March 31, 2024December 31, 2023
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash$444,634$523,025
Accounts receivable, net of allowances for estimated credit losses of $7,228 and $6,604 at March 31, 2024 and December 31, 2023, respectively47,66654,697
Inventories95,72191,321
Income tax receivable1,204332
Prepaid expenses and other current assets25,59928,877
Total current assets614,824698,252
Property and equipment, net12,04814,226
Right-of-use assets, net16,38312,120
Intangible assets, net58,40562,123
Goodwill125,365125,818
Deferred income tax assets, net1,932531
Other assets15,78416,043
TOTAL ASSETS$844,741$929,113
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$37,312$44,768
Accrued payroll-related expenses15,45622,028
Syndeo Program reserves8,31421,009
Lease liabilities, current4,6484,598
Income tax payable3,4432,759
Other accrued expenses24,39519,846
Total current liabilities93,568115,008
Lease liabilities, non-current13,6889,319
Deferred income tax liabilities, net1,068702
Warrant liabilities5,0193,555
Convertible senior notes, net665,486738,372
Other long-term liabilities2,6172,767
Total liabilities781,446869,723
Commitments (Note 10)
Stockholders’ equity:
Class A Common Stock, $0.0001 par value; 320,000,000 shares authorized; 123,453,419 and 122,899,002 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively12 12 
Additional paid-in capital546,912 541,281 
Accumulated other comprehensive loss(4,083)(3,036)
Accumulated deficit(479,546)(478,867)
Total stockholders’ equity63,295 59,390 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$844,741 $929,113 
The accompanying notes are an integral part of thethese unaudited condensed financial statements.


3

VESPER HEALTHCARE ACQUISITION CORP.


THE BEAUTY HEALTH COMPANY
CONDENSED STATEMENTCONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIOD FROM JULY 8, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

(UNAUDITED)

Formation and operating costs $1,540 
Net loss $(1,540)
     
Weighted average shares outstanding, basic and diluted (1)  10,000,000 
Basic and diluted net loss per common share $(0.00)

(1)Excluded an aggregate of 1,500,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full (see Note 5).

COMPREHENSIVE INCOME (LOSS)

(in thousands, except for share and per share amounts)
(Unaudited)

Three Months Ended March 31,
20242023
Net sales$81,403 $86,278 
Cost of sales33,042 32,174 
Gross profit48,361 54,104 
Operating expenses:
Selling and marketing33,684 38,699 
Research and development2,807 2,336 
General and administrative28,861 30,379 
Total operating expenses65,352 71,414 
Loss from operations(16,991)(17,310)
Interest expense3,029 3,417 
Interest income(5,356)(4,315)
Other income, net(16,087)(418)
Change in fair value of warrant liabilities1,464 9,076 
Foreign currency transaction loss (gain), net1,297 (1,149)
Loss before provision for income taxes(1,338)(23,921)
Income tax benefit(659)(3,662)
Net loss$(679)$(20,259)
Comprehensive loss, net of tax:
Foreign currency translation adjustments(1,047)888 
Comprehensive loss$(1,726)$(19,371)
Net loss per share
Basic$(0.01)$(0.15)
Diluted$(0.10)$(0.15)
Weighted average common shares outstanding
Basic123,120,426 132,420,762 
Diluted144,477,208 132,420,762 
The accompanying notes are an integral part of thethese unaudited condensed financial statements.


4

VESPER HEALTHCARE ACQUISITION CORP.


THE BEAUTY HEALTH COMPANY
CONDENSED STATEMENTCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’SSTOCKHOLDERS’ EQUITY

FOR THE PERIOD FROM JULY 8, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

(UNAUDITED)

  Class B Common Stock  

Additional

Paid in

  Accumulated  

Total

Stockholder’s

 
  Shares  Amount  Capital  Deficit  Equity 
Balance – July 8, 2020 (inception)  —  $—  $—  $—  $— 
                     
Issuance of Class B common stock to Sponsor (1)  11,500,000   1,150   23,850   —   25,000 
                     
Net loss  —   —   —   (1,540)  (1,540)
                     
Balance – September 30, 2020  11,500,000  $1,150  $23,850  $(1,540) $23,460 

(1)Included an aggregate of 1,500,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full (see Note 5).

(DEFICIT)

(in thousands, except for share amounts)
(Unaudited)

Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Equity (Deficit)
SharesAmount
BALANCE, December 31, 2022132,214,695 $14 $550,320 $(4,530)$(378,751)$167,053 
Net loss— — — — (20,259)(20,259)
Issuance of Common Stock pursuant to equity compensation plan473,049 — — — — — 
Shares withheld for tax withholdings on vested stock awards(170,415)— (2,195)— — (2,195)
Issuance of Common Stock relating to employee stock purchase plan— — 2,034 — — 2,034 
Share-based compensation— — 3,577 — — 3,577 
Common Stock relating to asset acquisition109,625 — 1,310 — — 1,310 
Foreign currency translation adjustment— — — 888 — 888 
BALANCE, March 31, 2023132,626,954 $14 $555,046 $(3,642)$(399,010)$152,408 
BALANCE, December 31, 2023122,899,002 $12 $541,281 $(3,036)$(478,867)$59,390 
Net loss— — — — (679)(679)
Issuance of Common Stock pursuant to equity compensation plan843,950 — — — — — 
Shares withheld for tax withholdings on vested stock awards(289,533)— (1,005)— — (1,005)
Share-based compensation— — 6,636 — — 6,636 
Foreign currency translation adjustment— — — (1,047)— (1,047)
BALANCE, March 31, 2024123,453,419 $12 $546,912 $(4,083)$(479,546)$63,295 

The accompanying notes are an integral part of thethese unaudited condensed financial statements.



VESPER HEALTHCARE ACQUISITION CORP.





5
THE BEAUTY HEALTH COMPANY
CONDENSED STATEMENTCONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIOD FROM JULY 8, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

(UNAUDITED)

Cash Flows from Operating Activities:   
Net loss $(1,540)
Changes in operating assets and liabilities:    
Accrued expenses  1,000 
Net cash used in operating activities  (540)
     
Cash Flows from Financing Activities:    
Proceeds from issuance of Class B common stock to Sponsor  25,000 
Advance from related party  228,723 
Proceeds from promissory note – related party  5,190 
Payment of offering costs  (233,373)
Net cash provided by financing activities  25,540 
     
Net Change in Cash  25,000 
Cash — Beginning  — 
Cash — Ending $25,000 
     
Non-Cash investing and financing activities:    
Deferred offering costs included in accrued offering costs $179,236 

(in thousands)
(Unaudited)


Three Months Ended March 31,
20242023
Cash flows from operating activities:
Net loss$(679)$(20,259)
Adjustments to reconcile net loss to net cash from operating activities
Share-based compensation6,636 3,577 
Amortization of intangible assets4,985 3,874 
Depreciation of property and equipment2,773 1,834 
Amortization of other assets890 548 
Amortization of debt issuance costs951 1,058 
Inventory write-down5,479 3,337 
Provision for estimated credit losses656 1,093 
Change in fair value of warrant liabilities1,464 9,076 
Gain on repurchase of convertible senior notes, net(16,087)— 
Deferred income taxes(1,030)(279)
Other, net3,108 (515)
Changes in operating assets and liabilities:
Accounts receivable5,879 4,793 
Inventories(11,081)(13,905)
Prepaid expenses, other current assets, and income tax receivable1,936 (1,325)
Accounts payable, accrued expenses, and income tax payable(20,786)(3,829)
Other, net(1,948)(2,088)
Net cash used for operating activities(16,854)(13,010)
Cash flows from investing activities:
Cash paid for intangible assets(1,458)(2,450)
Cash paid for property and equipment(344)(2,319)
Cash paid for asset acquisitions— (16,915)
Net cash used for investing activities(1,802)(21,684)
Cash flows from financing activities:
Repurchase of convertible senior notes(57,750)— 
Payment of tax withholdings on vested stock awards(868)(2,195)
Net cash used for financing activities(58,618)(2,195)
Net change in cash, cash equivalents, and restricted cash(77,274)(36,889)
Effect of foreign currency translation on cash(1,117)974 
Cash, cash equivalents, and restricted cash beginning of period523,025 568,197 
Cash, cash equivalents, and restricted cash end of period$444,634 $532,282 

The accompanying notes are an integral part of thethese unaudited condensed financial statements.

statements


VESPER HEALTHCARE ACQUISITION CORP.

6



THE BEAUTY HEALTH COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Note 1 — Description of Business

The Beauty Health Company (the “Company”) is a global category-creating company focused on delivering skin health experiences that help consumers reinvent their relationship with their skin, bodies, and self-confidence. The Company and its subsidiaries design, develop, manufacture, market, and sell esthetic technologies and products. The Company’s brands are pioneers: Hydrafacial in hydradermabrasion; SkinStylus in microneedling; and Keravive in scalp health. Together, with its powerful global community of estheticians, partners, and consumers, the Company is personalizing skin health for all ages, genders, skin tones, and skin types.

Historical Information

The Company (f.k.a. Vesper Healthcare Acquisition Corp. (the “Company”) was incorporated in the State of Delaware on July 8, 2020. The Company was formed forOn May 4, 2021, we consummated the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similarpreviously announced business combination pursuant to that certain Agreement and Plan of Merger, dated December 8, 2020, by and among Vesper Healthcare Acquisition Corp. (“Vesper Healthcare”), Hydrate Merger Sub I, Inc. (“Merger Sub I”), Hydrate Merger Sub II, LLC (“Merger Sub II”), LCP Edge Intermediate, Inc., the indirect parent of HydraFacial LLC, f.k.a. Edge Systems LLC (“Hydrafacial”), and LCP Edge Holdco, LLC (“LCP,” or “Former Parent,” and, in its capacity as the stockholders’ representative, the “Stockholders’ Representative”) (the “Merger Agreement”), which provided for: (a) the merger of Merger Sub I with one or more businesses (aand into Hydrafacial, with Hydrafacial continuing as the surviving corporation (the “First Merger”), and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Hydrafacial with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”).

The Company is not limited to As a particular industry or geographic region for purposesresult of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such,the First Merger, the Company is subject to allowns 100% of the risks associatedoutstanding common stock of Hydrafacial and each share of common stock and preferred stock of Hydrafacial was cancelled and converted into the right to receive a portion of the consideration payable in connection with early stage and emerging growth companies.

the Mergers. As a result of September 30, 2020,the Second Merger, the Company had not commenced any operations. All activity for the period from July 8, 2020 (inception) through September 30, 2020 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

The registration statement for the Company’s Initial Public Offering was declared effective on September 29, 2020. On October 2, 2020, the Company consummated the Initial Public Offering of 46,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwritersowns 100% of the over-allotment option to purchase an additional 6,000,000 Units, at $10.00 per Unit, generating gross proceeds of $460,000,000, which is describedoutstanding interests in Note 3.

SimultaneouslyMerger Sub II. In connection with the closing of the Initial Public Offering,Business Combination, the Company consummated the sale of 9,333,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to BLS Investor Group LLC (the “Sponsor”), generating gross proceeds of $14,000,000, which is described in Note 4.

Transaction costs amounted to $25,777,859 consisting of $9,200,000 of underwriting fees, $16,100,000 of deferred underwriting fees and $477,859 of other offering costs.

Following the closingowns, directly or indirectly, 100% of the Initial Public Offering on October 2, 2020, an amountstock of $460,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public OfferingHydrafacial and its subsidiaries and the salestockholders of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16)Hydrafacial as of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.

The Company’s management has broad discretion with respectimmediately prior to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at theeffective time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

The Company will provide its holders of the outstanding Public SharesFirst Merger (the “public stockholders”“Hydrafacial Stockholders”) with the opportunity to redeem all orhold a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.


VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or don’t vote at all.

Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.

The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by October 2, 2022 and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.

The Company will have until October 2, 2022 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that theClass A common stock, par value $0.0001 per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and will not apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”“Class A Common Stock”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.



VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation


The accompanying unaudited condensedinterim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for interimcomplete financial informationstatements. These statements reflect all normal and recurring adjustments which, in accordance with the instructionsopinion of management, are necessary to Form 10-Q and Article 10 of Regulation S-X ofpresent fairly the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows of the Company for the interim periods presented.

The accompanying unaudited condensed


These interim financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offeringaudited consolidated financial statements and notes thereto included in, or presented as filed with the SEC on September 30, 2020, as well asexhibits to, the Company’s Current ReportsAnnual Report on Form 8-K, as filed with the SEC on October 5, 2020 and October 8, 2020. The interim results10-K for the period from July 8, 2020 (inception) through September 30, 2020 are not necessarily indicative of the results to be expected for periodyear ended December 31, 20202023.

Subsequent to the issuance of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023, during the quarter ended June 30, 2023, the Company identified prior period misstatements related to the elimination of intercompany balances and right of return assets. Although the Company concluded that these misstatements were not material, either individually or in the aggregate, the Company elected to revise its previously issued unaudited consolidated financial statements to correct for any future periods.

Emerging Growth Company

these misstatements.


The revision of the previously issued unaudited consolidated financial statements is presented in the accompanying unaudited consolidated financial statements and related disclosures. For further detail, refer to Note 16 – Revision for Immaterial Misstatements.

7


Note 2 — Revenue

The Company generates revenue through manufacturing and selling its patented hydradermabrasion delivery systems (“Delivery Systems”). In conjunction with the sale of Delivery Systems, the Company also sells single-use tips, solutions, and serums used to provide a Hydrafacial treatment that cleanses, extracts, and hydrates the skin (collectively “Consumables”). Original Consumables are sold solely and exclusively by the Company (and from authorized retailers) and are available for purchase separately from the purchase of Delivery Systems. For both Delivery Systems and Consumables, revenue is an “emerging growth company,” as defined in Section 2(a)recognized upon transfer of control to the customer, which generally takes place at the point of shipment.

The Company manages its business on the basis of one operating segment and one reportable segment. As a result, the chief operating decision maker, who is the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.

The Company’s revenue disaggregated by major product line consists of the Securities Act,following for the periods indicated:
Three Months Ended March 31,
(in thousands)20242023
Net Sales
Delivery Systems$35,783 $45,353 
Consumables45,620 40,925 
Total net sales$81,403 $86,278 

Net sales by geographic region were as modified byfollows for the Jumpstart Our Business Startups Actperiods indicated:
Three Months Ended March 31,
(in thousands)20242023
Americas$50,326 $52,978 
Asia-Pacific (“APAC”)11,972 13,620 
Europe, the Middle East and Africa (“EMEA”)19,105 19,680 
Total net sales$81,403 $86,278 

Note 3 — Balance Sheet Components

Inventories consist of 2012 (the “JOBS Act”),the following as of the periods indicated:

(in thousands)March 31, 2024December 31, 2023
Raw materials$23,793 $24,406 
Finished goods71,928 66,915 
Total inventories$95,721 $91,321 

Accrued payroll-related expenses consist of the following as of the periods indicated:

(in thousands)March 31, 2024December 31, 2023
Accrued compensation and payroll taxes$7,296 $10,458 
Accrued sales commissions5,572 7,565 
Accrued benefits2,588 4,005 
Total accrued payroll-related expenses$15,456 $22,028 

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Other accrued expenses consist of the following as of the periods indicated:

(in thousands)March 31, 2024December 31, 2023
Sales and VAT tax payables$4,328 $4,971 
Accrued interest4,219 2,344 
Royalty liabilities3,783 3,914 
Other12,065 8,617 
Total other accrued expenses$24,395 $19,846 

As of March 31, 2024 and it may take advantageDecember 31, 2023, the Company has approximately $12 million and $15 million, respectively, of non-trade receivables from certain exemptionsof its manufacturing vendors resulting from various reporting requirementsthe sale of components to these vendors who manufacture or assemble final products for the Company, which is included in prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company purchases components directly from suppliers and do not reflect the sale of these components to the manufacturing vendors in net sales.

As of March 31, 2024 and December 31, 2023, total warranty reserve was approximately $7 million and $6 million, respectively. As of March 31, 2024, approximately $5 million was included in other accrued expenses and approximately $2 million was included in other long-term liabilities on the Condensed Consolidated Balance Sheets. As of December 31, 2023, approximately $4 million was included in other accrued expenses and approximately $2 million was included in other long-term liabilities on the Consolidated Balance Sheets.

As of March 31, 2024, the Company has approximately $2 million in restricted cash held as collateral for the Company’s credit cards.

Note 4 — Fair Value Measurements

The following tables present information about the Company’s assets and liabilities that are applicablemeasured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

The three levels of the fair value hierarchy are as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other public companiesthan Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not emerging growth companiesactive.

Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

As of March 31, 2024
(in thousands)Level 1Level 2Level 3Total
Assets
Cash, cash equivalents, and restricted cash:
Money market funds$363,070 $— $— $363,070 
International treasuries$— $3,740 $— $3,740 
Liabilities
Warrant liability — Private Placement Warrants$— $— $5,019 $5,019 

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As of December 31, 2023
(in thousands)Level 1Level 2Level 3Total
Assets
Cash, cash equivalents, and restricted cash:
Money market funds$458,676 $— $— $458,676 
International treasuries$— $3,777 $— $3,777 
Liabilities
Warrant liability — Private Placement Warrants$— $— $3,555 $3,555 

In October 2020, in connection with the consummation of Vesper Healthcare’s initial public offering, the Company issued 9,333,333 warrants to purchase shares of the Company’s Class A Common Stock at $11.50 per share (the “Private Placement Warrants”), to BLS Investor Group LLC. As of March 31, 2024 and December 31, 2023, the Company had approximately 7 million Private Placement Warrants outstanding for which the fair value was determined using a Monte Carlo simulation.

Note 5 — Property and Equipment, net

Property and equipment consist of the following as of the periods indicated:
(in thousands)
Useful life
(years)
March 31, 2024December 31, 2023
Leasehold improvementsShorter of remaining lease
term or estimated useful life		$12,399$12,323 
Machinery and equipment2-58,6838,597 
Furniture and fixtures2-75,9425,903 
Computers and equipment3-55,5305,479 
Tooling5887887 
Autos and trucks5199242 
Construction in progress765748 
Total property and equipment34,40534,179 
Less: accumulated depreciation and amortization(22,357)(19,953)
Property and equipment, net$12,048$14,226

Note 6 — Goodwill and Intangible Assets, net

Goodwill

The changes in the carrying value of goodwill for the three months ended March 31, 2024 is as follows (in thousands):

December 31, 2023$125,818 
Foreign currency translation impact(453)
March 31, 2024$125,365 

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Intangible Assets, Net

The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of March 31, 2024 were as follows:
(in thousands)Gross
Carrying
Value		Accumulated
Amortization		Net Carrying
Value		Estimated
Useful Life
(Years)
Developed technology$91,629 $(67,186)$24,443 3 - 10
Capitalized software19,782 (4,899)14,883 3 - 5
Customer relationships18,620 (12,060)6,560 5 - 10
Trademarks11,568 (5,571)5,997 15
Non-compete agreement5,863 (1,834)4,029 3
Patents3,068 (575)2,493 3 - 19
Total intangible assets$150,530 $(92,125)$58,405 

The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2023 were as follows:
(in thousands)Gross
Carrying
Value		Accumulated
Amortization		Net Carrying
Value		Estimated
Useful Life
(Years)
Developed technology$91,629 $(64,453)$27,1763 - 10
Capitalized software18,423 (4,078)14,345 3 - 5
Customer relationships18,809 (11,317)7,492 5 - 10
Trademarks11,521 (5,367)6,154 15
Non-compete agreement5,878 (1,530)4,348 3
Patents3,132 (524)2,608 3 - 19
Total intangible assets$149,392 $(87,269)$62,123 

Acquisition of Esthetic Medical, Inc. and Anacapa Aesthetics LLC
In February 2023, Edge Systems Intermediate, LLC, an indirect, wholly-owned subsidiary of the Company, acquired all of the outstanding shares of Esthetic Medical, Inc. (“EMI”) in exchange for (i) a cash payment of $11.8 million and (ii) 109,625 shares of Class A Common Stock of the Company ($1.3 million). In addition, Dr. Lawrence Groop (the “Seller”) is entitled to receive up to an additional $3.2 million in contingent consideration based upon the achievement of certain conditions defined in the purchase agreement, of which $1.9 million was considered probable as of the acquisition date. Applicable tax guidance was used to apply the simultaneous equation method to incrementally assign $4.6 million to the book value of the intangible asset in excess of the purchase price. The Company accounted for this transaction as an asset acquisition and allocated substantially all of the purchase price and the tax basis difference totaling $19.9 million to intangible assets, primarily related to developed technology.

In July 2023, EMI obtained clearance from the U.S. Food and Drug Administration that the SkinStylus Sterilock MicroSystem is cleared for use as a treatment to improve the appearance of facial acne scars in Fitzpatrick skin types I, II, and III in adults aged 22 years and older (the “Facial Indication Approval”). Obtaining the Facial Indication Approval triggered a $1.3 million contingent payment made in July 2023 by the Company to the Seller, which was previously not considered probable of payment.

In March 2023, the Company acquired assets from Anacapa Aesthetics LLC and recognized approximately $5 million of intangible assets, primarily related to non-compete agreements.

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Note 7 — Long-term Debt

Amended and Restated Credit Facility

On November 14, 2022, the Company, as successor by assumption to Hydrafacial, a California limited liability company, entered into an Amended and Restated Credit Agreement (as it may be further amended, restated, supplemented or modified from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (the “Administrative Agent”). The Credit Agreement provides for a $50 million revolving credit facility with a maturity date of November 14, 2027. In addition, the Company has the ability from time to time to increase the revolving commitments or enter into one or more tranches of term loans up to an additional aggregate amount not to exceed $50 million, subject to receipt of lender commitments and certain conditions precedent. As of March 31, 2024, the Credit Agreement remains undrawn and there is no outstanding balance under the revolving credit facility.

The Credit Agreement contains various restrictive covenants subject to certain exceptions, including butlimitations on the Company’s ability to incur indebtedness and certain liens, make certain investments, become liable under contingent obligations in certain circumstances, make certain restricted payments, make certain dispositions within guidelines and limits, engage in certain affiliate transactions, alter its fundamental business or make certain fundamental changes, and requirements to maintain financial covenants, including maintaining a leverage ratio of no greater than 3.00 to 1.00 and maintaining a fixed charge coverage ratio of not limitedless than 1.15 to not being1.00. As of March 31, 2024, the Company was in compliance with all restricted and financial covenants of the Credit Agreement.

Convertible Senior Notes
On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee (the “Indenture”). Pursuant to the purchase agreement between the Company and the initial purchasers of the Notes, the Company granted the initial purchasers an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes were first issued, up to an additional $100 million principal amount of Notes. The Notes issued on September 14, 2021 include the $100 million principal amount of Notes issued pursuant to the full exercise by the initial purchasers of such option.

The following is a summary of the Company’s Notes for the periods indicated:
(in thousands)March 31, 2024December 31, 2023
1.25% Convertible Notes due 2026$675,000 $750,000 
Unamortized debt issuance costs(9,514)(11,628)
Net carrying value$665,486 $738,372 

In January 2024, the Company repurchased $75.0 million principal amount of its Notes at a weighted-average price equal to 77% for $57.8 million resulting in a net gain of $16.1 million, which includes $1.2 million of unamortized debt issuance costs related to the repurchase. The net gain is included in other income, net in the Condensed Consolidated Statements of Comprehensive Income (Loss).

Additionally, in April 2024, the Company repurchased $98.3 million principal amount of its Notes at a weighted-average price equal to 84% for $82.4 million. In the month of May, through May 8, 2024, the Company repurchased $19.0 million principal amount of its Notes at a weighted-average price equal to 84% for $15.9 million.

As of March 31, 2024 and December 31, 2023, the estimated fair value of the Notes was approximately $554 million and $558 million, respectively. The estimated fair value of the Notes was determined based on the actual bid price of the Notes on March 31, 2024 and December 31, 2023, and are classified as Level 2 within the fair value hierarchy.

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Capped Call Transactions

On September 9, 2021, in connection with the pricing of the offering of Notes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with Bank of Montreal, Credit Suisse Capital LLC, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC and Wells Fargo Bank, National Association (collectively, the “Option Counterparties”). In addition, on September 10, 2021, in connection with the initial purchasers’ exercise of their option to purchase additional Notes, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions,” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”) with each of the Option Counterparties. The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the Notes, and are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to comply with the independent registered public accounting firm attestation requirements of Section 404make in excess of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reportsprincipal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions. The cap price of the Capped Call Transactions is initially $47.94, which represents a premium of 100% over the last reported sale price of the Company’s common stock on September 9, 2021. The cost of the Capped Call Transactions was $90.2 million.

The Capped Call Transactions are separate transactions, each between the Company and proxy statements,the applicable Option Counterparty, and exemptionsare not part of the terms of the Notes and do not affect any holder’s rights under the Notes or the Indenture. Holders of the Notes will not have any rights with respect to the Capped Call Transactions.

Note 8 — Income Taxes

The income tax benefit for the three months ended March 31, 2024 is $0.7 million. The income tax benefit for the three months ended March 31, 2023 was $3.7 million.

The effective tax rate for the three months ended March 31, 2024 is 49.3%. The effective tax rate for the three months ended March 31, 2023 was 15.3%. The effective tax rate differs from the requirementsfederal statutory rate of holding21% due primarily to a nonbinding advisory vote on executive compensationfull valuation allowance against the Company’s U.S. deferred tax assets, foreign jurisdictions that are taxed at different rates, state taxes, and stockholder approvalthe impact of discrete items that may occur in any golden parachute paymentsgiven year but which are not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companiesconsistent from being requiredyear to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. year.


The Company has elected not to opt out of such extended transition period which means that whenestablished a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could changevaluation allowance in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturityU.S. against a portion of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2020.

Deferred offering Costs

Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $25,777,859 were charged to stockholders’ equity upon the completion of the Initial Public Offering.


VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect onits remaining deferred tax assets and liabilities of a change in tax ratesbecause it is recognized in income in the periodmore likely than not that included the enactment date. Valuation allowances are established, when necessary, to reducecertain deferred tax assets towill not be realized. In determining whether deferred tax assets are realizable, the Company considers numerous factors including historical profitability, the amount expectedof future taxable income and the existence of taxable temporary differences that can be used to be realized.  

FASB ASCrealize deferred tax assets.


The Company applies Accounting Standards Codification 740 – Income Taxes, the accounting standard addressing the accounting for uncertainty in income taxes, which prescribes arules for recognition, thresholdmeasurement and a measurement attribute forclassification in the financial statement recognition and measurementstatements of tax positions taken or expected to be taken in a tax return. For thoseThe Company has gross unrecognized tax benefits of $0.3 million and $1.1 million as of March 31, 2024 and December 31, 2023, respectively.

Note 9 — Share-Based Compensation

The Company has various stock compensation plans, which are more fully described in Part II, Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Equity-Based Compensation" in the Company’s 2023 Annual Report on Form 10-K. Under the Beauty Health Company 2021 Incentive Award Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, other stock or cash-based awards to eligible service providers. Additionally, the Company maintains the Employee Stock Purchase Plan for employees located in the United States, whereby eligible employees can have up to 10% of their earnings withheld, subject to certain maximums, to be used to purchase shares of the Company’s Class A Common Stock at certain purchase dates.

13


Share-based compensation expense was as follows for the periods indicated:

Three Months Ended March 31,
(in thousands)20242023
Cost of sales$(404)$293 
Selling and marketing2,424 1,804 
Research and development676 (2)
General and administrative3,940 1,482 
Total share-based compensation$6,636 $3,577 

As of March 31, 2024, total unrecognized compensation expense related to unvested share-based compensation totaled $36.7 million and is expected to be recognized over a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interestweighted-average period of 1.5 years.

Note 10 — Commitments and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2020. The Company is currently not aware of any issues under review that could resultContingencies

Ageless

On October 21, 2020, Hydrafacial filed a complaint (the “California Complaint”) against Ageless Serums LLC (“Ageless”) in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. 

Net Income Per Common Share

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 1,500,000 shares of common stock that were subject to forfeiture if the over-allotment option was not exercised by the underwriters (see Note 5). As of September 30, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented. 

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account. 

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the condensed balance sheet, primarily due to their short-term nature. 

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements. 

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States District Court for the Central District of California, Western Division, captioned Edge Systems LLC v. Ageless Serums LLC, Case No. 2:20-cv-09669-FMO-PVC (the “California Case”), for various claims, including contributory trademark infringement, false designation of origin, induced breach of contract, tortious interference with contractual relations, and unfair competition. In the California Complaint, Hydrafacial alleged that Ageless is selling its serums to Hydrafacial customers and intentionally encouraging those customers to market treatments performed by such customers as “Hydrafacial Treatments,” in violation of the customers’ license agreements with Hydrafacial and that Ageless is improperly marketing its products for use as part of the Hydrafacial treatment. Hydrafacial sought monetary damages and injunctive relief from Ageless in the California Case.


Additionally, on December 22, 2020, Hydrafacial filed a complaint (the “Texas Complaint”) against Ageless in the United States District Court for the Southern District of Texas, Houston Division, captioned Edge Systems LLC v. Ageless Serums LLC, Case No. 4:20-cv 04335 (the “Texas Case”), alleging infringement of six of Hydrafacial’s patents. Hydrafacial sought monetary damages and injunctive relief from Ageless in the Texas Case.

On November 30, 2020, Ageless answered the California Complaint and asserted counterclaims for violation of antitrust, California statutory and common law unfair competition, false advertising, defamation, and tortious interference with prospective and actual economic advantage. On July 12, 2021, Ageless answered the Texas Complaint and asserted similar counterclaims as those in the California Case. On May 5, 2022, Ageless filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Houston Bankruptcy Court”), and the World.California Case and Texas Case were thus stayed under 11 U.S.C. Section 362(a)(1). On September 7, 2022, Hydrafacial filed a proof of claim, asserting general unsecured claim for damages arising from claims alleged in the California Case and Texas Case. On January 4, 2023, Hydrafacial filed an Objection to the Confirmation of Debtor’s Subchapter V Plan of Reorganization and Brief in Support. On March 8, 2023, Hydrafacial and Ageless engaged in mediation to settle the claims alleged in the California Case and Texas Case. Ultimately, Hydrafacial and Ageless reached a tentative settlement agreement of all claims alleged in the California Case and Texas Case.

On September 18, 2023, Ageless filed the Debtor’s Third Amended Subchapter V Plan of Reorganization (the “Plan”). The Plan incorporated the material terms of the settlement that Hydrafacial and Ageless reached at the mediation. Under the Plan, Ageless was required to pay to Hydrafacial $0.1 million on or before October 15, 2023 and tender thirteen (13) subsequent quarterly payments, each consisting of $0.1 million, for a total of $1.4 million. Ageless also agreed to various sales and marketing conditions that restrict Ageless from selling to Hydrafacial’s customers that use Hydrafacial’s service mark to provide hydradermabrasion treatments. Ageless agreed to other covenants that are contained in Article VIII of the Plan. The Plan also includes mutual releases between Hydrafacial and Ageless. The Plan includes remedies for Hydrafacial’s benefit in the event that Ageless defaults on any of its material obligations under the Plan.

14


The Houston Bankruptcy Court considered confirmation of the Plan at a hearing held on September 22, 2023, and Hydrafacial expressed its support of the Plan at the hearing. The Houston Bankruptcy Court entered the Findings of Fact, Conclusions of Law, and Order Confirming Debtor’s Third Amended Plan of Reorganization on September 22, 2023. The Plan contains various conditions precedent to the effectiveness of the Plan that are contained in Article X of the Plan. The Plan required Hydrafacial to dismiss the California Case and the Texas Case within ten (10) days of the occurrence of the effective date of the Plan.

On October 13, 2023, Ageless tendered its initial payment of $0.1 million to Hydrafacial pursuant to the terms and conditions of the Plan. On February 2, 2024, all claims, counterclaims, and defenses in the California Case and the Texas Case were dismissed with prejudice.

Cartessa

On December 14, 2020, Hydrafacial filed a complaint (the “Cartessa Complaint”) against Cartessa Aesthetics, LLC (“Cartessa”) in the United States District Court for the Eastern District of New York (the “New York Court”), captioned Edge Systems LLC v. Cartessa Aesthetics, LLC, Case No. 1:20-cv-6082, for patent infringement arising from Cartessa’s sale of Cartessa’s hydradermabrasion system that Hydrafacial alleged has infringed five of Hydrafacial’s patents on its device. Hydrafacial narrowed its allegation in the Cartessa Complaint to assert infringement of just four of its patents. On September 15, 2022, the New York Court granted Hydrafacial’s Motion for Summary Judgment of No Unclean Hands and denied Cartessa’s Motion for Summary Judgment of non-infringement on three of the four patents-in-suit. On June 6, 2023, the New York Court granted Hydrafacial’s Motion for Summary Judgment of No Invalidity of the fourth patent-in-suit and granted Cartessa’s Motion for Summary Judgment of non-infringement of that same patent. As of the date the financial statements were issued, there was considerable uncertainty around the expected duration of this pandemic. report, Hydrafacial and Cartessa are awaiting the New York Court to set a trial date on Hydrafacial’s remaining three patents-in-suit in the Cartessa Complaint.

Hydrafacial is seeking monetary damages and plans to vigorously pursue its claims against Cartessa. Hydrafacial also plans to appeal the New York Court’s grant of Cartessa’s Motion for Summary Judgment.

Securities Class Action

On November 16, 2023, a putative class action was filed in the United States District Court for the Central District of California against the Company, its then-current president and chief executive officer, Andrew Stanleick, its former chief financial officer, Liyuan Woo, and its current chief financial officer, Michael Monahan. The complaint, styled, Abduladhim A. Alghazwi, individually and on behalf of all others similarly situated, v. The Beauty Healthy Company, Andrew Stanleick, Liyuan Woo, and Michael Monahan, Case No. 2:23-cv-09733 (C.D. Ca.) (the “Securities Class Action”), asserts claims for violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder against all defendants (First Claim), and violation of Section 20(a) of the Exchange Act against the individual defendants (Second Claim). The complaint alleges that, between May 10, 2022 and November 13, 2023, defendants materially misled the investing public by publicly issuing false and/or misleading statements and/or omissions relating to Hydrafacial's business, operations, and prospects, specifically with respect to the performance of and demand for the Syndeo 1.0 and 2.0 devices. The relief sought in the complaint includes a request for compensatory damages suffered by the plaintiff and other members of the putative class for damages allegedly sustained as a result of the alleged securities violations.

On January 16, 2024, putative class members Jeff and Kevin Brown (the “Browns”), Priscilla and Martjn Dijkgraaf (the “Dijkgraafs”), and Joseph Jou filed three competing motions for appointment as lead plaintiff under the Private Securities Litigation Reform Act (“PSLRA”), 17 U.S.C. § 78u-4(a)(3). On January 31, 2024, Joseph Jou filed a notice of non-opposition to the Browns’ and Dijkgraafs’ motions for appointment as lead plaintiff. On May 2, 2024, the court granted the Dijkgraafs’ motion for appointment as lead plaintiff and approved the Dijkgraafs’ counsel, Hagens Berman, as lead counsel. On May 8, 2024, the parties met and conferred to discuss a proposed schedule for the filing of a consolidated, amended complaint and defendants’ response(s) thereto. The Securities Class Action case is assigned to U.S. District Judge Sherilyn Peace Garnett.

The Company believes that the claims asserted in the Securities Class Action have no merit and intends to vigorously defend them. The Company is unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims, and, accordingly, it has concludednot accrued any liability associated with the Securities Class Action.

15


Derivative Action - Margie Elstein

On February 8, 2024, a derivative complaint was filed in the Delaware Court of Chancery against the Company’s former president and chief executive officer, Andrew Stanleick; its former chief financial officer, Liyuan Woo, and current members of the Company’s board of directors (the “Board of Directors”): Brenton Saunders, Marla Beck, Michael Capellas, Julius Few, Desiree Gruber, Michelle Kerrick, Brian Miller, and Doug Schillinger, with the Company as the nominal defendant. The complaint, styled Margie Elstein, derivatively on behalf of The Beauty Health Company v. Brenton Saunders, Marla Beck, Michael Capellas, Julius Few, Desiree Gruber, Michelle C. Kerrick, Brian Miller, Doug Schillinger Andrew Stanleick, and Liyuan Woo, C.A. No. 2024-0114-LWW (Del. Ch.) (the “Elstein Derivative Action”), asserts a single claim for breach of fiduciary duty against the individual defendants based on the alleged disclosure of knowingly false information and/or the alleged failure to respond to red flags relating to Hydrafacial’s business, operations, and prospects, specifically with respect to the performance of and demand for the Syndeo 1.0 and 2.0 devices. The plaintiff-stockholder further maintains that whileno demand was made upon the Company’s Board of Directors prior to the initiation of the Elstein Derivative Action based on allegations that a majority of the Board of Directors was not disinterested or independent with respect to the fiduciary duty claim, such that demand should be excused as futile. The relief sought in the complaint includes a finding of demand futility, a finding that the individual defendants are liable for breaching their fiduciary duties (as current/former officers and directors), and an award of compensatory damages for harm suffered by the Company and its stockholders for harm allegedly sustained as a result of the alleged fiduciary duty violation. The Elstein Derivative Action has been assigned to Vice Chancellor Lori Will.

The Company believes that the claims asserted in the Elstein Derivative Action have no merit and intends to vigorously defend them. The Company is unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims, and, accordingly, it has not accrued any liability associated with the Elstein Derivative Action.

Derivative Action - Richard Montague

On May 1, 2024, a derivative complaint was filed in the Delaware Court of Chancery against the Company’s former president and chief executive officer, Andrew Stanleick; its former chief financial officer, Liyuan Woo, and current members of the Company’s Board of Directors: Brent Saunders, Marla Beck, Michael Capellas, Julius Few, Desiree Gruber, Michelle Kerrick, Brian Miller, and Doug Schillinger, the Company as the nominal defendant. The complaint, styled Richard Montague, derivatively on behalf of The Beauty Health Company v. Andrew Stanleick, Liyuan Woo, Brent Saunders, Marla Beck, Michael Capellas, Julius Few, Desiree Gruber, Michelle C. Kerrick, Brian Miller, and Doug Schillinger, C.A. No. 2024-0463-LWW (Del. Ch) (the “Montague Derivative Action”), asserts claims for (i) breach of fiduciary duty, (ii) gross mismanagement, (iii) waste of corporate assets, (iv) unjust enrichment, and (v) aiding and abetting against the individual defendants based on allegations that the individual defendants made materially false and/or misleading statements, as well as failing to disclose material adverse facts about the Company’s business, operations, and prospects, specifically relating to the Syndeo 1.0 and 2.0 devices. The relief sought in the Montague Derivative Action includes (a) awarding damages for harm suffered by the Company allegedly sustained as a result of the individual defendants’ alleged breach of fiduciary duties, gross mismanagement, waste of corporate assets, and unjust enrichment, (b) awarding damages for harm suffered by the Company allegedly sustained as a result of the Company’s directors’ alleged aiding and abetting of breaching their fiduciary duties, (c) directing the Company to reform and improve its corporate governance and internal procedures, to comply with its existing governance obligations and all applicable laws, and to protect its investors from a recurrence of the alleged damaging events, and (d) awarding the plaintiff-stockholder the costs and disbursements of the Montague Derivative Action, including reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses.

The Company believes that the claims asserted in the Montague Derivative Action have no merit and intends to vigorously defend them. The Company is unable to reasonably estimate the possible that COVID-19 could haveloss or range of loss, if any, associated with these claims, and, accordingly, it has not accrued any liability associated with the Montague Derivative Action.

Securities and Exchange Commission (the “SEC”) Subpoena

The Division of Enforcement of the SEC has issued a negative effect on identifyingsubpoena in connection with a target company for aformal order of investigation of the Company seeking documents and information from us. The Company is in the process of responding to the subpoena and intends to fully cooperate with the SEC investigation. We cannot predict the duration, scope, or outcome of this matter at this time.


16


Note 11 — Related-Party Transactions
Registration Rights Agreement

In connection with the consummation of the Business Combination, on May 4, 2021, the specific impact is not readily determinableCompany entered into that certain Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) with BLS Investor Group LLC and the Hydrafacial stockholders.

Pursuant to the terms of the Registration Rights Agreement, (i) any outstanding shares of Class A Common Stock or any other equity securities (including the Private Placement Warrants and including shares of Class A Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by the Sponsor or the Hydrafacial stockholders (together, the “Restricted Stockholders”) as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

NOTE 3. INITIAL PUBLIC OFFERING

Pursuant toRegistration Rights Agreement or thereafter acquired by a Restricted Stockholder (including the Initial Public Offering, the Company sold 46,000,000 Units, which includes the full exercise by the underwriters of their option to purchase an additional 6,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one shareshares of Class A common stock and one-thirdCommon Stock issued upon conversion of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (see Note 7). 

NOTE 4. PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 9,333,333 Private Placement Warrants at a price of $1.50 per private Placement Warrant, for an aggregate purchase price of $14,000,000. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants. 


VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

On August 5, 2020, the Company issued an aggregate of 11,500,000 shares of Class B common stock (the “Founder Shares”) that were owned by the Sponsor and converted into shares of Class A Common Stock in connection with the Business Combination and upon exercise of any Private Placement Warrants) and shares of Class A Common Stock issued as earn-out shares to the Sponsor for an aggregate purchase priceHydrafacial stockholders and (ii) any other equity security of $25,000the Company issued or issuable with respect to any such share of common stock by way of a stock dividend or stock split or in cash. connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise will be entitled to registration rights.


The Founder Shares includedRegistration Rights Agreement provides that the Company will, within 60 days after the consummation of the Business Combination, file with the SEC a shelf registration statement registering the resale of the shares of common stock held by the Restricted Stockholders and will use its reasonable best efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but in no event later than 60 days following the filing deadline. The Company filed such registration statement on July 19, 2021 and it was declared effective by the SEC on July 26, 2021. The Hydrafacial stockholders are entitled to make up to an aggregate of up to 1,500,000two demands for registration, excluding short form demands, that the Company register shares of Class B common stock subjectheld by these parties. In addition, the Restricted Stockholders have certain “piggy-back” registration rights. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to forfeiture bythe terms of the Registration Rights Agreement. The Company and the Restricted Stockholders agree in the Registration Rights Agreement to provide customary indemnification in connection with any offerings of common stock effected pursuant to the terms of the Registration Rights Agreement.

Pursuant to the Registration Rights Agreement, the Sponsor agreed to restrictions on the extent that the underwriters’ over-allotment option was not exercisedtransfer of its securities issued in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Sharesinitial public offering, which (i) in the Initial Public Offering). As a resultcase of the underwriter’s election to fully exercise its over-allotment option, 1,500,000 Founder Shares are no longer subject to forfeiture.

The Sponsor has agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned, sold or released from escrow until the earlier of (A)is one year after the completion of athe Business Combination unless (A) the closing price of the common stock equals or exceeds $12.00 per share for 20 days out of any 30-trading-day period commencing at least 150 days following the Closing of the Business Combination or (B) the date subsequent to the Company’s initial Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstandingproperty, and (ii) in the foregoing, if the last reported sale price of the shares of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, the converted Class A common stock will be released from the lock-up.

Due from Sponsor

At the closing of the Initial Public Offering on October 2, 2020, a portion of the proceeds from the salecase of the Private Placement Warrants inand the amount of $4,800,000 was due to the Company to be held outside of the Trust Account for working capital purposes. Such amount was paid by the Sponsor to the Company on October 6, 2020.

Advances from Related Party

As of October 2, 2020, the Sponsor paid for certain offering costs on behalf of the Company in connection with the Initial Public Offering. As of September 30, 2020, advances amounting to $228,723 were outstanding. The outstanding balance under these advances was repaid subsequent to the closing of the Initial Public Offering, on October 6, 2020.

Promissory Note — Related Party

On July 23, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) January 31, 2021 or (i) the consummation of the Initial Public Offering. As of September 30, 2020, there was $5,190 outstanding under the Promissory Note. The outstanding balance under the Promissory Note of $261,386 was repaid subsequent to the closing of the Initial Public Offering on October 6, 2020.

Administrative Support Agreement

The Company entered into an agreement, commencing on September 30, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Company’s Chief Executive Officer, a total of up to $10,000 per month for office space and administrative support services.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical torespective Class A Common Stock underlying the Private Placement Warrants.


VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBERWarrants is 30 2020

(Unaudited)

NOTE 6. COMMITMENTS

Registration and Stockholder Rights Agreement

Pursuant to a registration and stockholder rights agreement entered into on September 29, 2020,days after the holderscompletion of the Founder Shares,Business Combination. The Sponsor and its permitted transferees will also be required, subject to the terms and conditions in the Registration Rights Agreement, not to transfer their Private Placement Warrants and warrants that may be issued upon conversion(as defined in the Registration Rights Agreement) or shares of Working Capital Loans (and any Class A common stock issuable upon the exercise thereof for 30 days following the Closing.


Investor Rights Agreement

In connection with the consummation of the Private Placement WarrantsBusiness Combination, on May 4, 2021, the Company and warrants issued upon conversionLCP Edge Holdco, LLC entered into that certain Investor Rights Agreement (the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement, LCP has the right to designate a number of directors for appointment or election to the Company’s Board of Directors as follows: (i) one director for so long as LCP holds at least 10% of the Working Capital Loans)outstanding Class A Common Stock, (ii) two directors for so long as LCP holds at least 15% of the outstanding Class A Common Stock, and (iii) three directors for so long as LCP holds at least 40% of the outstanding Class A Common Stock. Pursuant to the Investor Rights Agreement, for so long as LCP holds at least 10% of the outstanding Class A Common Stock, LCP will be entitled to have at least one of its designees represented on the compensation committee and nominating committee and corporate governance committee of the Company’s Board of Directors.

17


Note 12 — Stockholders' Equity

Common Stock

The Company is authorized to issue 320,000,000 shares of Class A Common Stock, par value of $0.0001 per share. Holders of Class A Common Stock are entitled to registration rights.one vote for each share. As of March 31, 2024 and December 31, 2023, there were 123,453,419 and 122,899,002, respectively, of Class A Common Stock issued and outstanding. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rightshas not declared or paid any dividends with respect to registration statements filed subsequent to consummationits Class A Common Stock.

Common Stock Repurchases

On September 12, 2023, the Company’s Board of Directors approved a Business Combination. However, the registration rights agreement provides thatshare repurchase program authorizing the Company will not permit any registration statement filed under the Securities Act to become effective until terminationrepurchase up to $100.0 million of the applicable lockup period. The Company will bearCompany’s Class A Common Stock. Under the expenses incurred in connection with the filingshare repurchase program, repurchases can be made from time to time using a variety of any such registration statements.

Underwriting Agreement

The underwriters are entitled tomethods, which may include open market purchases, privately negotiated transactions, transactions structured through investment banking institutions, or a deferred fee of $0.35 per Unit, or $16,100,000 in the aggregate. Subject to the termscombination of the underwriting agreement, (i)foregoing. Under this share repurchase program, for the deferred fee will be placed in the Trust Account and released to the underwriters only upon the completion of a Business Combination and (ii) the deferred fee will be waived by the underwriters in the event thatyear ended December 31, 2023, the Company doesrepurchased and retired 10.4 million shares for $30.2 million excluding taxes. During the three months ended March 31, 2024, the Company did not complete a Business Combination.

NOTE 7. STOCKHOLDER’S EQUITY

repurchase any shares of its common stock.


Preferred Stock—

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s boardBoard of directors.Directors. At September 30, 2020,March 31, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

Class A


Note 13 — Net Loss Attributable to Common StockStockholders

The following table sets forth the calculation of both basic and diluted net loss per share as follows for the periods indicated:
Three Months Ended March 31,
(in thousands, except share and per share amounts)20242023
Net loss available to common stockholders - basic$(679)$(20,259)
Adjustments related to Convertible Notes (1)
(13,072)— 
Net loss available to common stockholders - diluted$(13,751)$(20,259)
Weighted average common shares outstanding - basic123,120,426 132,420,762 
Effect of dilutive shares:
Convertible Notes21,356,782 — 
Weighted average common shares outstanding - diluted144,477,208 132,420,762 
Basic net loss per share:$(0.01)$(0.15)
Diluted net loss per share:$(0.10)$(0.15)
(1) For the three months ended March 31, 2024, the adjustments related to Convertible Notes include the net gain on repurchase offset by interest expense and amortization of debt issuance costs related to our Notes (net of taxes).
18


The following shares have been excluded from the calculation of the weighted average diluted shares outstanding as the effect would have been anti-dilutive:

Three Months Ended March 31,
20242023
Convertible Notes— 23,614,425 
Restricted Stock Units4,133,118 3,855,757 
Stock Options3,671,120 4,852,995 
Performance-based Restricted Stock Units1,179,487 1,997,512 
For the three months ended March 31, 2024 and 2023, income and shares related to the Private Placement Warrants were excluded from the calculation of diluted net loss per common share because their effect would be antidilutive.

Note 14 — New Accounting Pronouncements

In November 2023, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. The Company is authorizedcurrently evaluating the potential effect that the updated standard will have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topic 740): Improvements to issue 200,000,000 shares of Class A common stockIncome Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning January 1, 2025, with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At September 30, 2020, there were no shares of Class A common stock issued or outstanding.

Class B Common Stock—early adoption permitted. The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At September 30, 2020, there were 11,500,000 shares of Class B common stock issued and outstanding.

Holders of Class B common stockcurrently evaluating the potential effect that the updated standard will have the righton its financial statement disclosures.


Note 15 — Syndeo Program

To stand behind its commitment to elect all ofits customers and protect the Company’s directors priorbrand reputation, during October 2023, the Company’s management decided that, with respect to a Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.

The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination at a ratio such that the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of  (i) the total number of shares of common stock issued and outstanding upon completion of the Initial Public Offering, plus (ii) the sum of (a) all shares of common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or deemed issued bySyndeo devices, the Company in connection with or in relation to the completion of a Business Combination, excluding (1) any shares of Class A common stock or equity-linked securities exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combinationwill only market and any (2) Private Placement Warrants issued to the Sponsor or any of its affiliates upon conversion of Working Capital Loans minus (b) the number of Public Shares redeemed by Public Stockholders in connection with a Business Combination. In no event will the shares of our Class B common stock convert into shares of our Class A common stock at a rate of less than one to one.

Warrants—Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) one year from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

sell Syndeo 3.0 devices. The Company will not be obligated to deliver any Class A common stock pursuantprovide, at no cost to the exercisecustomer, the option of (i) a warrant and will have no obligationtechnician upgrade to settle such warrant exercise unlesstheir Syndeo 1.0 or 2.0 devices to 3.0 standards in the field; or (ii) a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable andreplacement Syndeo 3.0 device for their existing device (the “Syndeo Program”). Additionally, the Company will not be obligatedextend the customer’s warranty by one year for each system from the date it was either brought to issuethe 3.0 standards or the customer received a shareSyndeo 3.0 device.


As of Class A common stock upon exercise of a warrant unless the share of Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.


VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

The Company has agreed that as soon as practicable, but in no event later than twenty business days after the closing of a Business Combination,December 31, 2023, the Company will use its commercially reasonable efforts to file with the SEC a registration statementaccrued costs of $21.0 million, primarily for the registration, underestimated cost to remediate, upgrade or exchange the Securities Act,remaining Syndeo 1.0 and 2.0 builds.


The following table summarizes the Syndeo Program charges and usage for the three months ended March 31, 2024 (in thousands):

Program liability as of December 31, 2023$21,009 
Usage(12,695)
Program liability as of March 31, 2024$8,314 

19


Note 16 — Revision for Immaterial Misstatements

As disclosed in Note 1 – Description of the Class A common stock issuable upon exercise of the warrants. The Company will use its commercially reasonable effortsBusiness, subsequent to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the issuance of the Class A common stock issuable upon exercise ofCompany’s Quarterly Report on Form 10-Q for the warrants is not effective bythree months ended March 31, 2023, during the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period whenquarter ended June 30, 2023, the Company will have failedidentified misstatements related to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9)the elimination of the Securities Act or another exemption. In addition, if the Class A common stock is at the timeintercompany balances and right of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act,return assets. Although the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and,concluded that these misstatements were not material, either individually or in the eventaggregate, the Company electselected to do so, it will not be requiredrevise its previously issued consolidated financial statements to file or maintain in effect a registration statement, but it will use its best efforts to register or qualify the shares under applicable blue sky lawscorrect for these misstatements. The revision to the extent an exemption is not available.

Redemptionaccompanying unaudited Condensed Consolidated Statements of warrants whenComprehensive Income (Loss) and Condensed Consolidated Statements of Cash Flows and related disclosures in Note 13 – Net Loss Attributable to Common Stockholders are detailed in the price per sharetables below.


As of Class A common stock equals or exceeds $18.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants (except with respectDecember 31, 2022 and March 31, 2023, accumulated deficit was overstated $2.8 million and $4.7 million, respectively, and as such, previously reported stockholders’ equity of $164.3 million and $147.7 million was revised to $167.1 million and $152.4 million, respectively. There were no other changes to the Private Placement Warrants):

●in whole and not in part;
●at a price of $0.01 per warrant;
●upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
●if, and only if, the reported last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like).

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company are unable to register or qualify the underlying securities for sale under all applicable state securities laws. However, in this case, the Company willunaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) that have not redeem the warrants unless an effective registration statement under the Securities Act covering the Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of our Class A common stock is available throughout the 30-day redemption period.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00. Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

●in whole and not in part;
●at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A common stock;
●if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and
●if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as describedotherwise been reflected in the warrant agreement. The exercise price and numberunaudited Condensed Consolidated Statements of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances includingComprehensive Income (Loss) as detailed in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.


VESPER HEALTHCARE ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020

(Unaudited)

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A common (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

NOTE 8. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Other than as described in these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

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tables below.


Three Months Ended March 31, 2023
Condensed Consolidated Statement of Comprehensive Income (Loss) (in thousands, except per share amounts)As Previously ReportedAdjustmentAs Revised
Foreign currency transaction loss (gain), net$877 $(2,026)$(1,149)
Loss before provision for income taxes$(25,947)$2,026 $(23,921)
Net loss$(22,285)$2,026 $(20,259)
Comprehensive loss$(21,397)$2,026 $(19,371)
Net loss per share - Basic$(0.17)$0.02 $(0.15)
Net loss per share - Diluted$(0.17)$0.02 $(0.15)

Three Months Ended March 31, 2023
Condensed Consolidated Statement of Cash Flows (in thousands)As Previously ReportedAdjustmentAs Revised
Net loss$(22,285)$2,026 $(20,259)
Adjustments to reconcile net loss to net cash from operating activities:
Other, net$1,511 $(2,026)$(515)
Change in operating assets and liabilities:
Inventories$(15,771)$1,866 $(13,905)
Prepaid expenses, other current assets, and income tax receivable$(203)$(1,122)$(1,325)
Accounts payable, accrued expenses, and income tax payable$(3,085)$(744)$(3,829)
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Vesper Healthcare Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to BLS Investor Group LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Operations.


Forward-Looking Statements


This Quarterly Report includes “forward-lookingon Form 10-Q for the three months ended March 31, 2024 (“the Quarterly Report on Form 10-Q”) contains “forward looking statements” within the meaning of Section 27Athe “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this Quarterly Report on Form 10-Q, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and Section 21Evariations of these words or similar expressions (or the Exchange Act thatnegative versions of such words or expressions) are intended to identify forward-looking statements.

These forward-looking statements are not historical factsguarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and uncertaintiesother important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factorsFactors that could cause actual resultsor contribute to differ materially fromthese differences include, but are not limited to, those anticipatedidentified below and those discussed in the forward-looking statements, please refer to thesection titled Risk Factors section of this Quarterlyfiling and our Annual Report and the Risk Factors section of the Registration Statement on Form S-1 (Registration No. 333-248717)10-K for the fiscal year ended December 31, 2023 filed with the SEC. The Company’s securities filings can be accessedSecurities and Exchange Commission (the “SEC”) on March 12, 2024 (the “Annual Report on Form 10-K”).

Important factors, among others, that may affect actual results or outcomes include the EDGAR sectioninability to recognize the anticipated benefits of the SEC’s website at www.sec.gov. Except as expressly requiredbusiness combination consummated on May 4, 2021 pursuant to a certain Agreement and Plan of Merger entered into by applicable securities law,and among the Company disclaimsand other parties (the “Business Combination”); costs related to the Business Combination; the Company’s availability of cash for debt service and exposure to risk of default under debt obligations; the Company’s ability to manage growth; the Company’s ability to execute its business plan; potential litigation involving the Company; changes in applicable laws or regulations; and the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors. The Company does not undertake any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

Weotherwise, except as required by law.


The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and also with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K.

Unless the context otherwise requires, references to the “Company”, “Hydrafacial”, “we”, “us”, and “our” in this section are intended to mean the business and operations of The Beauty Health Company and its consolidated subsidiaries.

Company Overview

The Beauty Health Company is a blank checkglobal category-creating company formeddelivering skin health experiences that help consumers reinvent their relationship with their skin, bodies and self-confidence. The Company and its subsidiaries design, develop, manufacture, market, and sell esthetic technologies and products. The Company’s brands are pioneers: Hydrafacial in hydradermabrasion; SkinStylus in microneedling; and Keravive in scalp health. Together, with its powerful global community of estheticians, partners and consumers, the Company is personalizing skin health for all ages, genders, skin tones, and skin types.

Business and Macroeconomic Conditions

During the three months ended March 31, 2024, we continued to execute against our plan to expand our footprint by selling and placing our patented hydradermabrasion delivery systems (“Delivery Systems”) worldwide, drive consumables, which consist of single-use tips, solutions, serums and other consumables used to provide a hydrafacial treatment that cleanses, extracts, and hydrates the skin (collectively “Consumables”), invest in our community of providers, partners, and consumers, drive brand awareness, and optimize our global infrastructure. Although we believe we can be successful in our current operating environment, various factors may impact our business in unpredictable ways such as:
•Disruptions in transportation and other supply chain related constraints, such as labor strife in the transportation industry;
•Global economic conditions, including inflation, recession, changes in foreign currency exchange rates, higher interest rates, and other changes in economic conditions; and
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•Ongoing issues related to new and older models of Hydrafacial’s current generation Delivery System, Syndeo (“Syndeo”), and our actions to remediate such ongoing issues. The Company has continued to execute replacements under the lawsSyndeo Program and continues to address customer cases under warranty. The Company has accrued approximately $8 million as part of its Syndeo Program and approximately $7 million for its warranty reserve as of March 31, 2024 based on the Company’s estimated cost to replace older Syndeo models and address incidences for delivery systems under warranty.

We may be able to offset cost pressures through increasing the selling prices of some of our products, increasing value engineering efforts to optimize product costs, increasing the diversification of our suppliers and supplier contracts, increasing natural foreign currency hedging, as applicable, and reducing discretionary spending. However, our pricing actions could have an adverse impact on demand, and may in turn, cause our providers to halt or decrease Delivery Systems and/or Consumables spending, and our actions may not be sufficient to cover unexpected increased costs that we may experience.

Business and macroeconomic factors may also negatively impact, in the short-term or long-term, the global economy, the beauty health industry, our providers and their budgets with us, our business, the Company’s brand reputation, financial condition, and results of operations. We remain attentive to these business and macroeconomic conditions that may materially impact our business, and we continue to explore and implement reporting and quality management systems and risk mitigation strategies in the face of these unfolding conditions to remain agile in adopting to changing circumstances.

Comparison of Three Months Ended March 31, 2024 to Three Months Ended March 31, 2023

The following tables set forth our consolidated results of operations in dollars and as a percentage of net sales for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the Stateresults that may be expected in the future. The results of Delaware on July 8, 2020,operations data for the purposethree months ended March 31, 2024 and March 31, 2023 have been derived from the condensed consolidated financial statements included elsewhere in this Form 10-Q. Amounts and percentages may not foot due to rounding.
Three Months Ended March 31,
(in millions)2024% of Net Sales2023% of Net Sales
Net sales$81.4 100.0 %$86.3 100.0 %
Cost of sales33.0 40.6 32.2 37.3 
Gross profit48.4 59.4 54.1 62.7 
Operating expenses
Selling and marketing33.7 41.4 38.7 44.9 
Research and development2.8 3.4 2.3 2.7 
General and administrative28.9 35.5 30.4 35.2 
Total operating expenses65.4 80.3 71.4 82.8 
Loss from operations(17.0)(20.9)(17.3)(20.1)
Interest expense3.0 3.7 3.4 4.0 
Interest income(5.4)(6.6)(4.3)(5.0)
Other income, net(16.1)(19.8)(0.4)(0.5)
Change in fair value of warrant liabilities1.5 1.8 9.1 10.5 
Foreign currency transaction loss (gain), net1.3 1.6 (1.1)(1.3)
Loss before provision for income tax(1.3)(1.6)(23.9)(27.7)
Income tax benefit(0.7)(0.8)(3.7)(4.2)
Net loss$(0.7)(0.8)%$(20.3)(23.5)%
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Net Sales
Three Months Ended March 31,Change
(in millions)20242023Amount%
Net sales
Delivery Systems$35.8 $45.4 $(9.6)(21.1)%
Consumables45.6 40.9 4.7 11.5 
Total net sales$81.4 $86.3 $(4.9)(5.7)%
Percentage of net sales
Delivery Systems44.0%52.6%
Consumables56.0%47.4%
Total100.0%100.0%
Total net sales for the three months ended March 31, 2024 decreased$4.9 million, or 5.7%, compared to the three months ended March 31, 2023. Delivery System net sales for the three months ended March 31, 2024 decreased$9.6 million, or 21.1%, compared to the three months ended March 31, 2023, with decreases across all regions. Delivery Systems net sales were impacted as the Company works to strengthen customer confidence in Syndeo.
Consumables net sales for the three months ended March 31, 2024 increased$4.7 million, or 11.5%, compared to the three months ended March 31, 2023. The increase in Consumables net sales was primarily attributable to increased placements of effectingdelivery systems and the adjoining consumption of consumables during the three months ended March 31, 2024.
Cost of Sales, Gross Profit, and Gross Margin
Three Months Ended March 31,Change
(in millions)20242023Amount%
Cost of sales$33.0 $32.2 $0.9 2.7%
Gross profit$48.4 $54.1 $(5.7)(10.6)%
Gross margin59.4 %62.7 %
Cost of sales for the three months ended March 31, 2024 increased$0.9 million, which was impacted by higher indirect product costs and inventory related charges. Gross profit decreased from $54.1 million during the three months ended March 31, 2023 to $48.4 million during the three months ended March 31, 2024, which was impacted by higher indirect product costs and inventory related charges.
Operating Expenses

Selling and Marketing
Three Months Ended March 31,Change
(in millions)20242023Amount%
Selling and marketing$33.7 $38.7 $(5.0)(13.0)%
As a percentage of net sales41.4 %44.9 %
Selling and marketing expense for the three months ended March 31, 2024 decreased $5.0 million, or 13.0%, compared to the three months ended March 31, 2023. The decrease is primarily driven by lower personnel-related expenses, including sales commission expense and lower marketing spend.
Research and Development
Three Months Ended March 31,Change
(in millions)20242023Amount%
Research and development$2.8 $2.3 $0.5 20.2 %
As a percentage of net sales3.4 %2.7 %
Research and development expense for the three months ended March 31, 2024 increased $0.5 million, or 20.2%, compared to the three months ended March 31, 2023. The increase is primarily driven by higher share-based compensation expense.
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General and Administrative
Three Months Ended March 31,Change
(in millions)20242023Amount%
General and administrative$28.9 $30.4 $(1.5)(5.0)%
As a percentage of net sales35.5 %35.2 %
General and administrative expense for the three months ended March 31, 2024decreased $1.5 million, or 5.0%, compared to the three months ended March 31, 2023. The decrease is primarily driven by lower professional fees and software expenses, partially offset by higher share-based compensation expense.

Interest Income, Change in Fair Value of Warrant Liabilities, and Other Income, Net
Three Months Ended March 31,Change
(in millions)20242023Amount%
Interest income$(5.4)$(4.3)$(1.0)24.1 %
Change in fair value of warrant liabilities$1.5 $9.1 $(7.6)(83.9)%
Other income, net$(16.1)$(0.4)$(15.7)N/M
N/M - Not meaningful
Interest income for the three months ended March 31, 2024increased $1.0 million compared to the three months ended March 31, 2023 primarily due to higher interest earned on our investment in money market funds.

During the three months ended March 31, 2024, the Company recognized income of $1.5 million related to the change in the fair value of the warrant liabilities, a merger,decrease of $7.6 million, as compared to income of $9.1 million for the three months ended March 31, 2023, driven primarily by the fluctuation of the Company’s stock price.

During the three months ended March 31, 2024, the Company recognized $16.1 million net gain related to the repurchase of its Notes.

Liquidity and Capital Resources

Our primary sources of capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate ourhave been (i) cash flow from operating activities, (ii) net proceeds received from the consummation of the Business Combination, using cash(iii) net proceeds received from the 1.25% Convertible Senior Notes due 2026 (the “Notes”), and (iv) net proceeds received from the exercise of public and private placement warrants. As of March 31, 2024, we had cash, cash equivalents, and restricted cash of approximately $444.6 million. A revolving credit facility of $50 million is also available to us as a source of capital. As of March 31, 2024, the Initial Public Offeringrevolving credit facility remains undrawn and there is no outstanding balance thereunder.

Our operating cash flows result primarily from cash received from sales of Delivery Systems and Consumables, offset primarily by cash payments made for products and services, employee compensation, payment processing and related transaction costs, operating leases, marketing expenses, and interest payments on our long-term obligations. Cash received from our customers and other activities generally corresponds to our net sales.

Our sources of liquidity and cash flows are used to fund ongoing operations, research and development projects for new products, services, and technologies, and provide ongoing support services for our providers and customers, including liabilities associated with the saleSyndeo Program. As part of our business strategy, we occasionally evaluate potential acquisitions of businesses and products and technologies. Accordingly, a portion of our available cash may be used at any time for the Private Placement Warrants, ouracquisition of complementary products, services, or businesses. Such potential transactions may require substantial capital stock,resources, which may require us to seek additional debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans.equity financing. We cannot assure you that our plans to raise capital or to complete our initial Business Combinationwe will be successful.

Results of Operations

We have neither engagedable to successfully identify suitable acquisition candidates, complete acquisitions, integrate acquired businesses into our current operations, or expand into new markets. Furthermore, we cannot provide assurances that additional financing will be available to us in any required time frame and on commercially reasonable terms, if at all.


Based on our sources of capital, management believes that we have sufficient liquidity to satisfy our anticipated working capital requirements for our ongoing operations norand obligations for at least the next 12 months. However, we will continue to evaluate our capital expenditure needs based upon factors including but not limited to our rate of revenue growth, potential acquisitions, the timing and amount of spending on research and development, growth in sales and marketing activities, the
24

timing of new product launches, timing and investments needed for international expansion, the continuing market acceptance of the Company’s products and services, expansion, and overall economic conditions.

The Company may also evaluate opportunities to repurchase and retire debt; the Company repurchased its Notes in both the first and second quarter of 2024.

If cash generated any revenuesfrom operations is insufficient to date. Our only activities through September 30, 2020satisfy our capital requirements, we may have to sell additional equity or debt securities or obtain expanded credit facilities to fund our operating expenses. The sale of additional equity would result in additional dilution to our stockholders. Also, the incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. In the event such additional capital is needed in the future, there can be no assurance that such capital will be available to us, or, if available, that it will be in amounts and on terms acceptable to us. If we cannot raise additional funds when we need or want them, our operations and prospects could be negatively affected. However, if cash flows from operations become insufficient to continue operations at the current level, and if no additional capital were organizational activities, those necessaryobtained, then management would restructure the Company in a way to prepare forpreserve our business while maintaining expenses within operating cash flows.

Amended and Restated Credit Agreement

On November 14, 2022, the Initial Public Offering, described below,Company, as successor by assumption to Hydrafacial (formerly known as Edge Systems LLC), a California limited liability company, entered into an Amended and after our Initial Public Offering, identifying a target companyRestated Credit Agreement (as it may be further amended, restated, supplemented or modified from time to time, the “Credit Agreement”) with JPMorgan Chase Bank, N.A. The Credit Agreement provides for a Business Combination. We do$50.0 million revolving credit facility with a maturity date of November 14, 2027. In addition, the Company has the ability from time to time to increase the revolving commitments or enter into one or more tranches of term loans up to an additional aggregate amount not expect to generate any operating revenues until after the completionexceed $50.0 million, subject to receipt of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accountinglender commitments and auditing compliance), as well as for due diligence expenses.

For the period from July 8, 2020 (inception) through September 30, 2020, we had a net loss of $1,540, which consisted of formation and operating costs.

Liquidity and Capital Resources

certain conditions precedent. As of September 30, 2020, we had cashMarch 31, 2024, the Credit Agreement remains undrawn and there is no outstanding balance under the revolving credit facility.


The Credit Agreement contains various restrictive covenants subject to certain exceptions, including limitations on the Company’s ability to incur indebtedness and certain liens, make certain investments, become liable under contingent obligations in certain circumstances, make certain restricted payments, make certain dispositions within guidelines and limits, engage in certain affiliate transactions, alter its fundamental business or make certain fundamental changes, and requirements to maintain financial covenants, including maintaining a leverage ratio of $25,000. Untilno greater than 3.00 to 1.00 and maintaining a fixed charge coverage ratio of not less than 1.15 to 1.00. As of March 31, 2024, the consummationCompany was in compliance with all restrictive and financial covenants of the Initial Public Offering, our only sourceCredit Agreement.
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Convertible Senior Notes

On September 14, 2021, the Company issued an aggregate of liquidity was$750.0 million in principal amount of its Notes. The Notes were issued pursuant to, and are governed by, an initial purchaseindenture dated as of common stock bySeptember 14, 2021, between the SponsorCompany and loans from our Sponsor.

SubsequentU.S. Bank National Association, as trustee (the “Indenture”). Pursuant to the quarterlypurchase agreement between the Company and the initial purchasers of the Notes, the Company granted the initial purchasers an option to purchase, for settlement within a period covered by this Quarterly Report,of 13 days from, and including, the date the Notes were first issued, up to an additional $100.0 million principal amount of Notes. The Notes issued on October 2, 2020, we consummatedSeptember 14, 2021 include the Initial Public Offering$100.0 million principal amount of 46,000,000 Units, which includesNotes issued pursuant to the full exercise by the underwritersinitial purchasers of such option.


In January 2024, the over-allotment optionCompany repurchased $75.0 million principal amount of 6,000,000 Units, at $10.00 per unit, generating gross proceeds of $460,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 9,333,333 Private Placement Warrants to the Sponsorits Notes at a weighted-average price equal to 77% for $57.8 million.

Additionally, in April 2024, the Company repurchased $98.3 million principal amount of $1.50 per warrant, generating gross proceedsits Notes at a weighted-average price equal to 84% for $82.4 million. In the month of $14,000,000.

FollowingMay, through May 8, 2024, the Initial Public Offering, the exerciseCompany repurchased $19.0 million principal amount of the over-allotment option and the sale of the Private Placement Warrants,its Notes at a total of $460,000,000 was placed in the Trust Account. We incurred $25,777,859 in transaction costs, including $9,200,000 of underwriting fees, $16,100,000 of deferred underwriting fees and $477,859 of other costs.


We intendweighted-average price equal to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting commissions and income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs84% for $15.9 million.


Capped Call Transactions

On September 9, 2021, in connection with a Business Combination, the Sponsor or an affiliatepricing of the Sponsor or certainoffering of our directorsNotes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with the Bank of Montreal, Credit Suisse Capital LLC, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC and officers may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts.Wells Fargo Bank, National Association (collectively, the “Option Counterparties”). In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical to the Private Placement Warrants, at a price of $1.50 per warrant at the option of the lender.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debtaddition, on September 10, 2021, in connection with such Business Combination. Subjectthe initial purchasers’ exercise of their option to compliance with applicable securities laws, we would only complete such financing simultaneouslypurchase additional Notes, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions”, and together with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidateBase Capped Call Transactions, the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2020.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay affiliate“Capped Call Transactions”) with each of the our Chief Executive OfficerOption Counterparties. The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the Notes, and are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a monthly feecap, based on the cap price of $10,000 for office space, administrative and support services. We began incurring these feesthe Capped Call Transactions. The cap price of the Capped Call Transactions is initially $47.94, which represents a premium of 100% over the last reported sale price of the Company’s common stock on September 30, 2020 and will continue to incur these fees monthly until the earlier9, 2021. The cost of the completion of the Business Combination and our liquidation.

Capped Call Transactions was $90.2 million.


The underwritersCapped Call Transactions are entitled to a deferred fee of $0.35 per Unit, or $16,100,000 in the aggregate. The deferred fee will be waived by the underwriter in the event thatseparate transactions, each between the Company doesand the applicable option counterparty, and are not complete a Business Combination, subject topart of the terms of the underwriting agreement. 

Pursuant to a registrationNotes and stockholderdo not affect any holder’s rights agreement entered into on September 29, 2020,under the holdersNotes or the Indenture. Holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (andNotes will not have any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the Working Capital Loans) are entitled to registration rights. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequentthe Capped Call Transactions.


Known Trends or Uncertainties

The majority of our customers operate within the medical industry (dermatologists and plastic surgeons), esthetician, and beauty retail industry. Although we have not seen any significant reduction in revenues to consummationdate due to consolidations, we have seen some consolidation in our industry during economic downturns. These consolidations have not had a negative effect on our total sales; however, should consolidations and downsizing in the industry continue to occur, those events could adversely impact our revenues and earnings going forward.

In addition, we continue to face macro-economic challenges such as the possibility of recession or financial market instability, and the impact of any governmental actions on the economy. These factors may adversely impact consumer, business, and government spending as well as customers' ability to pay for our products and services on an ongoing basis.

As a Business Combination. However,result, if economic and social conditions or the registration rights agreement providesdegree of uncertainty or volatility worsen, or the adverse conditions previously described are further prolonged, our growth rate could be affected by consolidation and downsizing in the medical, esthetician, and beauty retail industry. We are continuing to monitor these and other risks that may affect our business so that we can respond appropriately.

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Syndeo Program Costs

The Company has accrued $8.3 million as of March 31, 2024 for the estimated cost for its remediation plan to upgrade or exchange customer Syndeo devices to meet the Syndeo 3.0 device standard which is expected to be substantially complete by June 30, 2024 related to initial replacement devices.

Discontinuation of Trade-up Program in 2024

The Company has historically accepted Delivery Systems in trade-up transactions with the intent to refurbish and resell such Delivery Systems received from the customer. During the year ended December 31, 2023, the Company recognized approximately $17 million of revenue based on the estimated fair value of such Delivery Systems. The revenue recognized for such Delivery Systems during the three months ended March 31, 2023 was immaterial. While the Company still expects to resell Delivery Systems previously received in trade-up transactions, starting in 2024, the Company will discontinue the use of trade-up transactions and the ensuing revenue recognition for noncash consideration.

Cash Flows

The following table summarizes the activities from our statements of cash flows. Amounts may not permit any registration statement filed underfoot due to rounding.

Three Months Ended March 31,
(Dollars in millions)20242023
Cash, cash equivalents, and restricted cash at beginning of period$523.0 $568.2 
Operating activities:
Net loss(0.7)(20.3)
Non-cash adjustments9.8 23.6 
Changes in working capital(26.0)(16.4)
Net cash used for operating activities(16.9)(13.0)
Net cash used for investing activities(1.8)(21.7)
Net cash used for financing activities(58.6)(2.2)
Net change in cash, cash equivalents, and restricted cash(77.3)(36.9)
Effect of foreign currency translation(1.1)1.0 
Cash, cash equivalents, and restricted cash at end of period$444.6 $532.3 

Operating Activities

Net cash used for operating activities for the Securities Actthree months ended March 31, 2024 was $16.9 million, as compared to become effective until terminationnet cash used for operating activities of $13.0 million for the three months ended March 31, 2023. The change in cash used for operating activities was primarily related to the net impact of current year net loss and other non-cash adjustments, which include a net gain of $16.1 million related to the repurchase of our Notes. The prior year net loss and non-cash adjustments include the impact of $9.1 million loss resulting from the change in fair value of the applicable lockup period. We will bearCompany’s warrants.

Investing Activities

Net cash used for investing activities for the expenses incurredthree months ended March 31, 2024 was $1.8 million, as compared to $21.7 million for the three months ended March 31, 2023. The change in connection withcash used for investing activities was primarily related to prior year’s asset acquisitions of Esthetic Medical Inc. and Anacapa Aesthetics LLC for $16.9 million.

Financing Activities

Net cash used for financing activities for the filingthree months ended March 31, 2024 was $58.6 million, as compared to $2.2 million for the three months ended March 31, 2023. The change in cash used for financing activities was primarily related to the repurchase of any such registration statements.

$75.0 million principal amount of our Notes at a weighted-average price equal to 77% for $57.8 million.


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Critical Accounting Policies

The preparation and Estimates


Our discussion and analysis of condensedour financial condition and results of operations are based upon our consolidated financial statements, and related disclosureswhich have been prepared in conformityaccordance with accounting principles generally accepted inGAAP. In preparing the United States of America requires management toconsolidated financial statements, we make estimates and assumptionsjudgments that affect the reported amounts of assets, liabilities, stockholders’ equity/deficit, revenue, expenses, and liabilities, disclosure of contingent assetsrelated disclosures. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and liabilities aton various other assumptions that we believe to be reasonable under the datecircumstances. Because of the financial statements, and income and expenses during the periods reported. Actualuncertainty inherent in these matters, actual results could materiallymay differ from those estimates. Wethese estimates and could differ based upon other assumptions or conditions.

There have not identified anybeen no changes to our critical accounting policies.

policies since our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.


Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effectPronouncements


See Part I, Item 1 "Financial Statements—Note 14 to the Consolidated Financial Statements—New Accounting Pronouncements" of this Quarterly Report on our condensed financial statements.

14

Form 10-Q.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2020, weRisk.


Market risks relating to our operations result primarily from changes in interest rates, foreign currency, and inflation risk. There were not subjectno material changes to anyour market or interest rate risk. Followingrisks disclosed in our Annual Report on Form 10-K for the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

fiscal year ended December 31, 2023.

Item 4. Controls and Procedures

Procedures.


Evaluation of Disclosure Controls and Procedures

Disclosure controls


The Company conducted an evaluation, under the supervision and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported withinwith the time periods specified inparticipation of the SEC’s rules and forms, and that such information is accumulated and communicated to ourCompany’s management, including ourthe Company’s principal executive officer and principal financial officer, or persons performing similar functions,of the effectiveness of the design and operation of its disclosure controls and procedures as appropriate to allow timely decisions regarding required disclosure.

Underdefined in Rules 13a-15(e) and 15-d-15(e) under the supervisionSecurities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Any controls and withprocedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the participationdesired control objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of our management, including ourpossible controls and procedures. Based on that evaluation, the Company’s principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2020, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that, duringas a result of the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

There was no changematerial weakness in our internal control over financial reporting related to the Company’s inventory process as described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2023, the Company’s disclosure controls and procedures were not effective as of March 31, 2024.


Remediation Plan for Material Weakness

The Company, with oversight from its Audit Committee, is in the process of implementing measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation plan includes, but is not limited to, the following:

•hiring additional personnel, both internal and external, with the necessary experience and skill to manage supply chain and inventory operations; and
•enhancing controls, including the implementation of manual or automated processes over the physical existence of inventory, identification of excess and obsolete inventory, and authorization of inventory pricing and purchase arrangements.

Although the Company believes that these actions will remediate the material weakness, additional time is required to test such actions and to complete the design, implementation, and review its controls to demonstrate the effectiveness of the Company’s remediation efforts. The material weakness cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
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Changes in Internal Control Over Financial Reporting

Other than the remediation plan discussed above, there have been no changes in our internal control over financial reporting (as such term is defined in the Exchange Act) that occurred during the fiscal quarter of 2020 covered by this Quarterly Report on Form 10-Qthree months ended March 31, 2024 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.



29

PART II -II— OTHER INFORMATION


Item 1. Legal Proceedings.

None.


For a description of our material pending legal proceedings, see Note 10, Commitments and Contingencies, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

Except as


Please carefully consider the information set forth below, as of the date ofin this Quarterly Report there have been no material changes with respect to thoseon Form 10-Q and the risk factors previously discloseddiscussed in Part I, “Item 1A. Risk Factors” in the Annual Report on Form 10-K, which could materially affect our business, financial condition, or future results. The risks described in our Registration Statement filed with the SEC. Any of these factors could result in a significant or material adverse effectAnnual Report on our results of operations or financial condition. Additional risk factorsForm 10-K, as well as additional risks and uncertainties not presently known to us or that we currently deem immaterial, may also impaircould materially and adversely affect our business, or results of operations.

The securitiesoperations, and financial condition, which in which we investturn could materially and adversely affect the funds held in the Trust Account could bear a negative ratetrading price of interest, which could reduce the valueshares of our Class A Common Stock. As of the assets helddate of this Quarterly Report on Form 10-Q, there have been no material updates or changes with respect to the risk factors previously disclosed in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

The proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our Amended and Restated Certificate of Incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income not released to us, net of taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by public stockholders.

Annual Report on Form 10-K.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On October 2, 2020, we consummated


Unregistered Sales of Equity Securities

During the Initial Public Offeringthree months ended March 31, 2024, the Company did not issue any shares of 46,000,000 Units, which includes the full exercise by the underwriters of their over-allotment option of 6,000,000 Units. The Units sold in the Initial Public Offering, including pursuant to the over-allotment option,its Class A Common Stock or other equity securities that were sold at an offering price of $10.00 per unit, generating total gross proceeds of $460,000,000. Goldman Sachs & Co, LLC and J.P. Morgan Securities LLC acted at joint book-running of managers the Initial Public Offering. The securities in the offering werenot registered under the Securities Act on registration statements on Form S-1 (No. 333-248717). Theof 1933, as amended.

Purchase of Equity Securities by Issuer and Exchange Commission declaredAffiliated Purchasers

During the registration statements effective on September 29, 2020.

Simultaneous withthree months ended March 31, 2024, the consummationCompany and its affiliated purchasers did not make any purchases of the Initial Public Offering and the exercise of the over-allotment option in full, we consummated the private placement of an aggregate of 9,333,333 Private Placement Warrants to the Sponsor at a price of $1.50 per Private Placement Warrant, generating total proceeds of $14,000,000. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

The Private Placement Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Of the gross proceeds received from the Initial Public Offering including the exercise of the over-allotment option in full and the Private Placement Warrants, $460,000,000 was placed in the Trust Account.

We paid a total of $9,200,000 in underwriting discounts and commissions and $477,859 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer up to $16,100,000 in underwriting discounts and commissions.

For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.

Company’s equity securities.

Item 3. Defaults Upon Senior Securities.

None.


Item 4. Mine Safety Disclosures.

Not Applicable.


Item 5. Other Information.

None.


Rule 10b5-1 Trading Plans

During the three months ended March 31, 2024, no director or officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
30

Item 6. Exhibits


The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

EXHIBIT INDEX
No.Description of ExhibitFormFile No.ExhibitFiling DateFiled Herewith
8-K001-395652.1December 9, 2020
8-K001-395653.1May 10, 2021
8-K001-395653.2May 10, 2021
8-K001-395654.1September 14, 2021
8-K001-395654.2September 14, 2021
8-K001-395654.1October 5, 2020
10-K001-395654.4March 1, 2022

10.1†
8-K001-3956510.1April 8, 2024
8-K001-3956510.2April 8, 2024
X
X
8-K/A001-3956510.1May 2, 2024
X
X
31

EXHIBIT INDEX
No.Description of ExhibitFormFile No.ExhibitFiling DateFiled Herewith
1.1Underwriting Agreement, dated September 29, 2020, by and among the Company, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, as representatives of the several underwriters. (1)
3.1Amended and Restated Certificate of Incorporation. (1)
4.1Warrant Agreement, dated September 29, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent. (1)
10.1Letter Agreement, dated September 29, 2020, by and among the Company and its officers and directors. (1)
10.2Letter Agreement, dated September 29, 2020, by and between the Company and the Sponsor. (1)
10.3Investment Management Trust Agreement, dated September 29, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as trustee. (1)
10.4Registration Rights Agreement, dated September 29, 2020, by and between the Company and the Sponsor. (1)
10.5Administrative Support Agreement, dated September 29, 2020, by and between the Company and BLS Advisors LLC. (1)
10.6Private Placement Warrants Purchase Agreement, dated September 29, 2020, by and between the Company and the Sponsor. (1)
  31.1*Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2*Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32.1**X
X
101.INS**Inline XBRL Instance DocumentX
101.SCH**Inline XBRL Taxonomy Extension Schema DocumentX
101.CAL**Inline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEF**Inline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LAB**Inline XBRL Taxonomy Extension Labels Linkbase DocumentX
101.PRE**Inline XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith.X
104***Furnished.
(1)Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 attachmentsPreviously filed as an
_______________
*    These certifications are being furnished solely to accompany this annual report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
**    The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
†     Confidential portions of this exhibit were redacted pursuant to Item 601(b)(10) of Regulation S-K, and the Company agrees to furnish to the SEC a copy of any omitted schedule and/or exhibit upon request.
#    Management contract or compensatory plan or arrangement.

32

SIGNATURES

Pursuant to our Current Report on Form 8-K filed on October 5, 2020 and incorporated by reference herein.

17

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Vesper Healthcare Acquisition Corp.
THE BEAUTY HEALTH COMPANY
Date: November 16, 2020May 9, 2024By:/s/ Brenton L. SaundersMarla Beck
Name:Name:Brenton L. SaundersMarla Beck
Title:Title:Chief Executive Officer
(Principal Executive Officer)
Date: November 16, 2020May 9, 2024By:/s/ Manisha Narasimhan, PhDMichael Monahan
Name:Name:Manisha Narasimhan, PhDMichael Monahan
Title:Title:Chief Financial Officer
(Principal Accounting Officer and Financial Officer)

18

33