Item 3. Source and Amount of Funds or Other Consideration
Pursuant to the Investment Agreement (the “Investment Agreement”), dated April 30, 2020, by and among Steiner Leisure Limited (“Steiner Leisure”), the Issuer and the other investors party thereto, on June 12, 2020 Steiner Leisure was issued 2,833,250 Shares (in addition to certainNon-Voting Common Shares and warrants to purchaseNon-Voting Common Shares that have been excluded from this statement because such shares and warrants arenon-voting securities which do not constitute “equity securities” under Rule13d-1(i) promulgated under the Exchange Act and are not subject to the reporting requirements of Rule13d-1(a)) in satisfaction of the Issuer’s obligation to issue certain “deferred” common shares pursuant to the Business Combination Agreement, dated November 1, 2018, by and among Steiner Leisure, the Issuer and the other parties thereto (the “Business Combination Agreement”). Previously, Steiner Leisure was issued 8,548,130 Shares and 1,486,520 warrants, pursuant to the Business Combination Agreement, as consideration for the transactions set forth therein.
The Shares were acquired in consideration of and in exchange for Steiner Leisure’s equity interests in certain assets that were contributed to the Issuer pursuant to the Business Combination Agreement, which were initially acquired with investment funds of affiliates of Steiner Leisure.
Item 4. Purpose of Transaction
The Reporting Entities acquired the Shares because they believe it represents an attractive investment opportunity.
The Reporting Entities have from time to time engaged in discussions with members of management and the board of directors of the Issuer (the “Board”), including with respect to the composition of the Board. Steiner Leisure has the right to designate and appoint three directors to the Board and has designated and appointed two directors to the Board. The Reporting Entities have also from time to time engaged in discussions with other shareholders of the Issuer and may, from time to time, continue to engage in discussions with members of management and the Board, other current or prospective shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other third parties regarding a variety of matters relating to the Issuer, which may include, among other things, the Issuer’s business, management, capital structure and allocation, corporate governance, Board composition and strategic alternatives and direction, and may pursue other plans or proposals that relate to or could result in any of the matters set forth in clauses (a)-(j) of Item 4 of Schedule 13D.
The Reporting Entities expect to evaluate on an ongoing basis the Issuer’s financial condition and prospects and their respective interests in, and intentions with respect to, the Issuer and their respective investments in the securities of the Issuer, which review may be based on various factors, including the Issuer’s business and financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Issuer’s securities in particular, as well as other developments and other investment opportunities. Accordingly, each Reporting Entity reserves the right to change its intentions, as it deems appropriate. In particular, each Reporting Entity may at any time and from time to time, in the open market, in privately negotiated transactions or otherwise, increase its holdings in the Issuer or dispose of all or a portion of the securities of the Issuer that the Reporting Entities now own or may hereafter acquire.
Item 5. Interest in Securities of the Issuer
| (a) | The information requested in this item is incorporated herein by reference to the cover pages of this statement. |
| (b) | As of June 12, 2020, Dory directly holds 8,198,130 Shares and Steiner Leisure directly holds 3,183,250 Shares and 1,486,520 warrants, with each warrant exercisable for one Share, subject to adjustment, for an exercise price of $11.50 per share. |
Dory is 100% owned by Steiner Leisure. Steiner Leisure is controlled by Parent. Parent is 100% owned by Aggregator. Aggregator is governed by a board of directors consisting of seven directors. Each director has one vote, and the approval of a majority of the directors is required to approve an action of Aggregator. Under theso-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed to be a beneficial owner of the entity’s securities.
Steiner Leisure may be deemed to be the beneficial owner of the Shares directly held by Dory; Parent and Aggregator may be deemed beneficial owner of the Shares directly held by Dory and Steiner Leisure. Each Reporting Entity disclaims beneficial ownership of such Shares except to the extent of its pecuniary interest therein.
| (c) | The information set forth in Item 3 above is incorporated by reference into this Item 5(c). |
| (d) | No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of Shares. |
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