What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-07 compared with 2025-11-06 · 174 added, 191 removed, 443 unchanged (45% of the section changed)

Financial Statements.

THE BEAUTY HEALTH COMPANY

SKINHEALTH SYSTEMS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share amounts)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

1 unchanged sentence

$ 204,358 $ 232,673

Accounts receivable, net of allowances for estimated credit losses of $ 7,429 and $ 9,597 at September 30, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowances for estimated credit losses of $ 4,988 and $ 6,022 at March 31, 2026 and December 31, 2025, respectively

18,615 21,741

12 unchanged sentences

Current liabilities:

Current portion of convertible senior notes, net $ 102,944 $ 123,959

Accounts payable 15,885 15,631

6 unchanged sentences

Deferred income tax liabilities, net 393 393

Warrant liabilities 139 488

Convertible senior notes, net 241,276 240,431

2 unchanged sentences

417,993 438,747

Commitments (Note 6)

Commitments and Contingencies (Note 6)

Stockholders’ equity:

1 unchanged sentence

320,000,000 shares authorized;

127,301,264 and 124,924,185 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

129,144,801 and 127,520,823 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 581,053 579,961

5 unchanged sentences

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

THE BEAUTY HEALTH COMPANY

SKINHEALTH SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net sales $ 64,910 $ 69,580

13 unchanged sentences

Loss before provision for income taxes ( 6,814 ) ( 9,204 )

Income tax expense 386 1,948 285 936

Income tax (benefit) expense ( 184 ) 892

Net loss ( 6,630 ) ( 10,096 )

Comprehensive (loss) income, net of tax:

Comprehensive loss, net of tax:

Foreign currency translation adjustments ( 278 ) 1,128

Comprehensive (loss) income $ ( 10,610 ) $ ( 17,104 ) $ 3,763 $ ( 19,444 )

Comprehensive loss $ ( 6,908 ) $ ( 8,968 )

Net loss per share

5 unchanged sentences

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

THE BEAUTY HEALTH COMPANY

SKINHEALTH SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

9 unchanged sentences

BALANCE, March 31, 2025 125,246,286 $ 13 $ 569,935 $ ( 5,825 ) $ ( 518,061 ) $ 46,062

Net income — — — — 202 202

Issuance of common stock pursuant to equity compensation plan 454,362 — — — — —

Shares withheld for tax withholdings on vested stock awards ( 104,120 ) — ( 368 ) — — ( 368 )

Issuance of common stock relating to employee stock purchase plan 190,124 — 378 — — 378

Share-based compensation — — 6,498 — — 6,498

Foreign currency translation adjustments — — — ( 816 ) — ( 816 )

BALANCE, June 30, 2024 123,993,785 $ 12 $ 553,420 $ ( 4,899 ) $ ( 479,344 ) $ 69,189

Net loss — — — — ( 18,291 ) ( 18,291 )

Issuance of common stock pursuant to equity compensation plan 171,021 — — — — —

Shares withheld for tax withholdings on vested stock awards ( 53,372 ) — ( 73 ) — — ( 73 )

Share-based compensation — — 7,712 — — 7,712

Foreign currency translation adjustments — — — 1,187 — 1,187

BALANCE, September 30, 2024 124,111,434 $ 12 $ 561,059 $ ( 3,712 ) $ ( 497,635 ) $ 59,724

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit Total Stockholders’ Equity (Deficit)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit)

Shares Amount

6 unchanged sentences

BALANCE, March 31, 2026 129,144,801 $ 13 $ 581,053 $ ( 1,712 ) $ ( 524,114 ) $ 55,240

Net income — — — — 19,712 19,712

Issuance of common stock pursuant to equity compensation plan 2,091,026 — — — — —

Shares withheld for tax withholdings on vested stock awards ( 572,750 ) — ( 708 ) — — ( 708 )

Share-based compensation — — 5,308 — — 5,308

Foreign currency translation adjustments — — — 3,629 — 3,629

BALANCE, June 30, 2025 126,764,562 $ 13 $ 574,535 $ ( 2,196 ) $ ( 498,349 ) $ 74,003

Net loss — — — — ( 11,031 ) ( 11,031 )

Issuance of common stock pursuant to equity compensation plan 774,465 — — — — —

Shares withheld for tax withholdings on vested stock awards ( 237,763 ) — ( 188 ) — — ( 188 )

Share-based compensation — — 2,455 — — 2,455

Foreign currency translation adjustments — — — 421 — 421

BALANCE, September 30, 2025 127,301,264 $ 13 $ 576,802 $ ( 1,775 ) $ ( 509,380 ) $ 65,660

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

THE BEAUTY HEALTH COMPANY

SKINHEALTH SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

9 unchanged sentences

Change in fair value of warrant liabilities — ( 349 )

Gain on exchange and repurchases of convertible senior notes, net ( 18,089 ) ( 33,411 )

Gain on repurchase of 2026 Notes ( 1,019 ) —

Deferred income taxes ( 515 ) ( 265 )

6 unchanged sentences

Other, net ( 1,962 ) ( 1,999 )

Net cash provided by (used for) operating activities 22,289 ( 338 )

Net cash (used for) provided by operating activities ( 5,554 ) 2,996

Cash flows from investing activities:

3 unchanged sentences

Cash flows from financing activities:

Repurchase of 2026 Notes in connection with exchange ( 392,583 ) —

Issuance of 2028 Notes in connection with exchange, net 237,686 —

Repurchase of 2026 Notes ( 20,161 ) —

6 unchanged sentences

The accompanying notes are an integral part of these unaudited financial statements

THE BEAUTY HEALTH COMPANY

SKINHEALTH SYSTEMS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of Business

The Beauty Health Company (the “Company”) is a medtech meets beauty company that delivers 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 nanoneedling and 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.

SkinHealth Systems Inc.

(the “Company”) is a global medical aesthetics company delivering an integrated ecosystem of clinically proven solutions designed to help consumers achieve superior skin health and support the success of providers.

Anchored by Hydrafacial, a leading and widely requested professional skincare treatment, and supported by complementary offerings including SkinStylus microneedling and HydraScalp powered by Keravive, the Company combines advanced device technology, proprietary consumables, and clinical validation to deliver trusted treatment experiences through an omnichannel network of providers worldwide.

Historical Information

The Company (f.k.a.

Vesper Healthcare Acquisition Corp.) was incorporated in the State of Delaware on July 8, 2020.

On May 4, 2021, we consummated the 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.

The Company (previously, The Beauty Health Company, and formerly, Vesper Healthcare Acquisition Corp.) was incorporated in the State of Delaware on July 8, 2020.

On May 4, 2021, we consummated the business combination pursuant to that certain Agreement and Plan of Merger, dated December 8, 2020, by and among Vesper Healthcare Acquisition Corp., 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.

11 unchanged sentences

Inventories consist of the following as of the periods indicated:

(in thousands) September 30, 2025 December 31, 2024

(in thousands) March 31, 2026 December 31, 2025

Raw materials $ 19,631 $ 18,546

2 unchanged sentences

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

(in thousands) September 30, 2025 December 31, 2024

(in thousands) March 31, 2026 December 31, 2025

Accrued compensation and payroll taxes

4 unchanged sentences

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

(in thousands) September 30, 2025 December 31, 2024

Sales and VAT tax payables $ 2,852 $ 5,244

(in thousands) March 31, 2026 December 31, 2025

Accrued interest $ 7,508 $ 2,929

Sales and VAT tax payables 2,899 3,571

Royalty liabilities 1,318 1,571

2 unchanged sentences

Total other accrued expenses $ 18,722 $ 15,384

As of September 30, 2025 and December 31, 2024, total warranty reserve was approximately $ 2 million and $ 4 million, respectively, which was included in other accrued expenses on the Condensed Consolidated Balance Sheets.

As of September 30, 2025 and December 31, 2024, the Company has approximately $ 2 million in restricted cash held as collateral for the Company’s credit cards, which was included in cash, cash equivalents and restricted cash on the Condensed Consolidated Balance Sheets.

As of March 31, 2026 and December 31, 2025, total warranty reserve was approximately $ 1 million, which was included in other accrued expenses on the Condensed Consolidated Balance Sheets.

As of March 31, 2026 and December 31, 2025, the Company has approximately $ 2 million in restricted cash held as collateral for the Company’s credit cards, which was included in cash, cash equivalents and restricted cash on the Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2026, the Company amended the terms of its principal executive office lease agreement to expire in November 2032, resulting in an increase of approximately $ 14 million in future operating lease payments and an approximately $ 10 million increase in lease-related balances on the Condensed Consolidated Balance Sheets.

Note 3 — Property and Equipment, net

1 unchanged sentence

(in thousands) Useful life

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Leasehold improvements Shorter of remaining lease

11 unchanged sentences

Note 4 — Goodwill and Intangible Assets, net

The changes in the carrying value of goodwill for the nine months ended September 30, 2025 is as follows (in thousands):

The changes in the carrying value of goodwill for the three months ended March 31, 2026 are as follows (in thousands):

December 31, 2025 126,621

Foreign currency translation impact

September 30, 2025 $ 126,497

March 31, 2026 $ 126,246

Intangible Assets, Net

The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of September 30, 2025 were as follows:

The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of March 31, 2026 were as follows:

(in thousands) Gross

22 unchanged sentences

Note 5 — Long-Term Debt

Convertible Senior Secured Notes - 2028

On May 21, 2025, the Company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders (the “Exchanging Holders”) of the 1.25 % Convertible Senior Notes due October 1, 2026 (the “2026 Notes”).

Pursuant to the Exchange Agreements, the Company exchanged and repurchased $ 413.2 million aggregate principal amount of the 2026 Notes.

Of the $ 413.2 million aggregate principal amount of the 2026 Notes, $ 263.2 million principal amount were exchanged at a weighted-average price equal to 95 % for $ 250.0 million principal amount of new 7.95 % Convertible Senior Secured Notes due November 15, 2028 (the “2028 Notes”, and together with the 2026 Notes, the “Notes”), and $ 150.1 million principal amount were repurchased at a weighted-average price equal to 95 % for $ 142.6 million.

On May 27, 2025, the Company issued the 2028 Notes to the Exchanging Holders.

The 2028 Notes were issued pursuant to, and are governed by, an indenture, dated as of May 27, 2025, between the Company, the guarantors party thereto, and U.S.

Bank Trust Company, National Association, as trustee and collateral agent.

Convertible Senior Notes - 2026

On September 14, 2021, the Company issued an aggregate of $ 750.0 million in principal amount of its 1.25 % Convertible Senior Notes due October 1, 2026 (the “2026 Notes”).

The 2026 Notes were issued pursuant to, and are governed by, an indenture dated as of September 14, 2021, between the Company and U.S.

On September 14, 2021, the Company issued an aggregate of $ 750.0 million in principal amount of its 2026 Notes pursuant to, and governed by, an indenture dated as of September 14, 2021, between the Company and U.S.

Bank National Association, as trustee.

1 unchanged sentence

The 2026 Notes issued on September 14, 2021 include the $ 100.0 million principal amount of 2026 Notes issued pursuant to the full exercise by the initial purchasers of such option.

During the three months ended September 30, 2024, there were no repurchases related to the 2026 Notes.

During the nine months ended September 30, 2024, the Company repurchased $ 192.3 million principal amount of the 2026 Notes for $ 156.1 million and recognized a net gain of $ 33.4 million, which includes $ 2.8 million of unamortized debt issuance costs related to the repurchase.

During the three months ended September 30, 2025, there were no repurchases related to the 2026 Notes.

During the nine months ended September 30, 2025, the Company repurchased $ 20.0 million principal amount of the 2026 Notes for $ 18.4 million and recognized a net gain of $ 1.5 million, which includes $ 0.1 million of unamortized debt issuance costs related to the repurchase.

Convertible Senior Secured Notes - 2028

On May 21, 2025, the Company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders (the “Exchanging Holders”) of the 2026 Notes (the “Existing Notes”).

Pursuant to the Exchange Agreements, the Company exchanged and repurchased $ 413.2 million aggregate principal amount of the Existing Notes.

Of the $ 413.2 million aggregate principal amount of the Existing Notes, $ 263.2 million principal amount were exchanged at a weighted-average price equal to 95 % for $ 250.0 million principal amount of new 7.95 % Convertible Senior Secured Notes due November 15, 2028 (the “2028 Notes”, and together with the 2026 Notes, the “Notes”), and $ 150.1 million principal amount were repurchased at a weighted-average price equal to 95 % for $ 142.6 million.

The exchange and repurchase resulted in a net gain of $ 16.6 million, which includes $ 3.1 million of unamortized debt issuance costs and $ 0.9 million of other related fees.

On May 27, 2025, the Company issued the 2028 Notes to the Exchanging Holders.

The 2028 Notes were issued pursuant to, and are governed by, an indenture (the “2028 Indenture”), dated as of May 27, 2025, between the Company, the guarantors party thereto, and U.S.

Bank Trust Company, National Association, as trustee and collateral agent.

The 2028 Notes are the Company’s senior, secured obligations and are guaranteed by certain of the Company’s subsidiaries (including the Company’s material domestic, wholly-owned subsidiaries) and are secured on a first-priority basis by substantially all assets of the Company and such guarantors, subject to certain exceptions.

The 2028 Notes will accrue interest at a rate of 7.95 % per annum, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2025.

The 2028 Notes will mature on November 15, 2028 (the “Maturity Date”), unless earlier repurchased, redeemed or converted.

Subject to certain restrictions, noteholders may convert their 2028 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the Maturity Date.

The initial conversion rate is 349.6503 shares of Class A Common Stock per $1,000 principal amount of 2028 Notes, which represents an initial conversion price of approximately $ 2.86 per share of Class A Common Stock.

The conversion rate and conversion price is subject to adjustment upon the occurrence of certain events.

The Company will settle conversions by paying or delivering, as applicable, cash, shares of its Class A Common Stock or a combination of cash and shares of its Class A Common Stock, at the Company’s election.

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the 2028 Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The 2028 Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after September 1, 2028, and on or before the 40 th scheduled trading day immediately before the Maturity Date, but only if certain liquidity conditions are satisfied.

The redemption price will be a cash amount equal to the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, the calling of any 2028 Notes for redemption will constitute a Make-Whole Fundamental Change with respect to that 2028 Note, in which case the conversion rate applicable to the conversion of that 2028 Note will be increased in certain circumstances if it is converted after it is called for redemption.

If certain corporate events that constitute a “Fundamental Change” (as defined in the 2028 Indenture) occur, then, subject to a limited exception, noteholders may require the Company to repurchase their 2028 Notes at a cash repurchase price equal to the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s Class A Common Stock.

The 2028 Indenture also contains a number of restrictive covenants and limitations, including restrictions on the Company’s ability to incur certain indebtedness and other limitations on liens, investments and restricted payments, as further described in the 2028 Indenture.

The Company incurred $ 11.4 million of debt issuance costs related to the exchange and repurchase of the Existing Notes, which was recorded as a reduction to convertible senior notes, net on the Condensed Consolidated Balance Sheets.

The debt issuance costs are being amortized over the term of the 2028 Notes using the effective interest method.

Additionally, the Company incurred $ 0.9 million of other fees related to the exchange and repurchase of the Existing Notes.

During the three months ended March 31, 2026, the Company repurchased $ 21.3 million principal amount of its 2026 Notes at a weighted-average price equal to 94.875 % for $ 20.2 million and recognized a net gain of $ 1.0 million, which includes $ 0.1 million of unamortized debt issuance costs.

During the three months ended March 31, 2025, there were no repurchases related to the 2026 Notes.

Since inception through December 31, 2025, the Company exchanged and repurchased in total $ 625.5 million principal amount of its 2026 Notes.

The net gain recognized related to the repurchase is included in other income, net in the Condensed Consolidated Statements of Comprehensive Income (Loss).

The following is a summary of the Company’s Notes for the periods indicated:

(in thousands) September 30, 2025 December 31, 2024

(in thousands) March 31, 2026 December 31, 2025

2026 Notes $ 103,235 $ 124,485

1 unchanged sentence

Unamortized debt issuance costs ( 9,015 ) ( 10,095 )

( 11,097 ) ( 5,502 )

Total convertible senior notes, net 344,220 364,390

Current portion of convertible senior notes, net ( 102,944 ) ( 123,959 )

Convertible senior notes, net $ 241,276 $ 240,431

As of September 30, 2025 and December 31, 2024 , the estimated fair value of the Notes were $ 390.9 million (compared to a carrying amount of $ 374.5 million ) and $ 446.2 million (compared to a carrying amount of $ 557.7 million ), respectively.

The estimated fair value of the Notes was determined based on the actual bid price of the Notes on September 30, 2025 and December 31, 2024, and are classified as Level 2 within the fair value hierarchy.

The net gain recognized related to the exchange and repurchases is included in other income, net in the Condensed Consolidated Statements of Comprehensive Income (Loss).

As of March 31, 2026 and December 31, 2025 , the estimated fair value of the Notes were $ 345.3 million (compared to a carrying amount of $ 353.2 million ) and $ 383.1 million (compared to a carrying amount of $ 374.5 million ), respectively.

The estimated fair value of the Notes was determined based on the actual bid price of the Notes on March 31, 2026 and December 31, 2025, and are classified as Level 2 within the fair value hierarchy.

Note 6 — Commitments and Contingencies

15 unchanged sentences

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.

Ca.) (the “Securities Class Action”), asserted 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 alleged 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 included 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.

3 unchanged sentences

On July 1, 2024, lead plaintiffs filed a consolidated amended class action complaint asserting the same causes of action as the original complaint.

The Securities Class Action case is assigned to U.S.

The Securities Class Action case was assigned to U.S.

District Judge Sherilyn Peace Garnett.

On September 30, 2024, the Company filed a motion to dismiss the consolidated amended class action complaint in its entirety.

Plaintiffs filed their opposition brief on November 22, 2024, and the Company filed its reply brief on December 23, 2024.

On September 30, 2024, Defendants filed a motion to dismiss the consolidated amended class action complaint in its entirety.

Plaintiffs filed their opposition brief on November 22, 2024, and Defendants filed their reply brief on December 23, 2024.

A hearing on the Defendants’ motion to dismiss was scheduled for January 15, 2025.

On January 10, 2025, the Court granted the parties’ joint stipulation to adjourn the January 15, 2025 hearing.

On January 17, 2025, the court granted the parties’ joint stipulation to withdraw briefing on Defendants’ motion to dismiss without prejudice to refiling and to briefly stay proceedings so that the parties can complete a private mediation.

On January 17, 2025, the Court granted the parties’ joint stipulation to withdraw briefing on Defendants’ motion to dismiss without prejudice to refiling and to briefly stay proceedings so that the parties could complete a private mediation.

The parties conducted the private mediation on March 27, 2025.

The parties were unable to reach a settlement at the mediation.

On April 16, 2025, the court so-ordered the parties’ stipulation.

On May 5, 2025, the plaintiffs filed an amended complaint.

On July 11, 2025, Defendants filed a motion to dismiss the amended complaint in its entirety.

On May 5, 2025, the plaintiffs filed a second amended complaint (the “SAC”), pursuant to the parties’ stipulation, which was so-ordered by the Court on April 16, 2025.

On July 11, 2025, Defendants filed a motion to dismiss the SAC in its entirety.

The Court scheduled a hearing on Defendants’ motion for September 17, 2025.

1 unchanged sentence

On September 25, 2025, the Court denied Defendants’ motion to dismiss.

Defendants’ answer to the amended complaint is due November 24, 2025.

On November 24, 2025, each Defendant filed an answer to the SAC.

On November 26, 2025, the parties filed a Fed.

26(f) joint report and proposed stipulated pretrial schedule.

On December 15, 2025, the Court so-ordered the parties’ stipulated pretrial schedule, set the final pretrial conference for November 17, 2027, and set trial for December 7, 2027.

On the same day, the Court referred the parties to a private mediation before a private mediator of their choice, to be completed by October 13, 2027.

On March 24, 2026, the parties entered into a stipulation to extend the case schedule by approximately three months to allow them to focus on mediation efforts.

The Court approved the stipulation on March 25, 2026, resulting in a three-month extension of the case schedule, including all discovery deadlines.

The parties have agreed to participate in a private mediation, which is currently scheduled to take place on May 20, 2026.

The Company believes that the claims asserted in the Securities Class Action have no merit and intends to vigorously defend them.

Customer Class Action

On October 24, 2024, Jason Davalos (“Jason Davalos”), Sonia Davalos (“Sonia Davalos”, and collectively with Jason Davalos, the “Davaloses”), and Sol Tan Tanning & Spa LLC (“Sol Tan”, and collectively with the Davaloses, the “Class Action Plaintiffs”), individually and on behalf of all others similarly situated, filed a putative class action complaint against Hydrafacial LLC d/b/a The Hydrafacial Company and The Beauty Health Company (collectively, the “Class Action Defendants”) for alleged violations of New York consumer fraud statutes, breach of contract, and common law breach of implied warranties (the “Customer Class Action”).

On October 24, 2024, Jason Davalos (“Jason Davalos”), Sonia Davalos (“Sonia Davalos”, and collectively with Jason Davalos, the “Davaloses”), and Sol Tan Tanning & Spa LLC (“Sol Tan”, and collectively with the Davaloses, the “Class Action Plaintiffs”), individually and on behalf of all others similarly situated, filed a putative class action complaint (the “Complaint”) against Hydrafacial LLC d/b/a The Hydrafacial Company (“Hydrafacial”) and The Beauty Health Company (“BHC” and collectively with Hydrafacial, the “Class Action Defendants”) for alleged violations of New York consumer fraud statutes, breach of contract, and common law breach of implied warranties (the “Customer Class Action”).

The case is captioned Jason Davalos, Sonia Davalos, Sol Tan Tanning & Spa LLC, on behalf of themselves and all others similarly situated v.

Hydrafacial LLC dba The Hydrafacial Company, and The Beauty Health Company, Case No.

24-cv-8073 (S.D.N.Y.) (Caproni, J.) The complaint alleges that all three versions of the Syndeo machine (Syndeo 1.0, Syndeo 2.0, and Syndeo 3.0) were defective and did not perform in the manner in which it had been represented by Class Action Defendants.

24-cv-8073 (S.D.N.Y.) (Caproni, J.) The Complaint alleged that all three versions of the Syndeo machine (Syndeo 1.0, Syndeo 2.0, and Syndeo 3.0) were defective and did not perform in the manner in which it had been represented by Class Action Defendants.

Class Action Plaintiffs claim that Class Action Defendants made various misrepresentations in its marketing and sales of the Syndeo machines and, rather than provide a refund to customers for the defective machines, replaced them with another Syndeo machine that exhibited the same defects.

Class Action Plaintiffs purport to bring claims on behalf of themselves, and all other similarly situated purchasers within the United States, of Class Action Defendants’ Syndeo machines.

The complaint asserts five causes of action:

Class Action Plaintiffs purported to bring claims on behalf of themselves, and all other similarly situated purchasers within the United States, of Class Action Defendants’ Syndeo machines.

The Complaint asserted five causes of action:

(1) violations of N.Y.

5 unchanged sentences

and (5) breach of the implied warranty of fitness.

The relief sought in the complaint includes monetary damages allegedly suffered by Class Action Plaintiffs and other members of the putative class as a result of Class Action Defendants’ alleged violations and breaches, including a trebling of any money damages award for alleged violations of N.Y.

The relief sought in the Complaint included monetary damages allegedly suffered by Class Action Plaintiffs and other members of the putative class as a result of Class Action Defendants’ alleged violations and breaches, including a trebling of any money damages award for alleged violations of N.Y.

G.B.L., § 349 and § 350.

On December 30, 2024, the Class Action Defendants filed a motion to dismiss the Customer Class Action complaint in its entirety.

On December 30, 2024, the Class Action Defendants filed a motion to dismiss the Complaint in its entirety.

On January 3, 2025, the Class Action Defendants filed a motion to stay discovery during the pendency of their motion to dismiss.

13 unchanged sentences

On the same day, the Court endorsed the joint submission and ordered Plaintiff to file an amended complaint no later than June 2, 2025, and scheduled an initial pretrial conference for July 18, 2025.

On June 2, 2025, Plaintiff and fifteen other alleged purchasers of the Syndeo machines filed an amended complaint asserting:

On June 2, 2025, Plaintiff and fifteen other alleged purchasers of the Syndeo machines (“Plaintiffs”) filed an amended complaint (the “Amended Complaint”) asserting:

(1) violations of N.Y.

5 unchanged sentences

and (5) breach of express warranty (Count III).

The relief sought in the amended complaint includes monetary damages allegedly suffered by Class Action Plaintiffs and other members of the putative class as a result of Class Action Defendants’ alleged violations and breaches, including a trebling of any money damages award for alleged violations of N.Y.

The relief sought in the Amended Complaint included monetary damages allegedly suffered by Class Action Plaintiffs and other members of the putative class as a result of Class Action Defendants’ alleged violations and breaches, including a trebling of any money damages award for alleged violations of N.Y.

G.B.L., § 349 and § 350.

For Counts IV (violations of N.Y.

G.B.L., § 349) and V (violations of N.Y.

G.B.L., § 350), plaintiff Jennifer Skuratov d/b/a Spa Thirsty, Inc.

(“Spa Thirsty”), sought certification of an alternative subclass of New York purchasers of Syndeo devices (the “Putative New York Subclass”).

On June 23, 2025, Defendants moved to (i) dismiss Counts I, II, IV, and V in full;

(ii) partially dismiss Count III to the extent it alleges design defects;

(iii) dismiss all claims brought by plaintiff Jennifer Skuratov d/b/a Spa Thirsty in full;

(iv) dismiss all claims against the Company in full;

(iii) dismiss all claims brought by plaintiff Spa Thirsty in full;

(iv) dismiss all claims against BHC in full;

and (v) dismiss Plaintiffs’ claim for injunctive relief.

The parties are currently engaged in discovery while they await the Court’s ruling on Defendants’ partial motion to dismiss.

The Company believes that the claims asserted in the Customer Class Action have no merit and Class Action Defendants intend to vigorously defend them.

On December 22, 2025, the Court granted Defendants’ motion to dismiss in its entirety, except it denied Defendants’ request that the claims brought by plaintiff Spa Thirsty be dismissed with prejudice.

Specifically, the Court dismissed (i) all of Plaintiffs’ claims against BHC;

(ii) Plaintiffs’ claims for breach of the implied warranty of merchantability (Count I), breach of express and implied contract and class-wide rescission based on fraudulent inducement (Count II), and violations of N.Y.

G.B.L., §§ 349 and 350 (Counts IV and V), and their request for injunctive relief;

and (iii) the Class Action Plaintiffs’ claim for breach of express warranty (Count III) to the extent it arises out of alleged defects affirmatively identified as “design defects” in the amended complaint.

In addition, the Court denied the Class Action Plaintiffs’ request for leave to amend as to all of the dismissed causes of action except for plaintiff Spa Thirsty’s claims pursuant to N.Y.

§§ 349 and 350.

The Court gave plaintiff Spa Thirsty until January 9, 2026 to move for leave to file a second amended complaint that addresses the deficiencies with plaintiff Spa Thirsty’s §§ 349 and 350 claims.

Those deficiencies included plaintiff Spa Thirsty’s failure to allege that it “was aware of any of Defendants’ purportedly deceptive statements ‘before [it] purchased or came into possession’ of the Syndeo.”

On January 9, 2026, Class Action Plaintiffs filed a letter motion for leave to file a second amended complaint and for reconsideration of the Court’s dismissal of Plaintiffs’ claims for breach of express and implied contract and class-wide rescission based on fraudulent inducement (Count II).

Class Action Plaintiffs appended a proposed second amended complaint (the “Second Amended Complaint”) to their letter motion.

The Second Amended Complaint alleged that plaintiff Spa Thirsty purchased a Syndeo in reliance on representations made by Hydrafacial to plaintiff Spa Thirsty at an aesthetic conference in New York, including that Syndeo was “top of the line,” “hands free,” “had superior cleanliness,” “superior,” “a major upgrade,” “works great,” and “yielded ‘more than 15 uses per bottle of solution serum.” The Second Amended Complaint alleged that those representations were deceptive in violation of N.Y.

§§ 349 and 350 because the Syndeo allegedly lacked attributes Hydrafacial had represented to plaintiff Spa Thirsty and did not yield the promised treatments per bottle of solution serum.

On January 23, 2026, Hydrafacial filed its opposition to Class Action Plaintiffs’ letter motion.

Hydrafacial argued that the Second Amended Complaint was futile because all of its alleged representations about the Syndeo were inactionable puffery, except for, arguably, the representation regarding the number of treatments per bottle of solution serum.

For that representation, Hydrafacial argued that plaintiff Spa Thirsty did not allege that its Syndeo yielded fewer than 15 treatments per bottle and failed to allege other facts required to state §§ 349 and 350 claims.

Hydrafacial also argued that Class Action Plaintiffs’ request for reconsideration of the dismissal of Count II should be denied as untimely.

On January 27, 2026, the Court issued an order granting Class Action Plaintiffs’ motion for leave to file the Second Amended Complaint but denied their request that the Court reconsider its order dismissing the claim for breach of contract in Count II of the Amended Complaint.

Although the Court agreed with Hydrafacial that “many of the claims attributed to HydraFacial in the Second Amended Complaint are non-actionable puffery, the claim that the Syndeo ‘yielded more than 15 uses per bottle of serum’ is a verifiable statement of fact,” and the Court could “infer that plaintiff Spa Thirsty’s machine failed to yield the promised number of uses per bottle of serum ….

From plaintiff Spa Thirsty’s allegation that its ‘machines run through serums faster than Defendant states it should.’” The Court denied reconsideration because Class Action Plaintiffs’ request was both untimely and “would fail on the merits,” as Class Action Plaintiffs “failed to allege the specific provisions of the contract upon which liability was predicated.” Pursuant to the Court’s order, Class Action Plaintiffs filed the Second Amended Complaint on January 29, 2026.

As a result of the Court’s ruling, the only claims still pending before the Court in the Customer Class Action are (i) the Class Action Plaintiffs’ claim against Hydrafacial for breach of its express warranty against defects in materials and workmanship;

and (ii) plaintiff Spa Thirsty’s claim, asserted on behalf of itself and the Putative New York Subclass against Hydrafacial, for alleged violations of N.Y.

G.B.L., § 349 and § 350.

On February 26, 2026, the parties jointly notified the Court that a settlement-in-principle had been reached and requested that all deadlines be stayed for sixty (60) days.

On March 2, 2026, the Court ordered Class Action Plaintiffs to file the necessary motion papers for preliminary approval of the settlement on or before May 29, 2026, and canceled all other deadlines in the case.

The Company believes that the claims asserted in the Customer Class Action have no merit and it intends to vigorously defend them.

Consolidated Derivative Action

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Pursuant to a scheduling order entered by the court, Plaintiffs’ answering brief was filed on May 2, 2025, and Defendants’ reply brief was filed on June 3, 2025.

Although oral argument before the Delaware Court of Chancery on the Motion to Dismiss is scheduled for January 7, 2026, the parties held a mediation on November 4, 2025 and have reached agreement on certain terms of a mutually agreeable resolution.

However, the settlement discussions are ongoing and any final resolution is subject to the parties’ execution of a final settlement agreement and the Delaware Court of Chancery’s approval.

The Company believes that the claims asserted in the Consolidated Derivative Action have no merit and intends to vigorously defend them.

The parties held a mediation on November 4, 2025 and reached agreement on terms of a mutually agreeable resolution.

On February 9, 2026, the parties entered into a Stipulation of Settlement, which is subject to court approval.

On February 20, 2026, the Delaware Court of Chancery entered a Scheduling Order with respect to Notice and Settlement Hearing, requiring the Company to file a copy of the Notice of Pendency and Proposed Settlement of Derivative Action as an exhibit to a Current Report on Form 8-K, which the Company filed on March 6, 2026.

The Court has scheduled the settlement hearing for May 13, 2026 .

Securities and Exchange Commission (the “SEC”) Subpoena

On January 11, 2024, the Company was informed that the SEC is conducting a formal investigation of the Company related to, among other things, the allegations brought against the Company in the Securities Class Action lawsuit.

The Company has subsequently received subpoenas from the SEC for the production of documents and information related to its investigation.

The Company is in the process of responding to the subpoenas and intends to fully cooperate with the SEC investigation.

The Company has subsequently received subpoenas from the SEC for the production of documents and witness testimony related to its investigation.

The Company is in the process of responding to the subpoenas and intends to continue to fully cooperate with the SEC investigation.

We cannot predict the duration, scope, or outcome of this matter at this time.

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In connection with the consummation of the Business Combination, on May 4, 2021, the Company 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 BLS Investor Group LLC (the “Sponsor”) or the Hydrafacial Stockholders (together, the “Restricted Stockholders”) as of the date of the Registration Rights Agreement or thereafter acquired by a Restricted Stockholder (including the shares of Class A Common Stock issued upon conversion of the 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 Hydrafacial Stockholders and (ii) any other equity security of the Company issued or issuable with respect to any such share of Class A Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise will be entitled to registration rights.

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 9,333,333 warrants to purchase shares of the Company’s Class A Common Stock at $ 11.50 per share (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 BLS Investor Group LLC (the “Sponsor”) or the Hydrafacial Stockholders (together, the “Restricted Stockholders”) as of the date of the Registration Rights Agreement or thereafter acquired by a Restricted Stockholder (including the shares of Class A Common Stock issued upon conversion of the 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 Hydrafacial Stockholders and (ii) any other equity security of the Company issued or issuable with respect to any such share of Class A Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise will be entitled to registration rights.

The Registration 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 Class A 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.

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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 (as defined in the Registration Rights Agreement) or shares of Class A Common Stock issuable upon the exercise thereof for 30 days following the Closing.

As of March 31, 2026 and December 31, 2025 , the Company had approximately 7 million Private Placement Warrants outstanding, which will expire in May 2026.

The fair value of the Private Placement Warrants was immaterial as of March 31, 2026 and December 31, 2025 .

Investor Rights Agreement

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Holders of Class A Common Stock are entitled to one vote for each share.

As of September 30, 2025 and December 31, 2024, there were 127,301,264 and 124,924,185 , respectively, of Class A Common Stock issued and outstanding.

As of March 31, 2026 and December 31, 2025, there were 129,144,801 and 127,520,823 , respectively, of Class A Common Stock issued and outstanding.

The Company has not declared or paid any dividends with respect to its Class A Common Stock .

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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 Board of Directors.

At September 30, 2025 and December 31, 2024 , there were no shares of preferred stock issued or outstanding.

At March 31, 2026 and December 31, 2025 , there were no shares of preferred stock issued or outstanding.

Note 9 — Fair Value Measurements

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025, 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:

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

As of September 30, 2025

As of March 31, 2026

(in thousands) Level 1 Level 2 Level 3 Total

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Money market funds $ 128,303 $ — $ — $ 128,303

Warrant liability — Private Placement Warrants $ — $ — $ 139 $ 139

As of December 31, 2025

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Money market funds $ 149,927 $ — $ — $ 149,927

Warrant liability — Private Placement Warrants $ — $ — $ 488 $ 488

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, which will expire five years after the Business Combination.

As of September 30, 2025 and December 31, 2024, the Company had approximately 7 million Private Placement Warrants outstanding for which the fair value was determined using a Monte Carlo simulation.

Note 10 — Revenue

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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 (collectively “Consumables”).

In conjunction with the sale of Delivery Systems, the Company also sells single-use tips, solutions, serums, and other products used to provide a Hydrafacial treatment (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.

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Net sales disaggregated by major product line were as follows for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

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Net sales by geographic region were as follows for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

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13,735 14,987

6,336 10,829 22,389 36,436

Total net sales $ 64,910 $ 69,580

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

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

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Total share-based compensation $ 2,079 $ 3,476

Total share-based compensation expense for the three and nine months ended September 30, 2025 includes reversal of expense related to the forfeiture of unvested awards of $ 2.6 million and $ 5.1 million, respectively.

As of September 30, 2025 , total unrecognized compensation expense related to unvested share-based compensation totaled $ 19.4 million and is expected to be recognized over a weighted-average period of 1.9 years.

Restricted Stock Units (“RSU”) and Performance-based Restricted Stock Units (“PSU”)

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Weighted Average Grant Date Fair Value

RSU Shares PSU Shares RSU PSU

Outstanding - January 1, 2026

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Forfeited ( 1,241,717 ) ( 378,245 ) 2.01 3.20

Outstanding - September 30, 2025

Outstanding - March 31, 2026

17,607,311 2,210,053 $ 1.52 $ 2.76

As of March 31, 2026 , total unrecognized compensation expense related to unvested RSU and PSU totaled $ 25.7 million and is expected to be recognized over a weighted-average period of 2.3 years.

Stock Options

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Forfeited — —

Expired ( 867,750 ) 13.74

Outstanding - September 30, 2025

Outstanding - March 31, 2026

2,459,920 13.51 5.08

Vested and Exercisable - September 30, 2025

Vested and Exercisable - March 31, 2026

2,459,920 13.51 5.08

Options vested and expected to vest - September 30, 2025

Options vested and expected to vest - March 31, 2026

2,459,920 $ 13.51 5.08

Cash Performance Awards

During the three months ended March 31, 2026, cash performance awards with a total target value of $ 2.8 million were granted for which the final payout will range from 0 % to 200 % of the target value based on the total shareholder return of the Company’s Class A Common stock relative to a defined peer group.

The cash performance awards vest over a two to three-year period.

The cash performance awards can be settled in either cash or Class A Common Stock upon vesting at the Company’s discretion.

These awards are accounted for as liability awards under Accounting Standards Codification (“ASC”) 718 and are measured at fair value through the end of the performance period using the Monte Carlo simulation model.

For the three months ended March 31, 2026, the expense associated with the cash performance awards was immaterial .

The estimated future cash payments of these awards are included within other long-term liabilities in the Condensed Consolidated Balance Sheets.

As of March 31, 2026 , total unrecognized compensation expense related to unvested cash performance awards totaled $ 0.9 million and is expected to be recognized over a weighted-average period of 2.2 years.

Note 12 — Income Taxes

The Company is required to calculate its interim income tax provision using the estimated annual effective tax rate (“AETR”) method prescribed by Accounting Standards Codification (“ASC”) 740-270, and as such, excludes losses in jurisdictions where the Company cannot benefit in computing its worldwide AETR.

The Company is required to calculate its interim income tax provision using the estimated annual effective tax rate (“AETR”) method prescribed by ASC 740-270, and as such, excludes losses in jurisdictions where the Company cannot benefit in computing its worldwide AETR.

A separate AETR is computed and applied to ordinary losses in the U.S.

jurisdiction as required by ASC 740-270-30-36(a).

For the three and nine months ended September 30, 2025, the Company recorded income tax expense of $ 0.4 million and $ 0.3 million, respectively.

and China as required by ASC 740-270-30-36(a).

For the three months ended March 31, 2026, the Company recorded income tax benefit of $ 0.2 million.

The AETR differed from the U.S.

federal statutory tax rate of 21% due primarily to a full valuation allowance against the Company's U.S.

deferred tax assets, income in foreign jurisdictions that are taxed at higher rates than the U.S.

federal statutory tax rate of 21% due primarily to a full valuation allowance against the Company's deferred tax assets in the U.S.

and China, income in foreign jurisdictions that are taxed at higher rates than the U.S.

federal rate, and the impact of discrete items that may occur in any given year but are not consistent from year to year.

For the three and nine months ended September 30, 2024, the Company recorded income tax expense of $ 1.9 million and $ 0.9 million, respectively.

For the three months ended March 31, 2025, the Company recorded income tax expense of $ 0.9 million.

The estimated worldwide AETR differed from the U.S.

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federal rate, and the impact of discrete items that may occur in any given year but are not consistent from year to year.

The Company has established a valuation allowance in the U.S.

against its deferred tax assets because it is more likely than not that the deferred tax assets will not be realized.

The Company has established a valuation allowance against its deferred tax assets in the U.S.

and China, because it is more likely than not that the deferred tax assets will not be realized.

In determining whether deferred tax assets are realizable, the Company considers numerous factors including historical profitability, the amount of future taxable income and the existence of taxable temporary differences that can be used to realize deferred tax assets.

The Company applies ASC 740, the accounting standard addressing the accounting for uncertainty in income taxes, which prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return.

The Company has gross unrecognized tax benefits of $ 1.5 million and $ 1.2 million as of September 30, 2025 and December 31, 2024, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted in the United States.

The Act includes corporate tax provisions that make 100% bonus depreciation permanent, allow for the expensing of domestic research costs, and modify the business interest expense limitation calculation.

The Company has completed its initial assessment of the provisions relevant to its U.S.

Based on this assessment, the Act is expected to reduce the Company’s U.S.

federal income taxes.

The Company has incorporated the Act's changes in its income tax provision for the nine months ended September 30, 2025, which did not have a material impact on the U.S.

effective tax rate and net deferred tax assets as the Company maintains a full valuation allowance in the United States.

The Company has gross unrecognized tax benefits of $ 1.8 million and $ 1.7 million as of March 31, 2026 and December 31, 2025, respectively.

Note 13 — Net Loss Attributable to Common Stockholders

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 September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and per share amounts) 2026 2025

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Adjustments related to the 2026 Notes (1)

— — ( 13,117 ) ( 25,186 )

Net loss available to common stockholders - diluted $ ( 7,121 ) $ ( 10,096 )

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$ ( 0.05 ) $ ( 0.08 )

Dilutive net loss per share:

Diluted net loss per share:

$ ( 0.05 ) $ ( 0.08 )

(1) For the nine months ended September 30, 2025 and 2024, the adjustments related to the 2026 Notes include the net gain related to the exchange and repurchases offset by interest expense and amortization of debt issuance costs related to the 2026 Notes (net of taxes).

(1) For the three months ended March 31, 2026, the adjustments related to the 2026 Notes include the net gain related to the repurchase offset by interest expense and amortization of debt issuance costs related to the 2026 Notes (net of taxes).

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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

2026 Notes — 17,559,686

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PSUs 2,210,053 2,845,617

For the three and nine months ended September 30, 2025 and 2024, income and shares related to the Private Placement Warrants were excluded from the calculation of diluted net loss per share of Class A Common Stock because their effect would be anti-dilutive.

For the three months ended March 31, 2026 and 2025, income and shares related to the Private Placement Warrants were excluded from the calculation of diluted net loss per share of Class A Common Stock because their effect would be anti-dilutive.

Note 14 — Segment Information

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The following summarizes the components of operating expenses for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

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Note 15 — New Accounting Pronouncements

In December 2023, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 "Income Taxes (Topic 740):

Improvements to Income 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 early adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on its annual consolidated financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses” which expands interim and annual requirements to disclose about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, which was clarified in ASU 2025-01.

The standard allows for early adoption of these requirements.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statement disclosures.

In November 2024, the FASB issued ASU 2024-04 “Debt with Conversion and Other Options (Subtopic 470-20):

Recently Adopted Accounting Pronouncements

In November 2024, the Financial Standards Accounting Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-04 “Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments” which is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.

ASU 2024-04 is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements and related disclosures.

The Company adopted ASU 2024-04 on a prospective basis beginning January 1, 2026 and the adoption did not have a material impact on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05 “Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under ASC 606.

ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements and related disclosures.

The Company adopted ASU 2025-05 on a prospective basis beginning January 1, 2026 and the adoption did not have a material impact on its consolidated financial statements and related disclosures.

Accounting Pronouncements Not Yet Adopted

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, which was clarified in ASU 2025-01.

The standard allows for early adoption of these requirements.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06 “Intangibles:

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Targeted Improvements to the Accounting for Internal-Use Software” which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs, and enhances disclosure requirements.

ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted, and should be applied either prospectively, retrospectively, or under a modified prospective transition approach.

ASU 2025-06 is effective for interim and annual reporting periods beginning after December 15, 2027, with early adoption permitted, and should be applied either prospectively, retrospectively, or under a modified prospective transition approach.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11 “Interim Reporting (Topic 270):

Narrow Scope Improvements” which clarifies and reorganize GAAP interim reporting guidance to improve navigability, applicability, and consistency without changing the fundamental nature or volume of required interim disclosures.

This amendment clarifies when ASC 270 is applicable, establishes a disclosure principle requiring disclosure of material events or changes occurring since the most recent annual reporting period, and consolidates into ASC Topic 270 a comprehensive list of interim disclosures required by other Codification Topics.

The amendment also clarifies the form and content of interim financial statements, including guidance for condensed interim reporting.

ASU 2025-11 is effective for interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to GAAP.

The update represents changes to the Codification that (1) clarify, (2) correct errors or (3) make minor improvements.

ASU 2025-12 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted, and should be applied either prospectively or retrospectively.

The Company is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements and related disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements