What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-01 compared with 2022-03-01 · 78 added, 1165 removed, 106 unchanged (92% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Disclosure controls 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 within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021.

Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to the material weaknesses that existed as of December 31, 2020 accordingly disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2020 and in our Definitive Proxy Statement filed on April 7, 2021, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective.

Previously Identified Material Weaknesses in Internal Control over Financial Reporting

In connection with the audit of HydraFacial as of and for the year ended December 31, 2020, we previously identified material weaknesses in our internal control over financial reporting.

The material weaknesses were related to segregation of duties, including the review and approval of journal entries, our lack of sufficient accounting resources and the lack of a formalized risk assessment process.

These material weaknesses may not allow for us to have proper segregation of duties and the ability to close our books and records and report our results on a timely basis.

In response to the material weaknesses, management completed the following remediation actions:

• We established a formal risk assessment process to identify and evaluate risks relevant to financial reporting objectives

• We implemented segregation of duties around the approval of journal entries and accounting processes.

• We implemented a training program addressing internal control over financial reporting, including educating control owners regarding the requirements of each control

We determined that the material weakness around lack of sufficient accounting resources continued to exist as of December 31, 2021.

This material weakness may not allow for us to have proper segregation of duties and the ability to close our books and report our results on a timely basis.

We have begun the process of, and we are focused on, designing and implementing effective internal controls measures to improve our internal control over financial reporting and remediate the material weakness.

Our efforts include a number of actions:

• We are actively recruiting additional personnel, in addition to engaging and utilizing third party consultants and specialists to supplement our internal resources and segregate key functions within our business processes, if appropriate;

• We are designing and implementing additional review procedures within our accounting and finance department to provide more robust and comprehensive internal controls over financial reporting that address the relative financial statement assertions and risks of material misstatement within our business processes;

• We are designing and implementing information technology and application controls in our financially significant systems to address our relative information processing objectives

While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal controls over financial reporting and will continue to diligently review our internal control over financial reporting.

Table of Con tents

Limitations on the Effectiveness of Controls

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

As discussed elsewhere in this Annual Report on Form 10-K, we completed a Business Combination on May 4, 2021 pursuant to which we acquired HydraFacial.

Prior to the Business Combination, we were a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses.

As a result, previously existing internal controls are no longer applicable or comprehensive enough as of the assessment date, as our operations prior to the Business Combination were insignificant compared to those of the consolidated entity post-Business Combination.

As a result, management was unable, without incurring unreasonable effort or expense, to complete an assessment of our internal control over financial reporting as of December 31, 2021.

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of December 31, 2022 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Inherent Limitations over Internal Controls

The Company’s management, including our principal executive officer and principal financial officer , does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud.

A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Projections of any evaluation of the effectiveness of controls to future periods are subject to risks.

Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

Other than the remediation efforts described in this Item 9A, there have been no changes in our internal control over financial reporting during the quarter ended December 31, 2021 covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).

Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on the Company’s assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2022 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued an audit report on the Company’s internal control over financial reporting, which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of The Beauty Health Company

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of The Beauty Health Company and its consolidated subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated March 1, 2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Los Angeles, California

March 1, 2023

Other Information.

1 unchanged sentence

Not applicable.

Table of Con tents

Directors, Executive Officers and Corporate Governance.

Executive Officers

The following table sets forth the names, ages, and positions of our executive officers as of February 18, 2022.

There are no arrangements, agreements or understandings between non-management security holders and management under which non-management security holders may directly or indirectly participate in or influence the management of our affairs.

There are no arrangements or understandings between any executive officer and any other person pursuant to which any executive officer was or is to be selected as an executive officer.

Name Age Position

Andrew Stanleick 51 Chief Executive Officer, President and Director

Liyuan Woo 50 Chief Financial Officer

Indra Pamamull 57 President of APAC

Stephan Becker 50 President of EMEA

Daniel Watson 60 EVP of Americas Sales

Andrew Stanleick has served as Chief Executive Officer, President and Director since February 7, 2022.

Prior to joining the Company, Mr.

Stanleick held senior roles at Coty Inc.

since August 2017, including serving as its Executive Vice President, Americas and Chief Executive Officer of Kylie Jenner Beauty since March 2020.

From June 2018 to May 2020, Mr.

Stanleick served as COTY's Senior Vice President, North America, and from August 2017 to June 2018, he served as its Senior Vice President, Europe.

Prior to joining COTY, Mr.

Stanleick worked in various roles, including President and Chief Executive Officer of the South East Asia-Pacific and European divisions of Coach Inc.

from January 2013 to April 2016.

A native of England, Mr.

Stanleick graduated with a master’s degree from the University of Cambridge.

He currently serves on the Executive Board of Directors for the Personal Care Products Council and The Fragrance Foundation.

Liyuan Woo joined the Company in September 2020 as EVP, Chief Financial Officer.

Prior to joining the Company, Ms.

Woo was the Chief Operating Officer and Chief Financial Officer of The VOID, a virtual reality brand introducing consumers to fully immersive, location-based, hyper-reality experiences from August 2019 to September 2020.

From January 2018 to January 2019, Ms.

Woo served as the EVP, Chief Financial Officer at SharkNinja, a consumer electronic product portfolio category creator focused on innovation and marketing.

At SharkNinja, Ms.

Woo was in charge of finance, capital raising and allocation, legal and strategic initiatives involving global expansion and mergers and acquisitions.

From March 2017 to January 2018, as a Director with AlixPartners, Ms.

Woo was the interim Chief Financial Officer during Gymboree Group’s multi-billion dollar restructuring process.

Prior to that, Ms.

Woo worked at bebe stores, a publicly traded global multi-channel fashion brand, for six years, and served as the Chief Financial Officer from April 2013 to 2016.

Woo started her career with the consulting firm Deloitte in its Mergers and Acquisitions Transaction Services and Financial Advisory functions.

Woo’s thirteen years with Deloitte, she provided financial advisory services to public and private companies for mergers and acquisitions transactions, initial public offerings and growth initiatives.

Woo received her B.A.

from Bentley University in Accounting.

Indra Pamamull joined the Company as President of APAC in August 2021 and oversees the strategic development of the APAC region.

With over two decades of experience in beauty across skin care, fragrance and color cosmetics, Ms.

Pamamull has executed successful brand strategies, and has launched multiple leading brands across several geographies to deliver international sales growth and deliver profit objectives for the world’s leading prestige companies.

Prior to joining the Company, Ms.

Pamamull held the role of General Manager Asia Pacific at LVMH Moet and Hennessy’s Kendo Brands from May 2016 - March 2021.

In this role, she grew the business with significant growth, established offices in Singapore and Australia, and managed a portfolio of brands which included Fenty Beauty by Rihanna, Ole Henriksen Skin Care, Marc Jacobs Beauty, Bite Beauty and Kat Von D.

Prior, she held the position of Regional Director Asia Pacific at Estee Lauder Companies, based in Hong Kong, from October 2009 to April 2015, where she oversaw 12 countries across Asia Pacific.

She launched Lab Series Skin Care for Men in China and established the brand as a leader in Men’s Skincare across the region and established the First Global Lab Series stand-alone store.

She also managed Estee Lauder Designer Fragrance portfolio including DKNY, Coach, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna to name a few.

Prior to Asia, Ms.

Pamamull led Beauty Bank

Table of Con tents

UK from September 2008 – October 2009, which is Estee Lauder’s Innovation Hub and think tank and launched award winning innovation in skincare in the UK.

Pamamull spent several years in the UK market in various leadership roles from 2003 – 2009.

Pamamull began her career with Estee Lauder Companies in Australia, where she also completed a Graduate Certificate of Business at Monash University in 1999.

She is currently also studying Digital Transformation at Singapore Management University.

Stephan Becker joined the Company as President of EMEA in October 2021 and oversees the growth and execution of the EMEA region.

With over two decades of experience expanding brands throughout the beauty, lifestyle and healthcare categories, Mr.

Becker has a strong track record of growing market share and achieving stellar sales and profit results.

Prior to joining the Company, Mr.

Becker served as Managing Director DACH and the Vice President of Global Marketing at Kao Group (from October 2014 to September 2021), an international cosmetics, beauty and hair care company.

Becker also has led in senior sales and marketing roles at leading beauty and consumer companies, such as COTY (2009-2014), where he implemented a successful turnaround strategy for the Color Cosmetics Category as well as introduced various celebrity and lifestyle fragrance brands such as Lady Gaga, Beyoncé, Heidi Klum or Guess to Western Europe.

From 2003 to 2009, he worked at P&G / Gillette where he was leading the international expansion into emerging markets including Russia, Middle East and China via distributor operations for the cosmetics business (Max Factor, Covergirl), and prior to that, was responsible for the Braun appliances / Oral-B business in Western Europe integrating and transitioning the business from Gillette into P&G post-merger.

From 2001 to 2003, Mr.

Becker worked as a Management Consultant at The Marketing Corporation focusing on growth strategies for international FMCG clients.

Becker started his career in 1998 for the global skin care brand Nivea at Beiersdorf working in Sales and Marketing within the US (Charlotte, North Carolina) and Germany (HQ, Hamburg).

Becker received his diploma from the University of Cologne in Business Administration with a focus on Marketing, Psychology and Organizational development.

Daniel Watson has served as the HydraFacial’s EVP of Sales for the U.S.

and Canada since March 2017, and in 2020 took over leadership for all of the Americas.

Watson has 34 years of medical device sales experience and manages the Company’s capital sales teams and business development teams in both the medical, non-medical and corporate channels.

Prior to joining HydraFacial, Mr.

Watson worked at Stryker Spine since 2004, serving as the VP of Sales at Stryker Spine from 2015 to March 2017.

Stryker Corporation is an American multinational medical technology corporation and Stryker Spine is a comprehensive portfolio offering spinal solutions.

Watson has also held various senior sales management positions for companies such as Sherwood Medical, Ethicon EndoSurgery, CR Bard, SpineTech, Oratec, and Smith and Nephew.

Watson received his B.A.

from Bates College in Economics.

Name Age Position Audit Committee Compensation Committee Nominating and Corporate Governance Committee Director Since (3)

Andrew Stanleick (1)

51 Chief Executive Officer, President and Director February 7, 2022

52 Director May 4, 2021

Michael Capellas 67 Director * C May 4, 2021

Julius Few 54 Director * May 4, 2021

Desiree Gruber 54 Director * June 11, 2021

Michelle Kerrick 59 Director C * May 4, 2021

Brian Miller 47 Director * * May 4, 2021

Doug Schillinger 48 Director * C May 4, 2021

_______________

(1) Information regarding Mr.

Stanleick is set forth above under Part III.

Item 10 “Executive Officers”.

Saunders served as the Company’s interim Chief Executive Officer from January 1, 2022, to February 6, 2022

(3) Represents time from when HydraFacial consummated the Business Combination

The following biographical summaries provide details of our directors’ skills and experience:

Table of Con tents

Saunders has served on our Board of Directors since May 4, 2021.

Saunders has over 25 years of experience in various aspects of healthcare and has been in leadership roles at several prominent global pharmaceutical and healthcare companies.

Until May 2020, when it was acquired by AbbVie Inc.

ABBV) in a transaction valued at approximately $63 billion, Mr.

Saunders served as Chairman, President and Chief Executive Officer of Allergan plc (“Allergan”).

His role as President and Chief Executive Officer of Allergan began in July 2014 and his added role of Chairman began in October 2016.

Saunders first role as an executive officer in the pharmaceuticals and healthcare sectors began in 2003, as a member of the executive management team at Schering-Plough Corporation (“Schering-Plough”), where he held several key roles, including President of the company’s Global Consumer Health Care division.

While at Schering-Plough, Mr.

Saunders led the integrations of the company’s $14 billion acquisition of Organon Biosciences N.V.

in 2007 as well as the merger between Schering-Plough and Merck & Co., Inc.

MRK) in 2009.

From March 2010 until August 2013, Mr.

Saunders served as Chief Executive Officer of Bausch + Lomb Incorporated (NYSE:

BHC), a leading global eye health company, until its acquisition by Valeant Pharmaceuticals, Inc.

He then became the Chief Executive Officer of Forest Laboratories Inc., a role he held until the company’s merger with Actavis plc (“Actavis”) in 2014.

Following the merger with Actavis, Mr.

Saunders was named Chief Executive Officer of the combined business.

In 2015, he led Actavis’ acquisition of Allergan, renaming the post-combination company Allergan Plc.

Before joining Schering-Plough in 2003, Mr.

Saunders was a Partner and Head of Compliance Business Advisory at PricewaterhouseCoopers LLP.

Prior to that, he was Chief Risk Officer at Coventry Health Care, Inc.

(NYSE:CVH) and Senior Vice President, Compliance, Legal and Regulatory at Home Care Corporation of America.

Saunders began his career as Chief Compliance Officer for the Thomas Jefferson University Health System.

Over the course of his career, Mr.

Saunders has overseen over 80 mergers, acquisitions, divestitures and licensing transactions, totaling over $300 billion in value.

Notable highlights from Mr.

Saunders’ transaction experience include Actavis’ approximately $28 billion acquisition of Forest Laboratories in 2014, Actavis’ $70 billion acquisition of Allergan in 2015 and the $40 billion sale of Allergan’s global generics business to Teva Pharmaceutical Industries Ltd in 2016.

Saunders’ transaction experience also includes the divestiture of Allergan’s medical dermatology business, and the acquisitions of leading companies in the medical aesthetics space such as Kythera, Lifecell, and Zeltiq.

Additionally, Mr.

Saunders currently serves as a director of Cisco Systems, Inc.

CSCO), a global telecommunications company and BridgeBio Pharma Inc.

(NASDAQ:BBIO), a bio pharmaceutical company.

He is also a member of The Business Council.

Capellas has served on our Board of Directors since May 4, 2021.

Capellas has also been a member of the Board of Directors of Cisco Systems, Inc.

since January 2006 and currently serves Cisco as lead independent director.

He has served as founder and Chief Executive Officer of Capellas Partners since November 2012.

He served as Chairman of the Board of VCE Company, LLC from January 2011 until November 2012 and as Chief Executive Officer of VCE from May 2010 to September 2011.

Capellas was the Chairman and Chief Executive Officer of First Data Corporation from September 2007 to March 2010.

From November 2002 to January 2006, he served as Chief Executive Officer of MCI, Inc.

(“MCI”), previously WorldCom.

From November 2002 to March 2004, he was also Chairman of the Board of WorldCom, and he continued to serve as a member of the board of directors of MCI until January 2006.

Capellas left MCI as planned in early January 2006 upon its acquisition by Verizon Communications Inc.

Previously, Mr.

Capellas was President of Hewlett-Packard Company from May 2002 to November 2002.

Before the merger of Hewlett-Packard and Compaq Computer Corporation in May 2002, Mr.

Capellas was President and Chief Executive Officer of Compaq, a position he had held since July 1999, and Chairman of the Board of Compaq, a position he had held since September 2000.

Capellas held earlier positions as Chief Information Officer and Chief Operating Officer of Compaq.

Capellas also currently serves as the chairman of the board of directors of Flex Ltd.

and as a director of Elliot Opportunity II Corp.

He previously served as the independent lead director of MuleSoft, Inc., ending in 2018.

Julius Few has served on our Board of Directors since May 4, 2021.

Few founded and has been Director of The Few Institute for Aesthetic Plastic Surgery since 2008.

A board-certified plastic surgeon in private practice, Dr.

Few is widely recognized for enhancing the aesthetic appearance of his patients and contributing to research in plastic surgery.

He is called upon by regulatory agencies, professional associations and international study bodies to share his expertise on surgical techniques and skin care innovations.

Few can be seen across leading media channels including CBS News, ABC News, 20 20, Good Morning America, CNN, NBC News, The Wall Street Journal, Crain’s Business, Health Magazine, The Chicago Sun Times, The Chicago Tribune, WEB MD and Washingtonian Magazine on cosmetic procedures and treatments.

Few also serves as a Clinical Professor for the Division of Plastic Surgery at the University of Chicago as well as a Health Systems Clinician at Northwestern University.

He is on the Board of Trustees of the Museum of Contemporary Art and is a founding

Table of Con tents

member of the Common Ground Foundation.

He is also the founder of the Few Initiative, a non-profit that aids disadvantaged youth.

Few received his medical degree from the University of Chicago Pritzker School of Medicine and completed his residency in general surgery at the University of Michigan Medical Center, followed by plastic surgery training at Northwestern University.

In addition, Dr.

Few received special facial and eye cosmetic training in Honolulu, New York and Atlanta.

Desiree Gruber has served on our Board of Directors since June 2021.

Gruber, a Peabody Award-winner, founded Full Picture, a brand accelerator, content production, communications, and consulting services company in 1999 and currently serves as its Chief Executive Officer.

As a notable entrepreneur, business strategist, and venture capitalist, Ms.

Gruber co-founded the Project Runway television series in 2004 and co-founded Diagonal Ventures (“DGNL”) in 2016 with a goal to create real opportunities for women to achieve measurable success.

DGNL invests in and architects transformational deals across the consumer, technology, and media spectrum in order to establish a legacy of female empowerment.

Gruber also advises Anthos Capital, Pharrell Williams’ Something in the Water, and Chegg (NYSE:

CHGG), and is a board member of SLAM Corp.

SLAMU) and DPCM Capital, Inc.

XPOA, XPOA-UN).

A lifelong advocate for a more equitable and inclusive world, Ms.

Gruber proudly serves on the boards of UNICEF USA, Tech:NYC, and God’s Love We Deliver.

Michelle Kerrick has served on our Board of Directors since May 4, 2021.

Kerrick served as the West Region Market Leader and Managing Partner of the Los Angeles office of Deloitte.

Kerrick worked at Deloitte for 35 years before retiring in September 2020.

In her role, Ms.

Kerrick was responsible for driving national strategy and client and business growth and strategic positioning across the 13-office West Region and the Los Angeles office.

With more than 35 years of professional experience, Ms.

Kerrick has served a diverse group of publicly and privately held clients, ranging from middle-market companies to large multi-nationals, in various industry sectors.

Kerrick is an independent corporate board director for American Homes 4 Rent (NYSE:

AMH) and director of LDH Growth Corp I.

Kerrick is an accredited member of the California and Arizona State Board of Accountancy and the American Institute of Certified Public Accountants.

Kerrick holds a B.S.

degree in Accountancy from Northern Arizona University.

Brian Miller has served on our Board of Directors since May 4, 2021.

Miller is a Managing Partner and Co-Founder of Linden Capital Partners, which was founded in 2004.

He has been involved in healthcare principal investing since 1998.

Prior to Linden, Mr.

Miller was a founding member of the healthcare team at First Chicago Equity Capital.

Miller began his career in the investment banking division of Salomon Brothers Inc.

(currently Citigroup).

He is currently a board member of Vital Care, Flexan, MeriCal, StatLab Medical Products and Collagen Matrix, and was previously a board member of Z-Medica, Solara, SeraCare, BarrierSafe Solutions International, CORPAK MedSystems, HYCOR Biomedical, Strata Pathology Services and Suture Express.

Miller holds a Bachelor of Arts with honors in Economics from Princeton University and an MBA from Harvard Business School, with a concentration in healthcare.

He is a board member of AdvaMed, the Founder of the Healthcare Private Equity Association, the founder of Private Equity Analysts of Chicago, a Trustee of The University of Chicago Medical Center, and a member of the Economic Club of Chicago.

Doug Schillinger has served on our Board of Directors since May 4, 2021.

Schillinger joined DW Healthcare Partners in 2004 and is currently a Managing Director and oversees a number of the firm’s portfolio investments.

Schillinger’s investment, transaction and board experience include a broad array of healthcare service and medical devices including pharma services, diagnostics, medical tech products and devices, provider services, laboratory services, post-acute care, medical aesthetics, and telehealth.

Before joining DW Healthcare Partners, Mr.

Schillinger worked for Bain & Company and Accenture (previously Andersen Consulting).

Schillinger holds a Bachelor of Arts degree from Cornell University and an MBA with Distinction from Harvard Business School.

Schillinger is a current board member of the Healthcare Private Equity Association and a former member of the Harvard Business School Alumni Board of Directors.

There are no family relationships between our executive officers and directors.

Corporate Governance

We are committed to good governance practices.

Our governance practices seek to ensure that we conduct our affairs in a manner that matches the high standards we have set for our people, products, and services.

We believe that good governance builds integrity and trust, strengthens the accountability of our Board, management and employees, promotes the long-term interests of stockholders, and allows us to be a good corporate citizen in each of the countries where we do business.

Table of Con tents

Code of Ethics

We have a Code of Business Conduct and Ethics that applies to all of our executive officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

A copy of our Code of Business Conduct and Ethics may be found on our website:

www.beautyhealth.com under the heading “Governance”, and then “Documents & Charters”.

We intend to make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of ethics on our website rather than by filing a Current Report on Form 8-K.

Structure of our Board

In accordance with our Second Amended and Restated Certificate of Incorporation, the number of directors on our Board will be fixed from time to time by a resolution adopted by a majority of our Board.

As of the date of this Annual Report on Form 10-K, our Board is currently composed of eight directors.

In determining the appropriate size and composition of the Board, the Board considers the current and anticipated need for directors with specific qualities, skills, experience and backgrounds (including diversity of ethnicity, gender, nationality and age), the availability of highly qualified candidates, committee workloads and membership needs, and the impact of any anticipated director retirements.

Furthermore, our Board is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term.

Each of Andrew Stanleick, Desiree Gruber and Michelle Kerrick serve as Class I directors, Michael D.

Capellas, Dr.

Julius Few and Brian Miller serve as Class II directors and Brenton L.

Saunders and Doug Schillinger serve as Class III directors.

Upon expiration of the term of a class of directors, directors for that class will be elected for three-year terms at the annual meeting of stockholders in the year in which that term expires.

Each director’s term continues until the election and qualification of his or her successor or his or her earlier death, resignation or removal.

Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of an equal number of directors.

In addition, in connection with the Business Combination, we entered into the Investor Rights Agreement with LCP.

This agreement grants LCP the right, but not the obligation, to designate nominees to our Board of Directors subject to the maintenance of certain ownership requirements.

Pursuant to the Investor Rights Agreement, LCP’s director nominees are to be designated as either Class III and/or Class II directors.

See “ Certain Relationships and Related Transactions — Investor Rights Agreement ” for additional information.

Board Leadership

While our Board believes it is important for our Chairman to have both a stake in and deep understanding of the Company, our Board recognizes that the leadership structure and combination or separation of the Chief Executive Officer and Chairman roles is driven by the needs of the Company at any point in time.

As a result, no policy exists requiring combination or separation of leadership roles and our governing documents do not mandate a particular structure.

This has allowed our Board the flexibility to establish the most appropriate structure for the Company at any given time.

Saunders currently serves as our Chairman, and Mr.

Stanleick currently serves as our Chief Executive Officer.

Our Board believes the present structure provides the Company and the Board with strong leadership, continuity of experience, and appropriate independent oversight of management.

Executive Sessions

Our Board meets regularly in executive session without management directors or any members of management.

In addition, the independent directors on our Board meet annually in executive session.

Generally, the Chairman of our Board serves as Chairman in sessions without management directors or any members of management.

Board Meetings

Regular meetings of our Board are held at such times as our Board may determine.

In addition, special meetings of our Board may be called by the Chairman of the Board or President, or by the Chairman of the Board, President or Secretary on the written request of at least a majority of directors then in office.

In fiscal year 2021, our Board held 5 meetings, the audit

Table of Con tents

committee held 3 meetings, the compensation committee held 3 meetings, and the nominating and corporate governance committee held 4 meetings.

Each director attended more than 75% of the aggregate of the total number of meetings of the Board (held during the period for which he or she has been a director) and the total number of meetings held by all committees of the Board on which he or she served (during the periods that he or she served).

Our Board and its committees also act from time to time by written consent in lieu of meetings.

Board Qualifications and Membership Criteria

The nominating and corporate governance committee and the Board believe that a board composed of directors who have diverse personal backgrounds and experiences and who bring a fresh perspective is a priority for the Company.

We seek to mix a diverse range of skills, backgrounds and experiences such as leadership, beauty and consumer products, international and strategic planning experience, financial and accounting expertise, corporate governance, and governmental policy and regulatory experience.

We also value and consider broad diversity for our Board, including ethnicity, gender, nationality and age.

The Board conducts an annual self-evaluation process and periodically considers its composition and refreshment in order to effectively align the Board’s mix of skills, experience and attributes with the Company’s business strategy.

We believe that each director is well-qualified to serve on our Board and offers significant individual attributes and contributions important to our Board’s overall composition and functioning.

As of February 18, 2022, our Board is comprised as follows:

Board Diversity Matrix

Total Number of Directors

Did Not Disclose Gender

Gender Identity

Demographic Background

African American or Black

Alaskan Native or Native American

Hispanic or Latinx

Native Hawaiian or Pacific Islander

Two or More Races or Ethnicities

Did Not Disclose Demographic Background

Director Nomination Process

The nominating and corporate governance committee recommends nominees for our Board consistent with the criteria determined by our Board.

The nominating and corporate governance committee may receive recommendations from other directors and executives and may seek assistance from third-party search firms with respect to identifying and vetting qualified candidates for the Board’s consideration.

The nominating and corporate governance committee will also consider nominations from stockholder(s) to the extent the nomination complies with all procedures and includes all information about the candidate(s) required by our Amended and Restated Bylaws.

Nominations from stockholder(s) that are made in accordance

Table of Con tents

with these procedures and include all required information will be considered by the nominating and corporate governance committee in accordance with the criteria discussed above and in the same manner as other nominations, and the nominating and corporate governance committee will present its recommendation to our Board.

Communications with our Board

Our Board has established a process for stockholders to send communications to our Board.

Stockholders may communicate with our Board generally or a specific director at any time by writing to the Company’s Secretary, The Beauty Health Company, 2165 Spring Street, Long Beach, CA 90806.

Each communication should specify the applicable director(s) to be contacted, the general topic of the communication, and the number of shares of our Class A Common Stock owned of record (if a record holder) or beneficially owned.

We review all messages received, and forward any message that reasonably appears to be a communication from a stockholder about a matter of stockholder interest that is intended for communication to our Board.

Communications are sent as soon as practicable to the director to whom they are addressed, or if addressed to our Board generally, to the Chairman of our Board.

Because other appropriate avenues of communication exist for matters that are not of stockholder interest, such as general business complaints, commercial inquiries, employee grievances, or general information about the Company or our products, communications that do not relate to matters of stockholder interest are not forwarded to our Board.

In addition, communications that are unduly hostile, threatening, illegal, or similarly unsuitable will be excluded, with the provision that any communication that is so filtered will be made available to any director upon any such director’s request.

Risk Oversight

Our Board oversees, with management, the various risks we face.

Our Board and management consider risks in all facets of the Company, our business strategy and our overall business.

Our Board dedicates a portion of one meeting each year to evaluating and discussing risk, risk mitigation strategies and the Company’s internal control environment.

At this meeting, our Board considers an enterprise risk management analysis.

Topics examined in the enterprise risk management analysis include, but are not limited to, strategic, operational, financial and compliance risks.

Our Board’s risk oversight also includes an annual review of our strategic plan.

Because overseeing risk is an ongoing process and inherent in our strategic decisions, our Board also receives input from senior management and considers risk at other times in the context of specific proposed actions.

In addition to our Board’s risk oversight responsibility, the Board’s committees are also charged with overseeing risks within their areas of responsibility and reviewing with the Board significant risks identified by management and management’s response to those risks.

For example, our Audit Committee provides oversight to legal and compliance matters and assesses the adequacy of our risk-related internal controls.

In addition, our Compensation Committee considers risk and structures our executive compensation programs, if any, to provide incentives to appropriately reward executives for growth without undue risk taking.

While our Board is actively involved in overseeing our risk management process, management is responsible for assessing and managing risk on a day-to-day basis.

Our Board focuses on our general risk management strategy and ensures that appropriate risk mitigation strategies are implemented by management.

Certain departments, such as accounting, finance, legal, regulatory compliance, and individuals within other departments, focus on specific risks associated with different aspects of our business, from regulatory, environmental, and financial risks to commercial and strategic risks.

Senior members of management responsible for risk management report regularly to the appropriate Board committee or the Board, as appropriate.

Our Board believes its administration of its risk oversight function has not negatively affected our Board’s leadership structure.

Board Committees and Director Independence

Our Board has established three standing committees – an audit committee, a compensation committee, and a nominating and corporate governance committee – each of which operates under a charter that has been approved by our Board.

The charter documents for each committee may be found in the “Investor Relations” section of our website:

www.beautyhealth.com under the heading “Governance”, and then “Documents & Charters”.

Table of Con tents

Audit Committee

The audit committee oversees our accounting and financial reporting processes and the audits of our financial statements.

The audit committee consists of Michelle Kerrick, Michael D.

Capellas and Doug Schillinger.

Michelle Kerrick serves as the chair of the audit committee.

All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq.

Our Board has determined that Michelle Kerrick qualifies as an “audit committee financial expert” as defined in the applicable SEC rules and have the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations.

Our Board has determined that Michelle Kerrick, Michael D.

Capellas and Doug Schillinger are independent under the applicable rules of the SEC and Nasdaq.

We are currently in compliance with Nasdaq rules and Rule 10A-3 due to the fact that all members of our audit committee have been deemed independent by our Board.

The primary functions of the audit committee include:

• appointing, compensating and overseeing our independent registered public accounting firm;

• mutual reviewing and approving the annual audit plan;

• overseeing the integrity of our financial statements and our compliance with legal and regulatory requirements;

• discussing the annual audited financial statements and unaudited quarterly financial statements with management and the independent registered public accounting firm;

• pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;

• appointing or replacing the independent registered public accounting firm;

• establishing procedures for the receipt, retention and treatment of complaints (including anonymous complaints) we receive concerning accounting, internal accounting controls, auditing matters or potential violations of law;

• monitoring our environmental sustainability and governance practices;

• establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;

• approving audit and non-audit services provided by our independent registered public accounting firm;

• discussing earnings press releases and financial information provided to analysts and rating agencies;

• discussing with management our policies and practices with respect to risk assessment and risk management;

• approving or ratifying related party transactions required to be disclosed pursuant to Item 404 of Regulation S-K, as may be amended from time to time, and any other applicable requirements;

• producing an annual report for inclusion in our proxy statement, in accordance with applicable rules and regulations.

Compensation Committee

The compensation committee approves, or recommends to our board of directors, policies relating to compensation and benefits of our officers and employees.

The compensation committee consists of Doug Schillinger, Desiree Gruber and Brian Miller.

Doug Schillinger serves as the chair of the compensation committee.

Our Board has determined that Doug Schillinger, Desiree Gruber and Brian Miller are independent under the applicable rules and regulations of Nasdaq and all current members qualify as a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.

Our Board has determined that each of the members of our compensation committee is an “outside director” as that term is defined in Section 162(m) of the U.S.

Internal Revenue Code of 1986, as amended, or Section 162(m).

We are currently in compliance with Nasdaq rules due to the fact that all members of our compensation committee have been deemed independent by our Board.

The principle functions of the compensation committee include:

• reviewing and approving corporate goals and objectives relevant to the compensation of our executive officers, evaluating the performance of our executive officers in light of those goals and objectives, and setting compensation levels based on this evaluation;

Table of Con tents

• setting salaries and approving incentive compensation and equity awards, as well as compensation policies, for all other officers who file reports of their ownership, and changes in ownership, of the Section 16 Officers, as designated by our board of directors;

• making recommendations to the board with respect to incentive compensation programs and equity-based plans that are subject to board approval;

• approving any employment or severance agreements with our Section 16 Officers;

• granting any awards under equity compensation plans and annual bonus plans to our Section 16 Officers;

• producing an annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee identifies and recommends individuals qualified to serve as directors of the Company and on committees of the Board.

The nominating and corporate governance committee consists of Michelle Kerrick, Michael D.

Capellas, Dr.

Julius Few and Brian Miller.

Capellas serves as its chairman.

Our Board has determined that Michelle Kerrick, Michael D.

Capellas, Dr.

Julius Few and Brian Miller are independent under the applicable rules and regulations of Nasdaq relating to nominating and corporate governance committee independence.

We are currently in compliance with Nasdaq rules due to the fact that all members of our nominating and corporate governance committee have been deemed independent by our Board.

The principal functions of the nominating and corporate governance committee include:

• identifying individuals qualified to serve as directors of the Company and on committees of the Board;

• recommending to the Board the director nominees for election at the next annual meeting of shareholders;

• advising the Board with respect to the composition of Board, procedures and committees;

• developing and recommending to the Board a set of corporate governance guidelines applicable to the Company and to oversee the evaluation of the Board and the Company’s management.

The nominating and corporate governance committee has a written charter that sets forth the committee’s purpose and responsibilities, which, in addition to the items listed above, include:

• identifying, recruiting and, if appropriate, interviewing candidates to fill positions on the Company’s board of directors, including persons suggested by shareholders or others;

• reviewing the background and qualifications of individuals being considered as director candidates;

• recommending to the Company’s board of directors the director nominees for election by the Company’s shareholders or appointment by the Company’s board of directors;

• reviewing the suitability for continued service as a director of each member of the board of directors when his or her term expires and in certain other circumstances;

• reviewing annually with the Company’s board of directors the composition of the Company’s board of directors as a whole and to recommend, if necessary, measures to be taken so that the Company’s board of directors reflect the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Company’s board of directors as a whole and contains at least the minimum number of independent directors required by Nasdaq;

• monitoring the functioning of the committees of the Company’s board of directors and to make recommendations for any changes;

• reviewing annually committee size, membership and composition, including chairpersonships, and recommended any changes to the Company’s board of directors for approval;

• developing and recommending to the Company’s board of directors a set of corporate governance guidelines for the Company;

• review periodically, and at least annually, the corporate governance guidelines adopted by the Company’s board of directors to assure that they are appropriate for the Company;

• evaluating its performance and submitting any recommended changes to the board for its consideration.

The nominating and corporate governance committee has the authority to retain advisors as the committee deems appropriate.

Table of Con tents

Director Independence

Nasdaq listing standards require that a majority of the board of directors be independent.

An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which, in the opinion of the board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

The definition also includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us.

To help determine whether a director is independent, our Board reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.

Our Board has determined that each of the following directors satisfies our independence standards, Nasdaq’s listing standards, and applicable SEC rules:

Michael Capellas, Dr.

Julius Few, Ms.

Desiree Gruber, Ms.

Michelle Kerrick, Mr.

Brian Miller, and Mr.

Doug Schillinger.

Section 16(a) Reports

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership on Forms 3, 4 and 5 with the SEC on a timely basis.

These persons are required to furnish us with copies of all Forms 3, 4 and 5 they file.

Based solely on our review of the copies of such forms we have received and written representations from certain reporting persons that they filed all required reports, we believe that during the fiscal year ended December 31, 2021, all of our executive officers, directors and greater than 10% stockholders complied on a timely basis with all Section 16(a) filing requirements applicable to them with respect to transactions during 2021 except for Brent Saunders, who filed one (1) late Form 4 with respect to reporting the grant of a warrant (right to buy common stock).

There were no known failures to file a required Section 16(a) filing report.

The information required by this Item will be included in the Company’s definitive proxy statement to be filed with the SEC Securities and Exchange Commission within 120 days after our fiscal year end December 31, 2022, in connection with the solicitation of proxies for the Company’s 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”), under the captions “Proposal 1:

Election of Three Directors — Directors and Nominees,” and “Corporate Governance — Board Committees — Audit Committee,” and is incorporated herein by reference.

Executive Compensation.

COMPENSATION DISCUSSION AND ANALYSIS

In this Compensation Discussion and Analysis (“CD&A”), we provide an overview and analysis of the compensation awarded to or earned by our named executive officers identified in the Summary Compensation Table below (each, an “NEO”) during fiscal 2021, including the elements of our compensation program for NEOs, material compensation decisions made under that program for fiscal 2021 and the material factors considered in making those decisions.

Our NEOs for the year ended December 31, 2021, which consist of our principal executive officer (now our former principal executive officer), our principal financial officer and our three most other highly compensated executive officers for fiscal year 2021, are:

• Clinton Carnell, former Chief Executive Officer;

• Liyuan Woo, Chief Financial Officer;

• Indra Pamamull, President of APAC;

• Stephan Becker, President of EMEA;

• Daniel Watson, EVP, Sales America.

Pamamull and Mr.

Becker commenced employment with us on August 9, 2021 and October 1, 2021, respectively.

Carnell served as our Chief Executive Officer during our full fiscal year 2021, and his employment with us terminated on December 31, 2021.

Table of Con tents

Executive Summary

2021 Performance Highlights

Our executive compensation programs are designed to deliver pay in accordance with corporate and individual performance, rewarding superior performance and providing consequences for underperformance.

We believe that the compensation of our NEOs for fiscal year 2021 was aligned with the Company’s performance during 2021.

Highlights of that performance include:

• Delivered net sales of $260.1 million compared to $119.1 million in 2020.

• Increased adjusted gross margin to 74.0% compared to 65.5% in 2020.

• Adjusted EBITDA increased to $32.7 million from $7.7 million in 2020.

• Closed convertible senior notes offering, generating net proceeds of $638.7 million

• Announced 100% of the Company’s warrants were exercised or redeemed, generating cash proceeds of $185.4 million.

• Directly entered new countries via the acquisition of four distributors.

2021 Compensation Highlights.

Consistent with our compensation philosophy, key compensation decisions for 2021 included the following:

• Base Salaries and Target Annual Cash Incentive Opportunities .

The 2021 base salaries and target bonuses for our NEOs remained level or were increased in order to position base salaries at median and target bonuses from median to the 75 th percentile, based on the market analysis of our independent compensation consultant, as described further below.

We believe that providing base salaries and target bonuses at this level allows us to attract and retain superior talent in a competitive market.

• Annual Cash Incentives .

For 2021, our compensation committee (the “Compensation Committee”) selected performance goals for our performance-based annual bonus program that were intended promote our business plan and short-term goals, including with respect to revenue and adjusted EBITDA.

In light of our achievement of each of the performance goals, the Compensation Committee determined to pay out annual bonuses at 200% of target for each of our NEOs (other than Mr.

Carnell, whose 2021 performance bonus was paid at target as part of the severance benefits he received in connection with his termination of employment with us on December 31, 2021).

• Equity-Based Long-Term Incentives .

In 2021, we granted approximately 90% of our NEOs’ target direct compensation as equity-based compensation in the form of stock options and PSUs.

We believe that stock options and PSUs effectively align the interests of our executives with those of our stockholders by directly linking compensation to the value of our common stock.

Stock options require an increase in stockholder value in order for our NEOs to realize any value, and PSUs provide additional retentive value while also aligning the interests of our NEOs with those of our stockholders.

Compensation Governance and Best Practices.

We are committed to having strong governance standards with respect to our compensation programs, procedures and practices.

Our key compensation practices include the following:

What We Do What We Do Not Do

✓ Pay the vast majority of executive compensation in the form of incentive awards.

X Do not pay guaranteed bonuses.

✓ Emphasize the use of equity compensation to promote executive retention and reward long-term value creation.

X Do not provide excessive perquisites.

✓ Take into consideration the compensation levels of an appropriate and relevant peer group of companies when setting compensation.

X Do not provide tax gross-ups.

✓ Engage an independent compensation consultant to advise our Board and Compensation Committee.

X Do not reprice our underwater stock option awards without shareholder approval.

Table of Con tents

✓ Require our NEOs to satisfy meaningful stock ownership guidelines to strengthen the alignment with our shareholders’ interests.

X Do not allow executives to participate in the determination of their own compensation

✓ Cap the maximum payout under our annual incentive awards and maximum vesting percentage of our PSUs

X Do not allow for pledging of our common stock or

for employees to hedge or sell short our common stock.

Stockholder Advisory Vote on Executive Compensation

We expect to hold our first non-binding, advisory vote to approve the compensation of our NEOs at our next annual stockholder meeting anticipated to be held in June 2022.

Executive Compensation Objectives and Philosophy

The key objective in our executive compensation program is to attract, motivate, and reward leaders who create an inclusive and diverse environment and have the skills and experience necessary to successfully execute on our strategic plan to maximize stockholder value.

Our executive compensation program is designed to:

• Reward achievement of both operating performance and strategic objectives;

• Align the interests of our management and our investors by varying compensation based on short term and

long term business results and delivering a large portion of total pay tied to our stock;

• Differentiate rewards based on performance against business objectives to drive a pay for performance

culture, with a major portion of executive pay based on achievement of financial performance goals;

• To attract the very best talent necessary for our continued success, we strive to

pay base pay at the market median and variable short-and long-term compensation ranging from median to the

75 th percentile.

We strive to set our overall total compensation at a competitive level.

Executives may be compensated above or below the targeted market position based on factors such as experience, performance, scope of position and the competitive demand for proven executive talent, as described further below under “ Determination of Executive Compensation .”

Determination of Executive Compensation

Role of Board of Directors/Compensation Committee/Executive Officers

The Compensation Committee is responsible for establishing and overseeing our executive compensation programs and annually reviews and determines the compensation to be provided to our NEOs, other than with respect to our CEO, whose compensation is determined by the board of directors (the “Board”).

In setting executive compensation, the Compensation Committee considers a number of factors, including the recommendations of our Chief Executive Officer (other than with respect to the Chief Executive Officer’s own compensation) and our human resources team, current and past total compensation, competitive market data and analysis provided by the Compensation Committee’s independent compensation consultant, Company performance and each executive’s impact on results, each executive’s relative scope of responsibility and potential, each executive’s individual performance and demonstrated leadership, and internal equity pay considerations.

Our Chief Executive Officer’s recommendations are based on his evaluation of each other NEO’s individual performance and contributions, of which our Chief Executive Officer has direct knowledge.

Our Board makes decisions regarding our Chief Executive Officer’s compensation, following recommendation from the Compensation Committee.

Role of Compensation Consultant

In order to design a competitive executive compensation program that will continue to attract top executive talent and reflect our compensation philosophy, our Compensation Committee has retained FW Cook as an independent compensation consultant to provide executive compensation advisory services, help evaluate our compensation philosophy and objectives and provide guidance in administering our executive compensation program.

The Compensation Committee has evaluated FW Cook’s independence pursuant to the requirements of Nasdaq and SEC rules and has determined that FW Cook does not have any conflicts of interest in advising the Compensation Committee.

FW Cook did not provide any other services to the Company in 2021.

Table of Con tents

In consultation with FW Cook, in December 2020, our Compensation Committee selected our peer group for 2021 as follows, focusing on market capitalization, revenues, industry, and growth-oriented publicly-traded companies:

Anika Therapeutics AtriCure BioTelemetry Cardiovascular Systems

Cerus Corporation CryoLife Cryoport Cutera

Beauty Inogen iRhythm Technologies Mesa Laboratories

OraSureTechnologies Sientra STAAR Surgical Yeti Holdings

In February 2021, FW Cook provided an analysis of data derived from (i) members of our peer group and (ii) the industry-specific survey, the constituent companies of which were not provided to the Compensation Committee.

For 2021, the Compensation Committee used FW Cook’s analysis to help structure a competitive executive compensation program, position executive compensation by considering market data, and make individual compensation decisions based on comparable positions at companies with which we compete for talent.

While the Compensation Committee does not establish compensation levels solely based on a review of competitive data or benchmark to any particular level, it believes such data is a useful tool in its deliberations as our compensation policies and practices must be competitive in the marketplace for us to be able to attract, motivate and retain qualified executive officers.

Elements of Compensation

The primary elements of our NEOs’ compensation and the main objectives of each are:

• Base Salary .

Base salary attracts and retains talented executives, recognizes individual roles and responsibilities, and provides stable income;

• Annual Performance-Based Incentive Compensation .

Annual performance bonuses promote short-term performance objectives and reward executives for their contributions toward achieving those objectives;

• Equity Based Long-Term Incentive Compensation .

Equity compensation, provided in the form of stock options and PSUs, aligns executives’ interests with our stockholders’ interests, emphasizes long-term financial and operational performance, and helps retain key executive talent.

In addition, our NEOs are eligible to participate in our health and welfare programs and our 401(k) plan on the same basis as our other employees.

We also maintain severance and change in control arrangements, which aid in attracting and retaining executive talent and help executives to remain focused and dedicated during potential transition periods due to a change in control.

Each of these elements of compensation for 2021 is described further below.

The base salaries of our named executive officers are an important part of their total compensation packages, and are intended to reflect their respective positions, duties and responsibilities.

Base salary is a visible and stable fixed component of our compensation program and provides our NEOs with a reasonable degree of financial certainty and stability.

Our Compensation Committee, and with respect to our Chief Executive Officer, the Board, annually reviews and determines the base salaries of our executives and evaluates the base salaries of new hires at the time of hire.

Following such determinations, our NEOs’ base salaries for 2021 were as set forth below:

Name 2021 Annualized Base Salary ($)

Clinton Carnell

Liyuan Woo 415,000

Indra Pamamull (1)

Stephan Becker (2)

Daniel Watson

_______________

(1) Cash compensation was paid in SGD and was converted to USD using the exchange rate at December 31, 2021 of 0.73938

(2) Cash compensation was paid in EUR and was converted to USD using the exchange rate at December 31, 2021 of 1.1324

Table of Con tents

Cash Incentive Compensation

Annual cash incentive bonuses are an important component of our total compensation program and provides incentives necessary to retain executive officers.

Each NEO is eligible to receive an annual performance-based cash bonus based on a specified target annual bonus award amount, expressed as a percentage of the named NEO’s base salary (with actual bonuses capped at 200% of the applicable NEO’s target bonus).

In fiscal 2021, our NEOs target annual bonuses (expressed as a percentage of base salary) were as follows:

Name Target Bonus (Percentage of Base Salary)

Clinton Carnell

Liyuan Woo 60%

Indra Pamamull

Stephan Becker

Daniel Watson

The performance goals applicable to our 2021 annual bonus program included revenue (weighted at 75%) and adjusted EBITDA (weighted at 25%), as set forth in the table below.

Our Compensation Committee believes that using revenue as a performance metric drives our overall performance while ensuring our NEOs are aligned with our business strategy, and that using adjusted EBITDA as a performance metric focuses our NEOs on sustaining revenue growth that is profitable.

In order for any payouts to be made under our 2021 annual bonus program, adjusted EBITDA had to be attained at 85% or more of the target level.

Performance Metric

Adjusted EBITDA

Based on our 2021 performance, our revenue and EBITDA performance metrics were attained at 134% ($260.1 million) and 130% ($32.7 million) of target level, respectively and, accordingly, such Company performance goals were determined to be attained at 200% after taking into account their respective weightings.

Each NEO’s (other than Mr.

Carnell’s, as discussed below) actual performance bonus was determined by multiplying 200 % by such NEO’s target bonus, and the performance bonuses for Ms.

Pamamull and Mr.

Becker were pro-rated for 2021 based on their partial years of employment with us.

The 2021 performance bonuses earned by our NEOs are set forth in the column entitled “Non-Equity Incentive Plan Compensation” in the “2021 Summary Compensation Table” below.

Pursuant to the terms of Mr.

Carnell’s employment agreement with us, his 2021 performance bonus was paid at target as part of the severance benefits he received in connection with his termination of employment with us on December 31, 2021.

Equity-Based Long-Term Incentive Awards

We view equity-based compensation as a critical component of our balanced total compensation program.

Equity-based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns interest of executives with those of our stockholders.

Our Compensation Committee believes it is essential to provide equity-based compensation to our executive officers in order to link the interests and risks of our executive officers with those of our stockholders, reinforcing our commitment to ensuring a strong linkage between company performance and pay.

In connection with the Business Combination, employees’ existing long-term incentives vested in full and no longer provided retentive value.

To retain and motivate NEOs and employees for the next stage of the Company’s growth, the Compensation Committee approved one-time staking grants of stock options to certain employees.

The one-time awards of stock options granted to our NEOs pursuant to the 2021 Plan vest over four years, with 25% of the shares vesting on each of the first four

Table of Con tents

anniversaries of the respective Closing Date, subject to the NEO’s continued service with the Company through the applicable vesting date.

The options granted expire on the 10th anniversary of their respective grant dates.

To drive the Company’s aggressive growth and performance strategy, the Compensation Committee deemed it crucial to motivate NEOs to achieve significant outperformance objectives.

As a result, in addition to the one-time stock options staking awards, select NEOs received PSUs with performance-based vesting determined by achievement of stretch stock price goals.

It was intended that this component would reward NEOs for exceptional performance and, similarly, no pay would be delivered for performance that failed to meet the objectives established by the Compensation Committee.

The Compensation Committee believes this approach helps to align the compensation and objectives of the NEOs with the Company and its stockholders.

In 2021, we made the following grants of stock options and PSUs to our NEOs:

Name Number of Shares Underlying Stock Options Number of PSUs (at threshold/target) Number of PSUs (at maximum)

Clinton Carnell

3,100,000 250,000 375,000

Liyuan Woo 744,000 125,000 187,500

Indra Pamamull

372,000 125,000 187,500

Stephan Becker

372,000 125,000 187,500

Daniel Watson

These grants were approved by the Compensation Committee and the Board following consideration of the factors set forth above under “ Determination of Executive Compensation.”

The PSUs awarded to our NEOs pursuant to the 2021 Plan may be earned over a four-year performance period based on each NEO’s continuation in service through the end of the performance period and the attainment of pre-determined goals related to the Company’s stock price.

The actual number of PSUs that will vest on the last day of performance period will be determined based on the greater of (i) the Company’s average stock price during the 90-day period ending on the third anniversary of the vesting commencement date and (ii) the Company’s average stock price during the 90-day period ending on the fourth anniversary of the vesting commencement date, as follows:

Average Stock Price During the Applicable Measurement Period

Vesting Percentage (% of Maximum)

Less than $25.00

$37.50 or greater

If the Company’s average stock price falls between $25.00 and $30.00, or between $30.00 and $37.50, the vesting percentage used to determine the number of earned PSUs will be interpolated on a linear basis.

For a description of certain accelerated vesting provisions applicable to the stock options and PSUs granted to our NEOs during 2021, see “— Potential Payments Upon Termination or Change in Control ” below.

Employee and Other Benefits

Our NEOs are eligible to participate in a variety of retirement, health, insurance and welfare and paid time off benefits similar to, and on the same basis as, our other salaried employees.

We maintain a 401(k) retirement savings plan for our employees, including our NEOs, who satisfy certain eligibility requirements.

Our NEOs are eligible to participate in the 401(k) plan on the same terms as other full-time employees.

The Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan.

Currently, we match contributions made by participants in

Table of Con tents

the 401(k) plan up to a specified percentage of the employee contributions, and these matching contributions are fully vested as of the date on which the contribution is made.

We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan, and making fully vested matching contributions, adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies.

In 2022, we started to maintain a Deferred Compensation Plan for certain employees and members of the Board.

The Deferred Compensation Plan permits eligible participants to defer receipt of compensation pursuant to the terms of the plan.

The Deferred Compensation Plan permits participants to contribute, on a pre-tax basis, up to (i) 5% - 75% of the participant’s base salary, (ii) 5% - 100% of the participant’s bonus/commissions, and (iii) 5% - 66% of the participant’s restricted stock units earned in the upcoming plan year.

We may credit a participant’s account with Company contributions in our sole discretion.

Plan participants may designate investments for deferrals in a variety of different deemed investment options.

To preserve the tax-deferred status of deferred compensation plans, the IRS requires that the available investment alternatives be “deemed investments.” Participants do not have an ownership interest in the funds they select;

the funds are only used to measure the gains or losses that are attributed to the participant’s deferral account over time.

We believe the benefits described above are necessary and appropriate to provide a competitive compensation package to our named executive officers.

We do not provide excessive perquisites to our NEOs, and we do not view perquisites or other personal benefits as a significant component of our executive compensation program.

In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive officer in the performance of the executive’s duties, to make our executive officers more efficient and effective, and for recruitment, motivation, or retention purposes.

All future practices with respect to perquisites or other personal benefits will be approved by the Compensation Committee.

We do not generally provide any tax “gross ups” to our named executive officers.

Severance and Change in Control Arrangements

We are party to employment agreements or an employment offer letter with each of our NEOs which provide for severance benefits and payments upon certain terminations without cause or resignations for good reason.

Our Compensation Committee believes that these types of arrangements are necessary to attract and retain executive talent and are a customary component of executive compensation.

In particular, such arrangements can mitigate a potential disincentive for our NEOs when they are evaluating a potential acquisition of the Company and can encourage retention through the conclusion of the transaction.

The payments and benefits provided under our severance and change in control arrangements are designed to be competitive with market practices.

A description of these arrangements, as well as information on the estimated payments and benefits that our NEOs would have been eligible to receive as of December 31, 2021, are set forth in “ Potential Payments Upon Termination or Change in Control ” below.

Other Policies and Considerations

Clawback Policy We believe in maintaining best practices for our executive compensation program.

Consistent with that belief, our board of directors has adopted a “clawback” policy with respect to excess incentive-based cash and equity compensation in the event of a material restatement of our publicly disclosed financial statements as a result of material noncompliance with financial reporting requirements under applicable law.

The policy provides the Compensation Committee with the discretion to recover cash incentives and equity and equity-based awards from current and former executive officers, as well as from other senior executives or employees who the Compensation Committee determines are subject to the policy.

Stock Ownership Guidelines We believe that stock ownership aligns the interests of our named executive officers and directors with our stockholders and encourages long-term management of the Company for the benefit of its stockholders.

Accordingly, for 2022 we developed stock ownership guidelines that apply to our NEOs and to our non-employee directors aligned to the market median.

Table of Con tents

Named Executive Officer Guidelines

CEO and Executive Chair Ownership Multiple 6x base salary

Years to Comply 5 years to meet

Other NEOs Ownership Multiple 3x base salary

Years to Comply 5 years to meet

Non-Employee Director Guidelines

Non-Employee Directors Ownership Multiple 5x cash retainer

Years to Comply 5 years to meet

Under our stock ownership guidelines, shares counted toward the ownership requirements include vested shares, vested and unvested time-based restricted stock, restricted stock units, deferred stock units, stock held the in the Company’s the Company’s 401(k) plan and stock owned in trust by spouses or children.

NEOs and non-employee directors are required to retain 100% of the after-tax shares received from the Company if guidelines are not met within five years.

Derivatives Trading, Hedging, and Pledging Policies.

Our Insider Trading Policy provides that no employee, officer, or director may acquire, sell, or trade in any interest or position relating to the future price of Company securities, such as a put option, a call option or a short sale, or engage in hedging transactions.

In addition, our Insider Trading Policy provides that no employee, officer, or director to may pledge Company securities as collateral to secure loans.

This prohibition means, among other things, that these individuals may not hold Company securities in a “margin” account, which would allow the individual to borrow against their holdings to buy securities.

Section 409A .

The Compensation Committee takes into account whether components of the compensation for our executive officers will be adversely impacted by the penalty tax imposed by Section 409A of the Code, and aims to structure these components to be compliant with or exempt from Section 409A to avoid such potential adverse tax consequences.

Section 162(m) .

Section 162(m) of the Code disallows a tax deduction to public companies for compensation in excess of $1 million paid to “covered employees”, which generally includes all NEOs.

While the Compensation Committee may take the deductibility of compensation into account when making compensation decisions, the Compensation Committee will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us.

“Golden Parachute” Payments.

Sections 280G and 4999 of the Code provide that certain executive officers and other service providers who are highly compensated or hold significant equity interests may be subject to an excise tax if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that we, or a successor, may forfeit a tax deduction on the amounts subject to this additional tax.

While the Compensation Committee may take the potential forfeiture of such tax deduction into account when making compensation decisions, it will award compensation that it determines to be consistent with the goals of our executive compensation program even if such compensation is not deductible by us.

We do not provide any tax gross-ups to cover excise taxes under Section 4999 in connection with a change in control.

Accounting for Share-Based Compensation .

We follow Financial Accounting Standard Board Accounting Standards Codification Topic 718, (“ASC Topic 718”), for our share-based compensation awards.

ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options and PSUs, based on the grant date “fair value” of these awards.

This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards.

Compensation Committee Report

The Compensation Committee reviewed and discussed the foregoing Compensation Discussion and Analysis with the Company’s management.

Based on this review and discussion with management, the Compensation Committee recommended

Table of Con tents

to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the Company’s proxy statement for the 2022 annual meeting of stockholders.

The Compensation Committee:

Doug Schillinger

Desiree Gruber

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our Board of Directors.

EXECUTIVE COMPENSATION TABLES

2021 Summary Compensation Table

The following table contains information about the compensation earned by each of our NEOs during our most recently completed fiscal year ended December 31, 2021:

Name and Principal Position Year Salary ($) Non-Equity Incentive Plan Compensation ($)(1) Stock Awards ($)(2) Option Awards

($)(2) All Other Compensation ($) Total ($)

Clinton Carnell, 2021 672,500 — 2,287,500 21,266,037 1,722,068 25,948,105

Former Chief Executive Officer (3)

2020 661,154 300,000 — 487,415 11,200 1,459,769

2019 580,769 541,054 — — 11,000 1,132,823

Liyuan Woo, 2021 412,500 498,000 1,143,750 5,103,849 — 7,158,099

Chief Financial Officer 2020 107,692 — — 617,773 — 725,465

Indra Pamamull,

President APAC (4)

2021 158,798 199,633 2,643,750 4,082,665 — 7,084,846

Stephan Becker,

President EMEA (5)

2021 87,761 105,313 3,811,875 5,259,211 5,095 9,269,255

Daniel Watson, 2021 369,104 445,436 — 2,126,604 11,400 2,952,544

EVP Sales Americas 2020 362,571 171,600 — 50,296 11,200 595,667

2019 340,661 357,095 — — 11,000 708,756

_______________

(1) The amounts reflect the actual amount earned by each NEO under the Company’s performance-based cash incentive bonus program for 2021.

Please see the description of the annual bonus program under “Cash Incentive Compensation” above.

(2) Amounts reflect the full grant-date fair value of PSUs and stock options granted during fiscal 2021 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the NEO.

The value of the PSU awards set forth above is based on the probable outcome of the performance conditions on the grant date.

We provide information regarding the assumptions used to calculate the value of all PSUs and stock options granted to our NEOs in Note 13 to the consolidated financial statements included in in our Annual Report on Form 10-K for the year ended December 31, 2021.

Carnell served as our Chief Executive Officer during our full fiscal year 2021, and his employment with us terminated on December 31, 2021.

Amounts in all other compensation column represent the Company’s contributions under its 401(k) plan of $11,400 and severance payments and benefits that Mr.

Carnell became entitled to receive upon his termination of employment with us on December 31, 2021, consisting of:

(i) continued payment of his base salary in effect as of his separation date for a period of 18 months (or $1,012,500), (ii) his target bonus for 2021 (or $675,000) and (iii) reimbursement of the employer portion of COBRA premium payments for up to 18 months following termination (with an estimated aggregate value of $23,168).

Stock and option awards granted to Mr.

Carnell during fiscal year 2021 were forfeited upon his termination.

Pamamull commenced employment with us on August 9, 2021.

Salary and non-equity incentive plan compensation for Ms.

Pamamull was paid in SGD and was converted to USD using the exchange rate at December 31, 2021 of 0.73938.

Table of Con tents

Becker commenced employment with us on October 1, 2021.

Salary, non-equity incentive plan compensation and all other compensation for Mr.

Becker was paid in EUR and was converted to USD using the exchange rate at December 31, 2021 of 1.1324.

All other compensation included Mr.

Becker’s monthly car allowance pursuant to his employment agreement.

Grants of Plan-Based Awards in Fiscal 2021

The following table provides supplemental information relating to grants of plan-based awards made during fiscal 2021 to help explain information provided above in our Summary Compensation Table.

This table presents information regarding all grants of plan-based awards occurring during fiscal 2021:

Name Estimated Future Payouts Under Non-Equity Incentive Plan Awards (*) Estimated Future Payouts Under Equity Incentive Plan Awards (1) All Other Option Awards:

Number of Securities Underlying Options

(#) (2) Exercise or Base Price of Option Awards

($/Sh) Grant Date Fair Value of Stock and Option Awards

Grant Date Threshold($) Target

($) Maximum($) Threshold/Target (#) Maximum(#)

Clinton Carnell (4)

5/6/2021 — — — 250,000 375,000 — — 2,287,500

5/6/2021 — — — — — 3,100,000 12.85 21,266,037

— 270,000 675,000 1,350,000 — — — — —

Liyuan Woo 5/6/2021 — — — 125,000 187,500 — — 1,143,750

5/6/2021 — — — — — 744,000 12.85 5,103,849

— 99,600 249,000 498,000 — — — — —

Indra Pamamull

8/12/2021 — — — 125,000 187,500 — — 2,643,750

8/12/2021 — — — — — 372,000 20.63 4,082,665

— 95,824 239,559 479,118 — — — — —

Stephan Becker

10/1/2021 — — — 125,000 187,500 — — 3,881,875

10/1/2021 — — — — — 372,000 26.50 5,259,211

— 84,250 210,626 421,252 — — — — —

Daniel Watson

5/6/2021 — — — — — 310,000 12.85 2,126,604

— 89,087 222,718 445,436 — — — — —

_______________

(*) Amounts in this column represent cash performance bonus opportunities for the named executive officers in 2021 under our annual bonus program, which is described above under “— Cash Incentive Compensation ”

(1) Represents PSUs granted under the 2021 Plan.

The PSUs may be earned over a four-year performance period based on the applicable NEO’s continuation in service through the end of the performance period and the attainment of pre-determined goals related to the Company’s stock price.

(2) Represents stock options granted pursuant to the 2021 Plan, which vest over four years, with 25% of the shares vesting on each of the first four anniversaries of the applicable grant date, subject to the applicable NEO’s continued employment with the Company through the applicable vesting date.

(3) Amounts reflect the full grant-date fair value of the PSUs or options, as applicable, granted during fiscal year 2021 in accordance with ASC Topic 718.

The value of PSU awards set forth above is based on the probable outcome of the performance conditions on the grant date.

We provide information regarding the assumptions used to calculate these values in Note 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

(4) Stock and option awards granted to Mr.

Carnell during fiscal year 2021 were forfeited upon his termination.

Table of Con tents

NARRATIVE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE

Summary of Executive Compensation Arrangements

Each of our NEOs is (or, with respect to Mr.

Carnell, was during 2021) party to an employment agreement or

employment offer letter, as applicable, with us, as more fully described below.

For information regarding the severance

payments and benefits that our NEOs are eligible to receive, please see “— Potential Payments Upon Termination or

Change in Control ” below.

Employment Agreements with Mr.

Carnell and Ms.

Effective May 4, 2021, the Company entered into employment agreements with each of Mr.

Carnell and Ms.

Pursuant to their respective employment agreements, Mr.

Carnell was and Ms.

Woo is entitled to (i) an annual base salary of $675,000 and $415,000, respectively, (ii) an annual cash performance bonus targeted at 100% and 60% of base salary, respectively, (iii) eligibility for annual long-term incentive awards beginning in 2022, with the form of such award and the value of such awards determined by the Compensation Committee, and (iv) eligibility to participate in the Company’s employee benefit plans on the same terms as other senior executives of the Company.

Carnell’s employment agreement also provided that the Company would reimburse him for up to $50,000 in legal fees incurred by him in connection with the negotiation of his employment agreement.

Pursuant to their respective employment agreements, Mr.

Carnell and Ms.

Woo received the following one-time equity awards during 2021:

(1) an award of stock options to purchase 3,100,000 shares of Company common stock and 744,000 shares of Company common stock, for Mr.

Carnell and Ms.

Woo, respectively, and (2) an award of performance-based restricted stock units covering 375,000 shares at maximum of Company common stock and 187,500 shares at maximum of Company common stock for Mr.

Carnell and Ms.

Woo, respectively.

Stock and option awards granted to Mr.

Carnell during fiscal year 2021 were forfeited upon his termination.

For additional detail regarding the options and PSUs granted to Mr.

Carnell and Ms.

Woo during 2021, please see “ Compensation Discussion and Analysis—Equity-Based Long-Term Incentive Awards.

In connection with their entrance into the employment agreements, each of Mr.

Carnell and Ms.

Woo also entered into proprietary information and inventions assignment agreements which contain indefinite confidentiality and non-disclosure restrictions, invention assignment provisions, non-competition and customer non-solicitation covenants effective during employment, and employee non-solicitation covenants effective during the applicable NEO’s employment and for up to one year following termination.

Employment Offer Letter with Ms.

Effective August 9, 2021, the Company entered into an employment offer letter with Ms.

Pursuant to her offer letter, Ms.

Pamamull is entitled to (i) an annual base salary of $399,265, (ii) an annual cash performance bonus targeted at 60% of base salary, and (iii) eligibility for standard employee benefits and pension benefits.

In connection with her commencement of employment with us, Ms.

Pamamull received the following one-time equity awards during 2021:

(1) an award of stock options to purchase 372,000 shares of Company common stock and (2) an award of performance-based restricted stock units covering 187,500 shares at maximum of Company common stock.

For additional detail regarding the option and PSUs granted to Ms.

Pamamull during 2021, please see “ Compensation Discussion and Analysis—Equity-Based Long-Term Incentive Awards.

Pamamull’s offer letter also contains indefinite confidentiality and non-disclosure restrictions, invention assignment provisions, and customer and employee non-solicitation covenants effective during her employment and for up to one year following termination.

Employment Agreement with Mr.

Effective October 1, 2021, the Company entered into an employment agreement with Mr.

Pursuant to his employment agreement, Mr.

Becker is entitled to (i) an annual base salary of $351,044, (ii) an annual cash performance bonus targeted at 60% of base salary, (iii) eligibility for annual long-term incentive awards beginning in 2022, with the form of such award and the value of such awards determined by the Compensation Committee, (iv) a car allowance of $1,699 per month, and (v) eligibility for standard employee benefits.

Table of Con tents

Pursuant to his employment agreement, Mr.

Becker received the following one-time equity awards during 2021:

For additional detail regarding the option and PSUs granted to Mr.

Becker during 2021, please see “ Compensation Discussion and Analysis—Equity-Based Long-Term Incentive Awards.

Becker’s employment agreement also contains indefinite confidentiality and non-disclosure restrictions, invention assignment provisions, and non-competition covenants effective during employment.

Employment Offer Letter with Mr.

Effective May 4, 2021, the Company entered into an employment offer letter with Mr.

Pursuant to his offer letter, Mr.

Watson is entitled to (i) an annual base salary of $371,197, (ii) an annual cash performance bonus targeted at 60% of base salary, (iii) eligibility for annual long-term incentive awards beginning in 2022, with the form of such award and the value of such awards determined by the Compensation Committee, and (iv) eligibility to participate in the Company’s employee benefit plans on the same terms as other similarly-situated employees of the Company.

Pursuant to his offer letter, Mr.

Watson received a one-time equity award during 2021 of stock options to purchase 310,000 shares of Company common stock.

For additional detail regarding the option granted to Mr.

Watson during 2021, please see “ Compensation Discussion and Analysis—Equity-Based Long-Term Incentive Awards.

In connection with his entrance into the offer letter, Mr.

Watson also entered into a proprietary information and inventions assignment agreement which contains indefinite confidentiality and non-disclosure restrictions, invention assignment provisions, non-competition and customer non-solicitation covenants effective during employment, and employee non-solicitation covenants effective during his employment and for up to one year following termination.

Outstanding Equity Awards at Fiscal Year-End Table

The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each NEO as of December 31, 2021:

Option Awards Stock Awards

Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable (1) Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards:

Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) Equity Incentive Plan Awards:

Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3)

Clinton Carnell (4)

— 3,100,000 — 12.85 5/6/2031 — — 375,000 7,248,000

— 744,000 — 12.85 5/6/2031 — — 187,500 3,624,000

Indra Pamamull

— 372,000 — 20.63 8/12/2031 — — 187,500 3,624,000

Stephan Becker

— 372,000 — 26.50 10/1/2031 — — 187,500 3,624,000

Daniel Watson

— 310,000 — 12.85 5/6/2031 — — — —

_______________

(1) Represents stock options granted pursuant to the 2021 Plan that vest over four years, with 25% of the shares vesting on each of the first four anniversaries of the applicable grant date (which was March 6, 2021 for each of Messrs.

Carnell and Watson and Ms.

Woo, August 12, 2021 for Ms.

Pamamull, and October 1, 2021 for Mr.

Becker), subject to continued employment with the Company through the applicable vesting date.

Such stock options are also subject to accelerated vesting in certain circumstances, as described below under “ —Potential Payments Upon Termination or Change in Control—Accelerated Vesting of Equity Awards.

(2) Represents PSUs granted under the 2021 Plan that may be earned over a four-year performance period ending December 31, 2024 based on each NEO’s continuation in service through the end of the performance period and the attainment of pre-determined goals related to the Company’s stock price.

For additional information, see “ Compensation Discussion and Analysis—Equity-Based Long-Term Incentive Awards ” above.

Such PSUs are also subject to accelerated vesting in certain circumstances, as described below under “— Potential Payments Upon Termination or Change in Control—Accelerated Vesting of Equity Awards.

(3) The market value of unvested PSUs is calculated assuming stretch performance and based on the closing price of our common stock ($24.16) as reported on The Nasdaq Capital Market on December 31, 2021.

(4) Stock and option awards granted to Mr.

Carnell during fiscal year 2021 were forfeited upon his termination.

Table of Con tents

Potential Payments Upon Termination or Change in Control

The following summarizes the potential payments and benefits that would be made to our NEOs upon certain qualifying terminations of their employment with the Company.

We are party to an employment agreement with Ms.

Woo which provides for certain severance protections, and each of Messrs.

Becker and Watson and Ms.

Pamamull participate in our Executive Severance Plan.

The severance payments and benefits provided by such employment agreement and our Executive Severance Plan are more fully described below.

We were party to an employment agreement with Mr.

Carnell during 2021.

In connection with Mr.

Carnell’s separation from employment with the Company on December 31, 2021, his employment agreement terminated and he became entitled to certain severance payments and benefits, as further described below.

Employment Agreement with Ms.

Under her employment agreement, if Ms.

Woo’s employment is terminated before or more than twelve months after a “change in control” by the Company (as defined in the 2021 Plan) without “cause” or by Ms.

Woo for “good reason” (each as defined in her employment agreement), she will be entitled to the following:

(i) any earned, but unpaid annual bonus for the year prior to the year of termination, (ii) continued payment of her base salary for 18 months following termination, (iii) a prorated target annual bonus for the year of termination, and (iv) reimbursement of the employer portion of COBRA premium payments for up to 18 months following termination (collectively, the “Severance Benefits”).

If, within 12 months following the consummation of a “change in control” of the Company, Ms.

Woo’s employment is terminated by the Company without “cause” or by Ms.

Woo for “good reason”, she will be entitled to receive the Severance Benefits, along with a cash payment equal to one and one-half (1.5) times her target annual bonus for the year of termination.

Woo’s employment is terminated due to her death or “disability” (as defined in her employment agreement) she (or her estate, as applicable) will receive a lump sum cash payment equal to her prorated target annual bonus for the year of termination, and any earned, but unpaid annual bonus for the year prior to the year of termination.

Woo’s right to receive the foregoing severance payments and benefits is contingent upon her execution and non-revocation of a general release of claims in favor of the Company.

Her employment agreement also includes a Section 280G “best pay” provision, which provides that if any amount received by her pursuant to the agreement or otherwise that would be subject to the excise tax imposed by Section 4999 of the Code, she would receive the full amount of the payments and benefits or an amount reduced so that no portion would be subject to the excise tax, whichever would result in the largest payment to her on an after-tax basis.

Executive Severance Plan

Each of Messrs.

Becker and Watson and Ms.

Pamamull participate in our Executive Severance Plan, which provides that upon a termination of the applicable NEO’s employment without “cause” or for “good reason” (each as defined in the Executive Severance Plan) before or more than twelve months after a “change in control” by the Company (as defined in the 2021 Plan), the NEO will be entitled to:

(1) continued payment of his or her base salary for 12 months (or, for Ms.

Pamamull, six months) following termination, (2) a prorated target annual bonus for the year of termination, and (3) reimbursement of the employer portion of COBRA premium payments for 12 months (or, for Ms.

Pamamull, six months) following termination.

If, within 12 months following the consummation of a “change in control” of the Company, the applicable NEO’s employment is terminated without “cause” or for “good reason”, the NEO will be entitled to receive the same severance benefits outlined above, along with a cash payment equal to 100% (or, for Ms.

Pamamull, 50%) of the NEO’s target annual bonus for the year of termination.

The severance payments and benefits under the Executive Severance Plan are subject to the applicable NEO’s execution of a release of claims in favor of us.

The Executive Severance Plan also includes a Section 280G “best pay” provision, which provides that if any amount received by the NEO pursuant to the Executive Severance Plan or otherwise that would be subject to the excise tax imposed by Section 4999 of the Code, the NEO would receive the full amount of the payments and benefits or an amount reduced so that no portion would be subject to the excise tax, whichever would result in the largest payment to the NEO on an after-tax basis.

Table of Con tents

Carnell’s Severance Benefits

In connection with his separation from employment with us on December 31, 2021, Mr.

Carnell became entitled to the following severance payments and benefits:

(i) continued payment of his base salary in effect as of his separation date for a period of 18 months (representing an aggregate amount equal to $1,012,500), (ii) his target bonus for 2021 (which was equal to $675,000), and (iii) reimbursement of the employer portion of COBRA premium payments for up to 18 months following termination (valued at $23,168).

Such severance payments and benefits were contingent upon Mr.

Carnell’s execution and non-revocation of a general release of claims in favor of the Company.

Accelerated Vesting of Equity Awards

Our NEOs are entitled to accelerated vesting of their stock options and PSUs upon certain terminations of employment, as described below.

Stock Options

Upon an NEO’s termination of employment with us due to his or her death or “disability” or, if a “change in control” of the Company is consummated after May 4, 2022 and an NEO’s employment is terminated by us without “cause” or due to such NEO’s resignation for “good reason,” in either case, within 12 months following the consummation of the change in control, his or her options will immediately vest in full.

In addition, the stock options held by each of our NEOs other than Mr.

Carnell and Ms.

Woo provide that if a change in control of the Company occurs prior to May 4, 2022 (or pursuant to a binding agreement entered into prior to May 4, 2022) and the applicable NEO’s employment is terminated by us without “cause” or due to such NEO’s resignation for “good reason,” in either case, within 12 months following the consummation of the change in control, the option will vest pro-rata through the date of such termination (as if such option had originally been subject to monthly, rather than annual, vesting).

Any accelerated vesting applicable to the NEOs’ stock options is subject to the applicable NEO’s execution of a release of claims in favor of us.

Performance-Based Restricted Stock Units

In the event that a “change in control” of the Company is consummated during the four-year performance period applicable to our NEOs’ PSUs and the applicable NEO remains in employment with us until at least immediately prior to such change in control, then (i) if the underlying shares are not publicly traded following the consummation of the change in control and there is not an “assumption” of the PSUs, then a number of PSUs will vest upon the change in control based on the per-share consideration paid (or payable) in connection with the change in control (or, if the change in control is consummated after the third anniversary of the applicable vesting commencement date, based on the Company’s average stock price during the 90-day period ending on the third anniversary of the vesting commencement date (if greater));

and (ii) if the underlying shares are not publicly traded following the consummation of the change in control and there is an “assumption” of the PSUs, the PSUs will convert into a number of unvested restricted stock units based on per-share consideration paid (or payable) in connection with the change in control (or, if the change in control is consummated after the third anniversary of the applicable vesting commencement date, based on the Company’s average stock price during the 90-day period ending on the third anniversary of the vesting commencement date (if greater)).

The unvested restricted stock units (as so assumed and adjusted) would remain outstanding and eligible to vest on the last day of the performance period, subject to the NEO’s continued service through the applicable vesting date.

In the event the NEO’s service with the Company terminates prior to the last day of the performance period, the PSUs will vest or be forfeited as follow (with any vesting subject to the applicable NEO’s execution of a release of claims in favor of us):

Reason for Termination If Termination Occurs Before 3 rd Anniversary of the Applicable Vesting Commencement Date, then:

If Termination Occurs On or After 3 rd Anniversary of, but before 4 th Anniversary of, the Applicable Vesting Commencement Date, then:

Table of Con tents

Death or Disability A number of PSUs will vest based on the Company’s average stock price over the 90 days ending on and including the termination date A number of PSUs will vest based on the greater of (i) the Company’s average stock price over the 90 days ending on and including the termination date and (ii) the Company’s average stock price over the 90-day period ending on the 3 rd anniversary of the vesting commencement date.

Without cause or for good reason prior to the consummation of a change in control All PSUs will be forfeited without payment upon such termination.

A number of PSUs will vest based on the Company’s average stock price over the 90-day period ending on the 3 rd anniversary of the vesting commencement date.

Without cause or for good reason within 24 months after consummation of a change in control A number of PSUs will vest based on the Company’s average stock price over the 90 days ending on and including the termination date A number of PSUs will vest based on the greater of (i) the Company’s average stock price over the 90 days ending on and including the termination date and (ii) the Company’s average stock price over the 90-day period ending on the 3 rd anniversary of the vesting commencement date.

Any other reason (including for cause or without good reason) All PSUs will be forfeited without payment upon such termination All PSUs will be forfeited without payment upon such termination.

Estimated Potential Payments

The following table summarizes the payments that would have been made to our NEOs (other than Mr.

Carnell, whose employment with us ended on December 31, 2021 and show severance and termination benefits are described above under “— Mr.

Carnell’s Severance Benefits ”) upon the occurrence of certain qualifying terminations of employment or a change in control, in any case, occurring on December 31, 2021.

Amounts shown do not include (i) accrued but unpaid base salary through the date of termination or (ii) other benefits earned or accrued by the NEO during his employment that are available to all salaried employees, such as accrued vacation.

Name Type of Benefit Termination Without Cause or for Good Reason / Cause (no Change in Control) ($) Termination Without Cause or for Good Reason / Cause in Connection with a Change in Control ($) Termination due to Death or Disability

Liyuan Woo Cash - Base Salary 622,500 622,500 —

Cash - Target Bonus 249,000 622,500 —

Equity Acceleration (1) — 3,113,016 11,527,656

All Other Payments or Benefits 22,875 22,875 —

Total (2) 894,375 4,380,891 11,527,656

Table of Con tents

Indra Pamamull Cash - Base Salary 199,633 199,633 —

Cash - Target Bonus 239,559 359,339 —

Equity Acceleration (1) — 3,249,804 4,426,176

All Other Payments or Benefits 6,356 6,356 —

Total (2) 445,548 3,815,132 4,426,176

Stephan Becker Cash - Base Salary 351,044 351,044 —

Cash - Target Bonus 210,626 421,253 —

Equity Acceleration (1) — 3,113,016 3,113,016

All Other Payments or Benefits 5,592 5,592 —

Total (2) 567,262 3,890,905 3,113,016

Daniel Watson Cash - Base Salary 371,196 371,196 —

Cash - Target Bonus 222,718 445,436 —

Equity Acceleration (1) — 584,350 3,506,100

All Other Payments or Benefits 12,102 12,102 —

Total (2) 606,016 1,413,084 3,506,100

_______________

(1) With respect to options, the value of equity acceleration was calculated by (i) multiplying the number of accelerated shares of common stock underlying the options by $24.16, the closing trading price of our common stock on December 31, 2021 as reported on The Nasdaq Capital Market and (ii) subtracting the exercise price for the options.

With respect to PSUs, the value of equity acceleration was calculated by multiplying the number of accelerated PSUs by $24.16, the closing trading price of our common stock on December 31, 2021.

(2) Amounts shown are the maximum potential payments and benefits the applicable NEO would have received as of December 31, 2021 (without taking into account any Code Section 280G “best pay” provision that may result in the reduction of such payments and benefits).

2021 Director Compensation

The following table provides compensation information for fiscal year 2021 for each non-employee member of our Board of Directors:

Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Option Awards ($)(1) All Other Compensation ($) Total ($)

Brent Saunders (2) — 2,182,492 (3)

12,759,622 — 12,759,622

Capellas 42,918 134,986 — — 177,904

Julius Few 33,014 134,986 — — 168,000

Michelle Kerrick 46,219 134,986 — — 181,205

Brian Miller 37,966 134,986 — — 172,952

Desiree Gruber 29,199 123,737 — — 152,936

Douglas Schillinger 46,219 134,986 — — 181,205

_______________

(1) Amounts reflect the full grant-date fair value of time-based RSUs and, for Mr.

Saunders only, stock options granted during 2021 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual.

We provide information regarding the assumptions used to calculate the value of all restricted stock units and option awards made to our directors in Note 13 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Table of Con tents

Saunders serves as our Executive Chairman and is also an employee of the Company.

The compensation set forth in the table above for Mr.

Saunders was solely in respect of his services as a member of our Board.

Stock Awards consist of restricted stock units issued in lieu of Director Fees ($809,992) and performance-based restricted stock units ($1,372,500).

(3) To compensate Mr.

Saunders for his service as our Executive Chairman, Mr.

Saunders was eligible to receive annual compensation for 2021 targeted at 60% of Mr.

Carnell’s annual compensation, based on market data for an executive chairman.

For 2021, Mr.

Saunders received restricted stock units covering 30,963 shares of our common stock, which had a grant-date value of $809,992 (representing 60% of Mr.

Carnell’s annualized target cash compensation).

The restricted stock units vested in full on December 31, 2021, upon Mr.

Saunders’ continuation in service through such date.

Saunders also received a stock option to purchase 1,860,000 shares of our common stock at $12.85 per share and an award of PSUs covering 225,000 shares (at maximum) (each representing 60% of the option and PSU award granted to Mr.

Carnell during 2021).

The vesting provisions of Mr.

Saunders’ option and PSU award mirror those of our NEOs and are described more fully in the Compensation Discussion and Analysis above under “—Equity Based Long-Term Incentive Awards.”

The table below shows the aggregate numbers of option awards (exercisable and unexercisable) and unvested stock awards held as of December 31, 2021 by each non-employee director:

Name Option Awards Outstanding at 2021 Fiscal Year End Restricted Stock Units PSUs (at maximum)

Brent Saunders 1,860,000 — 225,000

Capellas — 5,160 —

Julius Few — 5,160 —

Michelle Kerrick — 5,160 —

Brian Miller — 5,160 —

Desiree Gruber — 4,730 —

Douglas Schillinger — 5,160 —

Non-Employee Director Compensation Program

We maintain a compensation program for our non-employee directors under which each non-employee director receives the following amounts for their service on the Board:

• an annual cash retainer of $45,000 for each non-employee director;

• an annual cash retainer of $10,000 for the chair of the audit committee, $7,500 for the chair of the compensation committee and $5,000 for the chair of the nominating and corporate governance committee;

• an annual cash retainer of $10,000 for each member of the audit committee;

$7,500 for each member of the compensation committee and $5,000 for each member of the nominating and corporate governance committee;

• an annual cash retainer of $25,000 for the lead director, if applicable;

• an annual equity award in the form of restricted stock units with a grant date fair value of $135,000 (the “Annual Award”), which vests on the earlier of the one-year anniversary of the grant and the next annual meeting of stockholders to occur following the grant date, subject to the director’s continuous service and further subject to full accelerated vesting upon a change in control of the Company or the applicable director’s termination of service due to death or disability;

• for directors who are elected or appointed to the Board on a date other than the date of any annual meeting of stockholders, a pro-rated Annual Award in connection with his or her commencement of service on the Board.

Director fees under the program are payable in arrears in four equal quarterly installments.

Compensation Risk Assessment

We believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us or create undesired or unintentional risk of a material nature.

Table of Con tents

We also believe that our incentive compensation arrangements provide incentives that do not encourage risk taking beyond our ability to effectively identify and manage significant risks and are compatible with effective internal controls and our risk management practices.

The Compensation Committee monitors our compensation programs on at least an annual basis and expects to make modifications as necessary to address any changes in our business or risk profile.

The information required by this Item will be included in the 2023 Proxy Statement under the captions “Compensation Discussion and Analysis,” “Executive Compensation,” “2022 Director Compensation,” “Corporate Governance - Compensation committee interlocks and insider participation,” “Compensation Committee Report,” “Compensation Risk Assessment” and “CEO Pay Ratio – 2022” and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

The following table provides information as of as of December 31, 2021, with respect to the shares of the Company’s common stock that may be issued under the Company’s existing compensation plans:

Plan Category Number of

and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of

Remaining Available

Issuance Under Equity Compensation Plans

Equity compensation plans approved by security holders 8,140,795 17.01 8,667,882

Equity compensation plans not approved by security holders — — —

Totals 8,140,795 (1) 17.01 (2) 8,667,882 (3)

_______________

(1) Comprises 6,785,020 shares issuable upon exercise of options outstanding under the 2021 Plan, 380,775 shares issuable upon vesting of outstanding RSUs under the 2021 Plan, and 975,000 shares issuable upon vesting settlement of PSUs outstanding under the 2021 Plan.

(2) The weighted average exercise price does not take into account the RSUs or PSUs that have no exercise price.

In addition, the weighted average exercise price does not take into account rights outstanding under the 2021 ESPP.

(3) Comprises 6,667,882 shares available for future issuance under the 2021 Plan and 2,000,000 shares available for future issuance under the 2021 ESPP, in each case, as of December 31,2021.

Beneficial Ownership

The following table sets forth information pertaining to “beneficial ownership” (as defined below) of our voting securities as of February 18, 2021, by (i) individuals or entities known by us to own more than five percent of any class of our voting securities, (ii) each director and director nominees, (iii) our named executive officers and (iv) all directors and executive officers as a group.

The table below is based upon information supplied by officers, directors and principal stockholders and Schedules 13G filed with the SEC.

The number of shares “beneficially owned” by a given stockholder is determined under SEC Rules, and the designation of ownership set forth below is not necessarily indicative of ownership for any other purpose.

In general, the beneficial ownership as set forth below includes shares over which a director, director nominee, principal stockholder, or executive officer has sole or shared voting or investment power and certain shares which such person has a vested right to acquire, under stock options or otherwise, within sixty (60) days of the date hereof.

The beneficial ownership percentages set forth in the table below are based on 150,598,047 shares of common stock outstanding as of February 18, 2022.

Except as otherwise set forth in the table below, the address of each of the persons listed below is c/o The Beauty Health Company, 2165 Spring Street, Long Beach, California 90806.

Table of Con tents

Common Stock Beneficially Owned

Name and Address of Beneficial Owner Number of Shares Percent of Total Outstanding Common Stock

5% Stockholders:

The Vanguard Group (1)

9,599,134 6.4%

100 Vanguard Blvd., Malvern, PA 19355

22,446,042 14.9%

245 Summer Street, Boston, MA 02210

LCP Edge Holdco LLC (3)

36,568,002 24.3%

150 N Riverside Plaza, Suite 5100, Chicago, IL 60606

Named Executive Officers and Directors:

Liyuan Woo 347,335 *

Indra Pamamull — *

Stephan Becker — *

Daniel Watson 217,361 *

Brent Saunders (4)

13,193,969 10.5%

Michael Capellas (5)

Julius Few (6)

Desiree Gruber (7)

Michelle Kerrick — *

Brian Miller (8)

36,568,002 24.3%

Douglas Schillinger (9)

2,600,391 1.7%

Clinton Carnell 2,470,174 1.6%

Andrew Stanleick — *

All executive officers and directors as a group (13 persons) 55,975,253 37.2%

_______________

* Less than one percent.

(1) Based solely on information contained in Schedule 13G filed with the Securities and Exchange Commission on February 9, 2021.

The Vanguard Group and Christine M.

Buchanan reported The Vanguard Group and Christine M.

Buchanan has shared voting power of 159,863 shares, sole dispositive power of 9,371,536 shares, and shared dispositive power of 227,598 shares.

(2) Based solely on information contained in Schedule 13G/A filed with the Securities and Exchange Commission on February 9, 2021.

FMR LLC and Abigail P.

Johnson reported that FMR LLC and Abigail P.

Johnson has sole power to direct the voting of 5,464,847 shares and sole power to direct the disposition of 22,446,042 shares.

(3) Based solely on information contained in Schedule 13G/A filed with the Securities and Exchange Commission on July 19, 2021, by LCP Edge Holdco LLC, Linden Capital III LLC, Linden Manager III LP, Linden Capital Partners III LP, Linden Capital Partners III-A LP, Brian Miller and Anthony Davis (collectively the Reporting Persons), each of the Reporting Persons may be deemed to directly or indirectly beneficially own the shares of Class A Common Stock held by LCP Edge Holdco LLC.

The aggregate number of shares of Class A Common Stock beneficially owned collectively by the Reporting Persons is 36,508,096 shares over which they have shared voting and dispositive power over.

Based solely on information contained in Form 4 filed with the Securities and Exchange Commission on August 27, 2021 the Reporting Persons acquired 59,906 shares, transacted on August 25, 2021, adjusting the number of shares of Class A Common Stock beneficially owned collectively by the Reporting Persons to 36,568,002.

The reported acquisition reflects working capital adjustment shares issued pursuant to the Business Combination.

(4) Consists of (i) 5,557,685 shares held by Mr.

Saunders, (ii) 1,681,771 shares held by Triplet Enterprises III, LLC ("Triplet"), (iii) 1,121,180 shares held by Saunders Family Trust ("Trust"), (iv) 3,166,666 convertible warrants held by Mr.

Saunders, (v) 1,000,000 convertible warrants held by Triplet, and (vi) 666,667 convertible warrants held by Trust.

As the managing member of Triplet, Mr.

Saunders may be deemed to indirectly beneficially own shares held by Triplet, but disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

Saunders has voting and dispositive control over the securities held by Trust and thus Mr.

Saunders may be deemed to indirectly beneficially own shares held by Trust, but disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

The business address of this stockholder is 1142 N Venetian Dr., Miami Beach, FL 33139.

(5) Consists of 136,162 shares and 233,333 convertible warrants.

(6) Consists of 63,903 shares and 66,667 convertible warrants.

(7) Consists of 24,623 shares and 53,333 convertible warrants.

(8) Includes shares of Class A Common Stock beneficially held by LCP Edge Holdco LLC.

Brian Miller, as Co-Founder and Managing Partner of LCP Edge Holdco LLC, may be deemed to directly or indirectly beneficially own the shares as he shares voting and

Table of Con tents

dispositive power over the 36,568,002 shares.

The business address of this stockholder is 150 North Riverside Plaza, Suite 5100, Chicago, IL 60606.

(9) Consists of 2,600,391 shares held by DW Healthcare Partners IV (B) LP.

Doug Schillinger, as the Managing Director of DW Healthcare Partners IV (B) LP, disclaims beneficial ownership of the shares other than to the extent of any pecuniary interest he may have therein, directly or indirectly.

The business address of this stockholder is 1413 Center Dr., Suite 220, Park City UT 84098.

Changes in Control

We are not aware of any arrangements that may result in a change in control.

The information required by this Item will be included in the 2023 Proxy Statement under the captions “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management,” and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The following includes a summary of transactions since January 1, 2021 to which we have been a party in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change of control, and other arrangements, which are described under the section entitled “Executive Compensation.”

Employment Agreements with Named Executive Officers

The information set forth in Part III, Item 11 under the heading, “ Summary of Executive Compensation Arrangements ”, including under the subheadings, “ Employment Agreements with Mr.

Carnell and Ms.

Woo ”, “ Employment Offer Letter with Ms.

Pamamull ”, “ Employment Agreement with Mr.

Becker ”, and “ Employment Offer Letter with Mr.

Watson ” is incorporated herein by reference.

Indemnity Agreements

In connection with the consummation of the Business Combination, on May 4, 2021, the Company entered into indemnity agreements with each of its directors and executive officers and certain other officers of the Company.

Each indemnity agreement provides for indemnification and advancement by the Company of certain expenses and costs relating to claims, suits or proceedings arising from service to the Company or, at its request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.

Registration Rights Agreement

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 the Sponsor and the HydraFacial Stockholders.

Pursuant to the terms of the Registration Rights Agreement, (i) any outstanding share of Class A Common Stock or any other equity security (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 a 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 Class B Common Stock 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 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 transactions contemplated by the Merger Agreement, 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 HydraFacial Stockholders are entitled to make up to an aggregate of two demands for registration, excluding short form demands, that the Company register shares of Common Stock held 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 the terms of the Registration Rights Agreement.

The Company and the Restricted

Table of Con tents

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.

Lock-Up Agreement

In connection with the consummation of the Business Combination, on May 4, 2021, the Company, the Sponsor and the HydraFacial Stockholders entered into a Lock-Up Agreement, pursuant to which the HydraFacial Stockholders agreed, subject to certain exceptions, not to sell, transfer to another or otherwise dispose of, in whole or in part, the Common Stock held by the HydraFacial Stockholders during the period commencing from the closing of the Business Combination and through the earlier of (i) the 180-day anniversary of the date of the closing of the Business Combination and (ii) the date after the closing of the Business Combination on which the Company consummates certain transactions involving a change of control of the Company.

Investor Rights Agreement

In connection with the consummation of the Business Combination, on May 4, 2021, the Company and LCP entered into that certain Investor Rights Agreement (the “Investor Rights Agreement”).

Pursuant to the Investor Rights Agreement, LCP will have 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 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.

Amended and Restated Management Services Agreement

HydraFacial entered into a Management Services Agreement, dated December 1, 2016 with Linden Capital Partners III LP (“Linden Capital Partners III”) and DW Management Services, L.L.C.

(“DW Management Services”) pursuant to which the parties receive quarterly monitoring fees of the greater of (a) $125,000 and (b) 1.25% of Last Twelve Months EBITDA multiplied by the quotient of (x) the aggregate capital invested by the DWHP Investors into LCP and/or its subsidiaries as of such date, divided by (y) the sum of (i) the aggregate capital invested by the DWHP Investors into LCP and/or its subsidiaries, plus (ii) the aggregate capital invested by the Linden Capital Partners III into LCP and/or its subsidiaries as of the date of payment.

In addition, the management services agreement provides for other fees in relation to services that may be provided in connection with equity and/or debt financing, acquisition of any other business, company, product line or enterprise, or divestiture of any division, business, and product or material assets.

The fees vary between 1% and 2% of the related transaction amount.

Linden Capital Partners III also received a transaction fee upon the consummation of the Business Combination.

In connection with the consummation of the Business Combination, HydraFacial and Linden Capital Partners III amended the Management Services Agreement such that Linden Capital Partners III will continue to provide advisory services to HydraFacial related to mergers and acquisitions for one year following the Business Combination.

As consideration for such services, HydraFacial will pay a fee, equal to 1% of enterprise value, to Linden Capital Partners III upon the consummation of any such transaction.

Fees paid to these investors totaled $1.8 million, $1.8 million and $3.2 million during the year ended December 31, 2020, 2019 and 2018, respectively.

A Management Services Agreement with DW Management Services was terminated at the consummation of the Business Combination.

In connection with the consummation of the Business Combination, on May 4, 2021, the Company, its subsidiary, Edge Systems LLC, and the Linden Manager entered into the Linden Management Services Agreement pursuant to which the Linden Manager may continue to provide advisory services at the request of the Company related to mergers and acquisitions for one year following the Business Combination.

As consideration for such services, the Company will pay a fee, equal to 1% of enterprise value of the target acquired, to the Linden Manager upon the consummation of any such transaction.

The Company has also agreed to reimburse the Linden Manager for certain expenses in connection with such advisory services.

However, pursuant to the Linden Management Services Agreement, the Company’s obligation to pay the 1% Fee expires twelve months after the consummation of the Business Combination.

Transactions with the Company’s Former Chief Executive Officer

HydraFacial entered into a promissory note (the “Carnell Promissory Note”) with Mr.

Carnell in December 2016 to finance his initial $550,000 co-investment in HydraFacial.

Interest on the Carnell Promissory Note accrued at an annual rate of 8% and was scheduled to mature in December 2022.

In December 2019, HydraFacial agreed to subordinate its rights under the Carnell Promissory Note, which as of December 31, 2020 had accrued to $760,159.89, and allow Mr.

Carnell to pledge certain options

Table of Con tents

granted to him by HydraFacial to a third party lender for an additional $1,500,000 loan Mr.

Carnell obtained from such third party lender.

This loan was amended in June 2020 to allow Mr.

Carnell to cancel his options pledged as collateral for the loan and instead pledge certain management incentive units issued or to be issued to him by HydraFacial.

Both loans were repaid at the consummation of the Business Combination.

Policies and Procedures for Related Party Transactions

The audit committee charter of the Company provides for the review, approval and/or ratification of “related party transactions,” which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated by the SEC, by the audit committee.

At its meetings, the audit committee shall be provided with the details of each new, existing or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the Company has already committed to, the business purpose of the transaction and the benefits of the transaction to the Company and to the relevant related party.

Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some or all of the committee’s discussions of the related party transaction.

Upon completion of its review of the related party transaction, the committee may determine to permit or to prohibit the related party transaction.

Related Party Transactions

In addition to the compensation arrangements with directors and named executive officers described elsewhere in this annual report on Form 10-K, since January 1, 2021, there has not been a transaction or series of related transactions in which we were or are a party in which any director, executive officer, holder of more than 5% of our capital stock, or any member of the immediate family or person sharing the household with any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.

Director Independence

Our board of directors determined that each of our directors, other than Mr.

Saunders, qualify as independent directors, as defined under the listing rules of Nasdaq (the “Nasdaq listing rules”) and that our board of directors consists of a majority of “independent directors,” as defined under the rules of the SEC and the Nasdaq listing rules relating to director independence requirements.

The information required by this Item will be included in the 2023 Proxy Statement under the captions “Certain Relationships and Related Party Transactions” and “Corporate Governance - Affirmative Determinations Regarding Director and Nominee Independence,” and is incorporated herein by reference.

Principal Accountant Fees and Services.

The Audit Committee of the Board has selected Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ended December 31, 2021.

Deloitte has audited our consolidated financial statements for the years ended December 31, 2021 and 2020.

Year Ended December 31,

Audit fees (1)

$ 1,452,495 $ 668,300

Audit related fees (2)

Tax fees 1,236,038 39,145

Total fees (3)

$ 2,951,033 $ 707,445

_______________

(1) Fees for audit services included fees associated with the annual audits for the years ended December 31, 2021 and 2020 and the quarterly reviews of the financial statements included in our quarterly reports on Form 10-Q in 2021.

(2) Audited related fees were for services related to consent letters issued in connection with the filing of our registration statements, comfort letter issued in connection with our offering of convertible senior notes, and other merger and acquisition related services.

(3) Excludes fees for services rendered by Marcum LLP as the principal accountant for Vesper prior to the Business Combination.

Pre-Approval Policy

The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services rendered by Deloitte, our independent registered public accounting firm.

The Audit Committee pre-approves specified services in defined categories of audit services, audit- related services and tax services up to specified amounts, as part of the Audit Committee’s approval of the

Table of Con tents

scope of the engagement of Deloitte or on an individual case-by-case basis before Deloitte is engaged to provide a service.

The Audit Committee has determined that the rendering of the services other than audit services by Deloitte is compatible with maintaining the principal accountant’s independence.

Table of Con tents

Financial Statements and Supplementary Data

The information required by this Item will be included in the 2023 Proxy Statement under the caption “Proposal 2:

Ratification of Approval of Independent Registered Public Accounting Firm,” and is incorporated herein by reference.

Exhibit and Financial Statements

(a)(1) Financial Statements

See Index to Financial Statements in Item 8 of this report.

See Index to Financial Statements in Item 8 of this Annual Report on Form 10-K.

(a)(2) Financial Statement Schedules

All financial statement schedules have been omitted as the information is not required under the related instructions or is not applicable or because the information required is already included in the financial statements or the notes those financial statements.

(a)(3) Exhibits

The documents set forth below are filed herewith or incorporated herein by reference to the location indicated.

List of Exhibits required by Item 601 of Regulation S-K.

See part (b) below .

The following exhibits are filed or furnished with this Annual Report on Form 10-K.

EXHIBIT INDEX

4 unchanged sentences

8-K 001-39565 2.1 December 9, 2020

Stock Purchase Agreement by and among Dr.

Lawrence Groop, Kristin Groop, Esthetic Education, LLC, and Edge Systems Intermediate, LLC, dated as of February 27, 2023

8-K 001-39565 2.1 February 28, 2023

Second Amended and Restated Certificate of Incorporation of The Beauty Health Company

10 unchanged sentences

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

001-39565 4.4 March 1, 2022

EXHIBIT INDEX

Description of Exhibit Form

Filed Herewith

Amended and Restated Registration Rights Agreement dated as of May 4, 2021, by and among the Company, BLS Investor Group LLC and the stockholders of LCP Edge Intermediate, Inc.

6 unchanged sentences

8-K 001-39565 10.2 April 30, 2021

Table of Con tents

EXHIBIT INDEX

Description of Exhibit Form

Filed Herewith

Employment Agreement, dated as of May 4, 2021, between Clinton E.

Carnell, Edge Systems LLC d/b/a The HydraFacial Company and The Beauty Health Company

8-K 001-39565 10.6 May 10, 2021

Employment Agreement, dated as of January 20.

2022 , between Andrew Stanleick, Ed ge Systems LLC d/b/a The Hydrafacial Company and The Beauty Health Company

8-K 001-39565 10.1 January 20, 2022

Employment Agreement, dated as of May 4, 2021, between Liyuan Woo, Edge Systems LLC d/b/a The Hydrafacial Company and The Beauty Health Company

8-K 001-39565 10.7 May 10, 2021

Employment Agreement, dated as of August 4, 2021, between Indra Pamamull and The Beauty Health Company

Offer Letter, dated as of August 4, 2021, between Edge Systems LLC d/b/a The HydraFacial Company, The Beauty Health Company and Indra Pamamull

Employment Agreement, dated as of October 1, 2021, between Stephan Becker and The Beauty Health Company

Offer Letter dated as of April 29, 2021, between Daniel Watson, Edge Systems LLC d/b/a The Hydrafacial Company and The Beauty Health Company

16 unchanged sentences

8-K 001-39565 10.1 January 4, 2022

Amended and Restated Credit Agreement, dates as of November 14, 2022, among The Beauty Health Company, as borrower, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent

8-K 001-39565 10.1 November 15, 2022

Master Confirmation - Uncollared Accelerated Share Repurchase, dates as of September 27, 2022, between JPMorgan Chase Bank, National Association and The Beauty Health Company

8-K 001-39565 10.1 September 27, 2022

Retention Agreement, dated May 7, 2022, between Daniel Watson and The Beauty Health Company

10-Q 001-39565 10.2 August 9, 2022

Separation Agreement, dates as of August 3, 2022, between HydraFacial LLC and Indra Pamamull

10-Q 001-39565 10.2 November 9, 2022

Subsidiaries of registrant

EXHIBIT INDEX

Description of Exhibit Form

Filed Herewith

Consent of Deloitte & Touche LLP

5 unchanged sentences

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Table of Con tents

EXHIBIT INDEX

Description of Exhibit Form

Filed Herewith

Inline XBRL Instance Document

9 unchanged sentences

** 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.

† Certain confidential information (indicated by brackets and asterisks) has been omitted from this exhibit because it is both (i) not material and (ii) the type of information that the registrant treats as private or confidential.

# Management contract or compensatory plan or arrangement.

Table of Con tents

See Item 15(a)(2) above.

Form 10–K Summary.

Table of Con tents

Pursuant to the requirements of Section 13 or 15(d) 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.

5 unchanged sentences

(Principal Executive Officer)

Table of Con tents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

6 unchanged sentences

Liyuan Woo (Principal Financial and Accounting Officer)

/s/ Marla Beck Director March 1, 2023

/s/ Michael D.

9 unchanged sentences

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-K

Item 9A. Controls and Procedures