NASDAQ: SKIN

Our Products

Hydrafacial Products

At the core of Hydrafacial’s product offerings is the Syndeo device, the current generation Delivery System (“Syndeo”), and its associated serum solutions and consumables. Each Delivery System is considered to be a Class I exempt medical device pursuant to the rules and regulations promulgated by the U.S. Food and Drug Administration (“FDA”).

Syndeo is designed to connect providers to consumers’ preferences to create more personalized skin care experiences. The hardware and software in Syndeo has been fully updated and includes Wi-Fi connectivity and radio frequency identification. These technologies allow us and providers to collect data on Hydrafacial consumers to ultimately provide a better consumer experience.

Hydrafacial’s device offering also includes the Elite Tower and the Allegro, both of which are a type of Delivery System that are predecessor models to the Syndeo.

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Consumables

Consumables consist of single-use tips, solutions, and serums used to provide a Hydrafacial treatment (collectively, “Consumables”). The table below summarizes the Consumables product offerings:

Consumables

Consumables

Description

Replenishment Frequency

Tips
Patented, patterned caps placed on the handpiece of the Delivery System to create pneumatic suction and deliver solutions and serums to the skin.

Minimum of 3 single-use tips used per Hydrafacial treatment.

Solutions
Proprietary formulations of ingredients delivered to the skin at different steps during the Hydrafacial treatment.

4 bottle stock-keeping units (“SKUs”) required to provide a Hydrafacial treatment; the bottles provide for approximately 12-15 Hydrafacial treatments.

4 SKUs contain varying strength chemical peel treatments. The provider chooses which strength to use during the Hydrafacial treatment, and each SKU lasts approximately 1-2 treatments.

SerumsOptional add-on to target specific skin concerns. Offering includes proprietary booster serums that are Hydrafacial branded as well as some that are co-developed via collaborations with various skincare brands.

Approximately 1-2 treatments per serum vial.

The Hydrafacial Experience

A Hydrafacial treatment is a noninvasive hydradermabrasion process that utilizes a patented Delivery System to cleanse, extract, and hydrate the skin with proprietary solutions and serums. We believe Hydrafacial treatments are accessible and appropriate for consumers across all genders, ages, skin types, and skin tones.

A Hydrafacial treatment is clinically proven to improve skin quality, delivering results that are instantly gratifying and glowing. The experience culminates in the reveal of a “gunkie” container that collects dead skin cells and debris that were extracted from the skin during the Hydrafacial treatment. We believe the instant gratification provided by our Hydrafacial treatment generates high consumer and provider affinity for our brand.

A summary of the Hydrafacial treatment is set forth below. In addition, consumers and providers can personalize their Hydrafacial treatments to target specific skin concerns or needs by choosing the abrasion of the tip, adding customized chemical peels, various serums, LED light therapy, and/or lymphatic drainage. Furthermore, a Hydrafacial treatment can be applied to the neck/decolletage, back, hands, or other parts of the body.

Hydrafacial Treatment Steps

Step 1: Cleanse
Skin is cleansed using technology that combines exfoliation, extraction, and hydration (“Vortex Fusion Technology”), a specially designed tip, and a cleansing solution. The outermost layer of skin is exfoliated with a customized peel that removes dead skin cells.

Step 2: Extract
Extractions and removal of remaining debris is performed with Vortex Fusion Technology, a specialized tip, and proprietary solutions.

Step 3: Hydrate
Vortex Fusion Technology is paired with a specialized tip to deliver hyaluronic acid and antioxidants to the skin to help nourish, hydrate, and protect.

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HydraScalp powered by Keravive Products

At the core of the HydraScalp product offering is the Keravive Peptide Solution that is designed to be delivered to an individual’s scalp using a Hydrafacial Delivery System and custom tips, and a take home spray that is intended to be used once daily at home for 30-days after an individual receives an in-office HydraScalp treatment to help support the appearance of healthier, thicker, fuller-looking hair.

We are evaluating the optimal re-launch strategy for HydraScalp and believe it will take time before sales of HydraScalp become a meaningful part of our business.

SkinStylus Products

SkinStylus SteriLock Microsystem (for microneedling)

The Company has been offering the SkinStylus SteriLock Microsystem since February 2023, after its indirect, wholly-owned subsidiary, Edge Systems Intermediate, LLC, acquired Esthetic Medical Inc., the owner of the SkinStylus brand.

The SkinStylus SteriLock Microsystem can be used as a microneedling device where it and its related accessories help stimulate the body’s natural collagen and elastin production and are intended to be used as a treatment to improve the appearance of (i) surgical or traumatic hypertrophic scars on the abdomen in adults aged 22 years and older, and (ii) facial acne scarring in Fitzpatrick skin types I, II, and III in patients aged 22 years and older. As of the date of this report, the FDA has only cleared the 36-pin cartridge of the SkinStylus SteriLock Microsystem to be used by providers to help treat facial acne scars, while the 12-pin cartridge, 36-pin cartridge, and the 36-pin HiLo cartridge may be used to help treat surgical or traumatic hypertrophic scars on the abdomen. The SkinStylus SteriLock Microsystem, when used in connection with microneedling services, is considered to be a Class II medical device pursuant to the rules and regulations promulgated by the FDA.

SkinStylus SteriLock Microsystem (for nano-channeling)

The SkinStylus SteriLock Microsystem can also be used as a nano-channeling device where it and its related accessories are intended to help enhance the penetration and absorption of topical products and improve exfoliation to promote smoother and more luminous-looking skin.The SkinStylus SteriLock Microsystem, when used in connection with nano-channeling services, is considered to be a cosmetic device.

Product Development Pipeline

Boosters

A key differentiating factor of the Hydrafacial treatment is our optional add-on serums that are delivered via a Hydrafacial Delivery System and clinically proven to increase absorption of topical products as compared to manual application to the skin. Hydrafacial develops its own boosters, as well as partners with leading skincare brands to co-develop these serums that tailor a Hydrafacial treatment based on a consumer’s skincare concerns (each, a “Booster”, and collectively, “Boosters”).

By leveraging the unique technologies of our partners, we believe our Booster strategy allows us to innovate rapidly and cost effectively, staying current with dynamic skincare trends and gaining exposure to new consumers through our partner brands. We currently offer a portfolio of approximately 15+ Boosters and intend to continue strategically developing Hydrafacial branded and partnership boosters internationally and locally to offer innovative and tailored Booster products to our consumers.

MyBeautyHealth Mobile Application

Launched in November 2023, the MyBeautyHealth mobile application rewards consumers for investing in their skin health. Through the app, consumers can: earn loyalty points and unlock exclusive savings with every treatment; log skin concerns and receive personalized treatment plans; and find and connect with local Hydrafacial providers. For Hydrafacial providers, the MyBeautyHealth loyalty program is a value-add that comes at no cost to them, incentivizing their customers to maintain regular treatments.

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Growth Strategy in General

Our strategic objective is to establish BeautyHealth as a leader in medical aesthetics by delivering an integrated ecosystem of solutions that combine devices, consumables, clinical credibility, and brand strength to achieve superior skin health outcomes for consumers and positive economic outcomes for providers.

We believe our platform benefits from several foundational advantages, including a globally recognized brand, a large installed base of Hydrafacial systems across provider practices worldwide, and a consumables-driven economic model that should generate meaningful operating leverage when utilization increases. Our strategy is focused on unlocking the full economic potential of these assets by strengthening commercial execution, increasing utilization across our installed base, and continuing to invest in clinically meaningful innovation.

Our commercial model is designed to create a reinforcing cycle of growth. Our brand and marketing initiatives help generate consumer demand, which drives client traffic into provider practices. Increased client traffic drives treatment utilization per device, and higher utilization increases demand for consumables, which would serve as a key driver of our revenue and margin profile. As providers experience increased client demand and revenue, we believe this would help incentivize them to expand their use of our technologies, upgrade systems, and deepen their relationship with our platform.

To accelerate this flywheel, we are focused on the following strategic priorities:

1.Salesforce excellence, including strengthening commercial discipline and adopting a value-based selling approach to help activate our installed base and expand provider relationships;

2.Marketing discipline, focused on generating consumer demand that supports provider success and reinforces the clinical credibility of our platform; and

3.Focused innovation, prioritizing clinically supported technologies and products that expand the capabilities of our platform and improve provider economics

Salesforce Excellence

We are evolving our commercial organization toward a more structured, data-driven model consistent with leading medical technology companies. Historically, much of our commercial success was relationship-driven; however, we believe the next phase of growth requires greater discipline, segmentation, and performance management.

We are transitioning to a value-based selling approach designed to clearly demonstrate the economic and clinical benefits of our platform to providers. This includes strengthening our clinical and economic differentiation, improving how we segment and prioritize accounts, and implementing structured sales planning processes.

Our commercial focus includes both expanding the number of provider practices on our platform and increasing utilization across our existing installed base, including taking measures to work toward reactivating lower-utilization accounts. We are also investing in improved commercial analytics and tools that allow us to monitor activation, utilization, and retention across the installed base, enabling more precise management of commercial performance.

Marketing Discipline

Our marketing strategy is focused on generating demand that directly supports provider growth and strengthens the value proposition of our platform. We are working to refine the positioning of Hydrafacial as a clinically credible skin health platform supported by science, outcomes, and provider education.

We also intend to expand consumer demand generation programs designed to increase consumer awareness and direct traffic to our provider network. These initiatives are intended to increase treatment utilization within provider practices while reinforcing the role of providers as trusted experts in skin health.

In addition, we are working to expand the commercial contribution of technologies within our portfolio, including SkinStylus, which participates in the growing microneedling and nano-channeling category and represents an opportunity to broaden treatment offerings within provider practices, as well as HydraScalp powered by Keravive.

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Focused Innovation

Innovation remains a central component of our long-term growth strategy. Our approach prioritizes clinically supported technologies and products that strengthen our platform and improve provider economics.

Our innovation pipeline includes the development of next-generation Hydrafacial systems designed to drive upgrades across our installed base which we believe should meaningfully expand our market share. We are also investing in a focused portfolio of clinically supported boosters and consumables designed to increase booster attachment rates, enhance treatment protocols, and improve provider profitability.

While Hydrafacial has historically been viewed primarily as a single treatment, we believe it represents the foundation of a broader skin health platform. Our vision is to integrate devices, boosters, protocols, and complementary technologies into a comprehensive ecosystem for providers and consumers. We are also exploring selective commercial and technology partnerships that may expand our product ecosystem and enhance the value we deliver to providers.

Business Model

Hydrafacial uses a razor / razor blade business model. The Delivery System, which facilitates the Hydrafacial treatment, is the razor. Delivery Systems are purchased by providers to offer Hydrafacial treatments to their clients and patients. In conjunction with the sale of Delivery Systems, we also sell our Consumables. The Consumables are akin to the razor blades, consisting of single-use tips, solutions, and serums, including Boosters, used during a Hydrafacial treatment. Delivery Systems and Consumables can be bought together or separately.

Delivery Systems follow a traditional capital equipment cycle, with the Delivery System lasting providers for years. Oftentimes, providers buy additional Delivery Systems to increase the number of Hydrafacial treatments their business can provide at any given time.

Consumables follow a recurring revenue model as Consumables are purchased on a periodic basis by providers as they exhaust their supplies. The expansion of the number of Delivery Systems providing Hydrafacial treatments, or “install base,” increases the foundation for future recurring revenue by providing a platform for more treatments, driving higher Consumables sales. Additionally, increasing the utilization of the install base is anticipated to contribute to higher Consumables revenue. As we optimize our install base, we believe Consumables revenue will ultimately become a larger share of our business.

In certain countries, we operate through a direct sales force, while in other countries, we sell our products utilizing a distributor or hybrid business model. We aim to invest in markets that have a large and growing group of consumers searching for non-invasive beauty health experiences, and invest in initiatives that will increase consumer penetration in these markets.

Industry Overview

We operate within the global medical aesthetics industry, a market focused on improving skin health and appearance through clinically supported, non-invasive and minimally invasive treatments delivered by licensed providers. We believe the category is experiencing sustained long-term growth driven by evolving consumer behavior, increasing provider adoption of advanced technologies, and a broader shift toward preventative and routine skin health.

Several industry trends continue to support growth in the category. Consumers are increasingly prioritizing skin health as part of their overall wellness routines and continue to invest in treatments even during periods of broader consumer spending pressure. At the same time, consumer preferences are shifting toward outcomes that look healthy, natural, and authentic, driving demand for non-invasive and minimally invasive treatments that can be incorporated into regular skin health regimens. Consumers are also more informed than ever before and increasingly seek treatments supported by clinical outcomes.

The provider landscape is also evolving. Practices are increasingly focused on technologies that generate client demand and deliver attractive economic returns, while treatment protocols are increasingly combining multiple modalities—such as lasers, microneedling, injectables, and skin health treatments—to improve clinical outcomes and client satisfaction.

Within this evolving landscape, we believe Hydrafacial occupies a differentiated position. Our treatments are non-invasive, clinically credible, and repeatable, enabling providers to incorporate them into routine skin health protocols. Hydrafacial treatments also serve as an accessible entry point for consumers into the aesthetics category, helping providers attract new clients while creating opportunities for additional procedures within their practices.

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Hydrafacial is also highly versatile, with treatments suitable across genders, age groups, skin tones, and skin types. Because the treatment is repeatable and easily integrated into provider workflows, it fits naturally into preventative skin health routines and combination treatment protocols.

We believe these industry dynamics—including growing demand for non-invasive treatments, clinically supported outcomes, and combination therapy approaches—favor companies with strong provider relationships, scalable platforms, and recurring revenue models.

Manufacturing; Sourcing and Material

We outsource the manufacturing of many of our products to multiple contract manufacturers that are primarily located in North America, Europe, and Asia. However, our Delivery Systems are manufactured and assembled in our manufacturing facility in Long Beach, California where our quality assurance team monitors and ensures the integrity of the Delivery Systems and conducts compliance audits.

The components and raw materials used in our products are sourced from a variety of component and raw material suppliers. To provide products to customers in a timely, cost-effective manner, we review existing contract manufacturers and suppliers and evaluate new partners and suppliers periodically with the objectives of improving quality, increasing innovation, accelerating speed-to-market, maintaining supply sufficiency, and reducing costs. As we integrate acquired businesses, distributors, and/or brands, we will continually seek new ways to leverage our production and sourcing capabilities to improve our overall supply chain performance.

We purchase components and raw materials for our products from various third parties and third-party contract manufacturers on a purchase order basis. We also purchase packaging components manufactured to our design specifications. We collaborate with our suppliers and contract manufacturers to ensure that they follow our established product design specifications and quality assurance programs. We also have our suppliers and contract manufacturers go through a vendor qualification and audit process to verify and ensure that they meet our manufacturing standards and expectations. We ensure our partners have the requisite experience to produce our products and develop relationships with them to maintain access to the resources needed to scale. To have control of supply and component pipelines, we own certain tooling and equipment required to manufacture our products.

While we have single supply relationships for certain of our key components, we try to mitigate related risks associated with our supply chain through various measures. We qualify alternative suppliers and manufacturers, when possible, maintain controls and methods to mitigate risk through buffer inventory, implement dual and/or co-sourcing, if needed, and develop contingency plans for responding to disruptions, such as maintaining inventory of single source components or leverage alternative freight modes that can have cost implications. However, in the event we experience war, natural disasters, pandemics, or epidemics, we may encounter challenges with various manufacturing related components and raw material shortages. We believe that we currently have adequate sources of supply for all our products.

Distribution Facilities

We operate and distribute finished products from our leased distribution facilities in Long Beach, California. We also have a global network of fulfillment and distribution centers that supports our international customers. We regularly evaluate our distribution infrastructure and consolidate or expand our distribution capacity as we believe appropriate for our operations and to meet anticipated needs.

Research and Development

Our research and development team works closely with our marketing and product development teams and third-party suppliers to generate ideas, develop new products and product line extensions, create new packaging concepts, and improve, redesign, or reformulate existing products in both domestic and global markets. In addition, these research and development personnel work to identify recent trends using market intelligence and consumer needs to bring products to market.

Quality and Regulatory

Our quality and regulatory team is responsible for registrations, ensuring product safety and reliability, and meeting and monitoring our regulatory compliance for all jurisdictions in which we operate.

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Competition

The beauty and personal care market is fragmented and highly competitive, with several companies specializing in different subsectors, including skincare, haircare, supplements, and medical products and procedures. Many of our competitors such as DiamondGlow, Dermasweep, Cartessa, OxyGeneo, Venus Glow, JetPeel, SaltFacial, and Glownar seek to compete with us by offering similar skin care and facial treatment products and services, and offering such products and services at similar or aggressive pricing.

Our ability to compete successfully depends heavily on ensuring the continued and timely introduction of new and reliable products and services, as well as staying relevant within the market and conforming to beauty and health trends. Principal competitive factors important to us include price, product and service features and offerings, relative price to performance, beauty health trends, marketing and distribution capability, service and support, reliability, and corporate reputation.

We believe our efforts to expand our brand recognition, cultivate our BeautyHealth community, invest in marketing capabilities, and activate consumers across channels will allow us to compete effectively as we continue to expand globally. We are focused on expanding the beauty health category and creating a premier beauty health experience.

Marketing Approach

We deploy a business-to-business-to-consumer marketing model with targeted strategies to engage relevant audiences through a combination of live and digital experiences. With aided brand awareness at 38% among U.S. esthetics consumers (Ipsos. 2025 Consumer Survey; n=1100), we are focused on maximizing our organic presence and introducing our brand to highly targeted consumer growth markets around the world. With approximately 60% U.S. market share in the microdermabrasion category, we continue to innovate and drive growth via novel treatment protocols by launching new Boosters, combination treatment regimens, and new indications backed by clinical data and real-world evidence.

Push and Pull Marketing

Our ability to effectively market our brands is critical to our operational success. Part of our marketing spend is based on a targeted “push and pull” marketing model that engages with both providers and consumers. On the “push” side, we foster relationships with our providers by investing in proprietary training programs, educational content-branding initiatives, digital marketing materials, and a loyalty program that offers tiered pricing on Consumables based on the provider’s spend. To support the “pull” side of our products, we are investing in tactics to drive consumer demand such as gift-with-purchase promotions, in-office events, targeted paid campaigns, and regional experiences such as influencer spa days conducted in partnership with key accounts and local influencers to promote both the Hydrafacial brand and product offerings. We believe enhancing our sales force effectiveness with “pull” side marketing initiatives will be key to driving year-over-year account growth.

Digital Marketing

We are also continuously innovating with digital marketing strategies to drive incremental revenue, brand equity, and customer/consumer engagement by elevating our digital presence, e-commerce capabilities, social media presence, and influencer marketing efforts. We are currently in the process of enhancing our digital infrastructure over the next 1-2 years to help improve user experience, maximize organic engagement, and drive online sales through artificial intelligence (“AI”) assisted targeting/check-out functions.

Customers

The majority of our customers are providers within the professional medical industry (dermatologists, plastic surgeons, and medical spas), esthetician, and beauty retail industry (spas, hotels, and other retailers). We currently sell approximately 69% of our Delivery Systems and Consumables into the professional medical channel in the United States and Canada. We expect this trend where the majority of our sales will be within the professional medical channel to continue on a global scale. No individual customer accounted for 10% or more of our net sales in fiscal 2025. In 2025, total net sales derived from markets outside the United States and Canada comprised approximately 35% of total net sales.

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Trademarks, Patents and Domain Names

As of December 31, 2025, we had a total of 226 patents with 84 pending patent applications worldwide to protect Hydrafacial’s current and contemplated technology platform. We also have 3 patents to protect certain aspects of the cartridge and needling system for the SkinStylus SteriLock Microsystem.

Our patent portfolio covers key aspects of certain products, systems, and designs, including several issued U.S. patents directed to features of the Hydrafacial MD® liquid-based skin exfoliation system. As of the date of this report, the portfolio includes 10 issued U.S. patents directed to the manifold and console of the Hydrafacial MD® system and skin treatment tips used in the system that will expire in March 2026. Following the expiration of these patents, third parties may be able to manufacture or commercialize products that incorporate features previously covered by such patents, which could result in increased competition or the introduction of competing products that incorporate similar features. Although these patents are scheduled to expire in March 2026, we do not believe that the expiration of these patents will have a material impact on our revenue. We continue to maintain patent protection in the U.S. and worldwide related to current and contemplated products and technologies, including handpieces, tips, improvements to the console and the like.

We also own and have applied to register numerous trademarks and service marks in the United States and in other countries throughout the world. Some of our trademarks are of material importance. The duration of trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely so long as they are in use and/or their registrations are properly maintained. In addition, we have registered and maintain numerous internet domain names.

Seasonality and Quarterly Results

Our business is subject to moderate seasonal fluctuations. We typically experience the highest revenues and operating income in the fiscal fourth quarter and lowest revenues and operating income in the first fiscal quarter. New product and service introductions can also impact net sales, cost of sales, and operating expenses. The timing of product and service introductions can also impact the Company’s net sales to its distribution channels as these channels are filled with new inventory following a product launch, and channel inventory of an older or similar product often declines as the launch of a newer product approaches. Net sales can also be affected when consumers and distributors anticipate a product introduction.

Furthermore, as our business outside of the United States grows, seasonal fluctuations may smooth out. As a result, results for any interim period are not necessarily indicative of the results that may be achieved for the full fiscal year.

Government Regulation

As a consumer-driven organization delivering comprehensive beauty health services and treatments, we are subject to the laws of the United States of America and multiple foreign jurisdictions in which we operate. The rules and regulations of various governing bodies may differ among jurisdictions. Certain of our products and our operations are subject to extensive regulation by the U.S. Food and Drug Administration, and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions. For example, certain of our products are subject to regulation as medical devices or cosmetics in the United States under the Federal Food, Drug and Cosmetic Act (“FDCA”), as implemented and enforced by the FDA.

Regulation of Medical Devices

The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance and/or approval, adverse event reporting, advertising, promotion, marketing, distribution, and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.

FDA Premarket Clearance and Approval Requirements

Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a premarket notification submitted under Section 510(k) of the FDCA, to follow a regulatory process that the FDA uses to classify low-to moderate-risk devices for which there is no predicate device already on the market (the “De Novo pathway”), or approval of a premarket approval application (“PMA”). Under the FDCA, medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure the device’s safety and effectiveness. Class I includes devices

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with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of the Quality System Regulation (“QSR”); facility registration and product listing; reporting of adverse medical events; and truthful and non-misleading labeling, advertising, and promotional materials. Class II and Class III devices are subject to the FDA’s General Controls, and Special Controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These Special Controls can include performance standards, post-market surveillance, patient registries, and any additional recommendations set forth in FDA guidance documents.

While most Class I devices are exempt from the premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification application under Section 510(k) of the FDCA before engaging in commercial distribution for the device. The FDA’s permission to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Alternatively, low to moderate risk novel medical devices for which there is no existing predicate may submit a De Novo classification request through which the FDA may establish a new classification for the device, Devices deemed by the FDA to pose the greatest risks, such as life sustaining, life supporting, some implantable devices, or devices that have a new intended use or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA. Some pre-amendment devices, which are devices legally marketed prior to May 28, 1976, are unclassified but are subject to FDA’s premarket notification and clearance process in order to be commercially distributed.

510(k) Clearance Marketing Pathway

To obtain 510(k) clearance, the sponsor must submit to the FDA a premarket notification submission demonstrating that the proposed device is as safe and effective as, or “substantially equivalent” to, a legally marketed predicate device. A predicate device is a legally marketed device that was legally marketed prior to May 28, 1976 (pre-amendment device), a device which has been reclassified from Class III to Class II or I, a device which has been found to be substantially equivalent through the 510(k) process, or a device that was granted marketing authorization via the De Novo classification process under Section 513(f)(2) of the FDCA and not exempt from premarket notification requirements. Once submitted, the FDA’s 510(k) clearance process usually takes from three to twelve months, but may take longer. The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence. In addition, FDA collects user fees for certain medical device submissions and annual fees for medical device establishments. For fiscal year 2026, the standard user fee for a 510(k) premarket notification submission is $26,067, with the fee being $6,517 for small businesses.

If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device. If the FDA determines that the device is “not substantially equivalent” to a previously cleared device, the applicant may resubmit another 510(k) clearance application with new data, request a risk-based classification determination for the device in accordance with the De Novo process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device, request reclassification through reclassification petitions pursuant to 21 U.S.C. § 360c, or submit a PMA application. While the De Novo pathway is available in response to a 510(k) denial, it does not require a 510(k) denial and is available as the initial pathway for approval if appropriate for the device.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a new or different intended use, will require a new 510(k) clearance or, depending on the modification, a PMA approval. If the change alters the device in a way that renders the initially approved device unavailable as a predicate and no other predicate exists, the De Novo pathway may be used. The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k) or a PMA application before the modified device may be marketed, but the FDA may review such decision and may disagree with a manufacturer’s determination. If the manufacturer markets the modified device without first obtaining what the FDA deems to be the proper approval or clearance, then the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until such marketing authorization has been granted. Also, in these circumstances, the manufacturer may be subject to significant regulatory fines, penalties, or other regulatory actions from the FDA.

Over the last several years, the FDA has proposed and implemented several changes to modernize and strengthen the 510(k) clearance process. Future proposals or the finalization of any unimplemented proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products by limiting the number of devices available for use to demonstrate equivalence as a predicate device.

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One such proposal was announced in November 2018, where the FDA indicated that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. These proposals have not yet been finalized or adopted, although the FDA may work with Congress to implement such proposals through legislation.

Further, in September 2019, the FDA issued revised final guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA has developed and maintains a list of device types appropriate for the “safety and performance based” pathway and continues to develop product-specific guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the guidance documents, where feasible.

More recently, in September 2023, the FDA released three draft guidance documents proposing recommendations on best practices for selecting a predicate device, situations in which clinical data may be necessary in a 510(k) submission, and evidentiary expectations for 510(k) submissions for implanted devices. The FDA recommended the use of best practices such as choosing a predicate device that meets or exceeds expected safety and performance, or that does not have unmitigated use-related or design-related safety issues. Further, the FDA recommended that manufacturers describe how the best practices in guidance documents were used to select the predicate device chosen in the 510(k) summary of their new device. Additionally, the FDA outlined situations in which innovation in materials could lead to differences in the technological characteristics of a new device and the predicate device, which may result in the need for clinical data in a 510(k) submission. Updated recommendations for manufacturers of implant devices regarding the design and execution of appropriate performance testing for 510(k) submissions, and the content and labeling information to be included, were also outlined and are expected to be considered in future applications. The FDA also introduced guidance regarding the use and device status of products that utilize artificial intelligence that may be utilized in the marketplace, and relevant considerations for approval, testing, and marketing of these devices. Furthermore, as devices continue to become more interconnected, cybersecurity risks continue to develop and grow exponentially. As a result, the FDA released guidance on the evolving landscape of cybersecurity threats in relation to premarket review and quality systems. The FDA intends to promote consistency, facilitate efficient premarket review, and ensure that devices are sufficiently resilient to cybersecurity threats by establishing recommended design, labeling, and documentation of testing to be included in premarket submissions of relevant devices.

While the FDA has not substantially altered the 510(k) process within the past year, the FDA can always release new guidance or make changes to the program in the future, which could significantly impact the clearance and/or approval process for applicable medical devices.

De Novo Classification Pathway

Novel medical devices, for which general controls alone or special controls provide reasonable assurance of safety and effectiveness for intended use, may seek approval through the De Novo pathway. A device that is classified into Class I or Class II via a De Novo classification request may be marketed and may also be used as a predicate device for future 510(k) submissions. The De Novo classification request standard user fee for fiscal year 2026 is $173,782 and the small business fee is $43,446.

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PMA Pathway

Class III devices require PMA approval before they can be marketed, although some pre-amendment Class III devices for which FDA has not yet required a PMA are cleared through the 510(k) process. The PMA process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies and human clinical trials. The PMA must also contain a full description of the device and its components, a full description of the methods, facilities, and controls used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years. Various actions can result in the pause or reset of the 180-day timeframe, resulting in an extended and lengthy approval process. These actions can include requests for additional information or data to supplement the application, panel reviews if the FDA determines expert panel input would be useful, or any decision by a manufacturer to make an administrative appeal regarding an FDA determination during this process. As mentioned above, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device. The FDA may or may not accept the panel’s recommendation. In addition, the FDA will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers’ or suppliers’ manufacturing facility or facilities to ensure compliance with the QSR. PMA applications are also subject to the payment of user fees, which for fiscal year 2026 includes a standard application fee of $579,272 or a small business fee of $144,818.

The FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance when deemed necessary to protect public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period of use. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.

Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness.

Clinical Trials

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Clinical trials are almost always required to support a PMA and are sometimes required to support a 510(k) submission or De Novo classification request. All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption (“IDE”) regulations that govern investigational device labeling and prohibit promotion of the investigational device while specifying an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials. If the device under evaluation does not present a significant risk to human health, then the device sponsor is not required to submit an IDE application to the FDA before initiating human clinical trials, but must still comply with abbreviated IDE requirements when conducting such trials. A significant risk device is one that presents a potential for serious risk to the health, safety, or welfare of a patient and either is implanted; used in supporting or sustaining human life; substantially important in diagnosing, curing, mitigating or treating disease, or otherwise preventing impairment of human health; or otherwise presents a potential for serious risk to a subject. An IDE application must be supported by appropriate data, which may include animal or laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit the clinical trial to proceed under a conditional approval.

Regardless of the degree of risk presented by the medical device, clinical studies must be approved by, and conducted under the oversight of, an Institutional Review Board (“IRB”), for each clinical site. The IRB is responsible for the initial and continuing review of the IDE and may impose additional requirements for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and complying with labeling and record-keeping requirements. In some cases, an IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness; study plan; or the rights, safety, or welfare of human subjects.

During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and complying with the prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of the investigational device, and comply with all reporting and recordkeeping requirements. After a trial begins, the sponsor, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

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Post-market Regulation

After a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply. These include:

•establishment registration and device listing with the FDA;

•QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;

•labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of “off-label” uses of cleared or approved products;

•requirements related to promotional activities;

•clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a new or different intended use of a cleared device, or approval of certain modifications to PMA-approved devices;

•medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;

•correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;

•the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and

•post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

The FDA finalized the Quality Management System Regulation (“QMSR”) on February 2, 2024, which replaces the prior QSR and incorporates the international standard ISO 13485:2016 by reference. The QMSR becomes effective February 2, 2026. Manufacturing processes for medical devices are required to comply with the applicable portions of the QSR/QMSR, which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation, and servicing of finished devices intended for human use. The QSR/QMSR also requires, among other things, maintenance of a device master file, device history file, and complaint files. As a manufacturer, we are subject to periodically scheduled and unscheduled inspections by the FDA. Failure to maintain compliance with the QSR/QMSR requirements could result in an adverse inspection or audit reports such as Form 483 Notices of Inspectional Observations; the shut-down of, or restrictions on, manufacturing operations; recall, market withdrawal, or seizure of marketed products; or other enforcement actions by the FDA or other regulatory agencies. The discovery of previously unknown problems with any marketed products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or approval, or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

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The FDA has broad regulatory compliance and enforcement powers. If the FDA determines that a manufacturer has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following, among others:

•warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;

•recalls, withdrawals, or administrative detention or seizure of our products;

•operating restrictions or partial suspension or total shutdown of production;

•refusing or delaying requests for 510(k) clearance or PMA approvals of new or modified products;

•withdrawing 510(k) clearances or PMA approvals that have already been granted;

•refusal to permit importation of the manufacturer’s products through import detention or refusals, or import alerts;

•refusal to grant export approvals for our products; or

•criminal prosecution.

State Regulation of Medical Devices

In addition to federal regulation of medical devices, individual states regulate various activities related to the medical device industry at large. State regulations can vary widely and include things such as permit or licensure requirements for manufacturing of devices at a facility located within certain states, manufacturing of devices which are sold in certain states, and the distribution of medical devices into or out of various states.

Regulation of Cosmetics

The FDCA defines cosmetics as articles or components of articles intended for application to the human body to cleanse, beautify, promote attractiveness, or alter the appearance. The labeling of cosmetic products is subject to the requirements of the FDCA, the Fair Packaging and Labeling Act, the Poison Prevention Packaging Act and, as of December 29, 2022, the Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”), along with various regulations. Cosmetics are not subject to pre-market approval by the FDA; however, certain ingredients, such as some types of color additives, must be pre-approved for the specific intended use of the product and are subject to certain restrictions on their use. If a company has not adequately substantiated the safety of its products or ingredients by, for example, performing appropriate toxicological tests or relying on already available toxicological test data, then a specific warning label is required. The FDA may, by regulation, require other warning statements on certain cosmetic products for specified hazards associated with such products. FDA regulations also prohibit or otherwise restrict the use of certain types of ingredients in cosmetic products.

In addition, the FDA requires that cosmetic labeling and claims be truthful and not misleading, and cosmetics may not be marketed or labeled for use in treating, preventing, mitigating, or curing disease or other conditions or in affecting the structure or function of the body because such claims would render the products to be a drug and subject to regulation as a drug. The FDA has issued warning letters to cosmetic companies alleging improper drug claims regarding their cosmetic products, including, for example, product claims regarding hair growth or preventing hair loss. In addition to FDA requirements, the FTC as well as state consumer protection laws and regulations can subject a cosmetics company to a range of requirements and theories of liability, including similar standards regarding false and misleading product claims, under which FTC or state enforcement or class-action lawsuits may be brought.

In the United States, the FDA has not yet promulgated finalized regulations establishing GMPs (as defined below) for cosmetics. However, Congress enacted MoCRA on December 29, 2022, which directed the FDA to implement a set of new regulatory requirements that previously were not applicable to cosmetic products. Pursuant to MoCRA, the FDA now subjects manufacturers and cosmetic products to requirements such as facility registration and product listing requirements, adverse event reporting requirements, and other labeling requirements. The ongoing implementation timeline of MoCRA is uncertain as the FDA was required to promulgate final regulations implementing GMPs for cosmetics by December 29, 2025, a deadline which has now passed. The FDA has not indicated when the agency plans to promulgate final regulations implementing GMPs for cosmetics as required by MoCRA and this could occur at any time. Subsequently, compliance with such GMP requirements will become mandatory for manufacturers of cosmetic products. Until then, the FDA’s existing draft guidance on cosmetic GMPs, most recently updated in June 2013, and other guidance such as the FDA’s Good Manufacturing Practice (“GMP”) Guidelines/Inspection Checklist current as of November 2025, will continue to provide guidance and recommendations related to process documentation, recordkeeping, building and facility design, and equipment maintenance and personnel. Compliance with these recommendations can reduce the risk that products will be adulterated or misbranded in violation of the FDCA and its regulations.

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In addition to GMP requirements, MoCRA brought on additional changes and updates to FDA’s cosmetics regulations. For example, cosmetic manufacturing and processing facilities are required to be registered with FDA, and products must be listed with FDA. Adulterated or misbranded cosmetic products are subject to recalls that are mandated by FDA, similar to medical devices. In addition, a responsible person, as defined under FDA regulations, is required to report any serious adverse events that result from the use of a cosmetic product manufactured, packaged, or distributed by the person, and the records relating to each adverse event report must be kept for six years. Additionally, cosmetic labels need to identify the responsible person for the purpose of serious adverse event reporting, and cosmetic labels need to identify fragrance allergens.

The FDA also requires that manufacturers maintain product complaint and recall files and voluntarily report adverse events to the agency. The FDA monitors compliance of cosmetic products through market surveillance and inspection of cosmetic manufacturers and distributors to ensure that the products are not manufactured under unsanitary conditions or labeled in a false or misleading manner. Inspections also may arise from consumer or competitor complaints filed with the FDA. In the event the FDA identifies unsanitary conditions, false or misleading labeling, or any other violation of FDA regulation, FDA may require, request, or a manufacturer may independently decide to conduct a recall or market withdrawal of a product or to make changes to its manufacturing processes or product formulations or labels.

State Regulation of Cosmetics

In addition to federal regulation of cosmetics, some states regulate cosmetics to a limited degree, generally focusing on substances used in cosmetic products. For example, California implemented the Cosmetic Fragrance and Flavor Ingredient Right to Know Act of 2020, which requires companies selling cosmetic products in the state to report the presence of any fragrance or flavor ingredient listed on designated hazard lists. Similarly, Washington’s Toxic-Free Cosmetics Act restricts sale of cosmetic products that contain certain specified compounds.

Regulation of Drugs

Even if a product is intended for use as a cosmetic, certain marketing claims, functional characteristics, or other factors can result in the product being considered a drug product by the FDA. Drug products are regulated differently from cosmetics and generally require FDA approval through a New Drug Application (“NDA”), Abbreviated New Drug Application (“ANDA”), or FDA monograph process before they can be marketed. The Company does not currently market any drug products; however, it may in the future market certain products that could be considered over the counter (“OTC”) drugs and subject to FDA regulations.

Regulation of OTC Drugs

In the United States, OTC drugs are regulated by the FDA under the FDCA. There are two primary regulatory pathways for bringing an OTC drug to market in compliance with FDA requirements: the drug application process, and the OTC drug monograph process.

Under the drug application process, a sponsor must submit an NDA or ANDA to FDA for approval before marketing the product. A sponsor may also seek approval to market a new drug directly as a non-prescription drug. To support such applications, sponsors typically conduct consumer behavior studies to demonstrate that consumers can use the OTC drug safely and effectively without the supervision of a healthcare provider. These studies include label comprehension studies to assess whether consumers understand the Drug Facts labeling in hypothetical situations, self-selections studies to evaluate whether consumers can determine if the drug is appropriate for their respective health condition, actual use studies to examine real-world use to confirm safe and effective self-treatment, and human factors studies to assess product design to minimize use-related hazards. The FDA also encourages sponsors to engage early with the Office of Nonprescription Drugs (for NDA products) or the Office of Generic Drugs for (ANDA products) and to review FDA guidance on these processes. Once the FDA approves the application, the product may be marketed, provided it complies with all labeling and manufacturing requirements.

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Under the OTC drug monograph process, certain OTC drugs may be marketed without an approved NDA or ANDA if they comply with an applicable OTC monograph and other requirements under the FDCA. An OTC monograph establishes conditions under which an OTC drug is generally recognized as safe and effective for its intended use, including specifications for active ingredients, uses, dosage, routes of administration, labeling, and testing. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) added Section 505G to the FDCA, modernizing the OTC monograph framework. A key change introduced by the CARES Act was introducing an administrative order system, which allows the FDA to add, remove, or modify OTC monograph conditions more efficiently and keep pace with scientific and technological advancements.

The administrative order process can be initiated by either industry (any person or group of persons marketing, manufacturing, processing, or developing a drug) or FDA. For industry-initiated orders, an entity submits an OTC Monograph Order Request to the FDA, which, if accepted for filing, is reviewed by the FDA. The FDA then issues a proposed order, followed by a public comment period of at least 45 days, and subsequently a final order. The FDA may also initiate an order on its own, following the same process. In both scenarios, all final orders are subject to dispute resolution, administrative hearings, and judicial review. Manufacturers are also expected to monitor FDA announcements and guidance closely and to engage with the agency to ensure compliance with these requirements.

Like all other drug products regulated by the FDA, the agency requires that OTC drug labeling and claims be truthful and not misleading. OTC drugs may not be marketed or labeled for uses other than the terms or phrases established in the applicable OTC drug monograph or NDA/ANDA. Any claims beyond the scope of the monograph or approved NDA/ANDA may render the product misbranded. FDA monitors compliance through inspections and market surveillance and may take enforcement actions, including recalls, if products are found to be adulterated, misbranded, or otherwise in violation of the FDCA.

State of Regulation of OTC Drugs

In addition to federal regulations of OTC drugs, individual states may regulate various activities related to the OTC drug industry at large. While in some cases federal law preempts states from imposing requirements that differ from or modify FDA rules governing OTC drugs, states may have authority to implement certain measures that protect public interests without creating conflict with federal law or regulations. State regulations can vary widely and include things such as age restrictions for the purchase of specific OTC products, limitations on quantity of product that can be purchased or sold, licensure requirements for various activities related to OTC drugs, such as manufacturing and wholesaling, and requirements governing professionals such as pharmacists.

State Regulation of Professionals

The regulation of professional scope of practice related to licensed professionals, such as estheticians, is governed by state law. These laws regulate who can use certain products, including medical devices, and whether any specific limitations on use apply. Some states require certain licensed professionals to be under the supervision of another licensed professional in order to administer certain treatments or perform certain procedures. Professionals such as estheticians who utilize our products are subject to state laws that may restrict their scope of practice, and failure to practice within the legally defined scope of practice for their profession can lead to significant penalties including the loss of their professional license. Limitations to a professional’s scope of practice can vary widely from state to state.

Political Changes and Associated Legal Considerations

There have been significant political and legal developments that could impact regulatory agencies, including the FDA. These include broad restructuring within the federal government, major legal changes affecting the authority of administrative agencies, and shifts in enforcement priorities. Various court decisions have influenced how agencies operate and govern, while changes in personnel and organizational restructuring at agencies, such as the FDA, have altered oversight and compliance approaches. Additionally, evolving political priorities have led to changes in policy direction, which could affect how regulations are interpreted and enforced. While it is impossible to predict exactly what will occur, changes to the laws described in this filing are expected and could be significant. The impact and breadth of these changes is an important unknown and will require careful monitoring.

Foreign Government Regulation

In addition to United States regulations, we are subject to a variety of foreign government regulations applicable to medical devices, cosmetic products, and drugs.

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Regulation of Medical Devices in the European Union

The European Union, (“EU”), has adopted specific directives and regulations regulating the design, manufacture, clinical investigation, conformity assessment, labeling and adverse event reporting for medical devices.

Until May 25, 2021, medical devices were regulated by Council Directive 93/42/EEC (the “EU Medical Devices Directive”) which has been repealed and replaced by Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation”). Our current certificates have been granted under the EU Medical Devices Directive whose regime is described below. However, as of May 26, 2021, some of the EU Medical Devices Regulation requirements apply in place of the corresponding requirements of the EU Medical Devices Directive with regard to registration of economic operators and of devices, post-market surveillance, and vigilance requirements. Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU Medical Devices Regulation when our current certificates expire on December 31, 2027.

Medical Devices Directive

Under the EU Medical Devices Directive, all medical devices placed on the market in the EU must meet the relevant essential requirements laid down in Annex I to the EU Medical Devices Directive, including the requirement that a medical device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others. In addition, the device must achieve the performance intended by the manufacturer and be designed, manufactured, and packaged in a suitable manner. The European Commission has adopted various standards applicable to medical devices. These include standards governing common requirements, such as sterilization and safety of medical electrical equipment and product standards for certain types of medical devices. There are also harmonized standards relating to design and manufacture. While not mandatory, compliance with these standards is viewed as the easiest way to satisfy the essential requirements as a practical matter as it creates a rebuttable presumption that the device satisfies that essential requirement.

To demonstrate compliance with the essential requirements laid down in Annex I to the EU Medical Devices Directive, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification. As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence. Except for low-risk medical devices (Class I non-sterile, non-measuring devices), where the manufacturer can self-assess the conformity of its products with the essential requirements (except for any parts which relate to sterility or metrology), a conformity assessment procedure requires the intervention of a notified body. Notified bodies are independent organizations designated by EU member states to assess the conformity of devices before being placed on the market. A notified body would typically audit and examine a product’s technical dossiers and the manufacturer’s quality system (the notified body must presume that quality systems which implement the relevant harmonized standards – which is ISO 13485:2016 for Medical Devices Quality Management Systems – conform to these requirements). If satisfied that the relevant product conforms to the relevant essential requirements, the notified body issues a certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply the CE mark to the device, which allows the device to be placed on the market throughout the EU.

Throughout the term of the certificate of conformity, the manufacturer will be subject to periodic surveillance audits to verify continued compliance with the applicable requirements. In particular, there will be a new audit by the notified body before it will renew the relevant certificate(s).

Medical Devices Regulation

The regulatory landscape related to medical devices in the EU has now evolved. On April 5, 2017, the EU Medical Devices Regulation was adopted with the aim of ensuring better protection of public health and patient safety. The EU Medical Devices Regulation establishes a uniform, transparent, predictable, and sustainable regulatory framework across the EU for medical devices and ensures a high level of safety and health while supporting innovation. Unlike the EU Medical Devices Directive, the EU Medical Devices Regulation is directly applicable in EU member states without the need for member states to implement into national law. This aims at increasing harmonization across the EU.

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The EU Medical Devices Regulation became effective on May 26, 2021. The new Regulation among other things:

•strengthens the rules on placing devices on the market (e.g., reclassification of certain devices and wider scope than the EU Medical Devices Directive) and reinforces surveillance once they are available;

•establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market;

•establishes explicit provisions on importers’ and distributors’ obligations and responsibilities;

•imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation;

•improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk;

•sets up a central database (“Eudamed”) to provide patients, healthcare professionals, and the public with comprehensive information on products available in the EU; and

•strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.

Devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2024 under transitional provisions with a further ‘sell-off’ deadline by May 26, 2025, provided that the requirements of the transitional provisions are fulfilled. In particular, the certificate in question must still be valid. However, even in this case, manufacturers must comply with a number of new or reinforced requirements set forth in the EU Medical Devices Regulation, in particular the obligations described below. The European Commission further extended the transitional provisions of the EU Medical Devices Regulation through Regulation (EU) 2023/607 on March 15, 2023, whereby manufacturers and notified bodies are given more time to carry out, in accordance with the EU Medical Devices Regulation, the conformity assessment of devices covered by a certificate or declaration of conformity issued in accordance with the EU Medical Devices Directive. Moreover, the “sell-off” deadline in the EU Medical Devices Regulation is deleted which aims to prevent unnecessary disposal of safe devices. The transition period of devices is extended through December 31, 2027 or December 31, 2028 depending on the device risk classification and certain other conditions being satisfied. On December 16, 2025, the European Commission proposed to amend the EU Medical Devices Regulation in order to simplify requirements, reduce administrative burden, and enhance the predictability and cost‑efficiency of notified body certification. The proposal will now proceed through the ordinary legislative procedure, with the European Parliament and Council each discussing the European Commission’s proposal and potentially proposing revisions. Formal adoption of the proposal is not expected before the second quarter of 2027.

The EU Medical Devices Regulation requires that before placing a device, other than a custom-made device, on the market, manufacturers (as well as other economic operators such as authorized representatives and importers) must register by submitting identification information to Eudamed, unless they have already registered. The information to be submitted by manufacturers (and authorized representatives) also includes the name, address and contact details of the person or persons responsible for regulatory compliance. The new Regulation also requires that before placing a device, other than a custom-made device, on the market, manufacturers must assign a unique identifier to the device and provide it along with other core data to the unique device identifier (“UDI”) database. These new requirements aim at ensuring better identification and traceability of the devices. Manufacturers are also notably responsible for entering the necessary data on Eudamed, which includes the UDI database, and for keeping it up to date. The obligations for registration in Eudamed will become applicable at a later date (as Eudamed is not yet fully functional). Some of the modules within Eudamed (e.g. registration; UDI) have been already available to economic operators for voluntary use. On June 13, 2024, the EU adopted Regulation 2024/1860 which provides for a gradual roll out of the different modules within Eudamed. Rather than waiting until Eudamed as a whole is fully functional, the legislative amendment aims to speed up the mandatory use of individual modules of Eudamed that are confirmed functional. Until a certain module is functional and thus mandatory under Eudamed, the corresponding provisions of the EU Medical Devices Directive continue to apply for the purpose of meeting the obligations laid down in the provisions regarding exchange of information, including, and in particular, information regarding registration of devices and economic operators. Commission Decision (EU) 2025/2371 declared the full functionality of the first four modules of Eudamed. The modules include: actor registration, UDI/device registration, notified bodies and certificates and market surveillance systems. Under the transitional provisions set out in Regulation 2024/1860, this decision triggers a six-month transition period, after which the four modules will become mandatory from May 28, 2026.

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All manufacturers placing medical devices on the market in the EU must comply with the EU medical device vigilance system which has been reinforced by the EU Medical Devices Regulation. Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”), must be reported to the relevant authorities of the EU member states. These reports will have to be submitted through Eudamed – once the relevant module is functional – and aim to ensure that, in addition to reporting to the relevant authorities of the EU member states, other actors such as the economic operators in the supply chain will also be informed. Until the module in Eudamed is functional, the corresponding provisions of the EU Medical Devices Directive continue to apply. A serious incident is defined as any malfunction or deterioration in the characteristics or performance of a device made available on the market, including user-error due to ergonomic features, as well as any inadequacy in the information supplied by the manufacturer and any undesirable side-effect, which, directly or indirectly, might have led or might lead to the death of a patient or user or of other persons or to a temporary or permanent serious deterioration of a patient's, user's or other person's state of health or a serious public health threat.

Manufacturers are required to take FSCAs defined as any corrective action for technical or medical reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market. An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device. FSCAs must be communicated by the manufacturer or its legal representative to its customers and/or to the end users of the device through field safety notices. For similar serious incidents that occur with the same device or device type and for which the root cause has been identified or an FSCA implemented or where the incidents are common and well documented, manufacturers may provide periodic summary reports instead of individual serious incident reports.

The advertising and promotion of medical devices is subject to some general principles set forth in EU legislation as well as in national legislation of the EU member states and industry codes of conduct. According to the EU Medical Devices Regulation, only devices that are CE-marked may be marketed and advertised in the EU in accordance with their intended purpose. Directive 2006/114/EC concerning misleading and comparative advertising and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the advertising thereof and contain general rules, for example, requiring that advertisements are evidenced, balanced and not misleading. Specific requirements are defined at a national level. EU member states’ laws related to the advertising and promotion of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general public and may impose limitations on promotional activities with healthcare professionals.

Many EU member states have adopted specific anti-gift statutes that further limit commercial practices for medical devices, in particular vis-à-vis healthcare professionals and organizations. Additionally, there has been a recent trend of increased regulation of payments and transfers of value provided to healthcare professionals or entities and many EU member states have adopted national “Sunshine Acts” which impose reporting and transparency requirements (often on an annual basis), similar to the requirements in the United States, on medical device manufacturers. Certain countries also mandate implementation of commercial compliance programs.

The aforementioned EU rules are generally applicable in the European Economic Area, which consists of the 27 EU member states plus Norway, Liechtenstein, and Iceland.

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United Kingdom (“UK”) Regulation of Medical Devices following Brexit

Since January 1, 2021, the Medicines and Healthcare Products Regulatory Agency (“MHRA”), has become the sovereign regulatory authority responsible for Great Britain (i.e. England, Wales and Scotland) medical device market according to the requirements provided in the UK Medical Devices Regulations 2002 (SI 2002 No 618, as amended) that sought to give effect to the three pre-existing EU directives governing active implantable medical devices, general medical devices and in vitro diagnostic medical devices whereas Northern Ireland continues to be governed by EU rules according to the Northern Ireland Protocol. Following the end of the Brexit (as defined below) transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA (but manufacturers were given a grace period of four to 12 months to comply with the new registration process) before being placed on Great Britain market. The MHRA only registers devices where the manufacturer or its authorized person or third-party company acting on its behalf (the “UK Responsible Person”) has a registered place of business in the UK. Manufacturers based outside the UK need to appoint a UK Responsible Person that has a registered place of business in the UK to register devices with the MHRA in line with the grace periods. All medical devices require in principle a UK Conformity Assessed (“UKCA”) mark, but manufacturers can continue to place CE marked medical devices on the UK market during a transitional period. This transitional period was extended through newly introduced legislation effective June 30, 2023, to take account of the new transitional measures taken under the EU Medical Devices Regulation. While CE marking continues to be recognized on the UK market, UKCA marking is not recognized in the EU. The rules for placing medical devices on the market in Northern Ireland, which is part of the UK, differ from those in the rest of the UK. Compliance with this legislation is a prerequisite to be able to affix the UKCA mark to our products, without which they cannot be sold or marketed in Great Britain.

An MHRA public consultation was opened until end of November 2021 on the post-Brexit regulatory framework for medical devices and diagnostics. In June 2022, the UK government published its response to the consultation regarding the new UK medical device regulatory framework which seeks to amend the UK Medical Devices Regulations 2002 (which are based on EU legislation, primarily the EU Medical Devices Directive, the EU AIMD and the EU In Vitro Diagnostic Medical Devices Directive 98/79/EC), in particular to create a new access pathways to support innovation, create an innovative framework for regulating software and artificial intelligence as medical devices, reform in vitro diagnostic medical devices regulation, and foster sustainability through the reuse and remanufacture of medical devices. The core elements of the new regime regarding pre-market requirements are expected to come into force in 2026, subject to appropriate transitional arrangements. The consultation indicated that the MHRA will publish guidance in relation to the changes to the regulatory framework and may rely more heavily on guidance to add flexibility to the regime. A subsequent consultation on the new pre-market regime was opened on November 14, 2024 which closed on January 5, 2025. The first part of the government response to the consultation was published on February 26, 2025 and the second part on July 22, 2025. The responses will inform the regulatory reforms, which will introduce additional measures that must be taken before a device can be put on the market. This new pre-market legislation will be implemented by way of amending the Medical Devices Regulations 2002 and is expected to come into effect in 2026. By way of Statutory Instruments 2024 No. 1368, the UK already introduced amendments to the UK Medical Device Regulations 2002 regarding post-market surveillance. These amendments came into effect on June 16, 2025.

In addition, the Trade and Cooperation Agreement between the UK and the EU that went into effect in 2021 generally provides for cooperation and exchange of information between the parties in the areas of product safety and compliance, including market surveillance, enforcement activities and measures, standardization-related activities, exchanges of officials, and coordinated product recalls. As such, processes for compliance and reporting should reflect requirements from regulatory authorities.

European Union Regulation of Cosmetic Products

In the EU, the sale of cosmetic products is regulated under the EU Cosmetics Regulation (EC) No 1223/2009, (the “EU Cosmetics Regulation”) setting out the general regulatory framework for finished cosmetic products and their ingredients. The EU Cosmetics Regulation is directly applicable in, and binding on all EU member states and is enforced at the national member state level. Over the years, the EU cosmetics legal regime has been adopted by many countries around the world.

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Under the EU Cosmetics Regulation, a product is considered to be a cosmetic if it is presented as protecting the skin, maintaining the skin in good condition or improving the appearance of the skin, provided that it is not a medicinal product due to its composition or intended use. By contrast, a substance or mixture intended to be ingested, inhaled, injected or implanted into the human body shall not be considered a cosmetic product, nor shall a product (i) the composition of which is such that it has a significant action on the body through a pharmacological, immunological or metabolic action; or (ii) for which medical claims are made. Legally, such a product is considered a medicinal product, not a cosmetic, in the EU. No test has been determined yet to determine the significance of the effect. A product may fall within the definition of both a cosmetic product and a medicinal product in which case the non-cumulation principle provides that the product will be regulated as a medicinal product (under the Medicinal Products Directive 2001/83/EC).

Generally, there is no requirement for pre-market approval of cosmetic products in the EU. The overarching requirement is that a cosmetic product made available on the EU market must be safe for human health when used under normal or reasonably foreseeable conditions of use. However, centralized notification of all cosmetic products placed on the EU market is required via the EU cosmetic products notification portal (“CPNP”). The company that is ‘responsible’ for placing a cosmetic product on the EU market (which could be the manufacturer, importer or a third person appointed by the former), referred to as the “responsible person”, is responsible for safety of their marketed finished cosmetic products (and each of its ingredients), and must ensure that they undergo an appropriate scientific safety assessment before cosmetic products are sold. Obligations of the responsible person further include:

•Manufacturing cosmetic products in compliance with GMPs.

•Creating and keeping a product information file (“PIF”), for each cosmetic product, including test results that demonstrate the claimed effects for the cosmetic product, and the cosmetic product safety report.

•Registering and submitting information on every product through the CPNP.

•Complying with Regulation (EU) No. 655/2013 which lists common criteria for the justification of claims used in relation to cosmetic products.

•Reporting serious undesirable effects attributable to cosmetics use to national competent authorities and taking corrective measures where required.

Some ingredients used in cosmetic products must undergo rigorous evaluation, including safety assessments and quality testing to make sure that they are safe for use, for example preservatives, and can also be subject to additional procedures such as an authorization by the European Commission and/or prior notification on a separate module of the CPNP, for example nanomaterials. Additionally, the EU Cosmetics Regulation includes a list of ingredients that are prohibited and a list of ingredients that are restricted in cosmetic products. A special database with information on cosmetic substances and ingredients, known as CosIng, enables easy access to data on cosmetic ingredients, including legal requirements and restrictions. We rely on expert consultants for our EU product registrations and review of our labeling for compliance with the EU Cosmetics Regulation.

The EU Cosmetics Regulation requires the manufacture of cosmetic products to comply with GMPs, which is presumed where the manufacture is in accordance with the relevant harmonized standards. In addition, in the labelling, making available on the market and advertising of cosmetic products, text, names, trademarks, pictures and figurative or other signs must not be used to imply that these products have characteristics or functions they do not have; any product claims in labeling must be capable of being substantiated and comply with the aforementioned list of common criteria.

Moreover, in the EU, animal testing is prohibited for finished cosmetic products and their ingredients. Marketing finished cosmetic products and ingredients in the EU which were tested on animals is equally prohibited.

Each member state appoints a competent authority to enforce the EU Cosmetics Regulation in its territory and to cooperate with the other member state authorities and the European Commission. The European Commission is responsible for driving consistency in the way the Cosmetics Regulation is enforced across the EU.

The aforementioned EU rules are generally applicable in the EEA.

On July 8, 2025, the European Commission published a proposal for the simplification of the current EU Cosmetics Regulation 1223/2009. This includes planned simplifications in processes and documentation requirements, intended to facilitate the work of cosmetic product manufacturers. The European Commission’s proposal is currently under review by the EU co-legislators (European Parliament and Council).

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UK Regulation of Cosmetic Products following Brexit

The UK formally left the EU on January 31, 2020, commonly referred to as “Brexit”. Following the end of a transition period, since January 1, 2021, the UK operates under a distinct regulatory regime, and the aforementioned EU laws now only apply to the UK in respect of Northern Ireland (as laid out in the Protocol on Ireland and Northern Ireland).

As a consequence, from January 1, 2021, Schedule 34 of the Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019 (the “UK Cosmetics Regulation”), applies to cosmetic products placed on the market in Great Britain, which includes England, Scotland and Wales. Cosmetic products placed on the market in Northern Ireland are still covered by the EU Cosmetics Regulation. However, to date, there are no significant differences between the frameworks of the UK Cosmetics Regulation and the EU Cosmetics Regulation. The main difference currently is that the UK Government has established a cosmetic product notification service to replace the EU’s CPNP in Great Britain, and that serious undesirable effects (“SUEs”) now should be notified on the new UK SUE form.

Regulation of Medicinal Products in the EU

Similar to the United States, products which are intended for use as a cosmetic could be reclassified as a medicinal product in view of certain claims, composition, functional characteristics, presentation, or other factors. Medicinal products are regulated differently from cosmetics and require a marketing authorization before they can be placed on the EU market. Authorization may be obtained through one of the EU authorization procedures and must be supported by appropriate quality, safety, and efficacy data. The Company does not currently market any medicinal products in the EU; however, it may in the future market certain products that would be considered prescription or non-prescription (OTC) medicines and would therefore be subject to EU and Member State medicinal product requirements.

In the European Economic Area (which is comprised of 27 Member States of the EU plus Norway, Iceland and Liechtenstein), medicinal products can only be commercialized after a related marketing authorization has been granted. Marketing authorization for medicinal products can be obtained through several different procedures. These are through a centralized, mutual recognition procedure, decentralized procedure, or national procedure (if marketing authorization is sought for a single EU Member State). The holder of an EU marketing authorization for a medicinal product must also comply with the EU’s pharmacovigilance legislation. This includes requirements to conduct pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.

Various requirements apply to the manufacturing and placing on the EU market of medicinal products. Manufacture of medicinal products in the EU requires a manufacturing authorization, and import of medicinal products into the EU requires a manufacturing authorization allowing for import. The manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance. These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients (“APIs”), including the manufacture of APIs outside of the EU with the intention to import the APIs into the EU. Similarly, the distribution of medicinal products within the EU is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of the EU Member States. Marketing authorization holders, manufacturing authorization holders, and/or distribution authorization holders may be subject to civil, criminal or administrative sanctions, including suspension of manufacturing authorization, in case of non-compliance with the EU or EU Member States’ requirements applicable to the manufacturing of medicinal products.

In the EU, the advertising and promotion of medicinal products are subject to EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (the “SmPC”), as approved by the competent authorities in connection with a marketing authorization approval. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU. Breaches of the rules governing the promotion of medicinal products in the EU could be penalized by civil, criminal or administrative sanctions, which may include fines and imprisonment. These laws may further limit or restrict the advertising and promotion of medicinal products to healthcare professionals. Advertising of medicinal products that contain psychotropic and narcotic substances is in any case prohibited.

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Environmental Regulations

We believe we are compliant in all material respects with applicable environmental laws. Presently, we do not anticipate such compliance will have a material effect on capital expenditures, earnings, or our competitive position with respect to any of our operations.

Information Technology

Information technology supports all aspects of our business, including our products, product development, marketing, sales, order processing, production, distribution, and finance. We continue to maintain and enhance our information technology systems in alignment with our long-term strategy. An increasing portion of our global information technology infrastructure is cloud-based. This allows for a more scalable platform to support current and future requirements and improves our agility and flexibility to respond to the demands of our business by leveraging more advanced technologies.

We recognize that technology presents opportunities for competitive advantage, and we continue to invest in new capabilities and the use of emerging technologies across various aspects of our business. During year ended December 31, 2024, we continued to invest in hardware, software, education and support structures to create engaging and collaborative work environments across our facilities, in both virtual and hybrid settings. We also continued to invest in new marketing and provider and consumer engagement capabilities globally with a focus on innovative digital experiences across our omnichannel landscape. Our strategy over the next few years includes continuing to build a strong and secure technology infrastructure to adapt to evolving business dynamics, which includes the expansion of our omnichannel capabilities, upgrading our existing hardware and software to be more streamlined, and the utilization of data-driven analytics to optimize our supply and demand planning.

Data Privacy and Security

We operate in a complex global environment where numerous federal, state, and international laws, regulations, and standards govern the collection, use, disclosure, confidentiality, and security of health-related and other personal information. Our obligations apply to our own operations as well as to those of our partners, and these requirements continue to evolve. In addition, emerging technologies such as AI have sparked additional legislation to address potential risks and challenges of such technologies’ use of personal information.

In the United States, various federal and state laws—including data breach notification laws, health information privacy and security laws, and consumer protection statutes—impose obligations on how we manage and protect both health-related and other personal information. Many of these regulations carry penalties that can be levied on a “per violation” basis and, in some instances, grant individuals the right to bring private claims.

Internationally, laws such as the EU General Data Protection Regulation (“GDPR”) and the United Kingdom (“UK”) GDPR impose strict requirements on entities handling personal data of individuals in the European Economic Area and the UK. Noncompliance can result in substantial fines of up to the greater of €20 million (or £17.5 million) or 4% of annual global revenue.

Additionally, new state laws governing the privacy of consumer health data, including information concerning individual health conditions and treatment, may apply to our business. For example, Washington’s My Health My Data Act (“MHMD”) broadly defines consumer health data, places restrictions on processing consumer health data, provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law. Other states, like Connecticut and Nevada, have also enacted health data privacy laws or amended existing privacy laws to protect consumer health data.

There is growing legislative and regulatory activity in the U.S. and abroad related to AI, such as the European Union’s Artificial Intelligence Act, the U.S. executive order to establish AI safety and security standards, and Colorado’s act concerning consumer protections in interactions with AI systems. We continue to closely monitor these emerging legislative and regulatory activity, which may add further obligations or restrictions on how AI technologies are developed and utilized. For instance, these laws and regulations may require businesses to regularly review and revise business operations, information technology systems, and data handling practices, and to implement enhancements and adaptations to comply.

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To address this dynamic landscape, we have appointed a dedicated Data Privacy Officer responsible for overseeing our compliance with data protection laws and emerging AI regulations. This role helps ensure that our policies, procedures, and practices keep pace with regulatory changes and industry best practices.

Our Commitment to Compliance and Responsible Data Use

We recognize that personal information, particularly health-related data, is central to delivering our products and meeting our customers’ expectations. Accordingly, we are committed to processing personal information in compliance with applicable laws and regulations, while also addressing new legal and ethical considerations surrounding artificial intelligence.

Our Data Privacy Officer works closely with cross-functional teams to:

•Develop and Update Policies: We review and refine our brands’ data privacy, security, and AI-related policies to align with shifting regulatory standards on an as-needed basis, and no less than on an annual basis.

•Implement Security Measures: We employ security protocols to protect personal and business-critical data from unauthorized access, disclosure, or misuse.

•Conduct Ongoing Training: Our employees receive regular training to ensure awareness of and adherence to data protection obligations and ethical AI practices.

Ongoing Enhancements and Strategic Alignment

We view data privacy and AI governance as an integral part of our long-term strategy. In line with this commitment, we continue to invest in:

•Information Technology Infrastructure: Upgrading systems and processes to address both current and anticipated regulatory requirements.

•Compliance Monitoring: Tracking developments in data privacy, security, and AI regulations worldwide to adjust our internal controls accordingly.

•Collaboration with Regulators and Industry Peers: Engaging in industry discussions and thought leadership to help shape responsible data and AI practices.

By refining our framework for data protection and AI compliance, we seek to mitigate the risks of regulatory actions, investigations, or legal claims. We believe these efforts help strengthen the trust we share with our customers, partners, and other stakeholders, and are critical to our continued success and growth.

Effect of Government Regulations

We believe that our operations are substantially in compliance with all applicable laws and regulations and that we hold all necessary permits to operate our business in each jurisdiction in which our facilities are located. Laws and government regulations are subject to change and interpretation.

No significant pollution or other types of hazardous emission result from our operations and it is not anticipated that our operations will be materially affected by federal, state or local provisions concerning environmental controls. Our costs of complying with environmental, health and safety requirements have not been material. Furthermore, compliance with these laws, rules, and regulations have not had, and are not expected to have, a material effect on our capital expenditures, results of operations, and competitive position as compared to prior periods.

Environmental, Social and Governance Matters

We are committed to maintaining a strong sense of good corporate citizenship that places a high value on the welfare of our employees, the communities in which we operate, and the world as a whole. Highlights of each of these values are set forth below. These values are reflective of our commitment to Environmental, Social, and Governance (“ESG”) matters and are fundamentally embedded in our operations and culture. We believe effectively prioritizing and managing our ESG topics will create long-term value for our stakeholders, including our providers, consumers, suppliers, and partners, which in turn will create long-term value for our stockholders. We also believe that transparently disclosing the goals and relevant metrics related to our ESG topics will allow our stakeholders to be informed about our progress.

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Social

Data Privacy and Security

We recognize that protecting personal data and ensuring data privacy measures are integral to both our social responsibility and our long-term success. To that end, we have implemented policies and procedures designed to uphold consumer privacy and safeguard the data we collect. Our brands’ websites include an accessible privacy policy that explains:

•Data Collection and Usage: How each brand obtains, processes, and uses personal information in the course of delivering our products and services.

•Data Disclosure: The limited circumstances under which each brand shares information with third parties.

•Data Subject Rights: How individuals can opt out, access, update, or delete their information, enhancing transparency and consumer control.

In recognition of the importance of data protection, including cybersecurity, we have implemented measures intended to safeguard the security, confidentiality, and privacy of our systems and information assets. These measures encompass both organizational and technical controls, and include ongoing training programs to ensure that all employees understand their roles and responsibilities regarding data protection.

By striving to maintain high standards of data privacy and security, we aim to not only fulfill our regulatory obligations, but to also uphold our commitment to social responsibility. We believe this approach helps reinforce trust in our brand and aligns with our broader goal of contributing positively to the communities we serve.

Human Rights

We endorse and respect the goals and principles of the United Nations (“UN”) Universal Declaration of Human Rights and the International Labor Organization Declaration on Fundamental Principles and Rights at Work.

This includes everyone’s right to life and liberty, the protection of law, and freedom from slavery and torture – within our operations and business relationships. We also seek to apply relevant sections of the UN Guiding Principles on Business and Human Rights.

While government authorities have the primary responsibility for protecting human rights, we believe we have a duty to respect the human, cultural, and legal rights of individuals and communities, and to avoid adverse human rights impacts through our own activities. This responsibility includes the fair treatment and meaningful involvement of all people, regardless of race, ethnicity, color, gender, gender identity, national origin, religion, sexual orientation or income level. In addition, we adhere to and comply with all local and national regulations in our operating areas and aim to respect the rights of all people within our spheres of influence.

Our commitment to many of these rights is articulated in our Code of Business Conduct and Ethics and other company policies. Our Code of Business Conduct and Ethics and related policies prohibit workplace harassment, violence or discrimination. These policies apply to our employee recruitment, training, development, compensation, performance management and benefits at the Company.

We also identify and proactively engage with stakeholders within or adjacent to our operations regarding potential risks, including human rights risks, and our response plans. Additionally, we are committed to ensuring that slavery, human trafficking, and other human rights violations do not exist in our supply chain or in any part of our business.

Environmental Matters

We participate in a recycling program through our local waste management facility to divert all recyclable materials – bottles, cans, plastics, paper, and cardboard – from landfills. Our facilities provide for recycling, and our electronic waste is sent to locally approved e-waste recycling centers.

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Governance

Business Ethics

We have placed the highest emphasis on conducting our business with honesty and integrity. The highest ethical standards are expected of management and employees alike, and we continuously strive to create a corporate culture of honesty, integrity, and trust. Throughout our operations and in our dealings with our stakeholders, we endeavor to engender the confidence that our conduct is beyond reproach.

The policies we have developed are intended to:

•Offer guidance in understanding our policies, interpreting laws, and handling company-related issues and situations;

•Foster clear, ethical behaviors and conduct to create an atmosphere of respect, trust, cooperation, and collaboration throughout the Company and our activities; and

•Provide clear and well-defined procedures by which our employees can easily obtain information, ask questions, and, if necessary, report any suspected violations of any of our business ethics policies.

In addition to abiding by all applicable laws, all management and employees are required to comply fully with our Code of Business Conduct and Ethics which sets forth the Company’s values, business culture, and practices.

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”.

Corporate Governance

We are committed to ensuring strong corporate governance practices on behalf of our stockholders and other stakeholders. We believe strong corporate governance provides the foundation for financial integrity and stockholder confidence. Our Board of Directors is responsible for the oversight of risks facing the Company, and our management is responsible for the day-to-day management of risk. Our Board of Directors, as a whole, oversees our strategic and business risk, including risks related to financial reporting, compensation practices, ESG, and product developments.

More information about our corporate governance features (including information about our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee) can be found in our annual proxy statement.

In addition, the charters for our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee may be found on our website: www.beautyhealth.com under the heading “Governance”, and then “Documents & Charters”.

Human Capital Resources

Employees

We have built a team of industry professionals focused on beauty health. As of December 31, 2025, we employed 613 employees, of whom approximately 80% were salaried, with the remainder being compensated on an hourly basis. Set forth below is the geographic makeup of our workforce:

Geographic LocationNumber of Employees% of Total Workforce

United States of America (1)
41467%

Asia-Pacific (“APAC”)305%

Europe, Middle East, and Africa (“EMEA”)12821%

Canada & Latin America417%

Total613100%

__________

(1) As of December 31, 2025, 187 of these employees were based in our Long Beach, California headquarters.

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None of our employees are represented by a labor organization or are a party to any collective bargaining arrangement. We believe we continue to maintain strong employee relations, which is consistent with employee feedback we received in prior years and reinforced through ongoing employee interactions and communication channels.

Talent Attraction and Development

Hiring, retaining, and developing the best talent globally is key to our success in sustaining long-term growth.

We employ targeted marketing practices through our careers website, which personalizes a user’s experience based on jobseeker location and searching behavior. Jobseekers can also apply for roles from anywhere using any device.

Our talent strategy is focused on employee engagement and investments in career development, as well as measuring, recognizing, and rewarding performance. Our investments include providing programs to ensure our employees are equipped with the right skillsets and knowledge, as well as providing opportunities to transfer to other functions or regions through short-term and long-term assignments. For instance, we provide eligible employees with a 3-5 day training program that informs and educates our employees about our business model, marketing strategies, and other related topics about our business operations. We believe these programs and opportunities create a pipeline of talent and leadership among our employees, while fostering a sense of shared ownership necessary to drive and deliver on our long-term strategy.

To enhance our culture and measure our human capital objectives, we regularly engage with our employees. We provide several mechanisms for our employees to provide their feedback, including direct discussions with managers, employee surveys, interactive town hall meetings, and team offsite meetings. Based on our review of employee feedback, we develop action plans and implement them to enhance employee satisfaction and to ensure alignment with our overall human capital strategy.

Workplace Practices and Policies

The Company is an equal opportunity employer committed to inclusion and diversity and to providing a workplace free of harassment and discrimination.

Diversity and Inclusion

As a beauty health company, we believe that it is important for our workforce to reflect the diversity of our consumers and be representative of the society in which we live. We firmly believe an inclusive work environment is essential for a successful and thriving business and enables us to better understand our consumers, drive innovation, and stimulate creativity. We recognize the importance of all types of diversity at leadership levels and throughout our organization.

Our objective in creating an environment of inclusion is to enhance our ability to attract and retain the best talent globally and promote a sense of belonging. We continuously encourage a culture of fairness, equal access to opportunities, including positions of leadership, and transparency in employment matters. We have enhanced our strategy in many areas including hiring, employee engagement, development, and talent management to further support diversity and inclusion across our organization. For instance, we have identified several priorities designed to guide our efforts in this matter such as creating an environment where every employee feels included and valued for who they are, and promoting equal opportunity in recruitment, hiring, training, development, and advancement across our organization.

As of December 31, 2025, a breakdown of our workforce is as follows:

Employee Population

Race/Ethnicity

Gender

% Minority (1)
% White
% Female
% Male

U.S. Workforce
53%47%64%36%

U.S. Managers & Above
43%57%60%40%

U.S. Officers
29%71%43%57%

__________

(1) In the United States, 53% of employees identified as Black or African American, Hispanic or Latino, American Indian, Alaska Native, Asian American, Native Hawaiian, or other Pacific Islander.

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Compensation and Benefits

Consistent with our core values, our “Total Rewards” programs take care of our employees by offering competitive compensation and flexible, comprehensive benefits programs designed to attract, motivate, and retain world-class talent.

We continuously review and ensure our compensation packages are competitive across all markets in which we operate. For instance, in addition to base pay (which is based on specific circumstances, including role and experience, geographic location, and performance), we offer annual cash performance-based incentives and equity-based long-term incentive awards for eligible employees.

Our robust benefit programs, which vary by country, include basic and supplemental health and insurance benefits, health savings and flexible spending accounts, access to a personal health advocate, family leave, life and disability insurance, employee assistance programs, physical, mental and financial well-being programs, retirement savings plans, and pet insurance, to name a few.

Workplace Health and Safety

Maintenance of a safe, healthy work environment is a basic policy of our Company. The backbone of our Safety & Health program is the accountability of line management, who are informed and guided by supporting staff. Our policy is to maintain the safety and healthfulness of the workplace for all employees, contractors, and visitors to reduce the probability and magnitude of injuries, illnesses, and financial loss.

Our program requirements and statement of basic policy represent the essential elements of our Safety & Health program. These requirements define minimum standards that apply, in a program and physical sense, to every employee and every workplace in which our people are employed. These requirements establish a frame of reference for assessing our progress in achieving important program objectives. Such progress will be monitored, but with the understanding that, in some of our facilities, subject to the influence of prevailing local practices and limited capabilities, certain requirements represent longer-range commitments that cannot be fully implemented in the short term.

Changes and additions to the program requirements will take place as needed through legal consultation to ensure the maintenance of a Safety & Health program that reflects the commitment and best interests of all at the Company. The establishment and maintenance of a safe environment is the shared responsibility between the employer and employees at all levels of the organization. To this end, every reasonable effort will be made in achieving the goal of accident prevention and health preservation.

The Company has developed and implemented a comprehensive Injury and Illness Prevention Program. The goal of this program is to protect employees, agency employees, contractors, and visitors by providing an active safety program for the prevention of injuries, accidents, and illnesses. The Company has a designated environmental, health, and safety (“EHS”) department to provide a clear focal point for the safety program. The EHS department has appointed “Department Safety Coordinators” to implement and maintain the program at each location. The Department Safety Coordinators are the Department Heads of the Company and are an integral part of the Safety Awareness Team.

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About Us

The Company (f.k.a. Vesper Healthcare Acquisition Corp.) was incorporated in the State of Delaware on July 8, 2020. On May 4, 2021, we consummated the business combination pursuant to that certain Agreement and Plan of Merger, dated December 8, 2020, by and among Vesper Healthcare Acquisition Corp. (“Vesper Healthcare”), Hydrate Merger Sub I, Inc. (“Merger Sub I”), Hydrate Merger Sub II, LLC (“Merger Sub II”), LCP Edge Intermediate, Inc., the indirect parent of HydraFacial LLC, (f.k.a. Edge Systems LLC) (“Hydrafacial”), and LCP Edge Holdco, LLC (“LCP,” or “Former Parent,” and, in its capacity as the stockholders’ representative, the “Stockholders’ Representative”) (the “Merger Agreement”), which provided for: (a) the merger of Merger Sub I with and into Hydrafacial, with Hydrafacial continuing as the surviving corporation (the “First Merger”), and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Hydrafacial with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the First Merger, the Company owns 100% of the outstanding common stock of Hydrafacial and each share of common stock and preferred stock of Hydrafacial was cancelled and converted into the right to receive a portion of the consideration payable in connection with the Mergers. As a result of the Second Merger, the Company owns 100% of the outstanding interests in Merger Sub II. In connection with the closing of the Business Combination (the “Closing”), the Company owns, directly or indirectly, 100% of the stock of Hydrafacial and its subsidiaries and the stockholders of Hydrafacial as of immediately prior to the effective time of the First Merger (the “Hydrafacial Stockholders”) hold a portion of our Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”).

On May 6, 2021, we began trading under the ticker symbol, “SKIN”, on Nasdaq.

Available Information

Our internet address is www.beautyhealth.com. At our investor relations website, www.investors.beautyhealth.com, we make available free of charge a variety of information for investors, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the Securities and Exchange Commission at www.sec.gov. Further, corporate governance information, including our corporate governance guidelines, board committee charters, and code of conduct, are also available on our investor relations website at: www.investors.beautyhealth.com/corporate-governance/documents-and-charters.

The information contained on or made available through our website or any of the websites referred to above are not incorporated by reference into, and does not form a part of, this Annual Report on Form 10-K or in any other report or document we file with or furnish to the Securities and Exchange Commission. Further, references to the URLs for these websites are intended to be inactive textual references only.