NOTE 1.
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
The Beauty Health Company (the Company) was incorporated in Delaware
on July 8, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a Business
Combination).
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business
Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The Company has two subsidiaries, Hydrate Merger Sub I, Inc., a wholly owned subsidiary of the Company incorporated in Delaware on
December 7, 2020 (Merger Sub I) and Hydrate Merger Sub II, LLC, a wholly owned subsidiary of the Company incorporated in Delaware on December 7, 2020 (Merger Sub II).
As of December 31, 2020, the Company had not commenced any operations. All activity for the period from July 8, 2020 (inception)
through December 31, 2020 relates to the Companys formation and the initial public offering (Initial Public Offering), which is described below. The Company will not generate any operating revenues until after the completion
of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Companys Initial Public Offering was declared effective on September 29, 2020. On
October 2, 2020, the Company consummated the Initial Public Offering of 46,000,000 units (the Units and, with respect to the shares of Class A common stock included in the Units sold, the Public Shares), which
includes the full exercise by the underwriters of the over-allotment option to purchase an additional 6,000,000 Units, at $10.00 per Unit, generating gross proceeds of $460,000,000, which is described in Note 4.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 9,333,333 warrants (the Private
Placement Warrants) at a price of $1.50 per Private Placement Warrant in a private placement to BLS Investor Group LLC (the Sponsor), generating gross proceeds of $14,000,000, which is described in Note 5.
Transaction costs amounted to $25,777,859 consisting of $9,200,000 of underwriting fees, $16,100,000 of deferred underwriting fees and
$477,859 of other offering costs. Of this amount, $24,762,064 was recorded as a reduction of gross proceeds in additional paid in capital and $1,015,795 was expensed.
Following the closing of the Initial Public Offering on October 2, 2020, an amount of $460,000,000 ($10.00 per Unit) from the net
proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the Trust Account), located in the United States and invested only in U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), with a maturity of 185 days or less or in any open-ended investment company that holds
itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a
Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.
The Companys
management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all
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