As filed with the Securities and Exchange Commission on February 8, 2022

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Solta Medical Corporation

(Exact name of registrant as specified in its charter)

British Columbia, Canada

3845

98-1628966

(State or other jurisdiction

of incorporation)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. employer

identification number)

520 Applewood Crescent

Vaughan, Ontario, Canada L4K 5X3

(905) 695-7700

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, New York 10168

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Michael Kaplan

Marcel Fausten

Stephen Byeff

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Tel: (212) 450-4000

Michael Schiavone

David Ni

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Tel: (212) 839-5300

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED FEBRUARY 8, 2022

PRELIMINARY PROSPECTUS

LOGO

Solta Medical Corporation

Common Shares

This is an initial public offering of common shares of Solta Medical Corporation. All of our common shares are currently held by Bausch Health Companies Inc. (“BHC”). BHC is selling all of the common shares offered hereby. We are not selling any of the common shares in this offering and will not receive any proceeds from the sale of the common shares. Prior to this offering, there has been no public market for our common shares. The estimated initial public offering price is between $ and $ per common share.

We have applied to list our common shares on the Nasdaq Global Select Market (“NASDAQ”) under the symbol “SLTA.”

After the completion of this offering, BHC will continue to own a majority of the voting power of our common shares eligible to vote in the election of our directors. As a result, we will be a “controlled company” within the meaning of the corporate governance standards of NASDAQ. See “Management—Controlled Company Exception.”


	Per Common Share	Total
Public offering price	$	$
Underwriting commissions(1)	$	$
Proceeds, before expenses, to BHC	$	$

(1)	BHC has agreed to reimburse the underwriters for certain FINRA-related expenses. See “Underwriting.”

BHC has granted the underwriters an option for a period of 30 days to purchase up to an additional common shares to cover over-allotments at the initial public offering price less underwriting commissions.

Investing in our common shares involves risks. See “Risk Factors” beginning on page 24.

None of the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the common shares to purchasers on or about , 2022.



Goldman Sachs & Co. LLC		Morgan Stanley

Citigroup		Guggenheim Securities

Barclays		Evercore ISI

The date of this prospectus is , 2022.

TABLE OF CONTENTS


	Page
Prospectus Summary		1
The Offering		20
Summary Historical and Unaudited Pro Forma Combined Financial Data		21
Risk Factors		24
Cautionary Statements Concerning Forward-Looking Statements		63
Use of Proceeds		67
Dividend Policy		68
Capitalization		69
Dilution		70
The Separation		72
Unaudited Pro Forma Condensed Combined Financial Statements		81
Management Discussion and Analysis of Financial Condition and Results of Operations		90
Business		122
Management		144
Executive Compensation		155
Principal and Selling Shareholder		167
Certain Relationships and Related Party Transactions		168
Description of Share Capital		177
Shares Eligible for Future Sale		181
Material Differences Between the BCBA and the Delaware General Corporation Law		183
Material U.S. Federal Income Tax Considerations		189
Certain Canadian Federal Income Tax Considerations for United States Residents		192
Underwriting		194
Legal Matters		203
Experts		203
Where You Can Find More Information		203

Until , 2022, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

We are responsible for the information contained in this prospectus and in any related free-writing prospectus we may prepare or authorize to be delivered to you. We have not, and neither BHC nor the underwriters have, authorized anyone to give you any other information, and we, BHC and the underwriters take no responsibility for any other information that others may give you. We, BHC and the underwriters are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common shares. We are offering to sell, and seeking offers to buy, common shares only in jurisdictions where offers and sales are permitted.

For investors outside of the United States: Neither we, BHC nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purposes is required, other than in the United States. Persons who come into possession of this prospectus and any applicable free writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.

About this Prospectus

Unless the context requires otherwise, (a) references to “Solta Medical,” “Solta,” the “Company,” “we,” “us,” “our” and the “Business” refer to Solta Medical Corporation and its consolidated subsidiaries after giving effect to the transactions described under “The Separation,” (b) references to “Bausch Health,” “Bausch,” “BHC” and “Parent” refer to Bausch Health Companies Inc., a company continued under the British Columbia Business Corporations Act (“BCBCA”), and its consolidated subsidiaries other than Solta Medical and its consolidated subsidiaries, unless the context otherwise requires and (c) references to “shares” and “common shares” refer to Solta’s common shares, unless the context otherwise requires. In addition, unless the context requires otherwise, statements relating to our history in this prospectus describe the history of the Solta business of BHC (the “Solta Business”) and forward-looking statements assume the completion of all of the transactions described in this prospectus, including the Separation.

Trademarks and Trade Names

The BHC name and mark, and other trademarks, trade names and service marks containing BHC appearing in this prospectus, including the Solta Medical Corporation and Solta names and marks, are the property of BHC. After the completion of this offering, we will own the Solta Medical Corporation and Solta names and marks and certain other trademarks, trade names and service marks. Solely for convenience, some of the trademarks, service marks and trade names referred to in this prospectus are listed without the ^® and ^TM symbols, but we and BHC, as applicable, will assert, to the fullest extent under applicable law, rights to such trademarks, service marks and trade names.

Basis of Presentation

The Company has historically operated as part of BHC; therefore, standalone financial statements have not historically been prepared. The financial information contained within this prospectus has been prepared from BHC’s historical accounting records and is presented on a standalone basis as if the Company’s operations had been conducted independently from BHC. The financial information contained herein has been prepared by the Company in United States (“U.S.”) dollars and in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), applied on a consistent basis. All intercompany accounts and transactions within the Company have been eliminated. The assets and liabilities of the Company have been determined to be specifically identifiable or otherwise attributable to the Company.

The financial information contained herein includes all revenues and expenses directly attributable to Solta, including costs for facilities, functions and services used by Solta. Expenses performed by centralized BHC are directly charged to Solta based on specific identification when possible or based on a reasonable allocation driver such as net sales, headcount or other allocation methods depending on the nature of the services and/or costs. The results of operations include allocations of costs for administrative functions and services performed on behalf of Solta by centralized groups within BHC. All charges and allocations for facilities, functions and services performed by BHC have been deemed settled in cash by Solta to BHC in the period in which the cost was recorded. Current and deferred income taxes have been determined based on the standalone results of Solta. However, because the Company filed as part of BHC’s tax group in certain jurisdictions, the Company’s actual tax balances may differ from those reported. The Company’s portion of its domestic and certain income taxes for jurisdictions outside the United States are deemed to have been settled in the period the related tax expense was recorded.

The financial statements and related financial results included in this prospectus may not be indicative of our future performance and do not necessarily reflect what our financial position and results of operations would have been had we operated as a standalone public company during the periods presented, including changes that will occur in our operations and capital structure as a result of this offering and the Separation. See “Risk Factors—Risks Relating to the Separation and Our Relationship with BHC—We have no recent history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.”

Non-GAAP Measures

This prospectus contains certain financial measures, including EBITDA (non-GAAP), Adjusted EBITDA (non-GAAP), Adjusted EBITDA margin (non-GAAP), Contribution (non-GAAP), Contribution margin (non-GAAP), Free cash flows (non-GAAP) and Adjusted net income (non-GAAP), that are not required by, or presented in accordance with, U.S. GAAP. We refer to these measures as “non-GAAP” financial measures or information. See “Management Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Information” for our definitions of EBITDA (non-GAAP), Adjusted EBITDA (non-GAAP), Adjusted EBITDA margin (non-GAAP), Contribution (non-GAAP), Contribution margin (non-GAAP), Free cash flows (non-GAAP) and Adjusted net income (non-GAAP) and reconciliations to the nearest GAAP measure for the periods presented.

Market and Industry Data and Forecasts

Unless indicated otherwise, the information concerning the industry in which Solta participates contained in this prospectus is based on Solta’s general knowledge of and expectations concerning the industry. Statements regarding Solta’s position, share and industry size are based on estimates made using publicly available information as well as Solta’s internal estimates, which are based on data from various industry analyses and internal research, adapted to adjustments and assumptions that we believe to be reasonable. In particular, statements in this prospectus relating to Solta’s market position and position as a leading global aesthetic medical device company are based on the Company’s revenue compared to its competitors in the global aesthetic medical device industry. In addition, Solta believes that data regarding the industry, market share and its position within such industry provide general guidance but are inherently imprecise and may be subject to differing interpretations. Further, while Solta is not aware of any misstatements regarding any such data, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Statements Concerning Forward-Looking Statements” and “Risk Factors” in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates and assumptions.

iii

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. It may not contain all the information that may be important to you. You should read the entire prospectus carefully, including the section entitled “Risk Factors,” our financial statements and the related notes included elsewhere in this prospectus and the pro forma financial statements and the notes to those statements included elsewhere in this prospectus, before making an investment decision to purchase our common shares. Unless the context otherwise requires, the information included in this prospectus about Solta, including the combined financial statements, assumes the completion of all of the transactions referred to in this prospectus in connection with the Separation (as defined below). Unless the context otherwise requires, or when otherwise specified, references in this prospectus to “Solta,” “we,” “us,” “our” and “the Company” refer to Solta Medical Corporation, a company incorporated under the BCBCA, and its consolidated subsidiaries after giving effect to the transactions described under “The Separation.” Unless the context otherwise requires, references in this prospectus to “BHC” refer to Bausch Health Companies Inc., a company continued under the BCBCA, and its consolidated subsidiaries, other than Solta.

Unless the context otherwise requires, or when otherwise specified, references in this prospectus to our historical assets, liabilities, products, businesses or activities of our businesses are generally intended to refer to the historical assets, liabilities, products, businesses or activities of the Solta Business of BHC as it was conducted as part of BHC prior to the Separation (as defined below). Our historical financial results as part of BHC contained in this prospectus may not reflect our financial results in the future as a standalone company or what our financial results would have been had we been a standalone company during the periods presented.

Overview

We believe we are a leading global aesthetic medical device company focused on the development, manufacture and sale of innovative technologies that provide aesthetic and therapeutic benefits. Since the launch of our first commercial Thermage^® product in 2002, we have pioneered products that have advanced the field of aesthetic medical devices, including building a portfolio of over 200 patents worldwide. With one of the longest track records in the aesthetic medical device industry, our category-leading brands – Thermage^®, Clear + Brilliant^®, Fraxel^® and VASER^® – are well-respected and well-known to consumers of skin and body aesthetic treatments. Our portfolio of clinically proven energy-based aesthetic medical devices addresses a range of fast-growing treatment categories, including skin tightening, skin resurfacing, and body contouring, and the majority of our revenue from these technologies is derived from non- and minimally-invasive procedures. We offer our global customer base of dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners a compelling value proposition and return on investment to build and grow their respective practices. Our focus on developing cutting-edge technologies to better meet the needs of consumers coupled with the compelling value we offer to our customer partners has allowed us to build a significant global footprint, with an installed base of more than 13,800 systems and presence in approximately 50 countries as of December 31, 2020.

Over the last two decades, we have built a consistent track record of demonstrated technological innovation. In 2002, we developed and launched our first Thermage^® product the first RF device approved by the FDA for skin tightening and treating wrinkles. The success and unique benefits that our technologies offer to consumers and patients is supported by more than 200 clinical publications. We believe this extensive track record of clinical evidence and safety is unique in our industry and a compelling differentiator that drives demand for our products. Since our founding, we have relentlessly focused on progressing the aesthetic medical device field through innovations, as demonstrated below.

LOGO

We build deep longstanding relationships with dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners across the globe. Our extensive commercial network, including a direct market presence in over 15 countries and a global commercial team of approximately 200 employees, is built to cultivate localized, partnership-oriented relationships with these customers. Our products are designed to offer attractive economics to our partners, allowing our customers to realize a compelling return on investment through ongoing consumer and patient treatment procedures, powering demand for our portfolio of proprietary consumables. Our commitment comprehensive post-sale customer support provides us with multiple ongoing touchpoints that enable us to deepen our customer relationships, drive product usage and gain valuable market insights that power our innovation.

Our comprehensive portfolio of aesthetic medical devices is built to deliver clear benefits to consumers across a wide range of use cases. Our products are built on key, clinically-proven energy-based technologies including monopolar RF, non-ablative fractional lasers, and ultrasound that offer compelling differentiated advantages relative to alternative treatment options and competitor technologies. Our portfolio offers an ability to treat all skin types through minimally-invasive treatment solutions that offer minimal downtime. We address many fast-growing areas of consumer aesthetic needs, including skin tightening, body contouring, smoothing fine lines, wrinkles, reducing pore size, collagen boosting, skin tone, pigment, skin permeability, sun damage, actinic keratosis (“AK”), acne scars, surgical scars, wrinkles, melasma, and unwanted fat. As a result, we believe the breadth and synergistic nature of our products allows us to meet a consumers’ aesthetic needs across their lifetime, promoting consumer loyalty to our brand and sustaining our growth.

To enhance our market position and sustain our track record of innovation we continuously invest in our technological R&D. Our powerful innovation engine is supported by a portfolio of over 200 patents built by our deeply experienced and committed R&D team of more than 40 employees. Our ability to effectively innovate is enhanced by our deep relationships with our customers and other scientists and physicians that have expertise in the field of aesthetic medical devices, which allows us to incorporate critical feedback and emerging trends in real-time to support our continuous and iterative development processes. We currently have an emerging pipeline

of enhancements and next generation products, solutions and enhancements and expect to continue to expand our portfolio in future years.

Our products address significant and growing markets that we believe will sustain our long-term growth. Demand for aesthetic medical devices is increasing due to innovative technologies, such as our non-invasive aesthetic procedures, growing interest in personal appearances, including amongst the aging population, greater word-of-mouth enabled by social media, and overall growth in disposable income, particularly in emerging markets, amongst others. We have multiple vectors to power our growth including further penetration of our market opportunity, increasing product utilization, cross-portfolio adoption of our treatment solutions and expanding our presence in existing and new geographies. We believe these factors, coupled with our compelling pipeline of enhancements and next-generation products, effectively positions us to sustain and power our future growth.

Our track record of success is evidenced by the significant growth in our business. Our compelling financial model is driven by a diverse offering of capital equipment sales, as well as highly recurring revenue driven by sales of consumables for individual treatments as well as service contracts.

Our revenues for the nine months ended September 30, 2021 and 2020 and for the years ended December 31, 2020, 2019 and 2018 were $218.7 million, $165.5 million, $252.6 million, $193.9 million and $135.2 million, respectively, and are generally diversified by franchise, category and geography, as set forth below:


	Nine Months Ended September 30,										Years Ended December 31,
	2021					2020					2020					2019					2018
(in millions)	Amount		Pct.			Amount		Pct.			Amount		Pct.			Amount		Pct.			Amount		Pct.
*Revenues by Franchise*
Thermage^®	$	170.2		78	%	$	139.6		84	%	$	210.4		84	%	$	142.8		74	%	$	84.8		63	%
Clear + Brilliant^®		18.5		8	%		7.8		5	%		13.3		5	%		18.0		9	%		16.3		12	%
Fraxel^®		12.4		6	%		7.0		4	%		12.2		5	%		13.7		7	%		15.1		11	%
VASER^®		16.6		8	%		10.4		6	%		15.8		6	%		18.1		9	%		16.3		12	%
Other		1.0		—	%		0.7		1	%		0.9		—	%		1.3		1	%		2.7		2	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	252.6		100	%	$	193.9		100	%	$	135.2		100	%

*Revenues by Category*
Systems	$	56.9		26	%	$	51.4		32	%	$	78.3		31	%	$	61.1		32	%	$	43.4		32	%
Tips and other consumables		156.0		71	%		110.0		66	%		168.3		67	%		126.9		65	%		85.9		64	%

Revenues from product sales		212.9		97	%		161.4		98	%		246.6		98	%		188.0		97	%		129.3		96	%
Other revenues		5.8		3	%		4.1		2	%		6.0		2	%		5.9		3	%		5.9		4	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	252.6		100	%	$	193.9		100	%	$	135.2		100	%

*Revenues by Region*
Asia Pacific	$	147.2		67	%	$	116.6		71	%	$	171.1		68	%	$	115.7		60	%	$	69.8		51	%
North America		58.2		27	%		33.0		19	%		57.7		23	%		62.5		32	%		52.9		39	%
Europe/Middle East		11.5		5	%		15.1		9	%		22.2		8	%		13.4		7	%		10.3		8	%
Other		1.8		1	%		0.8		1	%		1.6		1	%		2.3		1	%		2.2		2	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	252.6		100	%	$	193.9		100	%	$	135.2		100	%

Industry Overview

The global market for aesthetic medical devices is significant and growing. According the International Society of Aesthetic Plastic Surgery, there were an estimated 25 million surgical and non-surgical aesthetic procedures globally in 2019, of which approximately 2.7 million were non-surgical, non-injectable procedures. Additionally, the American Society for Aesthetic Plastic estimates that within the U.S. alone, consumers spent more than $8 billion on a total of over 4.5 million surgical and non-surgical aesthetic medical procedures in 2019. According to Data Bridge Market Research, the global aesthetic medical market is expected to grow at a CAGR of approximately 12% from 2019 to 2026.

In recent years, the aesthetics industry has seen a shift from traditional surgical approaches to more non-invasive and patient friendly procedures. This increase in patient preference for non- or minimally-invasive procedures has fueled industry growth. In addition to being more affordable, these procedures offer the additional advantages of being less painful, having a reduced risk of scarring, and offering shorter recovery periods. Growing demand for non-invasive cosmetic procedures combined with a surge in the availability of providers, facilities, and products continues to accelerate growth in the industry.

Other tailwinds driving industry growth include:

•

Strong demographic forces: The Baby Boomer generation is seeking procedures to battle the effects of aging. Simultaneously, Millennials are aging and as a result, are increasingly taking skin care and aesthetic health more seriously with an affinity to spend on premium treatments. As of 2019, Millennials comprise 22% of the U.S. population.

•

Growth in disposable income: As the global economy grows, consumers have more disposable income to spend on premium products. This dynamic accelerated during the COVID-19 pandemic when many consumers deferred large expenditures.

•

Social media influence and virtual communication: The proliferation of social media has elevated role of influencers in generating consumer demand especially among the Millennial and Gen Z demographics. Additionally, greater prevalence of virtual communication and video conferencing has increased consumers’ desire to “look their best” in their daily lives.

•

Physician economics: The impact of managed care and reimbursement on physician economics has motivated physicians to establish or expand the menu of elective, private-pay aesthetic medical procedures that they offer.

Established and Emerging Markets

According to the International Society of Aesthetic Plastic Surgery, North America was the largest aesthetics market globally in 2019. We believe the fastest growing region for aesthetics over the medium term will be Asia Pacific (“APAC”). In addition to growing consumer knowledge and increased interest in cosmetic procedures, we believe global marketing campaigns, rising medical tourism, and widened acceptance are all likely to stimulate the market in the APAC region. Other significant markets include Europe, the Middle East and Africa (“EMEA”) and Latin America.

Market Opportunity

With the rapid growth in the aesthetic medical device industry and increasing consumer demand, the attractive industry economics only further incentivize a broad group of new customers to incorporate aesthetics treatments into their practices. The aesthetic medical device industry is primarily a cash pay model which reduces reimbursement risk for both Solta and physician customers.

Additionally, we believe there is a large group of potential patients who desire to have surgery-like results provided the procedure is fast, painless and causes minimal patient recovery downtime. Our current product portfolio is capable of delivering such results. We estimate that approximately 60% of aesthetic patients are concerned about specific facial aesthetic issues that we treat, including drooping eyelids; facial sagging; and tone, texture, and jawline fat. Additionally, based on to a survey of 1,000 consumers conducted by ORC International, in 2018 there were approximately 28 million potential customers who identified as considering an aesthetic medical procedure in the next 12 months, but had not yet visited a physician. The same survey also found that over 40% of these potential and current patients consider facial skin tone, texture and brown- or red-colored spots on the face a top concern. Also, a significant percentage of surgical and non-surgical patients receiving cosmetic procedures are repeat patients who have multiple procedures performed in a single session.

Current Treatment Landscape

Numerous procedure types—ranging from surgical to non-invasive—are currently commercially available, but each bears its own limitations:

Surgical and Minimally-Invasive Procedures

•

Surgical risks: Surgical and moderately-invasive procedures carry risks of infection, scarring, perforation, and hemorrhage. These procedures generally require a general or local anesthesia, which has additional risks.

•

Pain and recovery downtime: Surgical procedures may involve pain and require significant post-procedure recovery that may result in extended patient consumption of pain medication and time away from work.

•

Physician dependent: The aesthetic results often depend on a particular physician’s skill and training. In addition, these procedures require significant physician time.

•

Limited repeatability: The process of removing or destroying fat cells with surgical or minimally-invasive procedures may result in the formation of scar tissue in the treated area. If a patient desires or requires additional treatments, the scar tissue in the treated area may prevent the patient from undergoing follow-up procedures to enhance or correct the original treatment results.

Non-Invasive Procedures

•

Potentially multiple treatments required: Existing non-invasive procedures based on radio frequency or laser energy often require multiple treatments before the patient obtains desired results, requiring the patient to schedule multiple, time-consuming procedures.

•

Inconsistent results: Existing non-invasive procedures may produce inconsistent results (e.g., fat reduction and skin rejuvenation). In addition, the technology used to perform these procedures is not always capable of selectively targeting fat cells and deeper-lying pigments, which can lead to unpredictable results, including damage to the surrounding tissue.

•

Technique dependent: Existing non-invasive procedures often require highly trained personnel to conduct the treatment. Poor technique may lead to reduced efficacy and inconsistent aesthetic results.

We believe our portfolio of diverse products addresses many of the shortcomings present across the current treatment continuum and offers an attractive value proposition for aesthetic physicians.

Our Products

Product Applications and Procedures

We provide a broad portfolio of products which collectively make up a comprehensive platform to address a range of aesthetic skin and body issues. With industry-leading technology underlying the simple, elegant designs, our products have a proven track record of providing consumers with aesthetic and therapeutic benefits. This platform of products includes the well-known brands Thermage^® FLX system, Clear + Brilliant^® system, Fraxel^® system and VASER^®lipo system.

Our portfolio of aesthetic treatment solutions includes a variety of non- and minimally-invasive aesthetic medical devices, in addition to surgical products. Backed by more than two decades of innovation, since inception our products have been used to perform over seven million procedures around the world.

Our energy-based aesthetic medical devices span numerous applications and procedures, enabling us to have what we believe is a leading position in our industry across age groups. The following graphic demonstrates the strength of our portfolio and provides high-level information about our products and their applications.

LOGO


Technology and Delivery	• Monopolar RF	• Non-ablative Fractional Laser • 1440 nm: Diode Laser • 1927 nm: Diode Laser	• Non-ablative Fractional Laser • 1550 nm: Erbium-Doped Fiber Laser • 1927 nm: Thulium Laser	• Precise Ultrasound-Assisted Liposuction

Description	Utilizes MRF to heat the deeper collagen rich layers of the skin, which can cause an immediate collagen contraction and tightening. As the collagen is deposited and remodeled, it enables tightening over time and improved collagen density.	Utilizes fractional laser technology to create microchannels that penetrate into the dermis. By utilizing the principle of factional photothermolysis, the laser stimulates collagen remodeling and promotes elastic tissue formation.	Creates microscopic laser columns that penetrate into the dermis to expedite the body’s remodeling of collagen.	Acoustic energy delivered through a probe results in dislodging of fat cells, then the groves on the probe create a large fluid that further separates the fat cells while leaving other tissues intact.

Key Differentiators	• AccuREP technology • Non-invasive • Can treats across a variety of skin types • Little to no downtime • Results in a single treatment that also can improve over time	• Complete Treatment allows you to treat superficial and deeper concerns • Non-invasive • Can treats across a variety of skin types • Minimal downtime	• Non-invasive • Treats all skin types • Minimal downtime	• Minimally-invasive • Immediate results • Reduced surgeon fatigue

Helps Address	Skin tightening, body contouring, smoothing, fine lines, wrinkles	Original (1440 nm): Fine lines, pore size, and boosts collagen Permea (1927 nm): Skin tone, pigment, and skin permeability	Dyschromia, pigment, sun damage, AK, acne scars, surgical scars, wrinkles, and melasma	Stubborn, unwanted fat

Treatment Areas	Eyes, Face, Body	Face, Body	Eyes, Face, Body	Face, Body

Thermage^® FLX System

The Thermage^® system is a non-invasive RF therapy that can help smooth, tighten and contour skin and provide an overall younger-looking appearance. Thermage^® can be used for the eyes, face and body, offering a flexible solution for consumers.

The Thermage^® FLX system is used for the treatment of periorbital wrinkles and rhytids including the upper and lower eyelids, the non-invasive treatment of wrinkles and rhytids and the temporary improvement in the appearance of cellulite. The Thermage^® FLX system uses monopolar RF technology to heat the deep, collagen rich layers of the dermal tissue, while the top vibrates and cools the surface to help provide patient comfort. The applied heat separates the water molecules from the fibrous collagen, which is designed to cause an immediate contraction, resulting in skin tightening. In the following few months, the secondary healing response can continue as collagen is deposited and remodeled. The new collagen growth further tightens the skin over time.

Unlike many cosmetic procedures which require multiple sessions, the Thermage^® FLX system can deliver results after a single treatment. Furthermore, results can often continue to improve over time. The user-friendly interface with touchscreen navigation provides real-time feedback, and the handpiece is designed with a small profile for accurate placement. With a single handpiece, the Thermage^® system is designed to provide consistent treatment without changing any headpieces. Optimized energy delivery is provided by our AccuREP technology which allows for automatic calibration.

Four different tips can be interchanged in order to deliver precise and effective treatment to various parts of the body. The current tip offerings include:

•

Total Tip—4.0 cm²: Precise heating to address lines and wrinkles and up to 25% faster than Total Tip 3.0 cm²

•

Total Tip—3.0 cm²: Precise heating to address lines and wrinkles

•

Eye Tip—0.25 cm²: Precise, shallow heating to treat wrinkles around the periorbital area and/or the eyelid itself

•

Body Tip—16.0 cm²: Offers vibration enhancements to aid in patient comfort

The Thermage^® system has been a leader in non-invasive skin tightening treatments for over 18 years. The benefits and safety profile have been demonstrated by more than 75 clinical publications. Based on surveys of patients who have completed a qualified visit to a provider’s office as reported by RealPatientRatings.com, approximately 90% of respondents are satisfied with their treatments using the Thermage^® system. Furthermore, the system provides compelling physician economics and return on investment. With more than two and a half million procedures performed since the system’s inception, we believe the Thermage^® system has completed the most procedures of any tightening product on the market.

Clear + Brilliant^® System

The Clear + Brilliant^® system uses fractional laser technology and is designed to address and prevent the early signs of aging skin. Specifically, treatments can help prevent the worsening of fine lines or wrinkles due to aging or sun damage, as well as uneven pigmentation. Clear + Brilliant^® creates hundreds of thousands of microscopic treatment zones in the upper layers of the skin, which stimulates collagen production and removes dead cells. This replaces damaged skin with healthy looking tissue and yields younger-looking skin. Treatment results have been demonstrated in over 20 published clinical studies. These studies have shown improvement in the look of fine lines, reduction in the appearance of pores, improvement to skin tone and texture, and improvement in skin’s overall appearance.

Treatments typically take about 30 minutes or less, and many patients choose to have routine treatments as part of their overall skincare regimen. The Clear + Brilliant^® system uses our patented technology, the Intelligent Optical Tracking System (“IOTS”) to provide even application to all treatment areas. Additionally, the Clear + Brilliant^® Perméa handpiece increases the skin’s permeability and can result in enhanced absorption of skincare products.

The Clear + Brilliant^® Touch system was launched in the U.S. in 2021 and enables the use of two different wavelengths. The fractional diode laser consists of a 1440 nm wavelength in the original handpiece and a 1927 nm wavelength in the Perméa handpiece. Also, the system is designed to be intuitive to use and has a small tabletop footprint with simplified settings, making it possible to delegate procedures to trained office staff.

We believe we have been a leader in the preventative laser treatments space since 2011 and have been recognized on multiple occasions for our innovative technology. Clear + Brilliant^® was named RealSelf’s most worth-it non-invasive laser in 2016 and then named New Beauty’s best laser for glowy skin in 2020. Based on surveys of patients who have completed a qualified visit to a provider’s office as reported by RealPatientRatings.com, approximately 96% of respondents are satisfied with their Clear + Brilliant^® treatments. With over two and a half million procedures and counting, Clear + Brilliant^® creates touchpoints with the consumer early and often making it an essential part of the consumer’s skin care regimen.

Fraxel^®System

The Fraxel^® system is designed to improve tone, texture and radiance for aging, sun-damaged or scarred skin. It uses a fractional resurfacing laser which is more intense than Clear + Brilliant^® to penetrate deeper into the skin. Next generation Fraxel^® can be effective on fine lines and wrinkles (i.e. crow’s feet and brow lines), surface scarring, pigmentation, age spots, melasma, sun damage and AK.

The Fraxel^® DUAL 1550/1927 laser targets aging and sun-damaged skin with microscopic laser columns that penetrate deep into the skin to expedite the body’s remodeling of collagen. Since the laser treats only a fraction of tissue at a time, it is designed to leave the surrounding tissue intact, which promotes rapid healing. Fraxel^® DUAL 1550/1927 treatment resurfaces the skin by stimulating the growth of new, healthy skin cells from the inside out.

Generally, an effective treatment regimen is three to five sessions spaced about two to four weeks apart. Results are often immediate and progressive, with optimal improvement usually visible in two to three months. This process allows for healing and the production of new collagen to replace damaged tissue. Also, it offers dual modality. The 1927 nm wavelength can be used for superficial treatments (pigmentation), while the 1550 nm wavelength targets skin texture (deep lines, acne scars). By utilizing deep microscopic lesions, the system is designed to target specific conditions and produce more effective results.

The Fraxel^® system is integrated with a Zimmer Cryo 6 Skin Cooling System which is designed to keep patients comfortable during treatment. The 1550 nm wavelength penetrates up to 1.6 mm and the 1927 nm wavelength penetrates up to 0.3 mm, and the Fraxel^® system is the only system to feature dual fiber laser technology. In addition to addressing both deep and superficial resurfacing, the Thulium wavelength enables the rapid clearance of pigment. Our patented handpiece IOTS technology permits our customers to deliver consistent, even treatment to consumers across a variety of conditions and skin types. Finally, the touchscreen interface and precise dosimetry facilitate ease of use for physicians.

Since 2003, the Fraxel^® system has been a pioneer in the fractional skin resurfacing field and continues to lead the way when it comes to innovation. With more than one million treatments performed, Fraxel^® has a strong track record with customers and consumers alike. According to surveys of patients who have completed a qualified visit to a provider’s office as reported by RealPatientRatings.com, approximately 92% of respondents are satisfied after receiving Fraxel^® treatments. Demonstrated efficacy and results, together with intellectual property protection, have solidified the Fraxel^®system’s leadership role in the space.

VASER^®System

The VASER^®lipo system uses ultrasound energy for aesthetic body contouring that is designed to deliver meaningful results with less pain and downtime than traditional liposuction. We believe the VASER^® system avoids many of the downsides of traditional liposuction, and consumer benefits include minimally-invasive body contouring, immediate and precise sculpting, treatment of multiple areas in a single procedure, and less pain, swelling and post procedure downtime

For a VASER^® procedure, the treatment area is filled with a medicated solution. The fat cells are then treated with ultrasound energy. The ultrasonic vibration breaks apart and loosens fat cells from deeper tissue, and the fat cells are then removed from the body through a gentle suction process. This process allows the fat cells to be more effectively removed through a cannula. The surrounding tissues are left intact, providing smoother contours with less pain and patient recovery time than traditional liposuction. The VASER^® system is designed to strike the balance of being powerful enough to eliminate large areas of fat yet gentle enough to target more delicate areas. The precise ultrasound-assisted technology combines mechanical and acoustic fragmentation/emulsification of fat. Through these mechanisms, VASER^® is designed to optimize procedure speed and efficiency while minimizing trauma to surrounding tissue.

The VASER^® difference is also driven by the treatment’s four-step approach. First, tumescent fluid is infused throughout the targeted fat tissue. Next, cavitation and acoustic streaming dislodge fat cells with minimal (if any) impact on vessels, nerves, and other tissues. Then, a small-diameter cannula removes the fat cells. Finally, post-procedure skin retraction is optimized by our minimally-invasive technique, allowing the skin to naturally retract and re-drape to the underlying frame during the healing process. The system’s design has been honed to enhance treatment delivery and physician ease. Features include the VASER^® Ultrasonic Amplifier, VentX Infiltration & Aspiration Console, and the Precision Fluid Management System. The VASER^® system’s advanced technology is designed to result in decreased surgeon fatigue, enhanced skin retraction and less post-operative discomfort. According to surveys of patients who have completed a qualified visit to a provider’s office as reported by RealPatientRatings.com, around 95% of the respondents are satisfied with the results after going through VASER^® procedures. Moreover, based on surveys reported by RealSelf.com, 88% of respondents rated VASER^®lipo treatments as “worth it”.

Pipeline Overview

We have an active and robust R&D pipeline which focuses on enhancements and next generation products to better serve our base. This includes scheduled launches across all four product lines over the next two years. Key next generation pipeline products include the recently launched next generation Clear + Brilliant^® Touch system, which is expected to serve as a foundation to launch laser platform in APAC and Europe, additional Thermage^® FLX system enhancements, next generation Fraxel^® system and next generation VASER^®system. Past launches have reinforced our belief that we are a market leader with a strong innovation portfolio, and our pipeline is a source of continued brand rejuvenation. Additionally, we expect to pursue other opportunities to continue to build out our product portfolio and address evolving customer and consumer needs.

Competitive Strengths

We believe we are a leader in aesthetic medical devices with well-established and reputable brands in highly strategic markets

We believe we are an industry leader with a global footprint in energy-based aesthetic medical devices. We believe our diverse portfolio of aesthetic medical devices and consumables are best-in-class and are recognized by our customers for products that deliver differentiated outcomes for their patients. For nearly two decades, our largest brand, Thermage^®, and other energy-based aesthetic medical device brands have served growing markets that have been driven by the need for reliable aesthetic medical devices.

Our global presence spans across key markets that include the U.S., APAC and the European Union Five. We also have a presence in Australia and Canada. We enter our markets through a mix of direct sales and distributor based-models, which allows us to nimbly respond to the specific market dynamics in the geographies we serve. We believe our reputation and success in these geographic markets is the result of support from dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners who use our products, which drives strong brand recognition and demand pull-through from other clinicians and practitioners.

We believe that our technologies and dynamic go-to-market approach effectively positions us to address the growing demand for skin tightening, skin rejuvenation and body contouring with products and procedures that are minimally-invasive, less painful, and result in shorter post-procedure downtime.

Our broad portfolio of trusted and reputable brands deliver a wide range of aesthetics treatments backed by an extensive track record of clinical data

Our products serve a diverse and complementary set of aesthetic applications and allow us to address a wide range of patient needs, while also recognizing portfolio synergies when patients seek additional aesthetics treatments. We have a diverse energy-based aesthetic medical device portfolio that includes non- and minimally-invasive solutions including RF energy skin tightening, fractional laser skin resurfacing, and ultrasound body contouring. Each of our products are well established in their respective markets and are viewed by our customers as central to their ability to address specific patient needs.

•

Thermage^® FLX System: Fourth generation Thermage^® device, which offers a single monopolar RF treatment with no post-procedure downtime resulting in tightening and contouring of skin with lasting results.

•

Clear + Brilliant Touch^®System: Preventative, non-ablative fractional laser treatment to help with tone, texture and pore reduction with little post-procedure downtime.

•

Fraxel^® System: Fractional resurfacing laser that provides a more intense treatment than the Clear + Brilliant^® system to help with pigment, fine lines, scars, AK and general skin resurfacing.

•

VASER^® System: Ultrasound energy device for surgeon-performed liposuction procedure.

To date, we have amassed a substantial body of clinical data supporting the efficacy and safety of our products, including more than 200 clinical publications across our portfolio. We believe our track record of extensive clinical data and publications highlights our clinical differentiation and relationships with medical professionals that is not easily replicated by our competitors.

Our holistic go-to-market strategy creates loyal and durable customer relationships

Commercially, we focus on a number of core competencies that form the foundation for our customer engagement efforts. These include:

•

Established Network of Dermatologists, Plastic Surgeons, Aesthetic Physicians and Medical Spa Practitioners: We focus on investing in our network of dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners who use our products to drive brand awareness and recognition, attracting end consumer demand to our customers as part of our advertising and promotional effort. These active relationships help us reach millions of potential end consumers across the globe. We believe these trusted voices drive demand more effectively than many traditional marketing channels, particularly given the growing influence of social media and increasing focus on aesthetic appearance.

•

Robust Post-Sales Support: We create partnership-oriented relationships through comprehensive post-sale customer support. This support is comprised of in-person and virtual clinical training, ongoing engineering support, product service, and in certain geographies we provide our customers with marketing and business support.

Collectively, these touchpoints deepen our relationships with our customers, which ultimately drives loyalty to our brands, serves as a potent channel for new product introductions, and provides us with feedback for innovation. We believe end consumers trust our brands and seek out procedures using our products from our customers. Additionally, we provide training and education to our customers on our products to drive adoption. Finally, we support our customers to meet this demand by providing high quality equipment, consumables and service and giving our customer the comprehensive support they need to provide differentiated outcomes to consumers.

We have a demonstrated history of value-added R&D, which has historically enabled us to launch and commercialize category creating products

We are a pioneer in the non-surgical, energy-based skin tightening, skin resurfacing, and body contouring categories with nearly two decades of successful product introductions. Over this period, we have brought to market many industry firsts, including, but not limited to, our Thermage^® system in 2002, the first RF device on the market, Fraxel^® 1550 in 2006, the industry’s first fractional laser treatment, and VASER^® in 2018, the first ultra-sound based liposuction device. In recent years, we have demonstrated our ability to leverage our development capabilities to bring to market category-creating technologies and products including monopolar RF technology with the Thermage^® FLX system in 2018 and non-ablative fractional laser technology with the Clear + Brilliant^® Touch system in 2021.

Our large and growing installed base and attractive economic returns for our customers powers our durable financial profile

We focus on growing our base of recurring revenues from consumable tip replacements and equipment servicing in the years following a placement of our capital equipment. Along with the growth in our installed base, we have experienced a rapid expansion in sales of related consumables for our equipment. For the nine months ended September 30, 2021 and the year ended December 31, 2020, we generated $218.7 million and $252.6 million of total revenues, approximately 74% and 69% of which was derived from consumables and equipment servicing, respectively. We consider these revenues to be recurring in nature, supported by our close customer relationships. We believe that customers who have invested in equipment such as our Thermage^® FLX system see attractive return profiles on their initial investment in our equipment. Today, we price an initial Thermage^® FLX equipment sale and its associated consumables in such a way that a typical customer may expect to break even on a given equipment investment through end consumer procedures over a number of months, not years. In aggregate, there have been over two and a half million procedures performed by our Thermage^® devices.

This mix of consumables has increased with the proliferation of our products like the Thermage^® FLX system, whose mix of consumables and equipment revenue was 74% and 26%, respectively, for the nine months ended September 30, 2021, and 63% and 37%, respectively, for the year ended December 31, 2020. We continue to rapidly expand our installed base across the globe as evidenced by year-over-year growth in systems sales of 41% in 2019 and 28% in 2020 and period-over-period growth in systems sales of 11% for the first nine months of 2021. This growth in our installed base has resulted in a rapid expansion of related recurring revenue from tips and other consumables, which grew 42%, 33% and 48% in the first nine months of 2021, full year 2020 and full year 2019, respectively. Systems sales were $56.9 million and $51.4 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $5.5 million, or 11% period-over-period growth. Systems sales for the year ended December 31, 2020 were $78.3 million, representing 28% year-over-year growth compared to 2019. Revenue from tips and other consumables were $156.0 million and $110.0 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $46.0 million, or 42% period-over-period growth. For the year ended December 31, 2020, we had $168.3 million of revenue from tips and other consumables, representing 33% year-over-year growth compared to 2019.

Our management team and employees have deep expertise and broad experience that has earned the trust of our customers

Our management team and employees have significant healthcare and aesthetics experience with a strong track record of developing and commercializing innovative technologies. The depth of this experience enables a performance-based culture built on the core tenants of top-down strategic planning and decentralized execution. We empower our direct sales professionals around the world to cater to the unique needs of our customers in their respective markets. This dynamic deepens the relationship and trust our customers have with us and enabled us to historically deliver above-market double digit growth and enhanced profitability.

Growth Strategies

We believe we are well-positioned to sustain our track record of growth and enhance our position as a leading global provider of energy-based aesthetic medical devices. To achieve this goal, our significant growth opportunities include:

Grow our relationships with our existing customers to expand patient and consumer use of our comprehensive portfolio of products and treatments

Our well established relationships with dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners provide us with a significant opportunity to deepen our commercial relationships and grow our revenue by expanding the usage of our products. Through comprehensive post-sales customer support, we identify opportunities to increase usage of our products through various clinical, educational and marketing activities. In partnership with our customers, we undertake extensive consumer education to expand awareness of our unique portfolio of products and their benefits and drive increased utilization. By developing deeper customer and consumer loyalty to our brand and our individual products, we are able to capture a larger portion of their aesthetic spend and increase their lifetime value to our company. Our portfolio also offers our customers a compelling ROI within their practices, further enhancing their willingness to promote and drive adoption of our offerings. As our customer and install base grow over time, we believe the powerful compounding effect of growing product usage across a large install base will drive our growth.

Drive adoption of our diverse product portfolio by increasing cross selling throughout our global customer base

We see significant opportunities to drive further adoption of our diverse and growing product portfolio across our current customer base. Our full suite of products address a wide range of aesthetic use cases, including skin tightening, skin resurfacing, and body contouring, allowing us to provide dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners with complementary treatment options to holistically meet their patient and consumers’ aesthetic needs. For example, the graphic below presents potential marketing strategies that our customers could employ to offer consumers complementary treatment options that take advantage of two or more of our systems and products:

LOGO

As of September 28, 2021, we estimate that among our U.S. customers, approximately 67% own only one of our devices, while 9% own three of our systems (Thermage^®, Clear + Brilliant^® and Fraxel^®). This represents a significant opportunity for us to cross-sell our portfolio to our existing customer base. Furthermore, by leveraging our well established customer relationships, we believe that we can effectively introduce enhancements and next-generation products through the numerous touch points provided by our high-touch commercial model.

Build and expand on our global scale by deepening our presence in key existing geographies and expanding into attractive new markets

We plan to expand our large and growing presence globally in highly attractive markets. We remain acutely focused on strengthening our position in the U.S. and APAC, in particular in China, and expanding our presence in the European Union Five. We believe we have significant opportunities to continue our growth in these markets. Despite our presence in approximately 50 countries today, we also see meaningful opportunities to expand our presence into new geographies both within our existing markets, such as Europe and APAC, and in new markets, such as Latin America. We believe our product portfolio is well-aligned with strong growth prospects and consumer trends in these markets. To achieve this growth, we intend to continue investing in our commercial infrastructure, while retaining and recruiting talented sales representatives. We believe our direct local commercial presence in over 15 countries is a key differentiator of our commercial strategy that differentiates us from our peers within the market. We believe that our industry-leading technologies, talented human capital, global market expertise and strong brand and reputation will allow us to expand our customer base and take market share globally.

Expand demand for our portfolio of aesthetic medical devices and products through increased awareness of our innovative solutions

Today, the large and growing aesthetic medical device industry ranges from highly-invasive surgeries, such as liposuction and plastic surgeries, to non-invasive cosmetic consumer products, such as serums and moisturizers. We believe that our portfolio of products is well-positioned to capture portions of this broader consumer demand for aesthetic treatments by offering meaningful benefits relative to traditional treatment options that are highly attractive to consumers, including less pain, reduced risk of scarring and shorter recovery periods. To achieve this and expand demand for our products, we invest significant resources in targeted customer and consumer marketing and education. As a result of these efforts, we believe we have strong relationships with our customers and equip them with the right knowledge and information to expand consumer awareness and convert “fence sitters” – potential consumers who are considering an aesthetic procedure in the next 12 months, but have not visited a physician—into active users of our products. We believe this represents a significant market opportunity, with an estimated 28 million fence sitters in the U.S. alone. We believe our deep local market presence and customer relationships is a valuable resource that places us closer to the end consumer and will continue to act as an important pathway to expand our addressable market over time.

Sustain our long track record of successful innovation to continue to enhance our existing products and deliver our next-generation pipeline

We believe that our unparalleled aesthetic medical devices, knowledge and insights differentiate our approach to R&D. Our robust pipeline has been built in direct collaboration with our dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners customers to ensure we benefit from their critical insights and best address the evolving needs of their patients and consumers. Since 2018, we have invested over $50 million into our R&D infrastructure, personnel and pipeline which we believe positions us for success going forward. Our emerging pipeline of enhancements and next generation products, solutions and enhancements, including additional Thermage^® FLX system enhancements, a next generation Fraxel^® system and a next generation VASER^® system, are built to expand upon our existing aesthetic medical device portfolio by introducing enhancements and next-generation products and addressing a wider range of skin and body treatments. We plan to continue investing in our pipeline to expand our portfolio and drive future growth.

Strategically pursue attractive opportunities to expand our technologies and grow and expand our global footprint

We may seek to selectively supplement our internal R&D efforts with attractive acquisition, strategic licensing and collaboration opportunities with innovative aesthetic companies, start-ups, and academic institutions. We are focused on differentiated technologies and products that can complement our existing portfolio and increase our product depth, expand our pipeline, strengthen our competitive positioning and grow our addressable market. We also intend to expand our commercial relationships, including with leading retailers, to introduce our brands to new segments of the global population. We may also seek to acquire distributors in key strategic markers where we do not have a direct presence to expand and deepen our commercial footprint. We believe our global platform and scale make us a highly attractive strategic partner and will present us with significant opportunities to drive growth through various channels. In addition, we plan to integrate and retain the talent and skills that we acquire through our business development activities to further sustain our growth.

The Separation

On August 3, 2021, BHC, our parent, announced its intention to separate our global aesthetic medical device business into an independent publicly traded entity from the remainder of BHC. In connection with the Separation (as defined below), we and BHC have entered into agreements that provide for certain transactions to effect the transfers of the assets and liabilities of BHC’s aesthetic medical device business to us and result in the separation of our business from BHC. For more information regarding the assets and liabilities to be transferred to us, see our combined pro forma and historical financial statements and accompanying notes included elsewhere in this prospectus. We refer to the separation transactions, as described in “The Separation,” along with the effectiveness of various agreements between us and BHC, as the “Separation.”

We have entered into certain other agreements that provide a framework for our relationship with BHC after the Separation, including:

•

a master separation agreement (the “Master Separation Agreement”) with BHC that governs (i) the relationship between us and BHC following the completion of this offering (including with respect to (1) the allocation of (x) assets and liabilities to us and BHC and (y) pending, threatened and unasserted legal matters, (2) corporate governance and (3) certain matters with respect to BHC’s outstanding debt) and (ii) certain matters related to this offering;

•

a transition services agreement (the “Transition Services Agreement”) with BHC governing BHC’s provision of various services to us on a transitional basis;

•

a tax matters agreement (the “Tax Matters Agreement”) with BHC that governs the parties’ rights, responsibilities and obligations after the closing of this offering with respect to tax matters (including responsibility for taxes attributable to us and our subsidiaries and taxes arising in connection with the Separation and related transactions, entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other matters);

•

an employee matters agreement (the “Employee Matters Agreement”) with BHC that addresses employment, compensation and benefits matters, including the allocation and treatment of assets and liabilities relating to employees and compensation and benefit plans and programs in which our employees participate prior to the Separation, as well as other human resources, employment and employee benefit matters;

•

distribution and agency agreements (the “Agency Agreements”) with certain of BHC’s subsidiaries (including subsidiaries of Bausch + Lomb Corporation (“Bausch + Lomb”)) pursuant to which such entities have agreed to market, promote and sell our products in certain territories on our behalf; and

•

a registration rights agreement (the “Registration Rights Agreement”) with BHC, pursuant to which we have granted BHC and its affiliates certain registration rights with respect to our common shares owned by them.

See “Certain Relationships and Related Party Transactions” for a more detailed discussion of these agreements. All of the agreements relating to the Separation have been and will be made in the context of a parent-subsidiary relationship and have been and will be entered into in the overall context of the Separation. The terms of these agreements may be more or less favorable to us than if they had been negotiated with unaffiliated third parties. See “Risk Factors—Risks Relating to the Separation and Our Relationship with BHC.” In addition, in connection with the closing of this offering and the Separation, we expect to enter into a $ million revolving credit facility, which is expected to be undrawn at the closing of this offering.

Prior to this offering, we are a wholly owned subsidiary of BHC. Immediately following the completion of this offering, we expect that BHC will beneficially own approximately % of our outstanding shares (or approximately % if the underwriters exercise their option to purchase additional shares in full). As a result, since BHC will continue to own a majority of our shares following the completion of this offering, we will be a “controlled company” within the meaning of the corporate governance requirements of NASDAQ. Accordingly, we will be exempt from certain corporate governance requirements of NASDAQ until such time we cease to be a “controlled company,” including the requirements that a majority of our Board of Directors consist of independent directors and that we maintain a compensation committee and a nominating and corporate governance committee that are composed entirely of independent directors. We expect to take advantage of the exemption from the requirement to have a fully independent nominating and corporate governance committee following the completion of this offering. See “Management—Controlled Company Exception.”

BHC has informed us that, following the completion of the Separation and this offering, it may sell all or a portion of its remaining equity interest in us over time through one or more public offerings or private placements, but it does not intend to effect such a disposition by means of a stock dividend to BHC shareholders. BHC has no obligation to pursue or consummate any further dispositions of its ownership interest in us and it may retain its ownership interest in us indefinitely or dispose of all or a portion of its ownership interest in us in a sale or other transaction. BHC has agreed not to sell or otherwise dispose of any of our shares for a period of 180 days after the date of this prospectus without the prior written consent of Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC. See “Underwriting.” However, there can be no assurance concerning the period of time during which BHC will maintain its ownership of our shares following the completion of this offering.

We believe, and BHC has advised us that it believes, that the Separation and this offering will provide a number of benefits to our business and to BHC’s business. These intended benefits include improving the strategic and operational flexibility of both companies, increasing the focus of the management teams on their respective business operations and allowing each company to adopt the capital structure, investment policy and dividend policy best suited to its financial profile and business needs, and providing each company with its own equity to facilitate acquisitions and to better incentivize management. In addition, as we will be a standalone company, potential investors will be able to invest directly in our business. There can be no assurance that we will achieve the expected benefits of the Separation in a timely manner or at all. See “Risk Factors—Risks Relating to the Separation.”

Summary of Risk Factors

An investment in our company is subject to a number of risks, including risks relating to our business, risks relating to the Separation and risks relating to this offering and ownership of our common shares. Set forth below is a high-level summary of the more significant risks we face. For a more thorough description of these and other risks, please read the information in “Risk Factors” included elsewhere in this prospectus.

Risks Relating to Our Business

•

The effect of the ongoing COVID-19 pandemic and related government and private sector responses to the pandemic on our business, financial condition, cash flows and results of operations;

•

Failure to comply with various laws and regulations, including anti-bribery laws, environmental laws and privacy and security regulations in the various jurisdictions in which we operate;

•

Failure to comply with legal and regulatory requirements for our marketed products;

•

Chinese authorities have recently released draft guidance which could impact the regulatory regime under which we operate in China. Any changes pursuant to such draft guidance or otherwise could result in the incurrence of additional operating expenses and other costs, and could make it more difficult for us to sell our products in China;

•

Interruptions to our manufacturing operations, including as a result of failure to comply with applicable regulations, issues relating to inventory levels or fluctuations in buying patterns by our large distributors and retail customers and supply chain disruptions;

•

The design and manufacture of our products is complex, requires a significant degree of technical expertise, and any failure in design and manufacture could result in defective products, which in turn could materially adversely affect our reputation, business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline;

•

Failure to obtain components or raw materials supplied by third parties could impede our ability to manufacture and deliver our products;

•

Our business, financial condition, cash flows and results of operations are subject to risks arising from the global scope of our operations, including exposure to foreign currency exchange fluctuations, capital controls and other regulatory risks, including changes in laws or tax rates;

•

We face risks associated with our business in China;

•

Due to the large portion of our business conducted in currency other than U.S. dollars, we have significant foreign currency risk;

•

Intellectual property rights may not provide adequate protection for some or all of our products and we may fail to obtain, maintain, license, enforce or defend the intellectual property rights required to conduct our business;

•

Intellectual property litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and cause the value of our common shares to decline; and

•

The risk of litigation and reputational harm resulting from ineffective training of our customers or third-party conduct outside of our control, such as after-market modifications to our systems, components and consumables, manufacture of counterfeit components and customer failure to follow our operating guidelines.

Risks Relating to the Separation and Our Relationship with BHC

•

We may not realize the anticipated benefits from the Separation, and the Separation could harm our business;

•

The transfer of certain employees from BHC to us contemplated by the Separation will not be complete upon the closing of this offering;

•

We have no recent history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily indicative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results;

•

The development of our operations and infrastructure in connection with the Separation, and any future expansion of such operations and infrastructure, may not be entirely successful, and may strain our operations and increase our operating expenses;

•

BHC will control the direction of our business, and the concentrated ownership of our shares will prevent you and other shareholders from influencing significant decisions, potentially indefinitely;

•

If BHC sells a controlling interest in our company to a third party in a private transaction, you may not realize any change-of-control premium on your shares and we may become subject to the control of a presently unknown third party;

•

The services that BHC provides to us may not be sufficient to meet our needs, which may result in increased costs and otherwise adversely affect our business;

•

We will remain a restricted subsidiary under certain of BHC’s credit facilities and indentures upon completion of this offering (under which BHC had an aggregate amount of $22.6 billion in outstanding indebtedness as of September 30, 2021) and will be subject to various covenants under these facilities and indentures, which may adversely affect our operations; and

•

After the Separation, our Chief Executive Officer, Mr. Hirsch, our Chief Operating Officer, Mr. Hart, and Mr. Appio, Mr. Herendeen, Mr. Ross, Mr. Power and Dr. Wechsler, who are members of our Board of Directors, may be perceived to have conflicts of interest because they own equity in BHC, and Mr. Appio may be perceived to have a conflict of interest because he also serves as an officer of BHC.

Risks Relating to this Offering and Ownership of Our Shares

•

We cannot be certain that an active trading market for our common shares will develop or will be sustained after the Separation and, following the Separation, the price of our common shares may fluctuate significantly;

•

The per share offering price in this offering will be higher than the net tangible book value per share;

•

Our historical combined financial data is not necessarily representative of the results we would have achieved as a standalone company and may not be a reliable indicator of our future results;

•

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common shares less attractive to investors;

•

As long as BHC owns a majority of our voting equity, we may rely on certain exemptions from the corporate governance requirements of NASDAQ available to “controlled companies”; and

•

Future sales by BHC or others of our shares, or the perception that such sales may occur, could depress our common share price.

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), enacted in April 2012. An “emerging growth company” may take advantage of exemptions from some of the reporting requirements that are otherwise applicable to public companies that are not emerging growth companies. These exemptions include:

•

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), in the assessment of our internal control over financial reporting;

•

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements;

•

an exemption from compliance with the requirement of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on the financial statements; and

•

exemption from the requirements of holding a nonbinding advisory vote on executive compensation and obtaining stockholder approval of any golden parachute payments not previously approved.

We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the last day of our fiscal year following the fifth anniversary of the completion of this offering. However, if certain events occur prior to the end of such five-year period, including, but not limited to, if we have more than $700.0 million in market value of our common shares held by non-affiliates (assessed as of the most recently completed second fiscal quarter), or if our annual gross revenue exceeds $1.07 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of some, but not all, of the reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than you might receive from other public reporting companies in which you hold equity interests. In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. However, we intend to irrevocably opt out of the extended transition period and, as a result, will adopt new or revised accounting standards on the relevant dates in which adoption of such standards is required for other public companies.

Corporate and Other Information

Our predecessor company was originally founded in 1996 (“Old Solta Medical”). From November 2006 to December 2014, Old Solta Medical’s common stock traded under the symbol “THRM” on NASDAQ and was registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In 2014, Old Solta Medical de-listed its common stock from NASDAQ and terminated its registration under the Exchange Act in connection with its acquisition by BHC (formerly Valeant Pharmaceuticals International, Inc.). Solta Medical Corporation was formed pursuant to the BCBCA on July 16, 2021 to ultimately hold the aesthetic medical device business of BHC, which BHC originally acquired with Old Solta Medical.

Solta Medical Corporation has nominal assets, no liabilities and has conducted no operations since its formation. Prior to the effectiveness of the registration statement of which this prospectus is a part, Solta will remain a wholly-owned subsidiary of BHC, which owns the shares being sold in this offering. Solta will not receive any proceeds from the sale of the shares in this offering. All of the proceeds from this offering will be received by Solta’s parent company, BHC.

Our executive offices are located at 520 Applewood Crescent, Vaughan, Ontario, Canada L4K 5X3 and our telephone number is (905) 695-7700. Our Internet website address is www.solta.com. Information on, or accessible through, our website is not part of this prospectus. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.

THE OFFERING

Common shares offered by BHC

Common shares to be outstanding after this offering

Over-allotment option

BHC has granted the underwriters an option for a period of 30 days to purchase up to an additional common shares at the initial public offering price less underwriting commissions to cover over-allotments, if any.

Use of proceeds

We will not receive any proceeds from the sale of our common shares in this offering. All of the proceeds from this offering will be received by our parent company, BHC. Prior to this offering, we are a wholly owned subsidiary of BHC, which owns the common shares being sold in this offering. See “Use of Proceeds.”

Dividend policy

We do not expect to pay dividends on our common shares for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used for the operation and growth of our business. See “Dividend Policy.”

Proposed Stock Exchange Symbol

We have applied to list our common shares on NASDAQ under the symbol “SLTA.”

Risk Factors

You should read the section entitled “Risk Factors” for a discussion of some of the risks and uncertainties you should carefully consider before deciding to invest in our common shares.

The number of shares to be issued and outstanding after the completion of this offering is based on the number of shares issued and outstanding as of , 2021 and excludes an additional shares reserved for issuance under the Solta Medical incentive compensation and stock plan, of which remain available for grant.

Unless otherwise indicated, the information presented in this prospectus:

•

gives effect to the transactions described under “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company;”

•

assumes an initial public offering price of $ per share, the midpoint of the price range set forth on the front cover page of this prospectus;

•

assumes no exercise by the underwriters of their option to purchase an additional common shares from BHC to cover over-allotments; and

•

does not include common shares (representing 10% of our issued and outstanding common shares following this offering assuming exercise of the underwriters’ over-allotment option) reserved for issuance under the Solta Medical Corporation 2022 Omnibus Incentive Plan.

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The summary historical combined statement of income data and the combined statement of cash flows data for the years ended December 31, 2020, 2019 and 2018 has been derived from our audited combined financial statements included elsewhere in this prospectus. The historical unaudited combined balance sheet data as of September 30, 2021 and the historical unaudited combined statement of income data and the unaudited combined statement of cash flows data for the nine months ended September 30, 2021 and 2020 were derived from Solta’s unaudited interim combined financial statements and the related notes included elsewhere in this prospectus. Our combined financial statements include expense allocations for certain support functions that are provided on a centralized basis within BHC, including expenses for executive oversight, treasury, accounting, audit, legal, human resources, shared services, compliance, procurement, information technology and other corporate functions and services. BHC does not routinely allocate these costs to any of its business units. These expenses have been allocated to the Business and directly charged to Solta based on specific identification when possible or based on a reasonable allocation driver, such as net sales or headcount, depending on the nature of the services and/or costs.

The pro forma information set out below has been derived from Solta’s historical financial information. See “Capitalization” and “Unaudited Pro Forma Condensed Combined Financial Statements” for further details.

The financial statements included in this prospectus may not be indicative of our future performance and do not necessarily reflect what our financial position and results of operations would have been had we operated as a standalone public company during the periods presented, including changes that will occur in our operations and capital structure as a result of this offering.

The unaudited pro forma condensed combined balance sheet at September 30, 2021, and the unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2021 and the year ended December 31, 2020, are presented to give effect to:

Transaction accounting adjustments which include the reclassification of BHC’s net investment in Solta into additional paid-in capital and common shares to reflect the number of common shares of Solta expected to be outstanding at the effective date of this registration statement and the completion of the other separation transactions, as described in “The Separation;” and

Autonomous entity adjustments, including the:

•

incremental costs Solta expects to incur as an autonomous entity;

•

one-time expenses associated with the Solta IPO; and

•

impacts of the Master Separation Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Agency Agreements, the Transition Services Agreement and the Registration Rights Agreement between Solta and BHC and the provisions contained therein;

as if such transactions occurred on September 30, 2021, in the case of the unaudited pro forma condensed combined balance sheet, and January 1, 2020, in the case of the unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2021 and the year ended December 31, 2020.

The summary unaudited pro forma combined financial data below is based upon available information and assumptions that we believe are reasonable. The unaudited pro forma combined financial data is for illustrative and informational purposes only and is not intended to represent what our financial condition or results of operations would have been had such transactions occurred on the dates indicated. The unaudited pro forma combined financial data also should not be considered representative of our future financial condition or results of operations.

Our combined financial statements have been prepared in accordance with U.S. GAAP. You should read the summary historical combined financial data set forth below in conjunction with the sections entitled “Management Discussion and Analysis of Financial Condition and Results of Operations” and “Unaudited Pro Forma Condensed Combined Financial Statements” and in conjunction with Solta’s combined financial statements and the related notes included elsewhere in this prospectus.


	Pro Forma				Historical
	Nine Months Ended September 30,		Year Ended December 31,		Nine Months Ended September 30,				Years Ended December 31,
	2021		2020		2021		2020		2020		2019			2018
	(in millions, except share and per share data)
Combined Statements of Income Data:
Revenues	$				$	218.7	$	165.5	$	252.6	$	193.9		$	135.2

Expenses
Cost of goods sold (excluding amortization of intangible assets)						49.1		42.8		62.9		52.3			40.8
Selling, general and administrative						54.7		42.5		62.6		58.6			50.2
Research and development						12.4		10.7		15.4		12.7			10.6
Amortization of intangible assets						13.5		14.0		18.7		18.7			18.7
Asset impairments						—		—		—		3.6			—
Other expense (income), net						—		—		—		0.8			(0.6	)

						129.7		110.0		159.6		146.7			119.7

Operating income						89.0		55.5		93.0		47.2			15.5
Foreign exchange and other						—		0.2		0.6		(0.5	)		(0.6	)

Income before income taxes						89.0		55.7		93.6		46.7			14.9
Income taxes						16.2		10.4		17.5		5.8			1.2

Net income		$	$			$ 72.8		$ 45.3	$	76.1	$	40.9		$	13.7

Basic net income per common share		$	$
Basic weighted average number of common outstanding
Diluted net income per common share		$		$
Diluted weighted average number of common shares outstanding


	Historical
	Nine Months Ended September 30,						Years Ended December 31,
	2021			2020			2020			2019			2018
Combined Statement of Cash Flows Data:							(in millions)
Net cash provided by (used in):
Operating activities	$	87.7		$	67.1		$	100.7		$	68.6		$	35.9
Investing activities	$	(1.3	)	$	(3.1	)	$	(4.6	)	$	(2.4	)	$	(1.7	)
Financing activities	$	(79.7	)	$	(64.0	)	$	(95.2	)	$	(66.2	)	$	(34.2	)


	Pro Forma As of September 30, 2021	Actual As of September 30, 2021
	(in millions)
Combined Balance Sheet Data:
Cash	$	$	7.7
Total assets	$	$	226.8
Total equity	$	$	178.3

RISK FACTORS

Our business, financial condition, cash flows and results of operations are subject to various risks and uncertainties. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including those risks set forth under the heading entitled “Cautionary Statements Concerning Forward-Looking Statements” before making any investment decision with respect to our common shares. If any of the risks or uncertainties actually occur or develop, our business, financial condition, cash flows, results of operations and/or future growth prospects could change, and such change could be materially adverse to us and/or the value of our common shares. Under these circumstances, the market value of our common shares could decline, and you could lose all or part of your investment in our common shares.

Risks Relating to COVID-19

The ongoing COVID-19 pandemic, the rapidly evolving reaction of governments, private sector participants and the public to that pandemic and/or the associated economic impact of the pandemic and the reactions to it, has impacted us in the past, and could in the future adversely and materially impact our business, financial condition, cash flows and results of operations.

The ongoing COVID-19 pandemic and the rapidly evolving reaction of governments, private sector participants and the public in an effort to contain the spread of COVID-19 and/or address its impacts have intensified and have had significant direct and indirect effects on businesses and commerce generally, including disruption to supply chains, employee base and transactional activity, facilities closures and production suspensions, and significantly increased demand for certain goods and services, such as pandemic-related medical services and supplies, alongside decreased demand for others, such as retail, hospitality, travel and elective surgery. Because many of the products we sell are used for elective procedures, decreased demand for those elective procedures adversely impacted our sales during parts of 2020 as the offices of many dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners were closed thereby deferring, if not preventing, aesthetic treatments from occurring as scheduled. For instance, certain regions within APAC (such as Vietnam, the Philippines and Thailand), Europe (such as Spain and Germany) and Australia, among others, maintained or reinstituted certain social restrictions during 2021 and, as a result, our revenues during the nine months ended September 30, 2021 did not experience the year-over-year growth that we experienced in other regions, such as China, the U.S., South Korea, Canada, Hong Kong and Taiwan. In addition, the restrictions imposed as a result of COVID-19 also caused us to temporarily pause our plans to strategically expand our sales force in specific geographies in support of our launches of our next generation Thermage^® FLX and Clear + Brilliant^® Touch systems. Although we are not currently observing reduced demand for elective procedures due to limitations imposed as a result of the COVID-19 pandemic and we have expanded our global sales force, a future outbreak of COVID-19 or another pandemic could result in similar or heightened impacts in the future.

In addition, certain of our facilities were temporarily closed as a result of restrictions put in place by state and local governments in response to the COVID-19 pandemic, and we have also experienced disruptions to our supply chain as a result of challenges associated with the COVID-19 pandemic. Although we are not currently experiencing material closures due to the COVID-19 pandemic, depending on future developments with respect to COVID-19, we may experience additional or enhanced adverse effects on our business as a result of the pandemic, the reactions of governments, private sector participants and the public to the pandemic and the associated disruption to business and commerce generally.

We are currently experiencing longer lead times and challenges having our orders filled on a timely basis by the third-party manufacturers on whom we rely due to ongoing global supply chain disruptions in connection with COVID-19, and we may experience similar issues in the future. We are currently facing back orders with respect to certain of the components for our systems and related materials, which has in the past and may in the future adversely impact our sales. To mitigate these supply issues, we also may be required to increase our working capital expenditures in order to build inventory.

For example, we may experience:

•

additional delays or difficulties in our business partners’ ability to access physicians, which may in turn impact our ability to train physicians to use our devices and provide needed services;

•

additional material closures or disruptions to our manufacturing site;

•

additional supply chain disruptions, including for some of our key products;

•

continued alternative working arrangements, including personnel working remotely and additional cleaning or sterilization protocols at our production facility, which could negatively impact our business should such arrangements remain for an extended period of time;

•

interruption or delays in the operations of the United States Food and Drug Administration (“FDA”) and other regulatory authorities, which may impact clearance or approval timelines for our products;

•

interruption or postponement of key activities due to limitations on travel imposed or recommended by federal or state governments, employers and others;

•

limitations on employee resources that would otherwise be focused on our business and operations, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; and

•

adverse effects on the regional economies in which we operate which could reduce demand for certain of our products.

The extent and duration of the pandemic, the reactions of governments, private sector participants and the public to that pandemic and the associated disruption to business and commerce generally, and the extent to which these may materially and adversely impact our business, financial condition, cash flows and results of operations in particular, will depend on future developments, which are highly uncertain and many of which are outside our control and cannot be predicted with confidence. Such developments include the ultimate geographic spread and duration of the pandemic, the availability and effectiveness of vaccines for COVID-19, the extent and duration of a resurgence of the COVID-19 virus and variant strains thereof, including the Delta and Omicron variants, new information which may emerge concerning the severity of COVID-19 and variant strains thereof, the effectiveness and intensity of measures to contain COVID-19 and variant strains thereof and/or address its impacts, and the economic impact of the pandemic and the reactions to it. Such developments, among others, depending on their nature, duration and intensity, could have a significant adverse effect on our business, financial condition, cash flows, results of operations and could cause the market value of our common shares to decline and may exacerbate other risk factors disclosed elsewhere in this “Risk Factors” section.

Regulatory Risks

We are, directly or indirectly, subject to various laws and regulations in the various jurisdictions in which we operate, and a failure to comply with such laws and regulations or prevail in any litigation related to non-compliance could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

As a manufacturer of aesthetic medical devices that sells almost exclusively to physicians and clinics, our products are not approved or promoted for procedures reimbursed by Medicare, Medicaid or other federal programs and in many cases the procedures for which our systems are used are not covered by insurance. We do sell products to certain hospitals administered by the Veterans Health Administration, and may be subject to certain healthcare regulations and enforcement, including related to transparency, fraud and abuse as a result of sales to the U.S. federal government, state laws in the jurisdictions in which we conduct our business, as well as other national healthcare laws and regulations, such as in China and the European Union. We are also subject to non-U.S. and U.S. state laws governing the privacy and security of certain health information, many of which differ from each other in significant ways, thus complicating compliance efforts.

Because of the breadth of these laws, it is possible that some of our business activities, including our relationships with physicians and other health care providers and entities, some of whom recommend, purchase and/or prescribe our products, could be subject to challenge or investigation under one or more of such laws. Any action against us for an alleged violation of these laws, even if we successfully defend against it, could potentially result in civil or criminal penalties, cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and cause harm to our reputation and brand. Any failure, or perceived failure, by us to comply with current and future regulatory or customer-driven privacy, data protection, and information security requirements, or to prevent or mitigate security breaches, cyber-attacks, or improper access to, use of, or disclosure of data, or any security issues or cyber-attacks affecting our business, could result in significant liability, costs (including the costs of mitigation and recovery), a material loss of revenue resulting from the adverse impact on our reputation and brand, loss of proprietary information and data, disruption to our business and relationships, and diminished ability to retain or attract customers and business partners. Such events may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties or adverse publicity, and could cause customers and business partners to lose trust in us, which could have an adverse effect on our reputation and business.

The U.S. Foreign Corrupt Practices Act (“FCPA”), the Canadian Corruption of Foreign Public Officials Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental corruption and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices or may require us to interact with doctors and hospitals, some of which may be state controlled, in a manner that is different than in the United States. We cannot provide assurance that our internal control policies and procedures will protect us from reckless or criminal acts committed by our employees, consultants, distributors, third party contractors or agents. Violations of these laws, or allegations of such violations, could disrupt our business and result in criminal or civil penalties or remedial measures, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Laws and regulations in many jurisdictions outside the United States apply broadly to the collection, transmission, dissemination, use, privacy, confidentiality, security, retention, availability, integrity and other processing of health-related and other sensitive and personal information. For example, the European Union’s General Data Protection Regulation (“GDPR”), together with national legislation, regulations and guidelines of the European Union member states and the UK governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, analyze, store, transfer and otherwise process personal data, including health data from adverse event reporting. The GDPR authorizes fines for certain violations of up to 4% of global annual revenue or €20 million, whichever is greater. European data protection authorities may interpret the GDPR and national laws differently and impose additional requirements, which contributes to the complexity of processing personal data in or from the European Economic Area (“EEA”) or UK. Guidance on implementation and compliance practices is often updated or otherwise revised. Canada’s federal Personal Information Protection and Electronic Documents Act and substantially similar equivalents at the provincial level impose data privacy and security obligations on our processing of personal information of Canadian residents. The federal and Alberta legislation include mandatory data breach notification requirements. Other similar examples include the China Personal Information Protection Law and the California Privacy Rights Act of 2020. These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business. The regulatory framework for data privacy, data security and data transfers worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Complying with all of these laws and regulations involves costs to our business, and failure to comply with these laws and regulations can result in the imposition of significant civil and criminal penalties, as well as litigation, all of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Our marketed devices and consumables will be subject to ongoing regulatory review.

Following initial regulatory clearance or approval of any product that we may develop or acquire, we are subject to continuing regulatory review by various government authorities in those countries where our products are marketed or intended to be marketed, including, but not limited to, the review of adverse events that are reported after our devices become commercially available. In addition, we are subject to ongoing audits of our facilities and products by the FDA in the United States, as well as other regulatory agencies in and outside the United States, including in China and the European Union.

If we fail to comply with the regulatory requirements in those countries where our products are sold, we could lose our marketing clearances or approvals or be subject to fines or other sanctions. Also, as a condition to granting marketing approval of a product, the applicable regulatory agencies may require a company to conduct additional trials or remediate Current Good Manufacturing Practice (“CGMP”) issues, the results of which could result in the subsequent loss of marketing clearance or approval, changes in product labeling or new or increased concerns about safety or efficacy of a product.

In April 2017, the European Union published the European Union Medical Device Regulation (MDR)-(EU 2017/745), which repeals and replaces the Medical Device Directive (“MDD”) and Active Implantable Medical Device Directive (“AIMDD”) 90/385/EEC. The MDR, for most parts, became applicable on May 26, 2021. Under the MDR, several transitional measures apply to medical devices that are certified under the MDD or AIMDD. For general Class I devices, a declaration of conformity declaring compliance to MDR was drawn up prior to May 26, 2021. For other Class I (Ir, Is, Im), Class IIA, Class IIB, and Class III there is a provisional transition period, until May 26, 2024, to become compliant with MDR. However, if we make any significant changes in the design or intended purpose of our devices, they will no longer benefit from such transitional periods. Generally, the MDR imposes stricter requirements on manufacturers, importers and distributors of medical devices. Moreover, the requirements to provide clinical data for medical devices has become stricter and as a result we may need to conduct new time consuming and costly clinical investigations with our existing medical devices to meet the new requirements, including to obtain CE certificates under the MDR. We may, or may not, be able to provide this data in time to obtain MDR certifications in a timely fashion when our existing certificates expire. Currently, the European Commission has not released the common specification for aesthetic medical devices, which has delayed our MDR submissions for Solta. These new regulations impact all of our existing and potential medical device products being sold in the EEA for which we are legal manufacturer, importer and/or distributor, including aesthetic and surgical areas as well as certain of our products outside the EEA, which rely on the CE Mark to support registration in those other countries. These products, in the aggregate, account for a meaningful portion of our net revenue in this region. While we are working to ensure compliance with these new regulations for all impacted products, we may not be able to achieve compliance for all products within the applicable transition period. If we fail to achieve compliance, we will not be able to market and sell the non-compliant products in the EEA, nor will we be able to rely on the non-compliant registration for such products in regions outside of the EEA, which could have a material adverse effect on our business, financial condition, cash flows and results of operations in the EEA and, possibly, on a consolidated basis, and could cause the market value of our common shares to decline.

While European Union law is currently applicable in Northern Ireland, the UK Medical Devices Regulations 2002 (SI 2002 No 618, as amended) also need to be complied with in Great Britain. Medical device manufacturers who have CE marked devices will be able to continue to place them on the market in the whole of the UK until June 30, 2023. After that, devices destined for Great Britain will be required to follow the UK regulatory regime, be assessed by a UK approved body (with the exception of Class I products), and to be labeled with the UKCA mark. Northern Ireland will, however, continue to accept CE marked devices. There are some extra hurdles for manufacturers who are based outside the UK such as the requirement to appoint a UK Responsible Person (“UKRP”) to take on certain regulatory responsibilities with respect to the Medicines and Healthcare products Regulatory Agency (“MHRA”) and users or customers in the UK. To enable devices to be placed on the market in the UK after January 1, 2021 (even for CE marked devices), a UK manufacturer must

register with the MHRA, an overseas manufacturer must appoint a UKRP, such registering entity will then register each of the devices for which they are responsible for placing on the market in the UK, whether in Great Britain or Northern Ireland. This may create added expense and challenges.

Until May 25, 2021, our products bearing a CE mark could be exported from the EEA to Switzerland. However, as of May 26, 2021, the European Union no longer applies the Mutual Recognition Agreement between the EEA and Switzerland. Accordingly, legal manufacturers in Switzerland will be required to appoint a European Union authorized representative, and manufacturers outside of Switzerland will be required to appoint a Swiss authorized representative in compliance with the Swiss Medical Device Ordinance. As a consequence, we will be required to appoint an authorized representative in Switzerland in order to export our CE-marked medical devices to Switzerland beginning in January 2022 through August 2022, depending on the Class of the device or system in question. Additionally, the name and address of the Swiss authorized representative must be placed on the packaging. This will create additional expenses and challenges.

The Chinese government extensively regulates the aesthetic medical industry. The laws and regulations applicable to the aesthetic medical industry in China are relatively new and rapidly evolving, and the interpretation and application of existing and proposed laws, regulations and policies have created uncertainty regarding device classifications and related registration requirements. For example, in China, we currently operate and distribute our products under Section 3 (9) of Circular No. 198 (2014) promulgated by China Food and Drug Administration (currently known as the National Medical Products Administration (the “NMPA”), which regulates high-frequency skin beauty instruments and under which our systems are not regulated as medical devices. However, in April 2021, Chinese authorities released draft guidance, “Guideline for Classification and Definition of Radiofrequency Cosmetic Products” (the “RF Guidance”) for public comment. Article 3.1 of the RF Guidance states that “radiofrequency (‘RF’) beauty products that fall into the definition of medical devices under the Regulation on the Supervision and Administration of Medical Devices shall be regulated as medical devices, specifically, RF products that are expected to use radiofrequency energy to act on the human body (including, but not limited to, skin tissue and subcutaneous deep soft tissue, etc.) to achieve local shallow mild heating, improve blood circulation, etc., shall be managed as medical devices.” Furthermore, Article 4 of the RF Guidance provides as follows: “Depending on the level of risk of RF beauty products, their management category should not be lower than Class II. For specific products, the management categories shall be determined in accordance with the Medical Device Classification Rules and the Medical Device Classification Catalog, and according to their intended purpose, mode of use and other factors,” and includes a description for medical device Class II and III. In addition, on November 9, 2021, Chinese authorities released an updated draft Medical Device Classification Catalog (the “Draft Catalog”), which, among other things, provided a new intended purpose for an RF treatment medical device and provided that an RF treatment medical device with such intended purpose should be classified as a Class III device. Some of our devices that we currently or plan to sell in China have such intended purpose as set out in the Draft Catalog and may be classified as a Class III device. Generally, Class II and Class III devices must be registered and approved by the Chinese regulators before they can be sold. While the final RF Guidance and the Draft Catalog have not been released at this time, the RF Guidance, the Draft Catalog or a similar regulation may be adopted in the future, in which case we believe it is likely that the systems we sell in China would be classified as Class II or III medical devices. As a result, we may be required to pursue registration and approval of other systems with the NMPA, which could be costly, time-consuming and divert management resources. To the extent that any such regulation did not include a grace period, or if we are unable to obtain any such registration and/or approval within any applicable grace period, our ability to sell our systems in China could be immediately and adversely impacted. Given the complexity of the Chinese regulatory process, Solta proactively took steps to prepare to comply with such guidance and NMPA New Regulations on the Supervision and Administration of Medical Devices (2021) and

submitted 3 medical device applications (Thermage FLX, TR2-Return Pad, and TR4-Return Pad) to NMPA on January 29, 2022.

Our prior generation Thermage^® (CPT) device has been previously approved as a medical device in China. Depending on the ultimate outcome of the RF Guidance and any other regulatory changes that may be adopted, we may consider selling Thermage^® (CPT) devices in China under the medical device registration. However, we could encounter challenges selling Thermage^® (CPT) devices in China. For example, we may face delays as we scale up our production of such devices. In addition, certain sole or single sourced components for our Thermage (CPT) system are not currently available from other sources of supply, and it may be difficult to identify or qualify new suppliers. As a result, we may be unable to produce enough Thermage (CPT) devices to meet demands in China. In addition, if we were required to market the Thermage^® (CPT) device under its medical device registration, certain consummables that are approved with a medical device registration may only be available from one or a limited number of third parties, making us reliant on these local vendors. See “—We depend on third parties to meet their contractual, legal, regulatory and other obligations” and “—For some of our products, we obtain components and materials from one or a limited number of sources. If we are unable to obtain components or raw materials supplied by third parties, our ability to manufacture and deliver our products to the market would be impeded, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.”

If we modify one of our cleared or approved devices, we may need to seek a new clearance or approval, which, if not granted, would prevent us from selling our modified products or cause us to redesign our products.

Modifications to a cleared or approved device that could significantly affect its safety or effectiveness or that would constitute a major change in its intended use would require a new 510(k) clearance by the FDA in the US, and similar approval under other regulatory regimes internationally, including in China and the European Union. We may not be able to obtain additional clearance or other premarket approvals for new products or for modifications to, or additional indications for, our existing products in a timely fashion, or at all. Delays in obtaining future clearance would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our revenue and future profitability.

We may make modifications in the future that we believe do not or will not require additional clearance or approvals. If our regulators disagree and require new clearances or approvals for the modifications, we may be required to recall and to stop marketing the modified devices, which could require us to redesign our products and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

The terms of approvals or clearances and ongoing regulations for our products may limit how we market our products, which could materially impair our ability to generate revenue.

Once marketing approval or clearance has been granted, an approved or cleared product and its manufacturer and marketer are subject to ongoing review and extensive regulation. The FDA and other regulatory agencies, including in China and the European Union, closely regulate the post-approval or clearance marketing and promotion of devices to ensure devices are marketed only for the approved indications and in accordance with the provisions of the approved labeling and regulatory requirements. Many of these regulators, including the FDA, impose stringent restrictions on manufacturers’ communications regarding off-label use. In particular, if we do not restrict the promotion of our products only to their approved indications, we may be subject to enforcement action for off-label promotion. We, and any potential partners we may have in the future, must therefore comply with requirements concerning advertising and promotion for any of our products for which we or our partners obtain marketing approval or clearance. Thus, if any of our products receive marketing approval or clearance, the accompanying label may limit the approved use of our product, which could limit sales of the product.

While we have historically focused mainly on improving and modifying our existing systems, we have an active research and development function and may in the future develop new devices and products, which would subject us to enhanced risks of failure to obtain government approvals and clearances in a reasonable amount of time or at reasonable cost.

If we develop new products, various studies and potentially clinical trials may be necessary to support our future product submissions to the relevant regulators. Prior to commercializing our devices, appropriate clearance or approval must be obtained in countries where we plan to market the device. Obtaining such regulatory clearances or approvals for new devices, consumables and manufacturing processes can take a number of years and involves the expenditure of substantial resources, including potentially for the development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy. Even if new products appear promising in development stages, regulatory clearance or approval may not be achieved and no assurance can be given that we will obtain clearance or approval in those countries where we wish to commercialize such products. Furthermore, from time to time, changes to the applicable legislation or regulations may be introduced that change the review and clearance or approval processes for new products, which changes may make it more difficult and costly to obtain or maintain regulatory registrations. Any failure to obtain regulatory clearance or approval for new products could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We are subject to a broad range of environmental laws and regulations and may be subject to environmental remediation obligations under such safety and related laws and regulations. The impact of these obligations and our ability to respond effectively to them may have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We are subject to a broad range of international, national, federal, state, provincial and local environmental laws and regulations concerning the environment, safety matters, regulation of chemicals and product safety in the countries where we manufacture and sell our products or otherwise operate our business. These requirements include, among other matters, regulation of the handling, manufacture, transportation, storage, use and disposal of materials, including the discharge of pollutants, hazardous substances and waste into the environment. Compliance with environmental, health and safety laws and regulations could require us to incur significant operating or capital expenditures or result in significant restrictions on our operations. If we fail to comply with these environmental, health and safety laws and regulations, including failing to obtain any necessary permits, we could incur substantial civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders enjoining or curtailing our operations or requiring us to conduct or fund remedial or corrective measures, install pollution control equipment, reformulate or cease the marketing of our products or perform other actions. In the normal course of our business, regulated substances and waste may be released into the environment, which could cause environmental or property damage or personal injuries and which could subject us to remediation obligations regarding contaminated soil and groundwater, potential liability for damage claims or to social or reputational harm and other similar adverse impacts. Under certain of these laws and regulations, we may be subject to joint and several liability for environmental investigations and cleanups, including at properties that we currently or previously owned or operated, or at sites at which waste we generated was disposed, even if the contamination was not caused by us or was legal at the time it occurred.

In recent years, legislation and regulation related to environmental protection have become increasingly stringent. Such legislation and regulations are complex and constantly changing. In particular, legislation and regulation relating to global climate, sustainability and product stewardship including greenhouse gas emissions, are at various stages of consideration and implementation. Future events, such as changes in existing laws or regulations or the enforcement thereof or the discovery of contamination at our facilities may, among other things, require us to install additional controls for certain of our emission sources, undertake changes in our manufacturing processes, remediate soil or groundwater contamination at facilities where such cleanup is not currently required or to take action to address social expectations or concerns arising from or relating to such

changes and our response to such changes. The cost of such additional compliance or remediation obligations or responding to such social expectations or concerns may be significant and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Manufacturing and Supply Risks

If we are unable to manufacture our products or the manufacturing process is interrupted due to failure to comply with regulations or for other reasons, the interruption of the manufacture of our products, and other manufacturing and supply difficulties or delays, could adversely affect our business.

Our manufacturing facility must be inspected and found to be in full compliance with CGMP, quality system management requirements or similar standards before approval for marketing. Compliance with CGMP regulations requires the dedication of substantial resources and requires significant expenditures. Our failure to comply with applicable manufacturing, quality control and environmental laws or regulations could result in enforcement action by regulatory bodies, including, but not limited to, warning letters, fines, injunctions, civil or criminal penalties, recall or seizure of products, total or partial suspension of production or importation, suspension or withdrawal of regulatory clearance or approval for approved or in-market products, refusal of the government to renew marketing applications or approve pending applications or supplements, refusal of certificates for export to foreign jurisdictions, suspension of ongoing trials, imposition of new manufacturing requirements, closure of facilities and criminal prosecution. These enforcement actions could lead to a delay or suspension in production, which could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows and could cause the market value of our common shares to decline.

In addition, our manufacturing and other processes use complicated and sophisticated equipment, which sometimes requires a significant amount of time to obtain and install. Manufacturing complexity, testing requirements and safety and security processes combine to increase the overall difficulty of manufacturing these products and resolving manufacturing problems that we may encounter. Although we endeavor to properly maintain our equipment, including through on-site quality control and experienced manufacturing supervision, and have key spare parts on hand, our business could suffer if certain manufacturing or other equipment, or our facility, were to become inoperable for a period of time. We could experience substantial production delays or inventory shortages in the event of any such occurrence until we repair such equipment or facility or we build or locate replacement equipment or a replacement facility, as applicable, and seek to obtain necessary regulatory clearances or approvals for such replacement. Any interruption in our production could adversely affect the sales of our devices and consumables and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

The supply of our products to our customers is subject to and dependent upon the use of transportation services. In addition, any prolonged disruption in the operations of our existing distribution facilities or in the transportation services we use to deliver our products to customers, whether due to technical, labor or other difficulties, weather conditions, equipment malfunction, contamination, failure to follow specific protocols and procedures, destruction of or damage to any facility or other reasons, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Due to the complex and technology-intensive nature of certain of our products, they require components made strictly to specification, proper assembly and technical testing, and any significant lapse in the design or

manufacturing processes for such products could adversely impact their reliability and performance. If our products contain defects that cannot be repaired easily, inexpensively, or on a timely basis, we may experience:

•

damage to our brand reputation;

•

loss of customer orders and delay in order fulfillment;

•

increased costs due to product repair or replacement;

•

inability to attract new customers;

•

diversion of resources from our manufacturing and research and development (“R&D”) activities; and

•

legal action.

The occurrence of any one or more of the foregoing could materially increase our costs and materially and adversely impact affect our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline

For some of our products, we obtain components and materials from one or a limited number of sources. If we are unable to obtain components or raw materials supplied by third parties, our ability to manufacture and deliver our products to the market would be impeded, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Some components and raw materials used in our manufactured products and some finished products sold by us, are currently available only from one or a limited number of domestic or foreign suppliers. For example, the supply of certain key components for our Thermage^®FLX and Thermage^® (CPT) systems are only available from a sole or single source. With the exception of one component, we believe that all of the other sole or single source components for our Thermage^® FLX system are currently or could be available from other sources in the market with no material delay. By contrast, certain sole or single sourced components for our prior generation Thermage^® (CPT) system are not currently available from other sources of supply, and it may be difficult to identify or qualify new suppliers because of that product’s advanced stage in its life cycle. For the components for which there is no readily available alternate supplier, we generally do not have long-term contracts with suppliers for the purchase of such components. Instead, we acquire them on a purchase order basis without minimum purchase requirements (except where we have elected to make purchase order commitments in an attempt to mitigate risk). Pricing under these arrangements varies and is typically reviewed by us and the suppliers periodically. These arrangements can generally be terminated at will by either party.

In the event an existing supplier fails to supply product on a timely basis and/or in the requested amount, supplies product that fails to meet our specifications or regulatory requirements, becomes unavailable through business interruption or financial insolvency or loses its regulatory status as an approved source or we are unable to renew current supply agreements when such agreements expire and we do not have a second supplier, we may be unable to obtain the required components or raw materials on a timely basis or at commercially reasonable prices. We attempt to mitigate these risks by maintaining safety stock of these products and by identifying and qualifying alternate suppliers, but such safety stock may not be sufficient and/or switching to such alternate suppliers may involve delays that could adversely impact our business. In particular, if we were to experience a significant disruption in the supply of the component for our Thermage^® FLX system for which there is no readily available alternate supplier, it would materially and adversely impact our business, financial condition, cash flows and results of operations.

Furthermore, the COVID-19 pandemic may result in disruptions to our supply chain, which could impact our ability to obtain necessary materials for some of our key products. See “—Risks Relating to COVID-19—The ongoing COVID-19 pandemic, the rapidly evolving reaction of governments, private sector participants and the public to that pandemic and/or the associated economic impact of the pandemic and the reactions to it, could adversely and materially impact our business, financial condition, cash flows and results of operations.”

If we fail to accurately forecast demand for our component and raw material requirements for the manufacture of our products, we could experience manufacturing delays and may experience lost sales or significant inventory carrying costs.

We use forecasts based primarily on our anticipated product orders to plan our manufacturing efforts and determine our requirements for components and materials. We balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence because of changing customer requirements, fluctuating commodity prices or changes to our products. It is very important that we accurately predict both the demand for our devices and consumables and the lead times required to obtain or manufacture the necessary components, raw materials or fully assembled products. Lead times for components and fully assembled products vary significantly and depend on numerous factors, including the specific supplier, the size of the order, contract terms and current market demand. If we overestimate the demand for our products, we may have excess inventory, which would increase our costs. Conversely, if we underestimate demand for our products and consequently, our components, materials and fully assembled products requirements, we may have inadequate inventory, which could interrupt our manufacturing, delay delivery of our products to our customers and result in the loss of customer sales. Any of these occurrences would negatively impact our business and operating results.

Commercialization Risks

Our products may not achieve or maintain expected levels of market acceptance.

Our commercial success and results of operations depend upon the success of our systems and related products, primarily the Thermage^®, Clear + Brilliant^®, Fraxel^® and VASER^® branded devices, consumables (treatment tips) and related services. We expect the sales of our systems and related products to continue to account for substantially all of our revenue for the foreseeable future. If our systems and related products fail to continue to gain market acceptance, our business and prospects would be harmed.

We plan to continue to refresh and expand our line of products, though this may not occur when expected. Even if we are able to obtain and maintain regulatory clearance or approvals for our products, their success is dependent upon achieving and maintaining market acceptance. Launching and commercializing products is time consuming, expensive and unpredictable. The commercial launch of a product takes significant time, resources, personnel and expertise, which we may not have in sufficient levels to achieve success, and is subject to various market conditions, some of which may be beyond our control. There can be no assurance that we will be able to successfully launch and commercialize new products or gain market acceptance for such products. Products that appear promising in development may fail to reach the market or may have only limited or no commercial success. While we have been successful in launching some of our products, we may not achieve the same level of success with respect to all of our new products, and we may face additional challenges associated with operating as an independent company following the completion of the Separation. Our inability to successfully launch our new products may negatively impact the commercial success of such products, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline. Our inability to successfully launch our new products could also lead to material impairment charges.

Levels of market acceptance for new products could be impacted by several factors, some of which are not within our control, including but not limited to the following:

•

safety, efficacy, convenience and cost-effectiveness of our products compared to the products of our competitors;

•

scope of approved uses and marketing clearance or approval;

•

availability of patent or regulatory exclusivity;

•

timing of regulatory clearances or approvals and market entry;

•

availability of alternative products from our competitors;

•

acceptance of the price of our products;

•

effectiveness of our sales forces and promotional efforts;

•

ability to market our products effectively in the appropriate setting of care; and

•

the reputation of our products.

If our products fail to gain, or lose, market acceptance, our revenues would be adversely impacted and we may be required to take material impairment charges, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Negative publicity regarding our current or future products and procedures could harm demand, which would adversely affect sales and our financial performance.

We have in the past experienced, and may in the future experience negative publicity. Such publicity may present negative individual physician or patient experience regarding the safety or effectiveness of our products or the procedures in which our products are used. Competitors could attempt to use such publicity to harm our reputation and disrupt current or potential future customer relationships. Any negative publicity about our products, such as the discovery of safety issues with our products, adverse events involving our products, or even public rumors about such events, could have a material adverse effect on our business.

Our reputation and competitive position may also be harmed by other publicly available information suggesting that our procedures are not safe. The market perception and reputation of our products and their safety and efficacy are important to our business and the continued acceptance of our products. For example, we file reports with the FDA that are publicly available on the FDA’s website if our products may have caused or contributed to a serious injury or malfunctioned in a way that would likely cause or contribute to a serious injury if it were to recur. Competitors may attempt to harm our reputation by pointing to isolated injuries that have been reported or publicized, or by claiming that their product is superior because they have not filed as many reports with the FDA. Such negative publicity and competitor behavior could harm our reputation and our future sales.

Our reputation may also be harmed by quality or safety issues of counterfeits of our products and aftermarket modifications. See “—Risks Relating to Our Business and Our Business Strategy—After-market modifications to our systems, components and consumables by third parties and the development of counterfeit components could reduce our sales, expose us to product liability litigation and adversely affect our brand reputation and our business.”

In addition, the discovery of significant problems with a product similar to one of our products that implicate (or are perceived to implicate) an entire class of products or the withdrawal or recall of such similar products could have a material adverse effect on sales of our products. Accordingly, new data about our products, or products similar to our products, could cause us reputational harm and could negatively impact demand for our products due to real or perceived side effects or uncertainty regarding safety or efficacy and, in some cases, could result in product withdrawal.

Catastrophic events may disrupt our business.

We have operations and facilities that sell and distribute our products in various geographic locations. Natural events (such as a hurricane or major earthquake), terrorist attacks, pandemics or other catastrophic events, including adverse weather events associated with global climate change, could cause delays in developing, manufacturing or selling our products. Such events that occur in major markets where we sell our products could reduce the demand for our products in those areas and, as a result, impact our sales into those markets. Any such disruption could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.

To market and sell our products in certain countries, we depend on third-party distributors, and they may not be successful.

In certain locations, including parts of Asia and Europe, we rely mainly or exclusively on third-party distributors to sell our products, and may continue to do so in these and other locations in the future. Moreover, our relationships with our third-party distributors are generally not supported by written contracts. As a result, if such distributors were to end their relationships with us, we may be unable to find new distributors that meet our standards on a timely basis or at all, and our business, financial condition, cash flows and results of operations could be adversely impacted. We may also need to engage additional international distributors to grow our business and expand the territories in which we sell our systems. Distributors may not commit the necessary resources to market, sell and service our products to the level of our expectations. In addition, from time to time, legal disputes may arise if we wish to discontinue a distributor relationship in a given territory or otherwise feel a distributor is not performing adequately. Such disputes could lead to legal proceedings that are costly to litigate and that could result in outcomes that are not favorable to us. If current or future distributors do not perform adequately, or if we are unable to engage distributors in particular geographic areas, it could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Employment-related Risks

The loss of the services of, or our inability to recruit, retain, motivate, our executives and other key employees could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We must retain and motivate our executives and other key employees and recruit other executives and employees in order to strengthen our management team and workforce. Our ability to retain or recruit executive and other key employees may be hindered or delayed by, among other things, competition from other employers who may be able to offer more attractive compensation packages. We have not historically operated as an independent company and will not have the same resources we had as a part of BHC and, as a result, we may experience additional challenges retaining and motivating our key personnel as we begin to operate as a standalone company following the completion of this offering. A failure by us to retain, motivate and recruit executives and other key employees or the unanticipated loss of the services of any of these executives or key employees for any reason, whether temporary or permanent, could create disruptions in our business, could cause concerns and instability for management and employees, current and potential customers, credit rating agencies and other third parties with whom we do business and our shareholders and debt holders and could cause concern regarding our ability to execute our business strategy or to manage operations in the manner previously conducted and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Furthermore, as a result of any failure to retain, or loss of, any executives or key employees, we may experience increased costs in order to identify and recruit a suitable replacement in a timely manner (and, even if we are able to hire a qualified successor, the search process and transition period may be difficult to manage and result in additional periods of uncertainty). In addition, once identified and recruited, the transition of new executives and key employees may be difficult to manage and we cannot guarantee that new executives and employees will efficiently transition into their roles or ultimately be successful in their roles. Finally, as a result of changes in our executives and key employees, there may be changes in the way we conduct our business, as well as changes to our business strategy. We cannot predict what these changes may involve or the timing of any such changes and how they will impact our product sales, revenue, business, financial condition, cash flows or results of operation, but any such changes could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We rely heavily on our sales professionals to market and sell our products worldwide. If we are unable to hire, effectively train, manage, improve the productivity of, and retain our sales professionals, our business could be harmed.

Our success largely depends on our ability to hire, train, manage, train, and improve the productivity levels of our sales professionals worldwide. Because of our focus on non-core practitioners in the past, several of our sales professionals do not have established relationships with the core market, consisting of dermatologists and plastic surgeons, or where those relationships exist, they are not appropriately strong.

Competition for sales professionals who are familiar with, and trained to sell in, the aesthetic medical device industry continues to be robust. As a result, we occasionally lose our sales people to competitors. Our industry is characterized by a few established companies that compete vigorously for talented sales professionals. Some of our sales professionals leave us for jobs that they perceive to be better opportunities, both within and outside of the aesthetic medical device industry. We believe we have adequate measures in place to protect our proprietary and confidential information when employees leave, however the ability to enforce these measures varies from jurisdiction to jurisdiction and we must make a case-by-case decision regarding legal enforcement action. For instance, covenants not-to-compete are not allowed in many states, and if allowed, are difficult to enforce in many jurisdictions. Furthermore, such legal enforcement actions are expensive and we cannot give any assurance that these enforcement actions will be successful.

We also continue to hire and train new sales people, including from our competitors. In addition, due to the competition for sales professionals in our industry, we also recruit sales professionals from outside the industry. Sales professionals from outside the industry typically take longer to train and become familiar with our products and the procedures in which they are used. As a result of a lack of industry knowledge, these sales professionals may take longer to become productive members of our sales force.

We train our existing and recently recruited sales professionals to better understand our existing and new product technologies and how they can be positioned against our competitors’ products. These initiatives are intended to improve the productivity of our sales professionals and our revenue and profitability. It takes time for the sales professionals to become productive following their training and there can be no assurance that the newly recruited sales professionals will be adequately trained in a timely manner, or that our direct sales productivity will improve, or that we will not experience significant levels of attrition in the future.

Risks Relating to Our Business and Our Business Strategy

If we cannot increase our sales volumes, reduce our costs, introduce higher margin products to offset potential reductions in the average unit price of our products and diversify our revenues, our business and results of operations may suffer.

The average unit price of our products may decrease in the future in response to changes in product mix, competitive pricing pressures, new product introductions by our competitors or other factors. If we are unable to offset anticipated decreases in our average selling prices by increasing our sales volumes or through new product introductions, our net revenues will decline. We are also subject to risks associated with the concentration of our sales in a single franchise, as sales associated with Thermage^® were responsible for 84% of our revenues in 2020. In addition, to improve or maintain our gross margins we must continue to reduce the manufacturing cost of our products. If we cannot maintain our gross margins our business could be seriously harmed, particularly if the average selling price of our products decreases significantly without a corresponding increase in sales, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

The success and continuing development of our products depend, in part, upon maintaining strong relationships with physicians and other healthcare professionals.

Our target physician customers typically already own one or more aesthetic medical device products. Our ability to grow our business and convince physicians to purchase our systems, comprised of devices, consumables (treatment tips) and associated services, depends on the success of our clinical, sales and marketing efforts. Our business model involves both a capital equipment purchase of our systems and continued purchases by our customers of our treatment tips, which are generally fulfilled as purchase orders without any minimum purchase requirement. This may be a novel business model for many potential customers who may be used to competing products that are either exclusively capital equipment, such as many laser-based systems, or that are exclusively single-use products, such as Botox or dermal fillers. We must be able to demonstrate that the cost of our systems and the revenue that the physician can derive from performing procedures using our products are compelling when compared to the cost and revenue associated with alternative products. When marketing to plastic surgeons, we must also, in some cases, overcome a bias against non- or minimally-invasive aesthetic procedures. If we are unable to maintain or increase physicians’ adoption and purchase of our systems and treatment tips, our business and prospects may be adversely affected. Moreover, if our customers or consumers develop a preference for our competitors’ products or otherwise decrease their demand for our systems, our ability to replace these sales may be limited, in particular due to the fact we do not generally have minimum purchase requirements with our customers, and our business and results of operation would be adversely impacted.

Additionally, if we fail to maintain our working relationships with physicians and other healthcare and aesthetic professionals, our products may not be developed and marketed in line with their needs and expectations. We rely on physicians not only as customers, but also as researchers and marketing and product consultants who provide us with considerable knowledge and experience. If we are unable to maintain these strong relationships, the development and marketing of our future versions of our systems and other new products could suffer, which could have a material adverse effect on our consolidated financial condition and results of operations.

After-market modifications to our systems, components and consumables by third parties and the development of counterfeit components could reduce our sales, expose us to product liability litigation and adversely affect our brand reputation and our business.

In the past, third parties have made after-market modifications to our systems and related components, and developed counterfeit components and consumables. Because our systems and related components are designed to meet specific specifications, after-market modifications could result in patient injuries. In addition, third parties may seek to develop counterfeit components and consumables that are compatible with our systems and available to practitioners at lower prices than our own. These risks may be enhanced in emerging markets and certain other jurisdictions with higher levels of counterfeiting and less favorable political and legal systems, such as China. If security features incorporated into the design of our systems are unable to prevent after-market modifications to our systems and components or the introduction of counterfeit components and consumables, our sales could decline, we could be exposed to product liability lawsuits resulting from the use of damaged or defective goods and we could experience damage to our reputation, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We may experience declines in sales volumes or prices as a result of the continuing trend towards consolidation of aesthetic medicine and other physician practices and other customer groups.

In recent years, physician practices and groups, including aesthetic medical practices, have undergone, and are continuing to undergo, significant consolidation. This consolidation may result in these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures facing our business. The result of these developments could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We may in the future seek to identify and acquire certain assets, products and businesses.

We may in the future seek to identify and acquire complementary businesses, products, technologies or other assets to augment our pipeline. Such transactions may be complex, time consuming and expensive. We do not have prior experience consummating acquisitions as a standalone company and there can be no guarantee that we will be able to successfully consummate acquisitions or other arrangements, which could result in significant diversion of management and other employee time, as well as substantial out-of-pocket costs. If such transactions are not completed for any reason, we may incur significant costs and the market price of our common shares may decline.

In addition, even if an acquisition is consummated, the integration of the acquired business, product or other assets may be complex and time-consuming, and we may not achieve the anticipated benefits, cost-savings or growth opportunities we expect. Potential difficulties that may be encountered in the integration process include the following: integrating personnel, operations and systems, while maintaining focus on selling and promoting existing and newly-acquired products; coordinating geographically dispersed organizations; distracting management and employees from operations; retaining existing customers and attracting new customers; maintaining the business relationships the acquired company has established, including with health care providers; and managing inefficiencies associated with integrating the operations of our company and the acquired business, product or other assets.

Finally, these acquisitions and other arrangements, even if successfully integrated, may fail to further our business strategy as anticipated or to achieve anticipated benefits and success, expose us to increased competition or challenges with respect to our products or geographic markets, and expose us to additional liabilities associated with an acquired business, product, technology or other asset or arrangement. Any one of these challenges or risks could impair our ability to realize any benefit from our acquisition or arrangement after we have expended resources on them.

We have various indemnity agreements and indemnity arrangements in place, which may result in an obligation to indemnify or reimburse the relevant counterparty, which amounts may be material.

In the normal course of business, we have entered or may enter into agreements that include indemnities in favor of third parties, such as license agreements, engagement letters with advisors and consultants and various product and service agreements. In particular, we have entered into agreements with BHC in connection with this offering and the Separation which include cross-indemnification obligations. These and other indemnification arrangements may require us to compensate counterparties for losses incurred by the counterparties as a result of breaches in representations, covenants and warranties provided by us or as a result of litigation or other third-party claims or statutory sanctions that may be suffered by the counterparties as a consequence of the relevant transaction. In some instances, the terms of these indemnities are not explicitly defined. We, whenever possible, try to limit this potential liability within the particular agreement or contract, but due to the unpredictability of future events the maximum amount of any potential reimbursement cannot be reasonably estimated, but could have a material adverse effect on our business.

Additionally, concurrently with this offering, we intend to enter into customary indemnification agreements with our directors and officers. We will also obtain directors’ and officers’ liability insurance to mitigate the cost of any potential future lawsuits or actions. The maximum amount of any potential future payment cannot be reasonably estimated but could have a material adverse effect on our business.

Ineffective training of the users of our systems or such users’ failure to follow our operating guidelines could result in the misuse of our systems, which could harm our reputation and our business.

U.S. federal regulations and similar regulations in certain other countries allow us to sell certain of our systems only to “licensed practitioners” or the non-U.S. equivalent. The definition of “licensed practitioners”

varies from state to state in the United States and equivalent requirements in other countries could differ substantially. As a result, our professional systems may be operated by licensed practitioners with varying levels of training, and in many states by non-physicians, including physician assistants, registered nurses and nurse practitioners. For example, in some states, the definition of “licensed practitioner” may result in the legal use of our professional products by non-physicians. Outside the United States, our independent distributors sell in many jurisdictions that do not require specific qualifications or training for purchasers or operators of products. We do not supervise the procedures performed with our professional systems, nor can we be assured that direct physician supervision of our equipment occurs according to our recommendations. We, and our distributors, require purchasers of our professional products to undergo an initial training session as a condition of purchase, but do not require ongoing training. In addition, we prohibit the sale of our professional systems to companies that rent our systems to third parties without our approval, but cannot prevent an otherwise qualified physician from contracting with a rental company in violation of his or her purchase agreement with us. The use of our professional systems by non-physicians, as well as non-compliance with the operating guidelines set forth in our training programs, may result in product misuse and adverse treatment outcomes, which could harm our reputation and expose us to costly product liability litigation.

Risks Relating to the Global Scope of our Business

Our business, financial condition, cash flows and results of operations are subject to risks arising from the global scope of our operations.

We conduct a significant majority of our business outside the United States and Canada, and may in the future expand our operations into new countries, including emerging markets. We sell our medical device products in many countries around the world and in 2020, our sales outside of the United States and Canada accounted for more than 75% of our revenues, a significant portion of which was from sales in China. See “—We face risks associated with our business in China.”

All of our foreign operations are subject to risks inherent in conducting business abroad, including, among other things:

•

difficulties in coordinating and managing foreign operations, including ensuring that foreign operations comply with foreign laws, such as export and sanctions laws and the FCPA and other applicable worldwide anti-bribery laws;

•

price and currency exchange controls;

•

restrictions on the repatriation of funds;

•

scarcity of hard currency, including the U.S. dollar, which may require a transfer or loan of funds to the operations in such countries, which they may not be able to repay on a timely basis;

•

political and economic instability;

•

compliance with multiple regulatory regimes;

•

compliance with economic sanctions laws and other laws that apply to our activities in the countries where we operate;

•

differing degrees of protection for intellectual property;

•

less established legal and regulatory regimes in certain jurisdictions, including as relates to enforcement of intellectual property, anti-bribery and anti-corruption laws and the reliability of the judicial systems;

•

unexpected changes in foreign regulatory requirements, including quality standards and other certification requirements;

•

new export license requirements;

•

adverse changes in tariff and trade protection measures, including as a result of changes in U.S.-China relations;

•

differing labor regulations;

•

potentially negative consequences from changes in or interpretations of tax laws;

•

restrictive governmental actions;

•

possible nationalization or expropriation;

•

financial market uncertainty;

•

restrictions on business activities and other challenges associated with pandemics, including the ongoing COVID-19 pandemic;

•

differing local practices, customs and cultures, some of which may not align or comply with our standard practices and policies or U.S. or Canadian laws and regulations;

•

difficulties with licensees, contract counterparties, or other commercial partners; and

•

differing local product preferences and product requirements.

As a result of changes to U.S. or Canadian government policy, there may be changes to existing trade agreements and greater restrictions on trade generally. On November 30, 2018, the United States, Canada and Mexico signed the United States-Mexico-Canada Agreement (“USMCA”) as an overhaul and update to the North American Free Trade Agreement. The USMCA was subsequently revised on December 10, 2019 and fully ratified on March 13, 2020. It is difficult to anticipate the full impact of this agreement on our business, financial condition, cash flows and results of operations.

Notwithstanding the USMCA, support for protectionism and rising anti-globalization sentiment in the United States and other countries may slow global growth. In particular, a protracted and wide-ranging trade conflict between the United States and China could adversely affect global economic growth. For example, the previous U.S. administration increased tariffs on certain goods imported into the United States and trade tensions between the United States and China escalated, with each country imposing significant, additional tariffs on a wide range of goods imported from the other country. The U.S. and China could impose other types of restrictions such as limitations on government procurement or technology export restrictions, which could affect our access to markets. Concerns also remain around the social, political and economic impacts of the changing political landscape in Europe. In addition, there are growing concerns over an economic slowdown in emerging markets in light of capital outflows in favor of developed markets and expected interest rate increases and inflation risks. Broader geopolitical tensions remained high among the United States, Russia, China and across the Middle East.

Given the global scope of our operations, any of the above factors, including tariffs, trade wars and other governmental actions, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline. Similarly, adverse economic conditions impacting our customers in these countries or uncertainty about global economic conditions could cause demand for our products to decline, which could materially adversely affect our revenues and operating results.

We face risks associated with our business in China.

For the year ended December 31, 2020, approximately 24% of our revenues were derived from sales in China. In addition to our sales activity, we have two warehouses in Shanghai, China that serve as distribution centers and a small office space in Hong Kong, China that serves as our experience center. As a result, our business is subject to risks associated with doing business in China, including but not limited to, a general

climate of economic, political and legal uncertainty, including with respect to future regulatory, policy and legislative developments, difficulties associated with the Chinese legal system, increased costs and uncertainties associated with enforcing contractual obligations in China and historically lower protection of intellectual property rights in China, each of which could adversely impact our business, results of operations and financial condition.

Although the Chinese government has implemented certain economic reform measures which have resulted in a reduction of state ownership of productive assets and the establishment of improved corporate governance in business enterprises, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. Even if these measures may benefit the overall economy in China, they could have a negative effect on us. Therefore, our business is continually subject to the risk of changes in Chinese laws and regulations that could have an adverse effect on our suppliers and manufacturing operations. Any changes in policies governing the regulation of our products, tariffs, imports and exports, taxation, inflation, environmental regulations, foreign currency exchange rates, the labor market, property or financial regulation could have an adverse effect on our business, results of operations and financial condition. More broadly, if the business environment in China deteriorates from the perspective of domestic or international investment, our business in China may also be adversely affected. In addition, changes in the political climate or trade policy of the United States, such as increased duties or tariffs on Chinese imports, may adversely affect our business. For additional information about the risks we face as a result of our business in China, see “—Regulatory Risks—Chinese authorities have recently released draft guidance which could impact the regulatory regime under which we operate in China. Any changes pursuant to such draft guidance or otherwise could result in the incurrence of additional operating expenses and other costs, and could make it more difficult for us to sell our products in China.”

Moreover, our operations in China are subject to several specific rules and regulations on the advertisements for medical devices, which subject us to additional risks. In addition, on November 1, 2021, the Chinese State Administration for Market Regulation released a guidance relating to the enforcement of aesthetic medical advertisements (the “Advertisements Guidance”). The Advertisements Guidance reiterates the existing core principles applicable to medical aesthetic advertisements and suggests, among other things, enhanced focus by Chinese authorities on advertisements that create anxiety about appearance, compare before and after treatment effects or use spokespersons to make recommendations. The Advertisements Guidance is generally targeted at the providers of aesthetic medical services rather than producers of devices and consumables such as us. However, although we have implemented measures designed to ensure that promotional materials related to Solta products comply with applicable law, we are subject to additional risks as a result of violations of such laws by third parties. Medical institutions, practitioners, distributors, and other third parties who are beyond our control may refer to our products in their advertisements without our approval and may engage in conduct in violation of applicable rules and regulations including as a result of advertising our products for unapproved uses and making misstatements relating to the safety or efficacy of our products. Under applicable law, we would generally not be directly liable for such conduct; nonetheless, practitioners, consumers, regulators and other third parties may associate such impropriety with us, which may have an adverse impact on our reputation, and, in turn, our business and results of operations.

Due to the large portion of our business conducted in currency other than U.S. dollars, we have significant foreign currency risk.

We face foreign currency exposure on the translation into U.S. dollars of the financial results of our operations in numerous jurisdictions, including Asia and Europe, and may be exposed to foreign currency translation risks in other jurisdictions as we expand our business in the future. Where possible, we manage foreign currency risk by managing same currency revenue in relation to same currency expenses. We may also use derivative financial instruments from time to time to mitigate our foreign currency risk and not for trading or speculative purposes. We face foreign currency exposure in those countries where we have revenue denominated in the local foreign currency and expenses denominated in other currencies. Both favorable and unfavorable

foreign currency impacts to our foreign currency-denominated operating expenses are mitigated to a certain extent by the natural, opposite impact on our foreign currency-denominated revenue. Further strengthening of the U.S. dollar and/or the devaluation of other countries’ currencies could have a negative impact on our reported international revenue.

Risks Relating to Intellectual Property and Exclusivity

Intellectual property rights may not provide adequate protection for some or all of our products, which may permit third parties to compete against us more effectively. We may fail to obtain, maintain, license, enforce or defend the intellectual property rights required to conduct our business, or third parties may allege that we are infringing, misappropriating or otherwise violating their intellectual property rights, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We rely on patent, copyright, trade secret and trademark laws and confidentiality agreements to protect our technology and products and we cannot guarantee that the protective steps we have taken are adequate to protect these rights. Some of our components, including our laser module, are not, and in the future are not expected to be, protected by patents. Additionally, any of our new patent applications may not issue as patents or, if issued, may not issue in a form that will be advantageous to us. Any patents or licenses we obtain may be challenged, invalidated or legally circumvented by third parties. The scope of our patent claims also may vary between countries, as individual countries have distinctive patent laws. Intellectual property protection may also be unavailable or limited in some foreign countries, enabling our competitors to capture increased market position. In addition, as our patents expire, we may be unsuccessful in extending their protection through patent term extensions. The expiration of, or the failure to maintain or extend our patents, could have an adverse effect on our business. Consequently, competitors and other third parties could market products and use manufacturing processes that are substantially similar or superior to ours. Without patent protection or regulatory exclusivity, competitors face fewer barriers in introducing competing products. We could therefore lose a significant portion of sales and market share of that product in a very short period and, as a result, our revenues could be lower. In addition, the introduction of competing products may have a significant downward pressure on the pricing of our products. The introduction of competing products could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

The laser and medical device industry historically has generated substantial litigation concerning the manufacture, use and sale of products and we expect this litigation activity to continue. As a result, we expect that patents related to our products will be routinely challenged, and the validity or enforceability of our patents may not be upheld. In order to protect or enforce intellectual property rights, we may initiate litigation against third parties. Intellectual property litigation is complex and can be expensive and time-consuming, and the outcome is uncertain. In addition, competitors may design around our technology or develop competing technologies. The invalidation of key intellectual property rights or an unsuccessful outcome in lawsuits filed to protect our intellectual property could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline. Our patents may also be challenged in administrative proceedings in the United States Patent and Trademark Office and patent offices outside of the United States. If we are not successful in enforcing our patents or defending an attack on our patents and maintaining exclusive rights to market one or more of our products still under patent protection, we could lose a significant portion of sales in a very short period. Even in cases where we prevail in an infringement claim, legal remedies available for harm caused to us may not be sufficient to make us whole. We may be subject to claims that we may be infringing upon, misappropriating or otherwise violating patents or other proprietary intellectual property owned by others. Third parties may also request a preliminary or permanent injunction from a court of law to prevent us from marketing a product. Even if we believe third-party intellectual property claims are without merit, there is no assurance that a court would find in our favor on questions of infringement, validity, enforceability or priority. If we are found to infringe, misappropriate or

otherwise violate the intellectual property rights of others, we could lose our right to develop, manufacture or sell products, including our generic products, or could be required to pay monetary damages or royalties to license proprietary rights from third parties, which could be substantial and include treble damages if we are found to willfully infringe intellectual property rights or others. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Any of the foregoing events could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

For certain of our products and manufacturing processes, we rely on trade secrets and other proprietary information, which we seek to protect, in part, through information technology systems discussed in more detail in the following section, and, in part, by confidentiality and nondisclosure agreements with our employees, consultants, advisors and partners. Trade secrets and proprietary information are difficult to protect. We also attempt to enter into agreements whereby such employees, consultants, advisors and partners assign to us the rights in any intellectual property they develop in the course of their engagement with us. These agreements may be breached, and we may not have adequate remedies for any breach. There can be no assurance that these agreements will be self-executing or otherwise provide meaningful protection for our trade secrets or other intellectual property or proprietary information. These agreements may not effectively prevent disclosure or misappropriation of such information and disputes may still arise with respect to the ownership of intellectual property. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we take to protect our intellectual property will be effective. Moreover, the laws of many countries will not protect our intellectual property rights to the same extent as the laws of the United States or Canada. In addition, third parties may independently develop the same or similar proprietary information. Further, we have employed and expect to employ individuals who were previously employed at universities, research centers or other companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants, advisors and partners do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that such persons have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information of their former employers or other third parties, or to claims that we have improperly used or obtained such trade secrets. Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights and face increased competition to our business. The unauthorized access to or disclosure of our proprietary information or the loss of such intellectual property rights may impact our ability to develop, manufacture and market our own products or may assist competitors in the development, manufacture and sale of competing products, which could have a material adverse effect on our revenues, financial condition, cash flows or results of operations and could cause the market value of our common shares to decline.

The absence of complete intellectual property protection exposes us to a greater risk of direct competition. Competitors could purchase one of our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, design around our protected technology, or develop their own competitive technologies that fall outside of our intellectual property rights. If our intellectual property is not adequately protected against competitors’ products and methods, it could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Intellectual property litigation could cause us to spend substantial resources, distract our personnel from their normal responsibilities and cause the value of our common shares to decline.

The laser and medical device industry is characterized by frequent litigation regarding patent and other intellectual property rights. Companies in the medical device industry have employed intellectual property litigation to gain a competitive advantage. Numerous patents are held by others, including academic institutions and our competitors. Patent applications filed in the United States generally will be published eighteen months after the filing date. Given that patent applications continue to be maintained in secrecy for at least some period

of time, both within the United States and internationally, we cannot provide assurance that our technology does not infringe any patents or patent applications held by third parties.

Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the value of our common shares. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace, including compromising our ability to raise the funds necessary to continue our research programs and invest in manufacturing improvements. Any of the foregoing events would harm our business, financial condition, results of operations and prospects and could cause the market value of our common shares to decline.

Risks Relating to Information Technology

We have become increasingly dependent on information technology systems and infrastructure and any breakdown, interruption, breach or other compromise of our information technology systems or those of our third party service providers could subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We have become increasingly dependent on our information technology systems and infrastructure, as well as those of third parties with whom we interact, and internal and public internet sites, data hosting and processing facilities, cloud-based services and hardware, social media sites and mobile technology, in connection with the conduct of our business.

We currently depend on BHC and its information technology systems and infrastructure systems. We cannot provide any assurance that the information technology systems and infrastructure on which we currently depend, including those of third parties, will continue to meet our current and future business needs or adequately safeguard our operations. Furthermore, as part of the Separation, we will need to build out and invest in new information technology systems and infrastructure. Building out our new information technology systems and infrastructure may be costly and require substantial time and effort, including the time of our management and key personnel. Modifications, upgrades or replacements of such systems and infrastructure in the future may be costly or beyond our control.

Any failure to so modify, upgrade or replace such systems and infrastructure, any disruptions that occur during the process of such modification, upgrade or replacement and/or any breakdown, interruption or corruption of our information technology systems and infrastructure could create system disruptions, shutdowns, delays in generating or the corruption or loss of data and information or other disruptions that could result in negative financial, operational, business or reputational consequences for us.

The size and complexity of the information technology systems and infrastructure on which we rely makes such systems and infrastructure potentially vulnerable to internal or external inadvertent or intentional security breaches, including as a result of private or state-sponsored cybercrimes, terrorism, war, malware, ransomware, human error, system malfunction, telecommunication and electrical failures, natural disaster, misplaced or lost data, socially engineered breaches or other similar events.

In addition, during the normal course of our business operations, including through the use of information technology systems and infrastructure, we are involved in the collection, processing, transmission, use and

retention of sensitive, confidential, non-public or personal data including personal health data and information in the United States and abroad.

Cyber-attacks are increasing in frequency, sophistication and intensity and are made by groups and individuals with a wide range of motives and expertise. Cyber-attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, worms, social engineering, improper modification of information, fraudulent “phishing” e-mails and other means to affect service reliability or threaten data confidentiality, integrity or availability. Techniques used in these attacks are often highly sophisticated, change frequently and may be difficult to detect for periods of time.

We have established: (i) physical, electronic and organizational measures to safeguard and secure our systems to prevent a compromise and (ii) policies and procedures designed to provide for the timely investigation of cybersecurity incidents and the timely disclosure of cybersecurity incidents consistent with our legal and contractual obligations. We also rely on commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of digital information.

While we attempt to take appropriate security and cybersecurity measures to protect our information technology systems and infrastructure (including any trade secrets, confidential or other sensitive information) and to prevent and detect breakdowns, unauthorized breaches and cyber-attacks, we cannot guarantee that these measures will be successful and that breakdowns and breaches of, or attacks on, our systems and data, or those of third parties upon which we rely, will be prevented. As the techniques used to exploit systems change frequently and can be difficult to detect, we may not be able to prevent these intrusions or mitigate them when and if they occur. Additionally, we rely on some information technology networks and systems managed by third parties, and we rely on these third parties to deploy appropriate measures to protect their systems and networks. Vulnerabilities in their systems could compromise the security of our own infrastructure. Such breakdowns and breaches of, or attacks on, our systems and infrastructure, or the public perception that we or any third party upon which we rely have suffered a cybersecurity incident or breakdown, may cause business interruption and could have a material adverse effect on our business, financial condition, cash flows and results of operations, damage our reputation with customers, employees and third parties with whom we do business and cause the market value of our common shares to decline, and we may suffer financial damage or other loss, including fines or criminal penalties or may be subject to litigation, including potentially class action law suits because of lost or misappropriated information.

While we maintain insurance against some of these risks, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from a breakdown, breach, cyber-attack or other compromise of or interruption to our information technology systems and infrastructure or confidential and other sensitive information.

In addition, we provide confidential and other sensitive information to third parties when necessary to pursue our business objectives. While we obtain assurances that these third parties will protect this information and, where appropriate, monitor the protections employed by these third parties, there is a risk that the confidentiality of information held by third parties, including trade secrets and sensitive personal information, may be compromised. If personal information of our customers or employees is misappropriated, our reputation with our customers and employees may be injured, resulting in loss of business and/or morale. Any such incidents could require us to incur costs to remediate possible injury to our customers and employees, to further improve our protective measures or to pay fines or take other action with respect to litigation, judicial or regulatory actions arising out of such incidents which may be significant. Any of the foregoing could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Competitive Risks

The aesthetic medical device industry is characterized by rapid innovation. To compete effectively, we must develop and/or acquire new products, seek regulatory clearance, market them successfully, and identify new markets for our technology.

The aesthetic medical device industry is subject to continuous technological development and product innovation. If we do not continue to innovate and develop new products and applications, our competitive position will likely deteriorate as other companies successfully design and commercialize new products and applications or enhancements to our current products. We created products to apply our technology to skin tightening, skin resurfacing and body contouring. To grow in the future, we must continue to develop and/or acquire new and innovative aesthetic medical devices and applications, identify new markets, and successfully launch the newly acquired or developed product offerings. To successfully expand our product offerings, we must, among other things:

•

develop or otherwise acquire new products that either add to or significantly improve our current product offerings;

•

obtain regulatory clearance for these new products;

•

convince our existing and prospective customers that our product offerings are an attractive revenue-generating addition to their practice;

•

sell our product offerings to a broad customer base;

•

identify new markets and alternative applications for our technology;

•

protect our existing and future products with defensible intellectual property; and

•

satisfy and maintain all regulatory requirements for commercialization.

To be successful in the aesthetic medical device industry, we believe we need to continue to innovate. Our business strategy is based, in part, on our expectation that we will continue to enhance our systems and, in the long-term, develop new product offerings, both of which can be costly and time consuming. Our failure to enhance our products or innovate successfully could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We compete against companies that offer alternative solutions to our products, have greater resources, or have a larger installed base of customers and broader product offerings than ours. In addition, increased consolidation in our industry may lead to increased competition.

The aesthetic medical device industry is highly competitive and dynamic and characterized by rapid and substantial technology development and product innovations. Our products compete against both laser and other light-based medical devices and conventional non-energy-based treatments, such as Botox, filler injections, chemical peels and microdermabrasion, as well as energy-based aesthetic medical devices, including light-based, RF, ultrasound, and other energy-based aesthetic modalities for skin resurfacing and rejuvenation, skin tightening, body contouring and acne treatments, which are offered by our competitors. Our products also compete against liposuction, cosmetic surgical procedures and minimally-invasive surgical solutions such as implanted sutures, among others. Other companies could introduce new products that are in direct competition with ours. Competition with these companies and new market entrants could result in reduced selling prices, reduced profit margins and loss of market share, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Some of our competitors have more established products and customer relationships than we do, which could inhibit our market penetration efforts. For example, we have encountered, and expect to continue to

encounter, situations where, due to pre-existing relationships, potential customers decided to purchase additional products from our competitors. Potential customers also may need to recoup the cost of expensive products that they have already purchased from our competitors and thus may decide not to purchase our products, or to delay such purchase. If we are unable to achieve continued market penetration, we will be unable to compete effectively and our business will be harmed.

Tax- and Accounting-related Risks

Our effective tax rate may increase.

We have operations in various countries that have differing tax laws and rates. Our tax reporting is supported by current domestic tax laws in the countries in which we operate and the application of tax treaties between the various countries in which we operate. Our income tax reporting is subject to audit by domestic and foreign authorities. Our effective tax rate may change from year to year based on changes in the mix of activities and income earned among the different jurisdictions in which we operate; changes in tax laws in these jurisdictions; changes in the tax treaties between various countries in which we operate; changes in our eligibility for benefits under those tax treaties; and changes in the estimated values of deferred tax assets and liabilities. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Such changes could result in a substantial increase in the effective tax rate on all or a portion of our income.

A significant portion of our business is conducted through U.S. subsidiaries. On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) significantly revised U.S. federal corporate income tax law by, among other things, reducing the U.S. federal corporate income tax rate to 21%, limiting the tax deduction for interest expense to 30% of adjusted earnings, allowing immediate expensing for certain new investments, implementing a modified territorial tax system that includes a one-time transition tax on deemed repatriated earnings of non-U.S. subsidiaries of U.S. persons, imposing an additional U.S. tax on such non-U.S. subsidiaries’ earnings which are considered to be Global Intangible Low Taxed Income and imposing an alternative “base erosion and anti-abuse tax” (“BEAT”) on U.S. corporations that make deductible payments to foreign related persons in excess of specified amounts and, effective for net operating losses arising in taxable years beginning after December 31, 2017, eliminating net operating loss carrybacks, permitting indefinite net operating loss carryforwards and limiting the use of net operating loss carryforwards to 80% of current year taxable income.

There are a number of uncertainties and ambiguities as to the interpretation and application of many of the provisions in the TCJA, including the provisions relating to the modified territorial tax system, the one-time transition tax and the BEAT. While the U.S. Treasury Department and the Internal Revenue Service have issued proposed and final regulations and other guidance on many provisions in the TCJA that address some of these uncertainties and ambiguities, there are still no final regulations or other definitive guidance addressing other uncertainties and ambiguities in the TCJA. In the absence of guidance on these issues, we will use what we believe are reasonable interpretations and assumptions in interpreting and applying the TCJA for purposes of determining our U.S. subsidiaries’ cash tax liabilities and results of operations, which may change as we receive additional clarification and implementation guidance and as the interpretation of the TCJA evolves over time. It is possible that the Internal Revenue Service could issue subsequent guidance or take positions on audit that differ from the interpretations and assumptions that we previously made, which could have a material adverse effect on our cash tax liabilities, results of operations and financial condition.

certain payments, including some that are related to inventory, made to affiliates that are subject to an effective tax rate of less than specified rates. Certain proposals also include limitations on the participation exemption for foreign dividends received and interest expense. In addition, certain proposals include additional limitations on the deduction of interest expense and carryforwards of unused interest expense, as well as an excise tax on certain pharmaceutical products that are non-compliant with the proposed drug pricing legislation. We are unable to predict which, if any, U.S. tax reform proposals will be enacted into law, and what effects any enacted legislation might have on our liability for U.S. corporate tax. However, it is possible that the enactment of changes in the U.S. corporate tax system could have a material adverse effect on our liability for U.S. corporate tax and our consolidated effective tax rate.

On October 8, 2021, the Organisation for Economic Co-operation and Development (“OECD”)/G20 inclusive framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) published a statement updating and finalizing the key components of a two-pillar plan on global tax reform originally agreed on July 1, 2021, and a timetable for implementation by 2023. The Inclusive Framework plan has now been agreed to by 141 OECD members, including several countries which did not agree to the initial plan. Under pillar one, taxing rights over multinational businesses with global turnover above €20 billion and a profit margin above 10% will generally be re-allocated to market jurisdictions. Under pillar two, the Inclusive Framework has agreed on a global minimum corporate tax rate of 15% for companies with revenue above €750 million, calculated on a country-by-country basis. On October 30, 2021, the G20 formally endorsed the new global minimum corporate tax rate rules. The Inclusive Framework agreement must now be implemented by the OECD Members who have agreed to the plan, effective in 2023. On December 20, 2021, the OECD published model rules to implement the pillar two rules, which are generally consistent with agreement reached by the Inclusive Framework in October 2021. We will continue to monitor the implementation of the Inclusive Framework agreement by the countries in which we operate. While we are unable to predict when and how the Inclusive Framework agreement will be enacted into law in these countries, it is possible that the implementation of the Inclusive Framework agreement, including the global minimum corporate tax rate, could have a material effect on our liability for corporate taxes and our consolidated effective tax rate.

Our provision for income taxes is based on certain estimates and assumptions made by management. Our consolidated income tax rate is affected by the amount of pre-tax income earned in our various operating jurisdictions, the availability of benefits under tax treaties and the rates of taxes payable in respect of that income. We enter into many transactions and arrangements in the ordinary course of business in respect of which the tax treatment is not entirely certain. We therefore make estimates and judgments based on our knowledge and understanding of applicable tax laws and tax treaties and the application of those tax laws and tax treaties to our business, in determining our consolidated tax provision. For example, certain countries could seek to tax a greater share of income than we will allocate to our business in such countries. The final outcome of any audits by taxation authorities may differ from the estimates and assumptions that we may use in determining our consolidated tax provisions and accruals. This could result in a material adverse effect on our consolidated income tax provision, financial condition and the net income for the period in which such determinations are made.

Our deferred tax liabilities, deferred tax assets and any related valuation allowances are affected by events and transactions arising in the ordinary course of business, acquisitions of assets and businesses and non-recurring items. The assessment of the appropriate amount of a valuation allowance against the deferred tax assets is dependent upon several factors, including estimates of the realization of deferred income tax assets, which realization will be primarily based on future taxable income, including the reversal of existing taxable temporary differences. Significant judgment is applied to determine the appropriate amount of valuation allowance to record. Changes in the amount of any valuation allowance required could materially increase or decrease our provision for income taxes in a given period.

We have significant goodwill and other intangible assets and potential impairment of our goodwill and other intangibles may have a significant adverse impact on our profitability.

Goodwill and intangible assets represent a significant portion of our total assets. Finite-lived intangible assets are subject to an impairment analysis whenever events or changes in circumstances indicate the carrying amount of the

asset may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. If impairment exists, we would be required to take an impairment charge with respect to the impaired asset.

We conducted our annual goodwill impairment test in the fourth quarter of 2020. No impairment to the goodwill of any reporting unit was identified. If market conditions deteriorate, or if we are unable to execute our strategies, it may be necessary to record impairment charges in the future.

Events giving rise to impairment are difficult to predict, including the uncertainties associated with the launch of new products, and are an inherent risk in the medical device industry. As a result of the significance of goodwill and intangible assets, our financial condition and results of operations in a future period could be negatively impacted should such an impairment of goodwill or intangible assets occur, which could cause the market value of our common shares to decline. We may be required to take additional impairment charges in the future and such impairment charges may be material.

Legal and Reputational Risks

We are subject to legal and governmental proceedings that are uncertain, costly and time-consuming and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We may become involved from time to time in legal and governmental proceedings, which may be material in the future. These proceedings are typically complex and extended, and may occupy the resources of our management and employees. These proceedings are also typically costly to prosecute and defend and may involve substantial awards or damages payable by us if not found in our favor. We may also be required to pay substantial amounts or grant certain rights on unfavorable terms in order to settle such proceedings. Defending against or settling such claims and any unfavorable legal decisions, settlements or orders could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

We depend on third parties to meet their contractual, legal, regulatory and other obligations.

We rely on distributors, suppliers, vendors, service providers, business partners and other third parties to distribute, market and sell certain of our products, as well as perform other services relating to our business. We rely on these third parties to meet their contractual, legal, regulatory and other obligations. A failure to maintain these relationships or poor performance by these third parties could negatively impact our business. In addition, we cannot guarantee that the contractual terms and protections and compliance controls, policies and procedures we have put in place will be sufficient to ensure that such third parties will meet their legal, contractual and regulatory obligations or that these terms, controls, policies, procedures and other protections will protect us from acts committed by our agents, contractors, distributors, suppliers, service providers or business partners that violate contractual obligations or the laws or regulations of the jurisdictions in which we operate, including matters respecting anti-corruption, fraud, pricing, sales and marketing practices, privacy laws and other legal obligations. Furthermore, our relationships with our third-party distributors are generally not supported by written contracts, which may make it difficult for us to enforce compliance by such third-party distributors with such legal, regulatory and other obligations. Any failure of such third parties to meet these legal, contractual and regulatory obligations or any improper actions by such third parties or even allegations of such non-compliance or actions could damage our reputation, adversely impact our ability to conduct business in certain markets and subject us to civil or criminal legal proceedings and regulatory investigations, monetary and non-monetary damages and penalties and could cause us to incur significant legal and investigatory fees and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Product liability suits could be brought against us due to a defective design, material or workmanship or misuse of our products and could result in expensive and time-consuming litigation and payment of substantial damages.

If our products are defectively designed, manufactured or labeled, contain defective components or are misused, we may become subject to substantial and costly litigation by our customers or their patients. Misusing our products or failing to adhere to operating guidelines could cause significant eye and skin damage, and underlying tissue damage. In addition, if our operating guidelines are found to be inadequate, we may be subject to liability. We have been involved, and may in the future be involved, in litigation related to the use of our products. Product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us. We currently self-insure product liability risks. Should we choose to obtain commercial insurance in the future, we may not be able to obtain insurance in amounts or scope sufficient to provide us with adequate coverage against all potential liabilities. Any product liability claims brought against us, with or without merit, could increase our self-insurance expense or prevent us from, or increase the cost of, securing future coverage, could harm our reputation in the industry and could reduce product sales, and, as a result, could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Our marketing, promotional and business practices, as well as the manner in which sales forces interact with purchasers and patients, are subject to extensive regulation and any material failure to comply could result in significant sanctions against us.

The marketing, promotional and business practices of medical device companies, as well as the manner in which companies’ in-house or third-party sales forces interact with purchasers and patients, are subject to extensive regulation, enforcement of which may result in the imposition of civil and/or criminal penalties, injunctions and/or limitations on marketing practice for some of our products. Many companies, including our parent, BHC, have been the subject of claims related to these practices asserted by government authorities. Such future claims could result in fines and other consequences, such as entering into corporate integrity agreements with the U.S. government. In addition, investigations related to alleged misconduct could divert management’s attention from our business operations and damage our reputation.

If our products are subject to product recalls, it could harm our reputation and have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Incidents associated with malfunctions of our products and undesirable side effects or misuse relating to our products could result in additional regulatory controls or restrictions, or even lead to the regulatory authority requiring us to recall or withdraw the product from the market. Our products can experience performance problems in the field that require review and possible corrective action. The occurrence of component failures, manufacturing errors, software errors, design defects or labeling inadequacies affecting any of our products could lead to a government-mandated or voluntary recall, in particular when such deficiencies may endanger health. The FDA requires that certain classifications of recalls be reported to the FDA within 10 business days after the recall is initiated. Companies are required to maintain certain records of recalls, even if they are not reportable to the FDA or other regulatory authorities. Further, if faced with incidents of undesirable side effects or misuse relating to our products, we may elect to voluntarily implement a recall or market withdrawal of our products. A recall or market withdrawal, whether voluntary or required by a regulatory authority, may involve significant costs to us, potential disruptions in the supply of our products to our customers and reputational harm to our products and business, all of which could harm our ability to market our products and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common shares to decline.

Risks Relating to the Separation and Our Relationship with BHC

We may not realize the anticipated benefits from the Separation, and the Separation could harm our business.

Since 2014, we have operated as a business within BHC. We may not be able to achieve the full strategic and financial benefits expected to result from the Separation, or such benefits may be delayed or not occur at all. The Separation is expected to enhance strategic and management focus, provide a distinct investment identity and allow us to efficiently allocate resources and deploy capital. We may not achieve these and other anticipated benefits for a variety of reasons, including, among others:

•

the Separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing our business;

•

following the Separation, we may be more susceptible to economic downturns and other adverse events than if we were still a part of BHC;

•

following the Separation, our business will be less diversified than BHC’s business prior to the Separation;

•

our business will also experience a loss of scale and purchasing power and access to certain financial, managerial and professional resources from which we have benefited at lower cost in the past; and

•

the other actions required to separate the respective businesses could disrupt our operations.

If we fail to achieve some or all of the benefits expected to result from the Separation, or if such benefits are delayed, our business could be harmed.

The transfer of certain employees from BHC to us contemplated by the Separation will not be complete upon the closing of this offering.

In connection with the Separation, BHC has agreed to transfer to us, through asset transfers, dividends, contributions and similar transactions, the entities, assets, liabilities and obligations that we will hold following the separation of our business from BHC’s other businesses. As set forth more fully in “The Separation” and “Certain Relationships and Related Party Transactions,” we have entered into the Master Separation Agreement and a number of other agreements with BHC prior to the completion of this offering.

Certain of these transactions will not be complete upon the closing of this offering. In particular, we expect that we will generate a substantial portion of our revenue by distributing our products through legal entities which are owned by BHC and Bausch + Lomb and not by us, and as a result we will rely on BHC and Bausch + Lomb to collect and remit revenue (net of expenses) to us. We are entering into the Agency Agreements with such entities to govern the terms under which our products will be distributed. If the Agency Agreements were in place as of January 1, 2021, approximately 67% of our revenues for the first eight months of 2021 would have been attributable to the Agency Agreements. See “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company—Agency Agreements.” To the extent our counterparties under the Agency Agreements failed to comply with such agreements or BHC or Bausch + Lomb were unwilling or unable to remit such revenue or lend, contribute or otherwise make funds available to us, our business, financial condition, cash flows and results of operations would be materially adversely impacted. Moreover, at the completion of this offering, we expect that a substantial portion of the employees that support our business will be employed by legal entities that are owned by BHC and not by us. While we have entered into the Employee Matters Agreement with BHC that provides for the transfer such employees to us following the completion of this offering (as well as the allocation of employee-related liabilities and certain other terms, including how such employees efforts must be directed), future developments such as changes in employment laws or work visas in the countries in which we operate are difficult to predict, and could prevent or delay the transfer of certain employees to legal entities owned by us, which could deprive us of key personnel and adversely impact our

business and results of operations. See “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company—Employee Matters Agreement.” Each of the risks described above and other risks that we may not currently be aware of may be exacerbated to the extent that we continue to have Agency Agreements with, and/or employees who remain at, Bausch + Lomb or its subsidiaries at the time that BHC completes its previously announced spinoff of Bausch + Lomb. At such time, Bausch + Lomb will be a standalone public company and, unlike BHC following this offering, will not be our controlling shareholder and will not have the same financial and other incentives that BHC has with respect to us.

We have no recent history of operating as an independent company, and our historical and unaudited pro forma financial information is not necessarily representative of the results that we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.

Our historical and unaudited pro forma financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows, nor does it reflect what our results of operations, financial condition or cash flows would have been as an independent public company during the periods presented. In particular, the historical financial information included in this prospectus is not necessarily indicative of our future results of operations, financial condition or cash flows primarily because of the following factors, among others:

•

Prior to the Separation, our business has been operated by BHC as part of its broader corporate organization, rather than as an independent company; BHC or one of its affiliates provide support for various corporate functions for us, such as information technology, compensation and benefits, human resources, engineering, finance and internal audit.

•

Our historical financial results reflect the direct, indirect and allocated costs for such services historically provided by BHC. Following the Separation, BHC will continue to provide some of these services to us on a transitional basis, pursuant to the Transition Services Agreement that we have entered into with BHC. See “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company.” Our historical financial information does not reflect our obligations under the various transitional and other agreements we have entered into with BHC in connection with the Separation. At the end of this transition period, we will need to perform these functions ourselves or hire third parties to perform these functions on our behalf, and these costs may differ significantly from the comparable expenses we have incurred in the past.

•

Our working capital requirements and capital expenditures historically have been satisfied as part of BHC’s corporate-wide cash management and centralized funding programs, and our cost of debt and other capital may significantly differ from the historical amounts reflected in our historical financial statements.

•

Currently, our business is integrated with that of BHC and we benefit from BHC’s size and scale in costs, employees and vendor and customer relationships. Thus, costs we will incur as an independent company may significantly exceed comparable costs we would have incurred as part of BHC.

We based the pro forma adjustments included in this prospectus on available information and assumptions that we believe are reasonable; actual results, however, may vary. In addition, our unaudited pro forma financial information included in this prospectus may not give effect to various ongoing additional costs we may incur in connection with being an independent public company. Accordingly, our unaudited pro forma financial statements do not reflect what our results of operations, financial condition or cash flows would have been as an independent public company and are not necessarily indicative of our future financial condition or future results of operations. Please refer to “Unaudited Pro Forma Condensed Combined Financial Statements,” “Management Discussion and Analysis of Financial Condition and Results of Operations” and our audited historical financial statements and the notes to those statements included elsewhere in this prospectus.

In connection with the Separation, we have been implementing a new information technology infrastructure for our business, which includes the creation of management information systems and operational and financial controls unique to our business. We may not be able to put in place adequate controls in an efficient and timely manner in connection with the Separation and our current systems may not be adequate to support our future operations. The difficulties associated with installing and implementing new systems, procedures and controls may place a significant burden on our management and operational and financial resources. If we fail to continue to improve our management information systems, procedures and financial controls, or encounter unexpected difficulties during expansion and reorganization, our business could be harmed. For example, we are investing significant capital and human resources in the design, development and enhancement of our financial and enterprise resource planning systems. We will depend on these systems in order to timely and accurately process and report key components of our results of operations, financial condition and cash flows. If the systems fail to operate appropriately or we experience any disruptions or delays in enhancing their functionality to meet current business requirements, our ability to accurately report our financial results and otherwise run our business could be adversely affected. Even if we do not encounter these adverse effects, the development and enhancement of systems may be much more costly than we anticipated. If we are unable to continue to develop and enhance our information technology systems as planned, our business, results of operations and financial condition could be materially adversely affected.

BHC will control the direction of our business, potentially indefinitely, and the concentrated ownership of our common shares will prevent you and other shareholders from influencing significant decisions.

Immediately following the completion of this offering, BHC will own approximately % of our outstanding shares (or approximately % if the underwriters exercise their option to purchase additional shares in full). As long as BHC controls a majority of the voting power of our outstanding shares with respect to a particular matter, it will generally be able to determine the outcome of all corporate actions requiring shareholder approval, including the election and removal of directors, and will be able to block a takeover bid made for our shares. Even if BHC were to control less than a majority of the voting power of our outstanding shares, it may be able to influence the outcome of such corporate actions so long as it owns a significant portion of our shares. If BHC does not dispose of its ownership of our equity interests, it could remain our controlling shareholder for an extended period of time or indefinitely. In such a case, the concentration of BHC’s holdings may delay or prevent any acquisition or delay or discourage takeover attempts that shareholders may consider to be favorable, or make it more difficult or impossible for a third-party to acquire control of our company or effect a change in the Board and management, any of which may cause the market price of our common shares to decline. Any delay or prevention of a change of control transaction could deter potential acquirors or prevent the completion of a transaction in which our shareholders could receive a premium over the then current market price for their shares.

BHC’s interests may not be the same as, or may conflict with, the interests of our other shareholders. Investors in this offering will not be able to affect the outcome of any shareholder vote while BHC controls the majority of the voting power of our outstanding shares. As a result, BHC will be able to control, whether directly or indirectly through its ability to remove and elect directors, and subject to applicable law, substantially all matters affecting us, including:

•

any determination with respect to our business direction and policies, including the election and removal of directors and the appointment and removal of officers;

•

any determinations with respect to mergers, amalgamations, business combinations or dispositions of assets;

•

our financing and dividend policy, and the payment of dividends on our shares, if any;

•

compensation and benefit programs and other human resources policy decisions;

•

changes to any other agreements that may adversely affect us; and

•

determinations with respect to our tax returns and other tax matters.

In addition, pursuant to the Master Separation Agreement entered into by us and BHC in connection with this offering, until BHC ceases to hold 50% of the total voting power of our outstanding share capital entitled to vote in the election of our directors, we will not be permitted, without BHC’s prior written consent, (or, in certain circumstances, the approval of the BHC board of directors), to take certain significant actions. As a result, our ability to take such actions may be delayed or prevented, including actions that our other shareholders, including you, may consider favorable. We will not be able to terminate or amend the Master Separation Agreement, except in accordance with its terms. See “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company.”

The Master Separation Agreement also provides, among other things, that so long as BHC owns more than 50% of our voting shares, it will have certain corporate governance rights. In addition, BHC will be entitled to certain customary information and access rights. See “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company.”

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated third party. While we are controlled by BHC, we may not have the leverage to negotiate amendments to our various agreements with BHC (if any are required) on terms as favorable to us as those we would negotiate with an unaffiliated third party. Because BHC’s interests may differ from ours or from those of our other shareholders, actions that BHC takes with respect to us, as our controlling shareholder and pursuant to its rights under the Master Separation Agreement, may not be favorable to us or our other shareholders.

Following the completion of this offering, BHC will continue to own a significant majority of the voting equity in our company. As long as BHC controls us, it will have significant influence over our plans and strategies, including strategies relating to marketing and growth. Subject to applicable law, BHC will have the ability, should it choose to do so, to sell some or all of our shares that it owns in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of our company. Such sale would not require that a concurrent offer be made to acquire all of our shares.

The ability of BHC to privately sell the shares it owns, with no requirement for a concurrent offer to be made to acquire all of our shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your shares that may otherwise accrue to BHC on its private sale of our common shares. Additionally, if BHC privately sells its significant equity interests in our company, we may become subject to the control of a presently unknown third party. Such third party may have interests that conflict with those of other shareholders, and may attempt to cause us to revise or change our plans and strategies, as well as the agreements between BHC and us, described in this prospectus.

The services that BHC provides to us may not be sufficient to meet our needs, which may result in increased costs and otherwise adversely affect our business.

Pursuant to the Transition Services Agreement, BHC has agreed to continue to provide us with corporate and shared services for a transitional period, including information technology services, technical and engineering support, application support for operations, legal, payroll, finance, tax, legal, real estate and accounting, general administrative services and other support services in exchange for the fees specified in the

Transition Services Agreement between us and BHC. If we no longer receive these services from BHC due to the termination of the Transition Services Agreement or otherwise, we may not be able to perform these services ourselves and/or find appropriate third party arrangements at a reasonable cost (and any such costs may be higher than those charged by BHC). See “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company—Transition Services Agreement” for a more detailed discussion of the Transition Services Agreement. In addition, we have received informal support from BHC, which may not be addressed in the agreements we have entered into with BHC, and the level of this informal support may diminish as we become a more independent company. Any failure or significant downtime in our own administrative systems or in BHC’s administrative systems during the transitional period could result in unexpected costs, impact our results and/or prevent us from paying our suppliers or employees and performing other administrative services on a timely basis.

We will remain a restricted subsidiary under certain of BHC’s credit facilities and indentures upon completion of this offering and will be subject to various covenants under these facilities and indentures, which may adversely affect our operations.

We will remain a restricted subsidiary under BHC’s credit facilities and indentures, under which BHC had an aggregate amount of $22.6 billion in outstanding indebtedness as of September 30, 2021. Although neither we nor our subsidiaries will be guarantors of such debt, our status as a restricted subsidiary means that our ability to take certain actions upon completion of this offering will be restricted by the terms of these credit facilities and indentures. We will remain a restricted subsidiary until we are no longer a consolidated subsidiary of BHC or BHC designates us as “unrestricted”. These covenants restrict, among other things, our ability to:

•

incur or guarantee indebtedness;

•

make certain investments and acquisitions;

•

incur liens on assets or permit them to exist;

•

enter into certain types of transactions with affiliates;

•

merge or consolidate with another company; and

•

transfer, sell, or otherwise dispose of assets.

Each of these restrictions is subject to various exceptions, the availability of which will be affected by the extent to which BHC utilizes those exceptions as well as the financial condition and results of operations of BHC. The existence of these restrictions could adversely affect our ability to finance our future operations or capital needs, including our ability to draw on our revolving credit facility, or engage in, expand, or pursue our business activities, and it could also prevent us from engaging in certain transactions that might otherwise be considered beneficial to us. Additionally, in the future, BHC may determine that it is in its best interest to agree to more restrictive covenants, which may indirectly impede our business operations.

Certain contracts used in our business will need to be replaced, or assigned from BHC or its affiliates to us in connection with the Separation, and failure to obtain such replacement contracts could increase our expenses or otherwise adversely affect our results of operations.

The Separation requires us to replace shared contracts. It is possible that, in connection with the replacement process, some parties may seek more favorable contractual terms from us. Moreover, we expect that certain of such replacement contracts will not be in place at the completion of this offering. If we are unable to obtain such replacement contracts, BHC has agreed to use commercially reasonable efforts to ensure that we receive the economic benefits of the contract in question following the Separation. Nonetheless, we may be unable to obtain some of the benefits, assets and contractual commitments that are intended to be allocated to us as part of the Separation. If we are unable to obtain such replacement contracts, the loss of these contracts could increase our expenses or otherwise materially adversely affect our business, results of operations and financial condition.

Because of their current or former positions with BHC, following the Separation, our Chief Executive Officer, Mr. Hirsch, our Chief Operating Officer, Mr. Hart, and Mr. Appio, Mr. Herendeen, Mr. Ross, Mr. Power and Dr. Wechsler, who are members of our Board of Directors, own shares of BHC or have options to acquire shares of BHC, and the individual holdings may be significant for some of these individuals compared to their total assets. Prior to the Separation, our Chief Executive Officer and certain other officers are officers or other employees of BHC. In addition, following the Separation, certain of our directors, such as Mr. Appio, will also serve as officers of BHC, and certain of our other directors will be directors of BHC. Although all transactions with related parties after this offering will be approved by a committee of non-BHC-affiliated directors, this ownership or service may create the appearance of conflicts of interest when the BHC-affiliated directors and officers are faced with decisions that could have different implications for BHC or us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between BHC and us regarding the terms of the agreements governing the Separation and the relationship thereafter between the companies. Potential conflicts of interest could also arise if we enter into commercial arrangements with BHC in the future. As a result of these actual or apparent conflicts, we may be precluded from pursuing certain growth initiatives.

We potentially could have received better terms from unaffiliated third parties than the terms we received in our agreements with BHC.

The agreements we entered into with BHC in connection with the Separation were negotiated while we were still part of BHC’s business. See “Certain Relationships and Related Party Transactions—Relationship with BHC” and “—Agreements between BHC and Our Company.” Accordingly, during the period in which the terms of those agreements were negotiated, we did not have an independent Board of Directors or a management team independent of BHC. The terms of the agreements negotiated in the context of the Separation relate to, among other things, the allocation of assets, intellectual property, liabilities, rights and other obligations between BHC and us, and arm’s-length negotiations between BHC and an unaffiliated third party in another form of transaction, such as a buyer in a sale of a business, may have resulted in more favorable terms to the unaffiliated third party.

We have agreed to indemnify BHC for certain liabilities, and BHC has agreed to indemnify us for certain liabilities. However, there can be no assurance that BHC’s indemnity will be sufficient to insure us against the full amount of such liabilities, or that BHC’s ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the Master Separation Agreement, the Tax Matters Agreement and certain other agreements with BHC, BHC has agreed to indemnify us for certain liabilities. However, there can be no assurance that the indemnity from BHC will be sufficient to protect us against the full amount of such liabilities, or that BHC will be able to fully satisfy its indemnification obligations to us in the future. Even if we ultimately succeed in recovering from BHC any amounts for which we are held liable, we may be temporarily required to bear these losses. Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.

Any indemnification claim against us could be substantial, may not be able to be satisfied and may have a material adverse effect on us. Each of these risks could also negatively affect our business, financial condition, results of operations and cash flows.

Risks Relating to this Offering and Ownership of our Shares

An active trading market for our shares may not develop, and you may not be able to sell your shares at or above the initial public offering price.

Prior to the completion of this offering, there has been no public market for our shares. An active trading market for our shares may never develop or be sustained following the completion of this offering. If an active trading market does not develop, you may have difficulty selling your shares at an attractive price, or at all. The price for our shares in this offering will be determined by negotiations among BHC, us and representatives of the underwriters, and it may not be indicative of prices that will prevail in the open market following the completion of this offering. Consequently, you may not be able to sell your shares at or above the initial public offering price or at any other price or at the time that you would like to sell. An inactive market may also impair our ability to raise capital by selling our shares, and it may impair our ability to attract and motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our shares as consideration. Although we have applied to list our shares on the NASDAQ, an active trading market for our shares may never develop or be sustained following the completion of this offering.

The price of our common shares may fluctuate substantially.

You should consider an investment in our shares to be risky, and you should invest in our shares only if you can withstand a significant loss and wide fluctuations in the market value of your investment. Some factors that may cause the market price of our common shares to fluctuate, in addition to the other risks mentioned in this section of the prospectus, are:

•

our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitions or strategic investments;

•

changes in earnings estimates or recommendations by securities analysts, if any, who cover our shares;

•

failures to meet external expectations or management guidance;

•

fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

•

changes in our capital structure or dividend policy, including as a result of future issuances of securities, sales of large blocks of shares by our shareholders, including BHC, or our incurrence of debt;

•

reputational issues;

•

changes in general economic and market conditions in or any of the regions which we conduct our business;

•

changes in industry conditions or perceptions;

•

changes in applicable laws, rules or regulations and other dynamics; and

•

announcement or actions taken by BHC as our principal shareholder.

In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our shares could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

The per share offering price in this offering will be higher than the net tangible book value per share.

The initial public offering price per share will be substantially higher than the net tangible book value per share of our common shares immediately after this offering. As a result, you will pay a price per share that exceeds the book value of our assets after subtracting our liabilities. See “Dilution.”

Our historical combined financial data is not necessarily representative of the results we would have achieved as a standalone company and may not be a reliable indicator of our future results.

Our historical combined financial data included in this prospectus does not reflect the financial condition, results of operations or cash flows we would have achieved as a standalone company during the periods presented or those we will achieve in the future. This is primarily the result of the following factors, among others:

•

our historical combined financial data does not reflect the Separation;

•

our historical combined financial data reflects expense allocations for certain support functions that are provided on a centralized basis within BHC, such as expenses for business technology, facilities, legal, finance, human resources, business development, public affairs and procurement, as well as certain manufacturing and supply costs that are shared with other BHC business units that may be higher or lower than the comparable expenses we would have actually incurred, or will incur in the future, as a standalone company;

•

our capital structure will be different from that reflected in our historical combined financial statements;

•

significant increases may occur in our cost structure as a result of this offering, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; and

•

this offering may have a material effect on our customers and other business relationships, including supplier relationships, and may result in the loss of preferred pricing available by virtue of our reduced relationship with BHC.

Our financial condition and future results of operations, after giving effect to the Separation, will be materially different from amounts reflected in our historical combined financial statements included elsewhere in this prospectus. As a result of the Separation, it may be difficult for investors to compare our future results to historical results or to evaluate our relative performance or trends in our business.

As a standalone public company, we may expend additional time and resources to comply with rules and regulations that do not currently apply to us, and failure to comply with such rules may lead investors to lose confidence in our financial data.

As a standalone public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act and the regulations of the NASDAQ. Such requirements will increase our legal, accounting and financial compliance costs, will make some activities more difficult, time-consuming and costly and could be burdensome on our personnel, systems and resources. We will devote significant resources to address these public company-associated requirements, including compliance programs and investor relations, as well as our financial reporting obligations. Complying with these rules and regulations has and will substantially increase our legal and financial compliance costs and make some activities more time-consuming and costly.

In particular, as a public company, our management will be required to conduct an annual evaluation of our internal controls over financial reporting and include a report of management on our internal controls in our annual reports on Form 10-K. Under current rules, we will be subject to these requirements beginning with our

annual report on Form 10-K for the year ended December 31, 2023. In addition, we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 beginning with our annual report on Form 10-K for the year in which we lose our “emerging growth company” status. If we are unable to conclude that we have effective internal controls over financial reporting, or if our registered public accounting firm is unable to provide us with an attestation and an unqualified report as to the effectiveness of our internal controls over financial reporting, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our shares. Moreover, failure to accurately report our financial performance on a timely basis could also jeopardize our continued listing on the NASDAQ or any other exchange on which our shares may be listed. Delisting of our shares on any exchange would reduce the liquidity of the market for our shares, which would reduce the price of and increase the volatility of the market price of our shares.

We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements. We cannot predict if investors will find our common shares less attractive if we rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary of our initial public offering, (2) the last day of the fiscal year in which we have total revenue of at least $1.07 billion, (3) the last day of the fiscal year in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (4) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior rolling three-year period.

As long as BHC owns a majority of our voting equity, we may rely on certain exemptions from the corporate governance requirements of the NASDAQ available to “controlled companies”.

Upon the completion of this offering, we will be a “controlled company” within the meaning of the corporate governance requirements of the NASDAQ because BHC will continue to own more than 50% of our outstanding voting equity. Until such time as we are no longer a “controlled company,” we will be exempt from certain corporate governance requirements, including requirements that a majority of the Board of Directors consist of independent directors and having a compensation committee and a nominating and corporate governance committee that is composed entirely of independent directors. We expect to take advantage of the exemption from the requirement to have a fully independent nominating and corporate governance committee following the completion of this offering. See “Management—Controlled Company Exception.” Subject to phase-in rules, which we intend to rely on, NASDAQ rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. While BHC controls a majority of the voting power of our outstanding shares, we may also in the future not have a majority of independent directors or our Talent and Compensation Committee may not consist entirely of independent directors. Prior to such time, you will not have certain of the protections afforded to shareholders of companies that are required to comply with all of the corporate governance requirements of the NASDAQ.

Future sales by BHC or others of our shares, or the perception that such sales may occur, could depress our common share price.

Immediately following the completion of this offering, BHC will own approximately % of our outstanding shares (or % if the underwriters exercise their option to purchase additional shares in full). Subject to the restrictions described in the paragraph below, future sales of these shares in the public market will be subject to the volume and other restrictions of Rule 144 under the Securities Act, for so long as BHC is deemed to be our affiliate, unless the shares to be sold are registered with the Securities and Exchange Commission (“SEC”). We have granted certain registration rights to BHC. See “Shares Eligible for Future Sale.” While BHC has advised us that they intend to sell some or all of their equity position in our company over time, they have no obligation to do so and we are unable to predict with certainty whether or when BHC will sell a substantial number of our shares. A sale by BHC of a substantial number of shares after this offering, or a perception that such sales could occur, could materially depress the market price of our shares.

We, our officers and directors and BHC have agreed with the underwriters that, without the prior written consent of Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, we and they will not, subject to certain exceptions, during the period ending 180 days after the date of this prospectus, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or enter into any swap or other agreement that transfers to another, in whole or in part, any of the economic consequences of ownership of our shares or any securities convertible into or exercisable or exchangeable for our shares or publicly disclose the intention to make any such offer, sale, pledge or disposition. Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC may, in their sole discretion and at any time without notice, release all or any portion of the shares subject to the lock-up. See “Underwriting.” Immediately following the completion of this offering, we intend to file a registration statement registering under the Securities Act the shares reserved for issuance under our equity compensation plan. If equity securities granted under our equity compensation plan are sold or it is perceived that they will be sold in the public market, the trading price of our common shares could decline substantially. These sales also could impede our ability to raise future capital.

Our Articles to be in effect prior to the completion of this offering designate specific courts in Canada and the federal district courts of the United States as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our Articles to be in effect prior to the completion of this offering, unless we consent in writing to the selection of an alternative forum, the Supreme Court of British Columbia and the appellate courts therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf; (ii) any action or proceeding asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of ours to us; (iii) any action or proceeding asserting a claim arising out of any provision of the BCBCA or our Articles (as either may be amended from time to time); or (iv) any action or proceeding asserting a claim otherwise related to the relationships among the Company, its affiliates and their respective shareholders, directors and/or officers, other than claims related to the business carried on by the Company or such affiliates (such provision, the “Canadian Forum Provision”). The Canadian Forum Provision will not apply to any causes of action arising under the Securities Act, the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction. Additionally, our Articles to be in effect prior to the completion of this offering further provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (such provision, the U.S. Federal Forum Provision”). In addition, our Articles to be in effect prior to the completion of this offering provide that any person or entity purchasing or otherwise acquiring any interest in our common shares is deemed to have notice of and consented to the Canadian Forum Provision and the U.S. Federal Forum Provision; provided, however, that shareholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder.

The Canadian Forum Provision and the U.S. Federal Forum Provision in our Articles to be in effect prior to the completion of this offering may impose additional litigation costs on shareholders in pursuing any such claims. Additionally, the forum selection clauses in our Articles to be in effect prior to the completion of this offering may limit our shareholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our shareholders. In the event a court finds either exclusive forum provision contained in our Articles to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. The courts of the Province of British Columbia and the federal district courts of the United States may also reach different judgments or results than would other courts, including courts where a shareholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our shareholders.

We do not expect to pay dividends on our shares for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used for the operation and growth of our business. Even if we decide in the future to pay a quarterly cash dividend to the holders of our shares, we may change our dividend policy at any time.

We do not expect to pay dividends on our shares for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used for the operation and growth of our business. As a result, returns on your investment will primarily depend on the appreciation, if any, in the price of our shares. Even if we decide in the future to pay a quarterly cash dividend to the holders of our shares, our dividend policy may change at any time. The declaration and payment of dividends to holders of our shares will be at the discretion of our Board of Directors in accordance with applicable law after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, cash flows, impact on our effective tax rate, indebtedness, legal requirements and other factors that our Board of Directors deems relevant. Payment of dividends may be subject to withholding taxes. See “Certain Canadian Federal Income Tax Considerations.”

General Risk Factors

Our operating results and financial condition may fluctuate.

Our operating results and financial condition may fluctuate from quarter to quarter for a number of reasons. In addition, our stock price can be volatile. The following events or occurrences, among others, could cause fluctuations in our financial performance and/or stock price from period to period:

•

the impact of COVID-19;

•

development and launch of new competitive products;

•

the timing and receipt of regulatory clearances or approvals or lack of such clearances or approvals;

•

changes in the amount we spend to promote our products;

•

delays between our expenditures to acquire new products, technologies or businesses and the generation of revenues from those acquired products, technologies or businesses;

•

changes in treatment practices of physicians that currently use certain of our devices and supplies;

•

increases in the cost of raw materials used to manufacture our products;

•

actions by the FDA or other regulatory bodies relating to our manufacturers;

•

manufacturing and supply interruptions;

•

our responses to price competition;

•

new legislation that would, directly or indirectly, control or regulate the prices of certain medical devices or supplies;

•

a protracted and wide-ranging trade conflict between the United States and China;

•

expenditures as a result of legal actions (and settlements thereof), including the defense of our patents and other intellectual property;

•

market acceptance of our products;

•

the timing of wholesaler and distributor purchases and success of our wholesaler and distributor arrangements;

•

general economic and industry conditions, including potential fluctuations in interest rates;

•

changes in seasonality of demand for certain of our products;

•

foreign currency exchange rate fluctuations;

•

changes to, or the confidence in, our business strategy;

•

changes to, or the confidence in, our management; and

•

expectations for future growth.

As a result, quarter-to-quarter comparisons of results from operations, or any other similar period-to-period comparisons, may not be reliable indicators of our future performance. In any quarterly period, our results may be below the expectations of market analysts and investors, which could cause the market value of our common shares to decline.

CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS

To the extent any statements made in this prospectus contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act (collectively, “forward-looking statements”).

These forward-looking statements relate to, among other things: our business strategy, business plans and prospects and forecasts and changes thereto; product pipeline, prospective products and product approvals, product development and future performance and results of current and anticipated systems and other products; anticipated revenues for our systems and other products; expected R&D and marketing spend; our expected primary cash and working capital requirements for 2022 and beyond; our plans for continued improvement in operational efficiency and the anticipated impact of such plans; our liquidity; the impact of our distribution, fulfillment and other third-party arrangements; proposed pricing actions; exposure to foreign currency exchange rate changes and interest rate changes; the outcome of contingencies, such as litigation, subpoenas, investigations, reviews, audits and regulatory proceedings; the anticipated impact of the adoption of new accounting standards; general market conditions; our expectations regarding our financial performance, including the Separation, the expected timetable for the Separation and our future financial and operating performance, revenues, expenses, gross margins and income taxes; our impairment assessments, including the assumptions used therein and the results thereof; the anticipated impact of the evolving COVID-19 pandemic and related responses from governments and private sector participants on the Company, its supply chain, third-party suppliers, project development timelines, costs, revenues, margins, liquidity and financial condition and the anticipated timing, speed and magnitude of recovery from these COVID-19 pandemic related impacts.

Forward-looking statements can generally be identified by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” “will,” “may,” “could,” “would,” “should,” “target,” “potential,” “opportunity,” “designed,” “create,” “predict,” “project,” “forecast,” “seek,” “strive,” “ongoing” or “increase” and variations or other similar expressions. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements may not be appropriate for other purposes. Although we have previously indicated certain of these statements set out herein, all of the statements in this prospectus that contain forward-looking statements are qualified by these cautionary statements. These statements are based upon the current expectations and beliefs of management. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making such forward-looking statements, including, but not limited to, factors and assumptions regarding the items previously outlined, those factors, risks and uncertainties outlined below and the assumption that none of these factors, risks and uncertainties will cause actual results or events to differ materially from those described in such forward-looking statements. Actual results may differ materially from those expressed or implied in such statements. Important factors, risks and uncertainties that could cause actual results to differ materially from these expectations include, among other things, the following:

•

the risks and uncertainties caused by or relating to the evolving COVID-19 pandemic, the fear of that pandemic, the availability and effectiveness of vaccines for COVID-19, including with respect to current or future variants, the rapidly evolving reaction of governments, private sector participants and the public to that pandemic, and the potential effects and economic impact of the pandemic and the reaction to it, the severity, duration and future impact of which are highly uncertain and cannot be predicted, and which may have a significant adverse impact on us, including but not limited to our supply chain, third-party suppliers, project development timelines, employee base, liquidity, share price, financial condition and costs (which may increase) and revenue and margins (both of which may decrease);

•

compliance by us or our third-party partners and service providers, or the failure by us or these third parties to comply, with laws and regulations impacting our marketing, promotional and business practices, worldwide anti-bribery laws, worldwide environmental laws and regulation and privacy and security regulations;

•

compliance with legal and regulatory requirements for our marketed products;

•

interruption of the manufacture of our products due to failure to comply with regulations or for other reasons, and other manufacturing and supply difficulties or delays;

•

risks associated with the design and manufacture of our systems and products;

•

uncertainties around the successful improvement and modification of our existing systems and products and development of new products, which may require significant expenditures and time and is subject to uncertainties in obtaining necessary government approvals;

•

our ability to obtain components, raw materials or finished products supplied by third parties (some of which may be single-sourced) and other manufacturing and related supply difficulties, interruptions and delays;

•

factors impacting our ability to achieve anticipated market acceptance for our products, including acceptance of the pricing, effectiveness of promotional efforts, reputation of our products and launch of competing products;

•

our ability to secure and maintain third-party licensing, marketing and distribution arrangements;

•

our ability to retain, motivate and recruit executives and other key employees;

•

changes in the assumptions used in connection with our impairment analyses or assessments, which would lead to a change in such impairment analyses and assessments and which could result in an impairment in the goodwill associated with any of our reporting units or impairment charges related to certain of our products or other intangible assets;

•

uncertainties associated with the acquisition and launch of new assets, products and businesses, including, but not limited to, our ability to provide the time, resources, expertise and funds required for the commercial launch of new products, the acceptance and demand for new products, and the impact of competitive products and pricing, which could lead to material impairment charges;

•

our ability or inability to extend the profitable life of our products, including through line extensions and other life-cycle programs;

•

our ability to implement effective succession planning for our executives and key employees;

•

potential legislative and regulatory reform of the health-care system, which may affect our ability to sell our products profitably;

•

our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors;

•

catastrophic events;

•

our ability to maintain strong relationships with physicians and other healthcare professionals;

•

the consolidation of aesthetic physician and group practices and the impact of such industry consolidation on our business;

•

our indemnity agreements, which may result in an obligation to indemnify or reimburse the relevant counterparty, which amounts may be material;

•

after-market modifications to our systems, components and consumables by third parties and the development and sale of counterfeit components;

•

ineffective training of the users of our systems or such users’ failure to follow our operating guidelines could result in the misuse of our systems;

•

the risks associated with the global scope of our operations, including our presence in emerging markets and the challenges we face when entering and operating in new and different geographic markets (including the challenges created by new and different regulatory regimes in such countries and the need to comply with applicable anti-bribery and economic sanctions laws and regulations);

•

significant foreign currency risk due to the large portion of our business conducted in currency other than U.S. dollars;

•

the impact of the USMCA and any potential changes to other trade agreements;

•

risks associated with doing business in China, including as a result of the trade conflict between the United States and China;

•

our ability to obtain, maintain and license sufficient intellectual property rights over our products and enforce and defend against challenges to such intellectual property;

•

the potential increase in our effective tax rates;

•

the expense, timing and outcome of pending or future legal and governmental proceedings, arbitrations, investigations, subpoenas, tax and other regulatory audits, examinations, reviews and regulatory proceedings against us or relating to us and settlements thereof;

•

economic factors over which we have no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins;

•

our ability to effectively distribute our products and the effectiveness and success of our distribution arrangements;

•

our ability to effectively promote our own products;

•

the risk that our products could cause, or be alleged to cause, personal injury and adverse effects, leading to potential lawsuits, product liability claims and damages and/or recalls or withdrawals of products from the market;

•

the mandatory or voluntary recall or withdrawal of our products from the market and the costs associated therewith;

•

the availability of, and our ability to obtain and maintain, adequate insurance coverage and/or our ability to cover or insure against the total amount of the claims and liabilities we face, whether through third-party insurance or self-insurance;

•

quarter-to-quarter fluctuation in our operating results and financial condition;

•

the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including with respect to regulatory clearances or approvals by the FDA, EMA and similar agencies in other countries, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others;

•

declines in the pricing and sales volume of certain of our products that are distributed or marketed by third parties, over which we have no or limited control;

•

the impact of any changes in or reforms to the legislation, laws, rules, regulation and guidance that apply to us and our businesses and products or the enactment of any new or proposed legislation, laws, rules, regulations or guidance that will impact or apply to us or our businesses or products;

•

the impact of changes in federal laws and policy that may be undertaken under the Biden administration;

•

failure to achieve the expected benefits from and successfully execute the Separation;

•

risks associated with the fact that the transfer of certain employees from BHC to us contemplated by the Separation will not be complete upon the closing of this offering;

•

the impact on our business of remaining a restricted subsidiary under certain of BHC’s credit facilities and indentures upon completion of this offering, which may adversely affect our operations;

•

our status as a controlled company, and the possibility that BHC’s interest may conflict with our interests and the interests of our other shareholders; and

•

potential tax liabilities that may arise as a result of the Separation or related transactions.

Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found elsewhere in this prospectus, under “Risk Factors.” When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. These forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect actual outcomes, except as required by law. We caution that, as it is not possible to predict or identify all relevant factors that may impact forward-looking statements, the foregoing list of important factors that may affect future results is not exhaustive and should not be considered a complete statement of all potential risks and uncertainties.

USE OF PROCEEDS

DIVIDEND POLICY

We do not expect to pay dividends on our shares for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future, if any, will be used for the operation and growth of our business. See “Management Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Any future determination to pay dividends on our shares will be at the discretion of our Board of Directors and will depend upon many factors, including our financial position, results of operations, liquidity, legal requirements, restrictions that may be imposed by the terms in current and future financing instruments and other factors deemed relevant by our Board of Directors.

CAPITALIZATION

The following sets forth our cash and cash equivalents and capitalization as of September 30, 2021:

•

on an actual basis; and

•

on a pro forma basis to give effect to the reclassification of BHC’s net investment in Solta into additional paid-in capital and shares to reflect the number of shares of Solta expected to be outstanding at the effective date of the registration statement of which this prospectus is a part, and the completion of the other separation transactions, as described in the section of this prospectus titled “the Separation.”

We will not receive any proceeds from the sale of our common shares in this offering. All of the proceeds from this offering will be received by our parent company, BHC. Prior to the effectiveness of this registration statement of which this prospectus is a part, we are a wholly owned subsidiary of BHC which owns the shares being sold in this offering. As the proceeds from this offering are to be received by our parent company, BHC, this offering has no impact on our capitalization. See “Use of Proceeds.”

You should read this table in conjunction with “Use of Proceeds,” “Summary Historical and Unaudited Pro Forma Combined Financial Data,” “Management Discussion and Analysis of Financial Condition and Results of Operations” and “Unaudited Pro Forma Condensed Combined Financial Statements” and our audited combined financial statements and related notes and other financial information included elsewhere in this prospectus.


	As of September 30, 2021
	Actual			Pro Forma
	(in millions, except share amounts)
Cash and cash equivalents	$	7.7		$

Long-term debt⁽¹⁾	$	—		$
Shareholders’ Equity
BHC investment		182.0
Shares, no shares authorized, issued and outstanding actual; shares authorized, issued and outstanding on a pro forma basis
Additional paid-in capital		—
Accumulated other comprehensive loss		(3.7	)

Total shareholders’ equity		178.3

Total capitalization	$	178.3		$

(1)	Concurrently with the closing of this offering, we also expect to have an undrawn $ million revolving credit facility.

DILUTION

Our historical net tangible book value as of September 30, 2021 was approximately $ million. We do not present historical net tangible book value per share because we had no shares outstanding at September 30, 2021. Our pro forma net tangible book value as of September 30, 2021 was approximately $ million, or $ per share, assuming our shares were issued and outstanding at such date. Pro forma net tangible book value per share represents pro forma total assets less intangible assets after giving effect to the Separation divided by the number of our shares outstanding after giving effect to the Separation.

Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of our shares in this offering and the net tangible book value per share immediately following the completion of this offering. We will not receive any proceeds from the sale of our common shares in this offering. All of the proceeds from this offering will be received by our parent company, BHC. Prior to the effectiveness of this registration statement of which this prospectus is a part, we are a wholly owned subsidiary of BHC which owns the shares being sold in this offering. As the proceeds from this offering are to be received by our parent company, BHC in exchange for the shares BHC is selling in this offering, this offering has no impact on our capitalization including the number of shares outstanding, and would have no impact on our pro forma net tangible book value.

After giving effect to this offering, our pro forma net tangible book value would be unchanged as of September 30, 2021 and would have been approximately $ , or $ per share. Purchasing common shares in this offering will result in pro forma net tangible book value dilution to new investors of $ per share. The following table illustrates this dilution per share:


Assumed initial public offering price per share		$
Pro forma net tangible book value per share after this offering

Dilution per share to new investors		$

Each $1.00 increase (decrease) in the assumed initial offering price of $ per share would increase (decrease) dilution per share to new investors by approximately $1.00 per share. The information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering determined at pricing.

The following table summarizes, on the same basis as of September 30, 2021, the total number of common shares purchased, the total consideration paid and the average price per common share paid by BHC and by new investors purchasing common shares in this offering.


	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
BHC					$				$
New investors

Totals			100.0	%	$		100.0	%	$

Each $1.00 increase (decrease) in the assumed initial offering price of $ per common share would increase (decrease) the total consideration paid by new investors by approximately $ , or the percent of total consideration paid by new investors by approximately %, assuming that the number of shares offered as set forth on the cover page of this prospectus remains the same. BHC may also increase or decrease the number of shares in the offering. An increase (decrease) in the number of shares offered by 1.0 million would increase (decrease) the total consideration paid by new investors by approximately $ , or the percent of total

consideration paid by new investors by approximately %, assuming the public offering price per share remains the same. The information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering determined at pricing.

The number of shares purchased is based on pro forma common shares outstanding at September 30, 2021. The discussion and table above exclude common shares issuable upon exercise of outstanding options. If the underwriters were to fully exercise their option to purchase additional common shares from BHC, the percentage of our common shares held by BHC would be %, and the percentage of common shares held by new investors would be %. To the extent any outstanding options are exercised, new investors will experience dilution. To the extent all outstanding options had been exercised at September 30, 2021, the pro forma net tangible book value per share after this offering would be $ and total dilution per share to new investors would be $ .

THE SEPARATION

The Separation

Our business was founded in 1995 and was acquired by BHC in 2014. Prior to the effectiveness of the registration statement of which this prospectus is a part, Solta is a wholly owned subsidiary of BHC which owns the shares being sold in this offering. We will not receive any proceeds from the sale of the shares in this offering. All of the proceeds from this offering will be received by Solta’s parent company, BHC.

On August 3, 2021, BHC announced its intention to separate its global aesthetic medical device business into an independent publicly traded entity from the remainder of BHC. As part of the plan to separate the Solta Business from the remainder of BHC’s businesses, we have entered into the Master Separation Agreement and a number of other agreements with BHC for the purpose of accomplishing the Separation and setting forth various matters governing our relationship with BHC after the completion of this offering. The agreements also provide for the allocation of employee benefits, tax and other liabilities and obligations attributable or related to periods or events prior to and in connection with this offering. We have entered into these agreements with BHC while we are still a wholly owned subsidiary of BHC and certain terms of these agreements are not necessarily the same as could have been obtained from unaffiliated third parties. In connection with the separation of BHC’s global eye health products business (the “Bausch + Lomb Business”), we have entered into an agreement with BHC and Bausch + Lomb pursuant to which we have agreed to enter into the master separation agreement relating to the separation of Bausch + Lomb to the extent appropriate to provide that any rights and obligations of BHC that are applicable to Solta will be performed by us to the extent necessary to effectuate the separation of the Bausch + Lomb Business.

The following are the principal steps of the Separation.

•

BHC has agreed to transfer to us the entities, assets, liabilities and obligations that we will hold following the separation of our business from BHC’s other businesses. Such internal reorganization may take the form of asset transfers, dividends, contributions and similar transactions, and involves the formation of several new subsidiaries to own and operate our business. Certain contracts will be assigned, in part to us or applicable subsidiaries or be appropriately amended. Among other things and subject to limited exceptions, such internal reorganization is expected to result in us owning, directly or indirectly, the operations comprising, and the entities that conduct, the Solta Business. In exchange, we will issue or transfer to BHC all of our issued and outstanding shares.

•

Prior to the effectiveness of the registration statement of which this prospectus is a part, we have entered into the Master Separation Agreement and a number of other agreements with BHC for the purpose of accomplishing the Separation and setting forth various matters governing our relationship with BHC after the completion of this offering. See “Certain Relationships and Related Party Transactions” for additional discussion.

•

We also expect to enter into a $ million revolving credit facility in connection with the closing of this offering and the Separation, which is expected to be undrawn at the closing of this offering.

BHC has informed us that, following the completion of the Separation and this offering, it may sell all or a portion of its remaining equity interest in us over time through one or more public offerings or private placements, but it does not intend to effect such a disposition by means of a stock dividend to BHC shareholders. BHC has no obligation to pursue or consummate any further dispositions of its ownership interest in us and it may retain its ownership interest in us indefinitely or dispose of all or a portion of its ownership interest in us in a sale or other transaction. BHC has agreed not to offer, sell, distribute or otherwise transfer or dispose of, directly or indirectly, any of our shares for a period of days after the date of this prospectus. See “Underwriting.”

Agreements with BHC

Solta has entered into the Master Separation Agreement and other related agreements with BHC to effect the Separation and to provide a framework for our relationship with BHC after the Separation, and has also entered into certain other agreements, including the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Agency Agreements and the Registration Rights Agreement. These agreements allocate among Solta and BHC the assets, employees, liabilities and obligations (including, among others, investments, property and employee benefits and tax-related assets and liabilities) of BHC and its subsidiaries attributable to periods prior to, at and after Solta’s separation from BHC, provide for certain services to be delivered on a transitional basis and govern the relationship between Solta and BHC following the Separation. For additional information regarding the Master Separation Agreement and other transaction agreements, see “Risk Factors—Risks Relating to the Separation and Our Relationship with BHC” and “Certain Relationships and Related Party Transactions—Agreements between BHC and Our Company.”

Master Separation Agreement

We have entered into the Master Separation Agreement with BHC that, together with the other agreements summarized below, governs the relationship between BHC and us following the completion of this offering.

Separation of Assets and Liabilities. The Master Separation Agreement generally allocates assets and liabilities to us and BHC according to the business to which such assets or liabilities relate. In particular, the Master Separation Agreement provides, among other things, that, subject to the terms and conditions contained therein:

•

all of the assets primarily related to the businesses and operations of the Solta Business, which we refer to as the “Solta Assets,” will be transferred to us or one of our subsidiaries;

•

certain liabilities (whether accrued, contingent or otherwise and regardless of whether arising or accruing before, on or after the completion of this offering) related to or arising out of the Solta Assets, and other liabilities related to the businesses and operations of the Solta Business, which we refer to as the “Solta Liabilities,” will be retained by or transferred to us or one of our subsidiaries;

•

all of the assets and liabilities (whether accrued, contingent or otherwise and regardless of whether arising or accruing before, on or after the completion of this offering) other than the Solta Assets and the Solta Liabilities (such assets and liabilities, other than the Solta Assets and the Solta Liabilities, are referred to as the “Parent Assets” and the “Parent Liabilities,” respectively) will be retained by or transferred to BHC or its subsidiaries; and

•

certain contracts will be transferred or assigned, in part, to us or our subsidiaries or will be amended.

Claims. In general, each party to the Master Separation Agreement, subject to certain customary exceptions which include any liabilities for taxes which are governed by the Tax Matters Agreement, has agreed to assume liability for all pending, threatened and unasserted legal matters exclusively related to its own business or its assumed or retained liabilities (as identified in the Master Separation Agreement). For certain legal matters that are not related exclusively to our business or BHC’s business, we intend to cooperate and consult with each other to maintain a joint defense with respect to such legal matters.

Intercompany Accounts. The Master Separation Agreement provides that, subject to any provisions in the Master Separation Agreement or any other ancillary agreement described therein to the contrary, immediately prior to or as promptly as practicable after the Separation, all intercompany accounts between BHC and its subsidiaries, on the one hand, and Solta and its subsidiaries, on the other hand, will be repaid or settled, in the ordinary course of business or following the Separation, as applicable.

Internal Transactions. The Master Separation Agreement provides for certain internal transactions related to the Separation, including a tax matters agreement, local distribution and agency agreements and other ancillary

agreements (as defined in the Master Separation Agreement). Certain of these transactions will occur prior to the completion of this offering, but we expect that the transfer of employees will not be complete at the time of this offering. See “Risk Factors—Risks Relating to the Separation and Our Relationship with BHC—The transfer of certain employees from BHC to us contemplated by the Separation will not be complete upon the closing of this offering.”

Delayed Transfers and Further Assurances. To the extent transfers of assets and assumptions of liabilities related to the Solta Business have not been completed because of a necessary governmental or third party approval or notification, the parties will use commercially reasonable efforts to obtain or make such approvals or notifications with respect thereto as soon as reasonably practicable. In the event that any such transfer has not been consummated prior to the closing of this offering, the party retaining any asset that otherwise would have been transferred shall hold such asset in trust for the use and benefit of the party entitled thereto and retain such liability for the account of the party by whom such liability is to be assumed, in each case to the extent reasonably possible and permitted by applicable law, and take such actions reasonably requested by the other party in order to place such party, in a substantially similar position as would have existed had such asset or liability been transferred prior to the closing of this offering.

Representations and Warranties. In general, neither we nor BHC has made any representations or warranties regarding any assets or liabilities transferred or assumed. Except as expressly set forth in the Master Separation Agreement, all assets will be transferred on an “as is,” “where is” basis, and the respective transferees will bear the economic and legal risks that conveyed assets are not sufficient to operate the applicable business or that the title to any of the conveyed assets shall be other than good and marketable title, free and clear of any lien.

Board Rights. So long as BHC owns more than 50% of our voting shares, it will be able to direct the election of all the members of our Board of Directors, and will have the right to nominate four (4) of our directors. At any time when BHC shall beneficially own at least thirty-five percent (35%) but less than fifty percent (50%) of our voting shares, it will have the right to nominate two (2) of our directors. At any time when BHC shall beneficially own at least ten percent (10%) but less than thirty-five percent (35%) of our voting shares, it will have the right to nominate one (1) of our directors. In addition, so long as BHC owns more than 50% of our voting shares, it has the right to designate at least two of the directors it designated to our Board of Directors to serve on each committee of the board (other than the audit committee).

Information Sharing. The Master Separation Agreement also provides for other arrangements with respect to the mutual sharing of information between us and BHC in order to comply with reporting, filing, audit, insurance regulatory or tax requirements, for use in judicial proceedings, and in order to comply with our respective obligations after the completion of this offering. We and BHC have also agreed to provide mutual access to historical business records.

Certain Debt Matters. After the completion of the Separation and the offering, we will continue to be a “restricted subsidiary” under BHC’s debt agreements, which means that our ability to enter into certain transactions, pay dividends or make distributions or incur additional debt will be strictly limited. We have agreed not to take certain specified actions, including any action that would lead to a breach of BHC’s agreements with its lenders.

Insurance. Our directors and officers have obtained coverage under a directors’ and officers’ insurance program to be established by us at our expense. Such insurance policies will become effective prior to the completion of this offering. BHC will have discretion whether we will benefit from any of BHC’s or its affiliates’ insurance policies following the effective date of these new insurance policies.

Mutual Releases. Except for specific liabilities associated with the Master Separation Agreement or the other ancillary agreements described therein or rights to indemnification under such arrangements, we and BHC have agreed to release and forever discharge the other party and its respective subsidiaries and affiliates from any

and all liabilities, claims or conditions existing or alleged to have existed on or prior to the closing of this offering. The liabilities to be released include liabilities arising under any contract or agreement, existing or arising from any acts or events occurring or failing to occur or any conditions existing before the completion of this offering. The releases will not extend to (i) obligations or liabilities under any agreements between BHC and the Company that remain in effect following the Separation, which agreements include, but are not limited to, the Master Separation Agreement, the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Agency Agreements, the Registration Rights Agreement and the transfer documents in connection with the Separation, (ii) liabilities for the lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one party from a member of the other party prior to the Separation, (iii) liabilities for unpaid amounts for products or services or refunds owing on products or services due on a value received basis for work done by one party at the request of another, (iv) liabilities provided in or resulting from any contract or understanding that is entered into between BHC and the Company after the Separation, (v) any liability provided in or resulting from any agreement between any Person, who after the Separation is an employee of a party, on the one hand, and the other party, on the other hand and (vi) any liability the release of which would result in the release of any Person other than the Persons expressly contemplated to be released under the Master Separation Agreement.

Indemnification. Generally, the Master Separation Agreement provides that each party will indemnify, defend and hold harmless the other party and its subsidiaries (and each of their affiliates) and their respective officers, employees and agents from and against any and all losses relating to, arising out of or resulting from: (i) liabilities assumed by the indemnifying party, (ii) any guarantee, indemnifications or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of the indemnifying party by the indemnified party that survives following the Separation, (iii) any breach by the indemnifying party or its subsidiaries of the Master Separation Agreement and the other agreements described in this section (unless such agreement provides for separate indemnification) or (iv) any untrue statement of a material fact, or omission to state a material fact, with respect to information provided by the indemnifying party for use in, and contained in, any document disclosed to the SEC (provided that BHC is responsible for any such untrue statement or omission contained in documents filed with the SEC in connection with this offering). The Master Separation Agreement also specifies procedures with respect to claims subject to indemnification and related matters. Certain customary exceptions to indemnification include that obligations of BHC to indemnify any director, officer or employee of the Company who was a director, officer or employee of BHC at or prior to the Separation (unless the underlying obligation giving rise to such indemnification obligation is a Solta Liability) will remain and each party generally will retain liability in cases where information is exchanged or provided pursuant to the Master Separation Agreement as a result of gross negligence, bad faith, or willful misconduct by the party providing such information.

Covenants. The Master Separation Agreement also governs other matters related to the completion of this offering, the provision and retention of records, access to information, confidentiality, cooperation with respect to governmental filings and third party consents, coordination with respect to financial statements and accounting matters. In addition, the Master Separation Agreement provides that, as long as BHC beneficially owns at least 50% of the total voting power of our outstanding share capital entitled to vote in the election of our Board of Directors, we will not (without BHC’s prior written consent) take certain actions related to indebtedness.

Separation Fees and Expenses. The Master Separation Agreement provides that BHC will be responsible for all fees, costs and expenses (as described in the Master Separation Agreement), in each case incurred at or prior to the Separation, in connection with the preparation, execution, delivery and implementation of the Master Separation Agreement and ancillary agreements thereto.

Termination. The Master Separation Agreement may be terminated at any time by mutual consent or, subject to the terms and conditions set forth in the Master Separation Agreement, at any time prior to the closing of this offering. The Master Separation Agreement provides that, in the event of a termination of the Master Separation Agreement on or after the completion of this offering, (i) only the provisions of the Master Separation

Agreement that obligate the parties to release any pre-Separation claims and the right of BHC to terminate the Master Separation Agreement in its sole discretion will terminate and (ii) the other provisions of the Master Separation Agreement and the ancillary agreements that BHC and we enter into will remain in full force and effect.

Transition Services Agreement

We have entered into the Transition Services Agreement with BHC in connection with the Separation pursuant to which BHC has agreed to provide us with certain services for a limited time to help ensure an orderly transition following the Separation. The cost of these services will be negotiated on an arms-length basis between us and BHC.

Under the Transition Services Agreement, Solta will receive certain services, including information technology services, technical and engineering support, application support for operations, legal, payroll, finance, tax, legal, real estate and accounting, general administrative services and other support services. As costs for these services historically were included in our operating results through expense allocations from BHC, we do not expect the costs associated with the Transition Services Agreement to be materially different and, therefore, we do not expect such costs to materially affect our results of operations or cash flows after becoming a standalone company.

Subsequent to the Separation, we will incur expenditures consisting primarily of employee-related costs, costs to establish certain standalone functions and information technology systems and other transaction-related costs. Additionally, we will incur increased costs as a result of becoming an independent, publicly traded company, primarily from establishing or expanding the corporate support for our businesses, including information technology, human resources, treasury, tax, internal audit, risk management, share-based compensation programs, accounting and financial reporting, investor relations, governance, legal, procurement and other services. Our preliminary estimates of these additional recurring costs expected to be incurred annually are approximately $ million to $ million greater than the expenses historically allocated to us from BHC, and primarily relate to selling, general and administrative expenses. We believe our cash flow from operations and available borrowings under our revolving credit facility will be sufficient to fund these additional corporate expenses.

In general, the services under the Transition Services Agreement begin on the date of the closing of this offering and will cover a period not expected to exceed months following the Separation.

Tax Matters Agreement

In connection with the Separation, we have entered into the Tax Matters Agreement with BHC that governs the parties’ respective rights, responsibilities and obligations with respect to tax matters (including responsibility for taxes, entitlement to refunds, allocation of tax attributes, utilization of tax attributes, preparation and filing of tax returns, control of tax contests and other tax matters). As of the date of the consummation of this offering, the Tax Matters Agreement will become the only tax sharing agreement between BHC and us, and any and all prior tax sharing agreements or arrangements shall be terminated.

In general, under the Tax Matters Agreement, the responsibility for tax liabilities are generally allocated as follows:

•

BHC will be responsible for any U.S. federal, state, local or non-U.S. income and non-income taxes (and any related interest, penalties or audit adjustments and including those taxes attributable to our business) reportable on a consolidated, combined or unitary tax return that includes BHC or any of its subsidiaries (including us and/or any of our subsidiaries), and on any other tax return of BHC or any of its subsidiaries (including us and/or any of our subsidiaries) that includes tax items relating to Parent Assets and Liabilities (whether or not such tax return also includes items relating to the Solta Business), for any periods or portions thereof ending prior to this offering;

•

BHC will be responsible for any taxes incurred as a result the Separation;

•

We will be responsible for any U.S. federal, state, local or non-U.S. income and non-income taxes (and any related interest, penalties or audit adjustments) that are reportable on tax returns that include only us and/or any of our subsidiaries (and do not include any tax items related to Parent Assets and Parent Liabilities) for all tax periods or portions thereof ending prior to this offering; and

•

We will be responsible for all of the taxes imposed on us and our subsidiaries for taxable periods (or portions thereof) that begin after the date of this offering.

For purposes of determining the amount of any tax liabilities attributable to the portion of any tax period that includes, but does not end on, the date of the consummation of this offering, such amount will generally be determined based on a closing of the books on the date of the closing of this offering. BHC will generally be entitled to receive any refunds of taxes for which it is responsible under the Tax Matters Agreement, and we will generally be entitled to receive any refunds of taxes for which we are responsible under the Tax Matters Agreement.

Each of BHC and us will generally be responsible for preparing and filing all tax returns relating to taxes for which it is responsible under the Tax Matters Agreement, subject to a right on the part of the other party to review and comment on such tax return to the extent that it reflects taxes for which the other party is responsible under the Tax Matters Agreement. The party responsible for preparing and filing a tax return will generally have exclusive authority to control tax contests related to any such tax return. We will generally have exclusive authority to control tax contests with respect to tax returns that include only us and/or any of our subsidiaries.

The Tax Matters Agreement provides that (i) we will generally indemnify BHC and its affiliates from and against any liabilities associated with, among other things, taxes for which we are responsible under the Tax Matters Agreement; and (ii) BHC will generally indemnify Solta and its affiliates from and against any liabilities associated with, among other things, taxes for which BHC is responsible under the Tax Matters Agreement. Neither party’s indemnity obligations in respect of taxes under the Tax Matters Agreement will be subject to any limit on the amount for which it is obligated to indemnify the other party.

Employee Matters Agreement

In connection with the Separation, we have entered into the Employee Matters Agreement with BHC, that governs our relationship with BHC with respect to employment, compensation and benefits matters.

Employee-related liabilities. In connection with the Separation, except as otherwise expressly provided in the Employee Matters Agreement, we will generally assume responsibility for all employment, compensation and benefits-related liabilities relating to current employees of the Solta Business (whether active or on certain specified leaves of absences) and former employees who were last actively employed primarily with respect to the Solta Business, whom we collectively refer to as “Solta Employees,” regardless of whether such liabilities arise before, on or after the closing of this offering. BHC will retain all employment, compensation and benefits-related liabilities relating to each current or former employee of BHC who is not a Solta Employee, whom we refer to as a “BHC Employee.” In addition, pursuant to the Agency Agreements, we have generally assumed responsibility for, and have agreed to indemnify the applicable subsidiary of BHC (including subsidiaries of Bausch + Lomb) for, certain employment-related liabilities in respect of individuals who are employed in the Solta Business by certain of BHC’s subsidiaries (including subsidiaries of Bausch + Lomb) and covered by the applicable Agency Agreement.

Transfers of Solta Employees. Effective on or prior to the closing of this offering, except as otherwise expressly provided in the Employee Matters Agreement or any applicable Agency Agreement, to the extent not already employed by us or one of our subsidiaries, the employment of each Solta Employee will be transferred to us or one of our subsidiaries. The transfer of the employment of Solta Employees who are employed in certain

non-U.S. jurisdictions, including employees of the Solta Business employed by BHC or one of its subsidiaries and covered by an applicable Agency Agreement, may occur following the closing of this offering (the “Post-Separation Transfer Employees”). Subject to the terms of any applicable Agency Agreement, prior to their transfer date, BHC (or Bausch + Lomb, as applicable) will make available to us the services of the Post-Separation Transfer Employees, to the extent employed by BHC (or Bausch + Lomb, as applicable) at such time. We or one of our subsidiaries will generally assume responsibility for any individual employment or similar agreements between any Solta Employee and BHC or any of its subsidiaries. Subject to the terms of any Agency Agreement, Solta will generally bear the cost of compensation, benefit and other employment-related liabilities incurred for Post-Separation Transfer Employees prior to their applicable transfer date.

Compensation and benefit plans generally. Except as otherwise provided in the Employee Matters Agreement, effective as of January 1, 2022 (or, in the case of Post-Separation Transfer Employees, the date such employees transfer to us), which we refer to as the “Benefits Commencement Date,” Solta Employees will be eligible to participate in compensation and benefit plans established by us or one of our subsidiaries, and such plans will generally recognize all of such employee’s service with BHC and its affiliates prior to the applicable Benefits Commencement Date for purposes of eligibility, vesting and benefit accruals. However, such service will not be recognized to the extent that such recognition would result in a duplication of benefits. BHC will bear the cost of designing or establishing any of our or our subsidiaries’ compensation or benefit plans; however, we will reimburse BHC for any costs and expenses incurred by BHC to administer such plans.

401(k) plan. Except as otherwise provided in the Employee Matters Agreement, effective as of a date mutually identified by the parties (but not later than six months after the closing of this offering), each Solta Employee who participates in the BHC 401(k) plan will cease active participation in the BHC 401(k) plan and will be eligible to participate in a 401(k) plan maintained by us or one of our subsidiaries. Following such effective date of participation, the account balance of each Solta Employee who is an active participant in the BHC 401(k) plan will be transferred to, and assumed by, the Solta 401(k) plan.

Health and welfare benefit plans. Effective as of the closing of this offering, we will generally assume all costs, expenses or liabilities relating to health and welfare coverage or claims incurred on or after the closing of this offering by each Solta Employee under any of our or BHC’s health and welfare benefit plans. However, prior to the applicable Benefits Commencement Date, Solta Employees may continue to participate in certain of BHC’s health and welfare benefit plans, and any claims incurred by Solta Employees prior to the applicable Benefits Commencement Date will continue to be covered under BHC’s health and welfare benefit plans, if applicable; provided that, any costs relating to such participation (if any) in BHC’s health and welfare benefit plans will be borne by us.

Treatment of annual cash incentive awards. Each Solta Employee participating in any cash incentive plan or program for the 2021 performance year will remain eligible to receive such cash bonus award, subject to the terms of the applicable bonus plan and actual achievement of applicable performance goals determined as of the end of the performance period. The actual 2021 cash bonuses payable to Solta Employees will be paid by us in accordance with the terms of the applicable cash bonus plan, and BHC will generally bear the cost of the aggregate actual amount (or an estimated amount, depending on the timing of the offering) of such cash bonuses. For the 2022 performance year, all Solta Employees will participate in a Solta cash bonus or incentive plan, the cost of which will be borne entirely by us.

Bausch + Lomb Separation Bonuses. Each Solta Employee who is eligible to receive a cash bonus award under the Bausch + Lomb Separation Bonus Opportunity program, regardless of when payable, will remain eligible to receive his or her cash bonus award based on continued employment with Solta, subject to the terms of the applicable agreement or program. The actual cash bonus awards under the Bausch + Lomb Separation Bonus Opportunity program will be paid by us in accordance with the terms of the

applicable agreement or program (including terms relating to the timing of payment) and BHC will bear the cost of the aggregate amount of such cash bonus award.

Treatment of equity incentive awards. As a general matter, except as may otherwise be determined by BHC’s board of directors (or an applicable committee thereof, including the BHC Compensation Committee), following the closing of this offering, each BHC equity award held by Solta Employees (including any stock options, restricted stock units (“RSUs”), Performance Share Units (“PSUs”) and matching RSUs) will remain outstanding in accordance with and subject to its existing terms and the applicable BHC equity incentive plan. Following this offering, (i) in the event a Solta Employee’s termination of employment is deemed to occur as a result of BHC no longer owning at least 50% of the total voting power of Solta’s outstanding shares, any requirement that the Solta Employee be employed by BHC for at least 12 months (or such other period) since the applicable date of grant in order to receive any prorated vesting will not apply to such BHC equity award and (ii) any such BHC equity awards may be subject to adjustment in connection with the contemplated separation of Bausch + Lomb from BHC, as determined by the board of directors of BHC (or an applicable committee thereof), in accordance with the terms of the BHC equity incentive plan and the applicable award agreement.

Agency Agreements

We have entered into the Agency Agreements with certain of BHC’s subsidiaries (including subsidiaries of Bausch + Lomb) pursuant to which such entities have agreed to market, promote and sell our products in certain territories in which we sell our products. Under the Agency Agreements, we will appoint a subsidiary of BHC as a non-exclusive distributor of the products we sell in each territory, except for China (where we will distribute our products directly). The distributor agrees to use its commercially reasonable efforts to facilitate the sale of our products on the terms and conditions provided by us from time to time, and the distributors have also agreed to provide administrative support, including sales support and, in certain cases, maintenance of warehouse facilities, and accounting and bookkeeping services.

We have agreed to supply all of a distributor’s requirements for the products to be sold under the applicable Agency Agreement. In addition, we will provide each distributor a non-exclusive, royalty-free sublicense to use our intellectual property for the sole purpose of distributing the products under the Agency Agreement, and will provide a warranty with respect to such products.

Under the terms of the Agency Agreements, depending on the jurisdiction, each distributor has agreed to either (i) purchase our products at discounted prices which are designed to allow the distributor to earn a fee of 2.5% operating income margin on its sales or (ii) receive a commission of no greater than 2.5% of the net revenue generated by the sale of the products, in each case in accordance with arm’s-length pricing practices. If the Agency Agreements were in place as of January 1, 2021, approximately 67% of our revenues for the first eight months of 2021 would have been attributable to the Agency Agreements. We believe our cash flows from operations and available borrowings under our revolving credit facility will be sufficient to fund these additional expenses following the Separation.

The Agency Agreements contain customary indemnification provisions by each party. In general, the services under the Agency Agreements begin on the date of signing and will have an initial term that expires when Solta, in its sole discretion, determines that the Solta entity that is party to such agreement has received the employees and other services from BHC or Bausch + Lomb, as the case may be, necessary to permit such entity to conduct its business on a standalone basis (the “Termination Condition”). Once the Termination Condition has been satisfied, Solta may terminate an Agency Agreement with immediate effect. If such Agency Agreement is not terminated at such time, the Agency Agreement will continue to be in effect until the end of the calendar year during which the Termination Condition is satisfied, with automatic monthly renewals, unless earlier terminated upon 30 days’ prior notice. The Agency Agreements may also be terminated upon 10 days’ prior notice in the case (i) that either party is in material breach which remains uncured for 30 days, (ii) of certain bankruptcy-related events or (iii) as mutually agreed by the parties. Following the completion of this offering, we intend over time to migrate to our own distributors.

Upon termination of an Agency Agreement, the distributor is required to transfer its Solta-related business (as carried on by the distributor) and assets to Solta for the fair market value of such business and assets as of the date of the applicable Agency Agreement, subject to adjustment if the fair market value increase or decreases by more than 10% over the course of the term of the Agency Agreement. In addition, any employees who are employed by a distributor for the primary purpose of carrying out the marketing, promotion and sale of Solta products during the term of the applicable Agency Agreement shall, subject to compliance with local law, be transferred to Solta following the termination of the applicable Agency Agreement.

We have filed a form of the Agency Agreement as an exhibit to the registration statement of which this prospectus forms a part. Each of the Agency Agreements is expected to be on substantially the same terms.

Registration Rights Agreement

We have entered into the Registration Rights Agreement with BHC prior to the completion of this offering pursuant to which we agree that, upon the request of BHC and its affiliates, we will use our reasonable best efforts to effect the registration under applicable U.S. federal and state securities laws of any of our common shares retained by BHC and its affiliates following the completion of this offering.

Demand registration. BHC will be able to request registration under the Securities Act of all or any portion of our common shares that are not freely sellable under Rule 144 under the Securities Act and we will be obligated, subject to certain customary exceptions, to register such shares. BHC may make up to four demand registrations in any twelve month period.

Piggy-back registration. If we at any time intend to file a registration statement in connection with a public offering of any of our securities on a form and in a manner that would permit the registration for offer and sale of our common shares held by BHC, BHC will have the right to include common shares it owns in that offering, subject to certain customary limitations.

Registration expenses. We will be generally responsible for all registration expenses in connection with the performance of our obligations under the registration rights provisions in the Registration Rights Agreement. BHC will generally be responsible for any applicable underwriting discounts, commissions and transfer taxes.

Indemnification. The agreement contains customary indemnification and contribution provisions by us for the benefit of BHC and, in limited situations, by BHC for the benefit of us with respect to the information provided by BHC included in any registration statement, prospectus or related document.

Term. The registration rights remain in effect with respect to any shares held by BHC until:

•

such shares have been sold pursuant to an effective registration statement under the Securities Act;

•

such shares have been sold to the public pursuant to Rule 144 under the Securities Act;

•

such shares have ceased to be outstanding; or

•

such shares may be sold to the public pursuant to Rule 144 under the Securities Act without any limitations on volume or manner of sale pursuant to such rule.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements of Solta give effect to the Separation and related adjustments in accordance with Article 11 of the Securities and Exchange Commission’s Regulation S-X, as amended by the final rule, Release No. 33-10786.

The unaudited condensed combined pro forma balance sheet gives effect to the Separation and related transactions described below as if they had occurred on September 30, 2021. The pro forma adjustments to the unaudited condensed combined statements of income for the nine months ended September 30, 2021 and the year ended December 31, 2020 assume that the Separation and related transactions occurred as of January 1, 2020.

The unaudited pro forma condensed combined balance sheet as of September 30, 2021 has been derived from the unaudited historical combined balance sheet of Solta as of September 30, 2021. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2020 has been derived from the audited historical combined statement of income of Solta for the year ended December 31, 2020. The unaudited pro forma condensed combined statement of income of Solta for the nine months ended September 30, 2021 has been derived from the unaudited historical combined statement of income for the nine months ended September 30, 2021.

Autonomous entity adjustments which reflect the impact of the agreements that Solta and BHC have entered into or will enter into prior to the Solta IPO.

In connection with the closing of this offering and the Separation, we expect to enter into a $ million revolving credit facility, which is expected to be undrawn at the closing of this offering. Any fees related to the anticipated undrawn revolving credit facility are expected to be immaterial and are excluded from the unaudited pro forma condensed combined financial statements.

Additionally, Management adjustments are presented in the explanatory footnotes to the pro forma condensed combined statements of income for the nine months ended September 30, 2021 and the year ended December 31, 2020 to provide supplemental information to understand the synergies and dis-synergies that are expected to result from the Separation, primarily comprising incremental costs that Solta expects to incur as a standalone entity.

We will not receive any proceeds from the sale of our common shares in this offering. All of the proceeds from this offering will be received by our parent company, BHC. Prior to the effectiveness of the registration statement of which this prospectus is a part, we are a wholly owned subsidiary of BHC which owns the common shares being sold in this offering. As the proceeds from this offering are to be received by our parent company, BHC, in exchange for the shares BHC is selling in this offering, this offering has no impact on our capitalization including the number of common shares outstanding, and would have no impact on our combined financial statements.

The unaudited pro forma condensed combined financial statements are for informational purposes only and do not purport to represent what Solta’s financial position and results of operations actually would have been had the Solta IPO occurred on the date indicated, or to project Solta’s financial performance for any future period. The audited combined financial statements of Solta have been derived from BHC’s historical accounting records and reflect certain allocation of expenses. All of the allocations and estimates in such financial statements are based on assumptions that management believes are reasonable. The historical combined financial statements of Solta do not necessarily represent the financial position or results of operations of Solta had it been operated as a standalone company during the periods or at the dates presented. As a result, autonomous entity adjustments have been reflected in the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the unaudited interim combined financial statements and the audited combined financial statements included elsewhere in this prospectus.

SOLTA MEDICAL

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

(in millions, except per share amounts)


	Historical		Transaction Accounting Adjustments			Autonomous Entity Adjustments	Pro Forma
Revenues	$	218.7	$			$	$

Expenses
Cost of goods sold (excluding amortization of intangible assets)		49.1
Selling, general and administrative		54.7		0.5	(b)
Research and development		12.4
Amortization of intangible assets		13.5

		129.7		0.5

Operating income		89.0		(0.5	)
Foreign exchange and other		—

Income before income taxes		89.0		(0.5	)
Income taxes		16.2		(0.1	)(c)

Net income	$	72.8	$	(0.4	)	$	$

Pro forma basic income per share							$	(f	)
Pro forma basic common shares outstanding								(f	)
Pro forma diluted income per share							$	(f	)
Pro forma diluted common shares outstanding								(f	)

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

SOLTA MEDICAL

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2020

(in millions, except per share amounts)


	Historical		Transaction Accounting Adjustments			Autonomous Entity Adjustments			Pro Forma
Revenues	$	252.6	$			$			$

Expenses
Cost of goods sold (excluding amortization of intangible assets)		62.9					—
Selling, general and administrative		62.6		0.6	(b)		5.2	(d)
Research and development		15.4					—
Amortization of intangible assets		18.7

		159.6		0.6			5.2

Operating income		93.0		(0.6	)		(5.2	)
Foreign exchange and other		0.6

Income before income taxes		93.6		(0.6	)		(5.2	)
Income taxes		17.5		(0.1	)(c)		(0.7	)(e)

Net income	$	76.1	$	(0.5	)	$	(4.5	)	$

Pro forma basic income per share									$	(f	)
Pro forma basic common shares outstanding										(f	)
Pro forma diluted income per share									$	(f	)
Pro forma diluted common shares outstanding										(f	)

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

SOLTA MEDICAL

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2021

(in millions, except share amounts)


	Historical			Transaction Accounting Adjustments			Autonomous Entity Adjustments	Pro Forma
Assets
Current assets:
Cash	$	7.7			(3.7	)(b)	$	$
Trade receivables, net		21.1
Inventories, net		32.7
Prepaid expenses and other current assets		5.7			0.6	(b)

Total current assets		67.2			(3.1	)
Property, plant and equipment, net		7.4
Intangible assets, net		24.7
Goodwill		94.2
Deferred tax assets, net		17.1
Other non-current assets		16.2			3.1	(b)

Total assets	$	226.8		$	—		$	$

Liabilities
Current liabilities:
Accounts payable	$	7.9		$			$	$
Accrued and other current liabilities		29.4

Total current liabilities		37.3
Other non-current liabilities		11.2

Total liabilities		48.5

Equity
BHC investment		182.0			(a	)
Common shares, no par value, shares authorized, and issued and outstanding on a pro forma basis		—			(a	)
Additional paid-in capital		—			(a	)
Accumulated other comprehensive loss		(3.7	)

Total equity		178.3

Total liabilities and equity	$	226.8		$			$	$

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

SOLTA MEDICAL

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Transaction accounting adjustments for the Separation:

Reflects the reclassification of BHC’s investment in Solta from “BHC investment” to “Common shares,” and “Additional Paid-in Capital.” In connection with the Solta IPO, BHC has agreed to transfer to Solta the entities, assets, liabilities and obligations that Solta will hold following the Solta IPO of the Solta Business from BHC’s other businesses. In exchange, Solta will issue or transfer to BHC all of its issued and outstanding common shares.

As the proceeds from this offering are to be received by the parent company, BHC, in exchange for the common shares BHC is selling in this offering, this offering has no impact on the Business’s capitalization including the number of common shares outstanding, and would have no impact on the Business’s combined financial statements.

Reflects the cash payment by Solta associated with a director and officer insurance policy related to the Separation. The insurance premium is $3.7 million, and the policy has a six-year coverage period effective January 1, 2022. Included in the unaudited pro forma condensed combined balance sheet are adjustments to Cash for $3.7 million, Prepaid expenses and other current assets for $0.6 million and Other non-current assets for $3.1 million related to the expected payment for the insurance policy upon Separation. Included in the unaudited pro forma condensed combined statements of income are adjustments to Selling, general and administrative expenses of $0.5 million and $0.6 million for the nine months ended September 30, 2021 and the year ended December 31, 2020, respectively representing the amortization related to the prepaid director and officer policy for the respective periods.

Reflects the income tax effect of the incremental Selling, general and administrative expenses discussed in (b) above. Included in the unaudited pro forma condensed combined statements of income are adjustments to Income taxes of $0.1 million and $0.1 million for the nine months ended September 30, 2021 and the year ended December 31, 2020, respectively, determined using the applicable statutory tax rates for the periods then ended.

Autonomous entity adjustments:

Reflects the effects of agreements that Solta and BHC have entered into or will enter into prior to the Solta IPO. Included in the unaudited pro forma condensed combined statement of income for the year ended December 31, 2020 is an adjustment to Selling, general and administrative expenses of $5.2 million for the year ended December 31, 2020 and reflects:

Incremental commercial distribution and agency services costs of $4.8 million associated with sales and marketing in certain geographies under a distribution agreement (the “Agency Agreements”) until Solta’s information technology (“IT”) environment is completely separated from BHC. We expect BHC to provide Solta with these commercial distribution and agency services on a transitional basis for less than 12 months after the Solta IPO in accordance with the terms of the Agency Agreements. The incremental costs related to the Agency Agreements is calculated based on 2.5% markup of Revenues in all Solta markets, except China, for an estimated period of 12 months after Solta’s IPO.

ii.

Incremental transition services costs of $0.4 million associated with the Transition Services Agreement Solta has entered into with BHC. These incremental costs are primarily associated with certain general and administrative functions, including finance, human resources and IT, as well as research and development, commercial and manufacturing services which will be provided to Solta by BHC. The incremental service costs presented as an autonomous entity adjustment were calculated based on the monthly duration of each service and reflects a 5% markup on costs that have been included in the historical financial statements. The fees paid to BHC will be variable based on the services provided and the duration of these services, and these fees may be lower than the costs that would be incurred by Solta if it was a fully separated business.

As the services provided under the Agency Agreements and the Transition Services Agreement are generally not expected to extend beyond twelve months after the Solta IPO, no corresponding autonomous entity pro forma adjustment has been made for the nine months ended September 30, 2021, however additional costs have been presented as part of the Management adjustments to reflect the anticipated cost structure of the new Solta entity.

Reflects the income tax effect of the incremental Selling, general and administrative expenses discussed in (d) above. Included in the unaudited pro forma condensed combined statement of income for the year ended December 31, 2020 is an adjustment to Income taxes of $0.7 million, determined using the applicable statutory tax rates for the period then ended.

Pro forma basic income per share and Pro forma basic common shares outstanding is based on the number of common shares of Solta expected to be outstanding immediately following the effectiveness of this registration statement of which this prospectus is a part. The number of shares used to compute Pro forma diluted income per share is based on the number of basic common shares of Solta, plus incremental shares assuming exercise of dilutive outstanding options and vesting of other outstanding stock awards expected to be issued by Solta, replacement awards to BHC employees transferring to Solta or otherwise as contemplated in connection with the separation of Solta from BHC.

Management adjustments:

We expect to have incremental costs related to certain expenses previously allocated from BHC to be incurred by Solta as a standalone public company. Our historical combined financial statements include expense allocations for certain research and development services and support functions that are provided on a centralized or regional basis within BHC, including expenses for executive oversight, treasury, accounting, audit, legal, human resources, shared services, compliance, procurement, information technology and other corporate functions and services. We will also incur new costs relating to our public reporting and compliance obligations as a standalone public company.

These incremental costs of Solta are based on its expected organization chart and Solta’s expected cost structure as a standalone company, adjusted for the allocated costs historically recorded within the financial statements, which vary by year. In order to determine synergies and dis-synergies, Solta prepared a detailed assessment of the resources and associated costs required as a baseline to stand up Solta as a standalone company. With respect to expected headcount increases, internal resources were matched to job roles to meet the required baseline.

In addition to internal resources, third party support costs in each function were considered, which included business support functions and corporate overhead charges previously shared with BHC. This process was used by all functions resulting in incremental costs when compared to the corporate allocations included in the historical financial statements.

Any shortfall of required resource needs will be filled through external hiring or will be supported by BHC through a new transition services agreement. From a timeframe standpoint, these incremental costs will begin to materialize at the effective date of the Solta IPO. Management believes the resource transfers and costs which were used as the basis for the Management adjustments below are reasonable and representative of the baseline to stand up Solta as a standalone company. Both the resource and vendor cost baseline would be impacted by additional costs and investments that Solta may incur as it pursues its growth strategies. In addition, other adverse effects and limitations including those discussed in the section entitled “Risk Factors” to this document may impact actual costs incurred.

Primarily as a result of the above items, the Management adjustments presented below, which are incremental to the autonomous entity pro forma adjustments, show additional incremental expenses compared to the allocated expenses from BHC included in our historical Combined Statements of Income, related to dis-synergies resulting from the contemplated organizational structure. The total adjustments for the nine months ended September 30, 2021 and for the year ended December 31, 2020 are $15.8 million and $29.3 million (including one-time expenses of $2.5 million expected to be incurred within 12 months following the completion of the Solta IPO), respectively. One-time costs primarily reflect costs for legal and regulatory registrations and are not expected to continue beyond the 12 months following the closing of this offering. The historical financial statements for the nine months ended September 30, 2021 reflect increased baseline functional area and infrastructure costs compared to the level of costs reflected in the financial statements for the year ended December 31, 2020. The Management adjustments shown in the table below for the incremental commercial, research and development and general and administrative costs required to reflect Solta as a standalone company are expected to be proportionally lower in the nine months ended September 30, 2021 compared to the year ended December 31, 2020 due to: (i) the increased level baseline functional area and infrastructure costs in our historical financial statements for the nine months ended September 30, 2021 when compared to the year-ended December 31, 2020 and (ii) the aforementioned one time costs that are not expected to continue beyond 12 months after the closing of this offering. The additional expenses have been estimated based on assumptions that management believes are reasonable. However, actual additional costs that will be incurred could be different from the estimates and would depend on several factors, including the economic environment and strategic decisions made in areas such as the Solta IPO, selling and marketing, R&D, information technology and infrastructure.

Management believes the presentation of these adjustments are necessary to enhance an understanding of the pro forma effects of the transaction. The pro forma financial information below reflects all adjustments that are, in the opinion of management necessary to provide a fair statement of the pro forma financial information, aligned with the assessment described above. If Solta decides to increase or reduce resources or invest more heavily in certain areas in the future, that will be part of its future decisions and have not been included in the Management adjustments below.

The tax effect has been determined by applying the applicable statutory tax rates to the aforementioned adjustments for the periods presented.

The table below includes each category of management adjustment as well as the basis for each adjustment and specific method used to estimate the adjustment:


	Nine Months Ended September 30, 2021
	Pro forma Net Income			Pro forma basic income per share	Pro forma diluted income per share
	($in millions)
Pro forma*	$			$	$

Management adjustments (pre-tax)
Cost of goods sold ⁽¹⁾		(0.3	)
Selling, general and administrative ⁽²⁾		(18.1	)
Research and development ⁽³⁾		2.6

Total Management adjustments (pre-tax)		(15.8	)
Tax effect of Management adjustments ⁽⁴⁾		(2.1	)

Pro forma net income after Management adjustments	$			$	$

Weighted average common shares


	Year Ended December 31, 2020
	Pro forma Net Income			Pro forma basic income per share	Pro forma diluted income per share
	($in millions)
Pro forma*	$			$	$

Management adjustments (pre-tax)
Cost of goods sold ⁽¹⁾		(0.4	)
Selling, general and administrative ⁽²⁾		(28.6	)
Research and development ⁽³⁾		(0.3	)

Total Management adjustments (pre-tax)		(29.3	)
Tax effect of Management adjustments ⁽⁴⁾		(3.8	)

Pro forma net income after Management adjustments	$			$	$

Weighted average common shares

*	As shown in the unaudited Pro Forma Condensed Combined Statements of Income.

⁽¹⁾

Reflects incremental employee and non-employee (third-party vendor support costs) costs related to commercial and supply chain, functions. Employee costs were based on standalone function estimates which resulted in incremental headcount as a standalone public company and leveraged benchmark salary information based on location and title and responsibilities of each employee. Non-employee costs (third party vendor support costs) were based on pricing estimates obtained from current vendors.

⁽²⁾

Reflects adjustments to executive compensation, employee and non-employee (third-party vendor support costs) costs to perform reporting and regulatory compliance, audit fees, tax, legal, information technology, human resources, investor relations, risk management, treasury and other overhead functions. Additional executive compensation for the executive leadership team, including new equity-based awards in connection with the Solta IPO was based on our anticipated executive roles and public company benchmarks for similar sized companies. Employee costs were based on standalone function estimates which resulted in incremental headcount as a standalone public company and leveraged benchmark salary information based on location, title and responsibilities of each employee. Non-employee costs (third party vendor support costs) were based on pricing estimates obtained from current vendors.

⁽³⁾

Reflects incremental employee and non-employee (third-party vendor support costs) related to research and development, regulatory and quality functions. For the nine months ended September 30, 2021, the allocations included in the historical unaudited condensed combined financial statements for research and development, regulatory and quality functions services exceed management’s estimate of those costs for Solta as a standalone company by $2.6 million. For the year ended December 31, 2020, management’s estimate of costs related to research and development, regulatory and quality functions for Solta as a standalone company, exceed the allocations for those costs as provided in the historical audited combined financial statements by $0.3 million. Employee costs were based on standalone function estimates which resulted in incremental headcount as a standalone public company and leveraged benchmark salary information based on location, title and responsibilities of each employee. Non-employee costs (third party vendor support costs) were based on pricing estimates obtained from current vendors.

⁽⁴⁾	Reflects the tax effect of the Management adjustments using the applicable statutory tax rates for the period ended.

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our results of operations and financial condition together with the audited and unaudited historical combined financial statements (referred to as the “combined financial statements”) and the notes thereto included elsewhere in this prospectus as well as the discussion in the “Business” section of this prospectus and the section entitled “Unaudited Pro Forma Condensed Combined Financial Statements.”

This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in “Risk Factors” and “Cautionary Statements Concerning Forward-Looking Statements” included elsewhere in this prospectus.

The combined financial statements included in this prospectus have been prepared from BHC’s historical accounting records and are presented on a standalone basis and are derived from the consolidated financial statements and accounting records of the Solta business of BHC. The combined financial statements reflect our financial position, results of operations and cash flows as we were historically managed, in conformity with U.S. GAAP. Our combined financial statements include all revenues and costs directly attributable to Solta, including costs for facilities, functions and services used by Solta. Costs for certain functions and services performed by centralized BHC organizations are directly charged to Solta based on a specific identification basis or, when specific identification is not practicable, a proportional cost allocation method. Allocations are based on direct usage where identifiable as well a number of other utilization measures including headcount, relative revenues, and other allocation methods depending on the nature of the services and/or costs. The results of operations include allocations of costs for administrative functions and services performed on behalf of Solta by centralized groups within BHC. The financial information discussed below and included in this prospectus may not necessarily reflect what our financial condition, results of operations or cash flows would have been had we been a standalone company during the periods presented or what our financial condition, results of operations and cash flows may be in the future.

Our accompanying unaudited interim Combined Financial Statements as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020 have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC for interim financial statements, and should be read in conjunction with our audited Combined Financial Statements for the year ended December 31, 2020, which are included in this prospectus. In our opinion, the unaudited interim Combined Financial Statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair statement of the financial condition, results of operations and cash flows for the periods indicated. All currency amounts are expressed in U.S. dollars unless otherwise noted.

Overview

We believe Solta is a leading global aesthetic medical device company focused on the development, manufacture and sale of innovative technologies that provide aesthetic and therapeutic benefits. Since the launch of our first commercial Thermage^® product in 2002, we have pioneered products that have advanced the field of aesthetic medical devices, including building a portfolio of over 200 patents worldwide. With one of the longest track records in the aesthetic medical device industry, our category-leading brands – Thermage^®, Clear + Brilliant^®, Fraxel^® and VASER^® – are well-respected and well-known to consumers of skin and body aesthetic treatments. Our portfolio of clinically proven energy-based aesthetic medical devices addresses a range of fast-growing treatment categories, including skin tightening, skin resurfacing, and body contouring, and the majority

of our revenue from these technologies is derived from non- and minimally-invasive procedures. We offer our global customer base of dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners, a compelling value proposition and return on investment to build and grow their respective practices. Our focus on developing cutting-edge technologies to better meet the needs of consumers coupled with the compelling value we offer to our customer partners has allowed us to build a significant global footprint, with an installed base of more than 13,800 systems and presence in approximately 50 countries as of December 31, 2020.

Our Product Portfolio

Our energy-based aesthetic medical devices span numerous applications and procedures, enabling us to have what we believe is a leading position in our industry across age groups. Our portfolio of aesthetic medical devices and consumable brands are primarily designed to address three treatment categories: (i) skin tightening, (ii) skin resurfacing, and (iii) body contouring and include:

•

Thermage^® System—The Thermage^® system is a non-invasive RF therapy that can help smooth, tighten and contour skin and provide an overall younger-looking appearance.

•

Clear + Brilliant^® System—The Clear + Brilliant^® system uses fractional laser technology and is designed to address and prevent the early signs of aging skin. Specifically, treatments can help prevent the worsening of fine lines or wrinkles due to aging or sun damage, as well as uneven pigmentation.

•

Fraxel^® System—The Fraxel^® system is designed to improve tone, texture and radiance for aging, sun-damaged or scarred skin. It uses a fractional resurfacing laser which is more intense than Clear + Brilliant^® to penetrate deeper into the skin. Next generation Fraxel^® can be effective on fine lines and wrinkles (i.e. crow’s feet and brow lines), surface scarring, pigmentation, age spots, melasma, sun damage and AK.

•

VASER^® System—The VASER^®lipo system uses ultrasound energy for aesthetic body contouring.

We have a well-established presence with key aesthetic medical device customer groups from dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners with capabilities that address a broad spectrum of aesthetic needs.

For additional discussion of these products, see the discussion set forth in “Business—Our Products” and “Business—Government Regulation—510(k) Clearance Pathway.”

Robust revenue growth, demonstrated operational excellence and strong cash flow generation

Our broad portfolio of products bolsters our strong financial profile. For the nine months ended September 30, 2021 and the year ended December 31, 2020, our mix of equipment, consumables and service sales generated $218.7 million and $252.6 million of total revenues, approximately 74% and 69% of which was derived from consumables and equipment servicing in the applicable periods, respectively. We consider these revenues to be recurring in nature.

The following table provides a summary of our financial performance and key metrics for the nine months ended September 30, 2021 and 2020 and the years ended December 31, 2020, 2019 and 2018.


	Nine Months Ended September 30,								Years Ended December 31,
(in millions)	2021			2020			2021 vs 2020		2020			2019			2018			2020 vs 2019		2020 vs 2018
Revenues	$	218.7		$	165.5		$	53.2	$	252.6		$	193.9		$	135.2		$	58.7	$	117.4
Gross profit	$	156.1		$	108.7		$	47.4	$	171.0		$	122.9		$	75.7		$	48.1	$	95.3
Contribution (non-GAAP)	$	169.6		$	122.7		$	46.9	$	189.7		$	141.6		$	94.4		$	48.1	$	95.3
Net income	$	72.8		$	45.3		$	27.5	$	76.1		$	40.9		$	13.7		$	35.2	$	62.4
Adjusted net income (non-GAAP)	$	83.7		$	56.4		$	27.3	$	91.0		$	59.1		$	27.6		$	31.9	$	63.4
Adjusted EBITDA (non-GAAP)	$	108.2		$	74.0		$	34.2	$	118.3		$	74.4		$	37.0		$	43.9	$	81.3
Cash flows from operations	$	87.7		$	67.1		$	20.6	$	100.7		$	68.6		$	35.9		$	32.1	$	64.8
Free cash flows (non-GAAP)	$	86.3		$	64.0		$	22.3	$	96.1		$	66.2		$	34.2		$	29.9	$	61.9
Gross profit margin		71.4	%		65.7	%		570 bps		67.7	%		63.4	%		56.0	%		430 bps		1170 bps
Contribution margin (non-GAAP)		77.5	%		74.1	%		340 bps		75.1	%		73.0	%		69.8	%		210 bps		530 bps
Net income margin		33.3	%		27.4	%		590 bps		30.1	%		21.1	%		10.1	%		900 bps		2000 bps
Adjusted EBITDA margin (non-GAAP)		49.5	%		44.7	%		480 bps		46.8	%		38.4	%		27.4	%		840 bps		1940 bps

We have achieved significant growth in total revenue in recent years, driven by growth in our end markets, customer base, new product launches and greater utilization of our products. From the year ended December 31, 2018 through the year ended December 31, 2020, we grew our revenue from $135.2 million to $252.6 million, representing overall growth of 87%, or a compound annual growth rate of 37%. Our solid revenue growth continued into 2021, as our revenues for the nine months ended September 30, 2021 were $218.7 million as compared to $165.5 million for the nine months ended September 30, 2020, representing revenue growth of 32%.

As we have grown our revenue, we have maintained our operating discipline, delivering and expanding our margins. We emphasize delivering quality with efficiency across our manufacturing, operations, services, and overall supply chain. For the year ended December 31, 2020, we delivered Gross profit of $171.0 million, Contribution (non-GAAP) (which we define as revenues less costs of goods sold, excluding amortization of intangible assets) of $189.7 million, Net income of $76.1 million, Adjusted net income (non-GAAP) of $91.0 million and Adjusted EBITDA (non-GAAP) of $118.3 million, representing Gross profit margin of 67.7%, Contribution margin (non-GAAP) of 75.1%, Net income margin of 30.1% and Adjusted EBITDA margin (non-GAAP) of 46.8%. This compares favorably to the year ended December 31, 2018, when we delivered Gross profit of $75.7 million, Contribution (non-GAAP) of $94.4 million, Net income of $13.7 million, Adjusted net income (non-GAAP) of $27.6 million and Adjusted EBITDA (non-GAAP) of $37.0 million, representing Gross profit margin of 56.0%, Contribution margin (non-GAAP) of 69.8%, Net income margin of 10.1% and Adjusted EBITDA margin (non-GAAP) of 27.4%, or an expansion of 530 and 1940 basis points of Contribution margin (non-GAAP) and Adjusted EBITDA margin (non-GAAP), respectively, over that time. During this period, we have also converted a significant amount of our profitability into cash flows, generating $100.7 million of Cash flows from operations and $96.1 million of Free cash flows (non-GAAP) for the year ended December 31, 2020. This compares favorably to the year ended December 31, 2018, when we generated $35.9 million of Cash flows from operations and $34.2 million of Free cash flows (non-GAAP).

During the nine months ended September 30, 2021 we continued to improve upon our year over year metrics. For the nine months ended September 30, 2021, we delivered Gross profit of $156.1 million, Contribution (non-GAAP) of $169.6 million, Net income of $72.8 million, Adjusted net income (non-GAAP) of

$83.7 million and Adjusted EBITDA (non-GAAP) of $108.2 million, representing Gross profit margin of 71.4%, Contribution margin (non-GAAP) of 77.5%, Net income margin of 33.3% and Adjusted EBITDA margin (non-GAAP) of 49.5%, respectively. This compares favorably to the nine months ended September 30, 2020, when we delivered Gross profit of $108.7 million, Contribution (non-GAAP) of $122.7 million, Net income of $45.3 million, Adjusted net income (non-GAAP) of $56.4 million and Adjusted EBITDA (non-GAAP) of $74.0 million, representing Gross profit margin of 65.7%, Contribution margin (non-GAAP) of 74.1%, Net income margin of 27.4% and Adjusted EBITDA margin (non-GAAP) of 44.7%, respectively, or a year over year expansion of 340 and 480 basis points of Contribution margin (non-GAAP) and Adjusted EBITDA margin (non-GAAP), respectively. During the nine months ended September 30, 2021, we continued to convert a significant amount of our profitability into cash flows, generating $87.7 million of Cash flows from operations and $86.3 million of Free cash flows (non-GAAP). This compares favorably to the nine months ended September 30, 2020, when we generated $67.1 million of Cash flows from operations and $64.0 million of Free cash flows (non-GAAP).

For a complete discussion of the non-GAAP measures used above and for reconciliations of these non-GAAP measures to their most directly comparable U.S. GAAP financial measures, please refer to “—Non-GAAP Information.”

Proposed Initial Public Offering of Solta

On August 3, 2021, BHC announced its intention to separate its global aesthetic medical device business into an independent publicly traded entity from the remainder of BHC. See “The Separation” elsewhere in this prospectus for additional information. Solta Medical Corporation was incorporated under the BCBCA on July 16, 2021 and was formed to ultimately hold the global Solta business.

Industry Overview

Over the past decade, the aesthetics industry has seen a shift from traditional surgical approaches to more non-invasive and patient friendly procedures. This increase in patient preference for non- or minimally-invasive procedures has fueled industry growth. In addition to being more affordable, these procedures offer the further advantages of being less painful, having a reduced risk of scarring, and offering shorter recovery periods. Growing demand for non-invasive cosmetic procedures combined with a surge in the availability of providers, facilities, and products are spearheading an upward trend within the industry.

North America continues to maintain the number one share of the aesthetics industry, although APAC is expected to grow at high rates during the coming years. Alongside growing consumer knowledge and increased interest in cosmetic procedures, global marketing campaigns, rising medical tourism, and widened acceptance are all likely to stimulate the market in the APAC region.

Trends and Factors Impacting Our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section of this prospectus titled “Risk Factors.”

Consumer, Patient and Skin Care Professional Demand for our Products

Our business is largely impacted by the demands of our customers. Our customers are primarily dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners and their customers. Our success depends on our ability to anticipate and respond to changes in the preferences of the end consumer for our aesthetic medical devices. We therefore continually look for key trends in the skin care market for investment. Once we have identified areas for investment, we allocate resources to extend our market share through new launches or upgrades to existing devices, sales force expansion and increased marketing. The outcome of this process allows us to better drive value in our aesthetic medical device portfolio by driving growth.

Our products address significant and growing markets that we believe will sustain our long-term growth. Demand for aesthetic products is increasing due to innovative technologies, such as our non-invasive aesthetic procedures, growing interest in personal appearances, including amongst the aging population, greater word-of-mouth enabled by social media, and overall growth in disposable income, particularly in emerging markets, amongst others. We believe we have multiple vectors to power our growth, including further penetration of our market opportunity, increasing product utilization, cross-portfolio adoption of our treatment solutions and expanding our presence in existing and new geographies. We believe these factors, coupled with our compelling pipeline of enhancements and next-generation products, effectively positions us to sustain and power our future growth.

Growth Markets

Our key strategic markets are diverse geographically and include the U.S., APAC and the European Union Five, which are among the largest markets in the industry. Our diverse product portfolio is aligned with fast-growing segments to take advantage of current consumer preferences and market tailwinds, which include: (i) increasing preference for minimally-invasive skin tightening procedures, which favors Thermage^® and (ii) increasing awareness of the benefits of energy-based liposuction for VASER^®, including less peripheral impact, shorter healing time and use in high-definition contouring.

For additional discussion of our growth strategies, see “Business—Our Markets.”

Focus on Recurring Revenues

Cash Pay Business Model

The aesthetic medical device market can be characterized as combining the attractive dynamics of medical products sales with the out-of-pocket nature of high-end consumer products. Unlike more traditional health care and pharmaceutical industries where insurance coverage allowances and payment rates can vary meaningfully, the aesthetics industry is primarily a cash-pay model which reduces, if not eliminates, insurance reimbursement

risk for practitioners. As practitioners are our direct customers who invest in our products as offerings to their patients, the cash-pay nature of our products provides them with an attractive economic model within their businesses. As consumer demand and the end market for aesthetics is increasing, this attractive cash pay model provides economic benefits in a growth environment for practitioners. We believe this consumer trend incentivizes additional dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners to incorporate our treatments into their practices, thus expanding our customer footprint.

Invest in Our Business to Drive Growth

Our capital allocation is driven by our long-term growth strategies and we continue to make investments in our product portfolio and anticipate building out our sales force, particularly in Europe, to address the growing demand.

Product Development Initiatives

We have an active and robust R&D pipeline that focuses on enhancements and next generation products to better serve our base. This includes scheduled launches across all four product lines over the next two years. Key next generation pipeline products include the recently launched next generation Clear + Brilliant^® Touch system, which is expected to serve as a foundation to launch laser platform in APAC and Europe, additional Thermage^® FLX system enhancements, next generation Fraxel^® system and next generation VASER^®system. Past launches have reinforced our belief that we are a market leader with a strong innovation portfolio, and our pipeline is a source of continued brand rejuvenation. Additionally, we expect to pursue other opportunities to continue to build out our product portfolio and address evolving customer and consumer needs.

To enhance our market position and sustain our track record of innovation, we continuously invest in our technological R&D. Our powerful innovation engine is supported by a portfolio of over 200 patents built by our deeply experienced and committed R&D team of more than 40 employees. Our ability to effectively innovate is enhanced by our deep relationships with our customers and other aesthetics industry participants, which allows us to incorporate critical feedback and emerging trends in real-time to support our continuous and iterative development processes. We currently have an emerging pipeline of enhancements and next generation products, solutions and enhancements and expect to continue to expand our portfolio in future years.

For additional discussion of our internal product development initiatives see “Business—Our Product Portfolio.”

Sales Force and Distribution Network

We have an established sales network that uniquely positions us to meet customers’ demands across the geographies we serve, building deeply loyal and enduring relationships. Through our teams, we have a well-established presence with key aesthetic medical device customer groups from dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners with capabilities that address a broad spectrum of aesthetic needs. These professional relationships are the foundation of our proven track record of converting innovation into trusted products with high sales and provide us additional patient insights and consumer feedback that virtuously informs the innovation effort.

We look for opportunities to strategically expand our sales force in specific geographies paced by country-specific regulatory registrations for new and upgraded product launches, most recently in support of our launches of our next generation Thermage^® FLX system and Clear + Brilliant^® Touch system in order to drive growth and maximize the return on our product portfolio. We plan to expand our large and growing presence globally in highly attractive markets. We remain acutely focused on strengthening our position in the U.S. and APAC, in particular in China, and expanding our presence in the European Union Five. We believe we have significant opportunities to continue our growth in these markets. Despite our presence in approximately 50 countries today,

we also see meaningful opportunities to expand our presence into new geographies both within our existing markets, such as Europe and APAC, and in new markets, such as Latin America. We believe our product portfolio is well-aligned with strong growth prospects and consumer trends in these markets. To achieve this growth, we intend to continue investing in our commercial infrastructure, while retaining and recruiting talented sales representatives.

We believe our direct local commercial presence in over 15 countries is a key differentiator of our commercial strategy that differentiates us from our peers within the market. We believe that our industry-leading technologies, talented human capital, global market expertise and strong brand and reputation will allow us to expand our customer base and take market share globally.

Our Competitive Environment

We operate in a marketplace with many competitors and face competition from competitors’ products and new products entering the market. We also face the threat of competition from new entrants to our markets as well as from existing competitors, including those overseas who may have lower production costs. In order to protect and grow our market share we (i) actively manage our pricing and (ii) refresh our product portfolio with innovative new products.

For additional discussion of our competitive environment see “Business—Our Competitive Environment.”

Business Trends

In addition to the actions previously outlined, the events described below have affected and may affect our business trends:

Impacts of COVID-19 Pandemic

Since the emergence of a novel strain of the coronavirus disease, COVID-19, in 2019, COVID-19 has spread across the globe, including the U.S., Canada and Europe, and was declared a global pandemic by the World Health Organization on March 11, 2020. The unprecedented nature of the COVID-19 pandemic has, and continues to, adversely impact the global economy. The COVID-19 pandemic and the rapidly evolving reactions of governments, private sector participants and the public in an effort to contain the spread of the COVID-19 virus and/or address its impacts have intensified and have had significant direct and indirect effects on businesses and commerce. This includes, but is not limited to, disruption to supply chains, employee base and transactional activity, facilities closures and production suspensions.

While we continue to take actions to mitigate the impact of the COVID-19 pandemic on daily operations, the global response to the pandemic has and is expected to impact our operating results until the impacts of the pandemic completely subside, the timing of which is uncertain and may be dependent upon, among other matters, the availability and effectiveness of vaccines for the COVID-19 virus. The changing dynamics of the pandemic, related responses from governments and private sector participants and the precautionary measures taken by our customers and the end consumers they serve, are expected to impact the timing and amount of our revenues.

During the pandemic, the public has been advised to engage in certain “social restrictions” such as: (i) remaining at home or shelter-in-place, (ii) limiting social interaction, (iii) closing non-essential businesses and (iv) postponing certain surgical and elective medical procedures in order to prioritize/conserve available health care resources. During 2020, these factors negatively impacted our revenues as social restrictions expanded worldwide, initially in Asia where the COVID-19 pandemic originated and later the U.S., Europe and other regions globally. Social restrictions in 2020 negatively impacted the Business’s revenues across our portfolio as the offices of many dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners were closed thereby deferring, if not preventing, aesthetic treatments from occurring as scheduled. These social

restrictions also caused us to temporarily pause our plans to strategically expand our sales force in specific geographies in support of our launches of our next generation Thermage^® FLX and Clear + Brilliant^® Touch systems. Although these factors had a drag on the trajectory of the revenue growth we generated in 2019, our established consumable business, aided by the momentum of our next generation Thermage^® FLX system sales in 2019 and 2020, still managed to provide us with 30% year-over-year revenue growth in 2020. Further, as governments began lifting social restrictions, allowing the offices of many dermatologists, plastic surgeons, aesthetic physicians and medical spa practitioners to reopen and aesthetic procedures to resume, the COVID-19 pandemic drag on our revenues began to lift prior to our fourth quarter of 2020 allowing us to resume the revenue growth trajectory we established in 2019.

Our objective is to maintain the uninterrupted availability of our products sufficient to meet customer demand in all our geographies. Business continuity plans are in place to ensure the well-being of our employees while we work to maintain the integrity of our supply chain and distribution channels. However, the ever-changing social restrictions during 2020 and 2021 presented unique challenges. COVID-19 related government and other restrictions impacted our supply chain and fill rates for certain materials, which in turn resulted in our factory running below capacity. Although we had in place procedures to mitigate the operational and supply issues associated with these matters, the COVID-19 pandemic did have an impact on our inventory levels and the manner in which we manage our inventories.

As social restrictions related to COVID-19 were put in place in one region, it would reduce demand in that region, while social restrictions were being lifted in others, creating a surge in demand in those regions. This shift in demand by region along with lower inventory levels required that we critically evaluate our inventory levels and future production runs before committing to our distributors and as a result, deferred shipments, and sales away from one geography to another where we expected the COVID-19 pandemic to have less of an impact. This had the effect of reducing the inventory levels at our distributors and as a result, certain distributors at times were working with inventories at levels less than optimal during 2020. This was particularly true in China where despite its social restrictions during 2020, demand for our products, particularly for the recently launched Thermage® FLX system, continued to increase. These factors reduced the inventory levels held by our distributor in China, our most significant market, to unsuitably low levels in 2020, which at times fell below one month on hand. During 2021 social restrictions were somewhat relaxed. In response to the continued strong demand in China and the overseas shipping delays we were anticipating, over the course of 2021 we took steps to return this distributor to its targeted level of three to four months to protect our business and maximize our opportunities in China. We continue to monitor the inventory levels of this distributor and expect our distributor to maintain its inventory levels at three to four months on hand, which we believe is appropriate in the current environment and consistent with our internal targets. We continue to monitor the impacts of the COVID-19 pandemic and take the actions appropriate to regulate our inventories at levels in line with the current supply and anticipated demand for our products.

Our revenues for the nine months ended September 30, 2021 and 2020 were $218.7 million and $165.5 million, respectively, an increase of $53.2 million or 32%. Our revenue growth is strongest in the regions where we are most established. This includes APAC, which includes our growth in China, South Korea, Hong Kong and Taiwan, and North America which includes our growth in the U.S. and Canada. Our revenues in China were $72.9 million and $41.1 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $31.8 million or 77%. Our revenues in the U.S. were $51.2 million and $29.1 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $22.1 million, or 76%. At the current pace of the recovery, we anticipate continued year-over-year revenue growth through the remainder of 2021, however as our revenues were most

negatively impacted by the social restrictions and other precautionary measures taken in response to the COVID-19 pandemic during the first half of 2020, we expect the rate of growth for the remainder of 2021 to be lower than the year-over-year revenue growth for the nine months ended September 30, 2021. We also expect the rate of recovery to vary by geography and to be dependent upon, among other things, the availability and effectiveness of vaccines for the COVID-19 virus and variant strains thereof, government responses, rates of economic recovery, precautionary measures taken by patients and customers, the rate at which remaining social restrictions are lifted and once lifted, the presumption that social restrictions will not be materially reenacted in the event of a resurgence of the virus or variant strains thereof and other actions taken in response to the COVID-19 pandemic. For instance, certain regions within APAC (such as Vietnam, the Philippines and Thailand), Europe (such as Spain and Germany) and Australia, among others, maintained or reinstituted certain social restrictions during 2021 and, as a result, our revenues in these regions during the nine months ended September 30, 2021 did not experience the year-over-year growth that we experienced in other regions, such as China, the U.S., South Korea, Canada, Hong Kong and Taiwan. As the COVID-19 pandemic remains a very fluid situation, it is difficult to predict what impact, if any, existing and new social restrictions may have on our revenues for the remainder of 2021.

We believe our product portfolio and strong brand recognition have served us well through the COVID-19 pandemic and we continue to be well-positioned to grow market share and continue growing our business as the world recovers. However, this situation remains very fluid and we continue to monitor the availability and effectiveness of vaccines and any resurgence of the COVID-19 virus, the Delta and Omicron variants and other variant strains thereof on our operations, businesses and primary goals. Given these circumstances, we continue to focus on: (i) revising our go-to-market and sales force strategies to address the changing business dynamics created by the COVID-19 pandemic, (ii) investing in our key promoted brands and product launches to increase market share, (iii) optimizing our cost structure and (iv) looking for key trends in the market to meet changing consumer/patient needs and identify areas for investment and growth. We believe focusing on these priorities will best enable us to effectively manage the changing business dynamics created by the COVID-19 pandemic, best prepare us for a possible resurgence of the virus and any variant strains thereof and provide a runway for continued growth during the recovery from the COVID-19 pandemic.

The changes in our revenues and operating results, including the impacts of COVID-19 pandemic related matters for the nine months ended September 30, 2021 and the year ended December 31, 2020, are discussed in further detail in “Results of Operations.” For a further discussion of these and other COVID-19 related risks, see “Risk Factors—Risks Relating to COVID-19.”

U.S. Tax Reform

In April 2021, U.S. President Joseph Biden proposed changes to the U.S. tax system. Since that date, both houses of Congress have released their own proposals for changes to the U.S. tax system, which proposals differ in a number of respects from the president’s proposal. The proposals under discussion have included changes to the U.S. corporate tax system that would increase U.S. corporate tax rates, although the most recent proposals do not include any such rate increase, and changes that would raise the tax rate on and make other changes to the taxation of Global Intangible Low Tax Income earned by foreign subsidiaries. Also under consideration are modifications to the BEAT, which would tax certain payments, including some that are related to inventory, made to affiliates that are subject to an effective tax rate of less than specified rates. Certain proposals also include limitations on the participation exemption for foreign dividends received and interest expense. In addition, certain proposals include additional limitations on the deduction of interest expense and carryforwards of unused interest expense, as well as an excise tax on certain pharmaceutical products that are non-compliant with the proposed drug pricing legislation. We are unable to predict which, if any, U.S. tax reform proposals will be enacted into law, and what effects any enacted legislation might have on our liability for U.S. corporate tax. However, it is possible that the enactment of changes in the U.S. corporate tax system could have a material adverse effect on our liability for U.S. corporate tax and our consolidated effective tax rate.

Global Minimum Corporate Tax Rate

On October 8, 2021, the Inclusive Framework published a statement updating and finalizing the key components of a two-pillar plan on global tax reform originally agreed on July 1, 2021, and a timetable for implementation by 2023. The Inclusive Framework plan has now been agreed to by 141 OECD members, including several countries which did not agree to the initial plan. Under pillar one, taxing rights over multinational businesses with global turnover above €20 billion and a profit margin above 10% will generally be re-allocated to market jurisdictions. Under pillar two, the Inclusive Framework has agreed on a global minimum corporate tax rate of 15% for companies with revenue above €750 million, calculated on a country-by-country basis. On October 30, 2021, the G20 formally endorsed the new global minimum corporate tax rate rules. The Inclusive Framework agreement must now be implemented by the OECD Members who have agreed to the plan, effective in 2023. On December 20, 2021, the OECD published model rules to implement the pillar two rules, which are generally consistent with agreement reached by the Inclusive Framework in October 2021. We will continue to monitor the implementation of the Inclusive Framework agreement by the countries in which we operate. While we are unable to predict when and how the Inclusive Framework agreement will be enacted into law in these countries, it is possible that the implementation of the Inclusive Framework agreement, including the global minimum corporate tax rate, could have a material effect on our liability for corporate taxes and our consolidated effective tax rate.

Components of Our Operating Results

Revenues

Our revenues are generated from the following sources:

•

Systems are energy-based aesthetic medical devices for aesthetic applications and consist of one or more handpieces, a console that incorporates a graphical user interface, an energy source and electronics, and a disposable treatment tip.

•

Treatment tips and other consumables used with the energy-based aesthetic medical devices available to be purchased separately from the systems.

•

Other revenue primarily from: (i) services for extended warranty contracts and (ii) fees for services and repairs not covered by a warranty contract.

Our revenues primarily fall into the following four franchises:

•

Thermage^® system—The Thermage^® system is a non-invasive RF therapy that can help smooth, tighten and contour skin and provide an overall younger-looking appearance.

•

Clear + Brilliant^® system—The Clear + Brilliant^® system uses fractional laser technology and is designed to address and prevent the early signs of aging skin. Specifically, treatments can help prevent the worsening of fine lines or wrinkles due to aging or sun damage, as well as uneven pigmentation.

•

Fraxel^® system—The Fraxel^® system is designed to improve tone, texture and radiance for aging, sun-damaged or scarred skin. It uses a fractional resurfacing laser which is more intense than Clear + Brilliant^® to penetrate deeper into the skin. Next generation Fraxel^®can be effective on fine lines and wrinkles (i.e. crow’s feet and brow lines), surface scarring, pigmentation, age spots, melasma, sun damage and AK.

•

VASER^® system—The VASER^®lipo system uses ultrasound energy for aesthetic body contouring.

Cost of Goods Sold (excluding amortization of intangible assets)

Cost of goods sold primarily includes: manufacturing and packaging; the cost of products we purchase from third parties; depreciation of our manufacturing facility and equipment; and adjustments to inventories. Cost of goods sold typically vary between periods as a result of product mix, volume, changes in foreign currency and inflation. Cost of goods sold excludes the amortization of intangible assets.

Selling, General and Administrative Expenses

Selling, general, and administrative (“SG&A”) expenses primarily include: employee compensation associated with sales and marketing, finance, legal, information technology, human resources and other administrative functions; and consultancy costs; product promotion expenses; overhead and occupancy costs; depreciation of facilities and equipment; and other general and administrative costs.

Research and Development Expenses

Included in Research and development are costs related to our product development and quality assurance programs. Expenses related to product development include: employee compensation costs; overhead and occupancy costs; depreciation of R&D facilities and equipment; clinical trial costs; clinical manufacturing and scale-up costs; and other third-party development costs. Quality assurance are the costs incurred to meet evolving customer and regulatory standards and include: employee compensation costs; overhead and occupancy costs; amortization of software; and other third-party costs.

Amortization of Intangible Assets

Intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives, generally 7 to 15 years. Management continually assesses the useful lives related to the Business’s long-lived assets to reflect the most current assumptions.

Asset impairments

Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company continues to monitor the recoverability of its finite-lived intangible assets and tests the intangible assets for impairment if indicators of impairment are present.

Foreign Exchange and Other

Foreign exchange and other primarily includes transactional gains/losses from the revaluation of certain assets and liabilities denominated in foreign currencies other than the Business’s functional currencies.

Income Taxes

Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the temporary differences between the financial statement and income tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. A valuation allowance is provided for the portion of deferred tax assets that is more likely than not to remain unrealized. Deferred tax assets and liabilities are measured using enacted tax rates and laws. Deferred tax assets for outside basis differences in investments in subsidiaries are only recognized if the difference will be realized in the foreseeable future.

The tax benefit from an uncertain tax position is recognized only if it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority, based on the technical merits of the position. The tax benefits recognized from such positions are measured based on the amount for which there is a greater than 50% likelihood of being realized upon settlement. Liabilities associated with uncertain tax positions are classified as long-term unless expected to be paid within one year. Interest and penalties related to uncertain tax positions, if any, are recorded in the income taxes and classified with the related liability on the Combined Balance Sheets.

100

Financial Performance Highlights

The following table provides financial performance highlights for the nine months ended September 30, 2021 and 2020:


	Nine Months Ended September 30,
(in millions)	2021		2020		Change
Revenues	$	218.7	$	165.5	$	53.2
Operating income	$	89.0	$	55.5	$	33.5
Income before income taxes	$	89.0	$	55.7	$	33.3
Net income	$	72.8	$	45.3	$	27.5

Summary of Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020

Revenues for the nine months ended September 30, 2021 and 2020 were $218.7 million and $165.5 million, respectively, an increase of $53.2 million, or 32%. The increase was primarily driven by: (i) higher volumes across all franchises and categories of $42.3 million, (ii) the favorable effect of foreign currencies of $9.8 million and (iii) higher net realized pricing of $1.1 million.

Operating income for the nine months ended September 30, 2021 and 2020 was $89.0 million and $55.5 million, respectively, an increase of $33.5 million which reflects, among other factors:

•

an increase in Gross profit of $47.4 million or Contribution (non-GAAP) (revenues less cost of goods sold, excluding amortization of intangible assets) of $46.9 million. The increase was primarily driven by the increase in revenues, as previously discussed;

•

an increase in SG&A expenses of $12.2 million primarily attributable to: (i) higher selling, advertising and promotion expenses in support of the launch of the next generation Clear + Brilliant^® Touch system and (ii) the impacts of the non-recurrence of certain profit protection measures taken in 2020 to manage and reduce operating expenses during the COVID-19 pandemic;

•

an increase in R&D expenses of $1.7 million; and

•

a decrease in Amortization of intangible assets of $0.5 million, due to fully amortized intangible assets no longer being amortized in 2021.

Operating income for the nine months ended September 30, 2021 and 2020 was $89.0 million and $55.5 million, respectively, and includes non-cash charges for Depreciation and amortization of intangible assets of $15.2 million and $15.3 million and Share-based compensation of $3.4 million and $2.5 million, respectively.

Net income for the nine months ended September 30, 2021 and 2020 was $72.8 million and $45.3 million, respectively, an increase in our results of $27.5 million and was primarily due to the increase in our operating results of $33.5 million, as previously discussed partially offset by: (i) an unfavorable change in the Income taxes of $5.8 million and (ii) an unfavorable net change in Foreign exchange and other of $0.2 million.

The following table provides financial performance highlights for each of the last three years:


	Years Ended December 31,						Change
(in millions)	2020		2019		2018		2019 to 2020		2018 to 2019
Revenues	$	252.6	$	193.9	$	135.2	$	58.7	$	58.7
Operating income	$	93.0	$	47.2	$	15.5	$	45.8	$	31.7
Income before income taxes	$	93.6	$	46.7	$	14.9	$	46.9	$	31.8
Net income	$	76.1	$	40.9	$	13.7	$	35.2	$	27.2

101

Summary of 2020 Compared with 2019

Revenues for 2020 and 2019 were $252.6 million and $193.9 million, respectively, an increase of $58.7 million, or 30%. The increase was primarily driven by: (i) net higher volumes of $50.3 million due to increased demand for Thermage^® systems and Thermage^® tips and other consumables, partially offset by lower sales related to our Clear + Brilliant^®, Fraxel^® and VASER^® franchises primarily due to the impacts of social restrictions and other precautionary measures taken in response to the COVID-19 pandemic, as discussed in the previous section titled “—Business Trends—Impacts of COVID-19 Pandemic,” (ii) higher pricing of $5.8 million and (iii) the favorable effect of foreign currencies of $2.6 million.

Operating income for 2020 and 2019 was $93.0 million and $47.2 million, respectively, an increase of $45.8 million which reflects, among other factors:

•

an increase in Gross profit of $48.1 million or Contribution (non-GAAP) of $48.1 million primarily driven by the increase in revenues, as previously discussed;

•

an increase in SG&A expenses of $4.0 million, primarily attributable to higher selling, advertising and promotion expenses in support of our launches of next generation Thermage^® FLX system into new regions;

•

an increase in R&D of $2.7 million;

•

a decrease in Asset impairments of $3.6 million attributable to the full impairment related to Acquired In-process research and development (“IPR&D”) not placed in service in 2019; and

•

a decrease in Other expense (income), net of $0.8 million, related to adjustments in 2019 not recurring in 2020 for Litigation and other matters of $0.9 million partially offset by adjustments to Acquisition-related contingent consideration of $0.1 million.

Operating income for 2020 and 2019 was $93.0 million and $47.2 million, respectively, and includes non-cash charges for Depreciation and amortization of intangible assets of $20.5 million and $20.2 million, Asset impairments of $0 and $3.6 million and Share-based compensation of $3.5 million and $2.5 million, respectively.

Income before income taxes for 2020 and 2019 was $93.6 million and $46.7 million, respectively, an increase of $46.9 million and is primarily attributable to: (i) the increase in our operating results of $45.8 million, as previously discussed, and (ii) a favorable net change in Foreign exchange and other of $1.1 million.

Net income for 2020 and 2019 was $76.1 million and $40.9 million, an increase of $35.2 million and was primarily due to the increase in Income before income taxes of $46.9 million, as previously discussed, partially offset by an increase in Income taxes of $11.7 million.

Summary of 2019 Compared with 2018

Revenues for 2019 and 2018 were $193.9 million and $135.2 million, respectively, an increase of $58.7 million, or 43%. The increase was primarily driven by: (i) net higher volumes of $59.3 million primarily due to increased demand for Thermage^® systems and Thermage^® tips and other consumables and (ii) higher pricing of $2.2 million, partially offset by the unfavorable effect of foreign currencies of $2.8 million.

Operating income for 2019 and 2018 was $47.2 million and $15.5 million, respectively, an increase of $31.7 million which reflects, among other factors:

•

an increase in Gross profit of $47.2 million or Contribution (non-GAAP) of $47.2 million primarily driven by the increase in revenues, as previously discussed;

•

an increase in SG&A of $8.4 million, primarily attributable to higher selling, advertising and promotion expenses in support of our launches of next generation Thermage^® FLX system into new regions;

102

•

an increase in R&D of $2.1 million;

•

an increase in Asset impairments of $3.6 million attributable to the full impairment related to Acquired IPR&D not placed in service in 2019; and

•

an increase in Other expense (income), net of $1.4 million, related to higher adjustments in 2019 for Litigation and other matters of $0.8 million and lower favorable adjustments in 2019 for Acquisition-related contingent consideration of $0.6 million.

Operating income for 2019 and 2018 of $47.2 million and $15.5 million, respectively, includes non-cash charges for Depreciation and amortization of intangible assets of $20.2 million and $21.0 million, Asset impairments of $3.6 million and $0 and Share-based compensation of $2.5 million and $1.7 million, respectively.

Income before income taxes for 2019 and 2018 was $46.7 million and $14.9 million, respectively, an increase of $31.8 million, primarily attributable to the increase in our operating results of $31.7 million, as previously discussed.

Net income for 2019 and 2018 was $40.9 million and $13.7 million, respectively, an increase of $27.2 million, primarily attributable to the increase in Income before income taxes of $31.8 million, as previously discussed, partially offset by the increase in Income taxes of $4.6 million.

Interim Results of Operations

Our results for the nine months ended September 30, 2021 and 2020 were as follows:


	Nine Months Ended September 30,				Change 2020 to 2021
(in millions)	2021		2020		Change 2020 to 2021
Revenues	$	218.7	$	165.5	$	53.2

Expenses
Cost of goods sold (excluding amortization of intangible assets)		49.1		42.8		6.3
Selling, general and administrative		54.7		42.5		12.2
Research and development		12.4		10.7		1.7
Amortization of intangible assets		13.5		14.0		(0.5	)

		129.7		110.0		19.7

Operating income		89.0		55.5		33.5
Foreign exchange and other		—		0.2		(0.2	)

Income before income taxes		89.0		55.7		33.3
Income taxes		16.2		10.4		5.8

Net income	$	72.8	$	45.3	$	27.5

103

Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020

Revenues

Our revenues by franchise, category and region for the nine months ended September 30, 2021 and 2020 were follows:


	Nine Months Ended September 30,										Change
	2021					2020					2020 to 2021
(in millions)	Amount		Pct.			Amount		Pct.			Amount			Pct.
*Revenues by Franchise*
Thermage^®	$	170.2		78	%	$	139.6		84	%	$	30.6			22	%
Clear + Brilliant^®		18.5		8	%		7.8		5	%		10.7			137	%
Fraxel^®		12.4		6	%		7.0		4	%		5.4			77	%
VASER^®		16.6		8	%		10.4		6	%		6.2			60	%
Other		1.0		—	%		0.7		1	%		0.3			43	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	53.2			32	%

*Revenues by Category*
Systems	$	56.9		26	%	$	51.4		32	%	$	5.5			11	%
Tips and other consumables		156.0		71	%		110.0		66	%		46.0			42	%

Revenues from product sales		212.9		97	%		161.4		98	%		51.5			32	%
Other revenues⁽¹⁾		5.8		3	%		4.1		2	%		1.7			41	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	53.2			32	%

*Revenues by Region*
Asia Pacific	$	147.2		67	%	$	116.6		71	%	$	30.6			26	%
North America		58.2		27	%		33.0		19	%		25.2			76	%
Europe/Middle East		11.5		5	%		15.1		9	%		(3.6	)		(24	)%
Other		1.8		1	%		0.8		1	%		1.0			125	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	53.2			32	%

(1)	Other revenue primarily consists of: (i) services for extended warranty contracts and (ii) fees for services and repairs not covered by a warranty contract.

Our revenues were $218.7 million and $165.5 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $53.2 million, or 32%. The increase was primarily driven by: (i) higher volumes across all franchises and categories of $42.3 million, (ii) the favorable effect of foreign currencies of $9.8 million and (iii) higher net realized pricing of $1.1 million.

The higher volumes were primarily driven by: (i) an increase in Thermage^® tips and other consumables sales in 2021 driven by systems sold in 2020 and early 2021, primarily in China and the U.S., (ii) the positive impacts from the recovery from the COVID-19 pandemic and the easing of certain social restrictions, as previously discussed, which positively impacted all franchises, categories and regions in 2021 and (iii) an increase in systems sold driven by the U.S. launch of the next generation Clear + Brilliant^® Touch laser system in January 2021. The higher volumes we experienced for the nine months ended September 30, 2021 as compared to the prior year period were also driven in part by inventory restocking, as certain of our distributors have increased inventory levels versus historic levels in order to build safety stock, which was partially exacerbated by mandated closures in certain jurisdictions as a result of the COVID-19 pandemic.

As previously discussed in “—Business Trends—Impacts of COVID-19 Pandemic,” at the current pace of the recovery, we anticipate continued year-over-year revenue growth through the remainder of 2021, however as

104

our revenues were most negatively impacted by the social restrictions and other precautionary measures taken in response to the COVID-19 pandemic during the first half of 2020, we expect the rate of growth for the remainder of 2021 to be lower than the year-over-year revenue growth for the nine months ended September 30, 2021. We also expect the rate of recovery to vary by geography and to be dependent upon, among other things, the availability and effectiveness of vaccines for the COVID-19 virus, rates of economic recovery, the rate at which remaining social restrictions are lifted and once lifted, the presumption that social restrictions will not be materially reenacted in the event of a resurgence of the virus and other actions taken in response to the COVID-19 pandemic. For instance, certain regions within APAC (such as Vietnam, the Philippines and Thailand), Europe (such as Spain and Germany) and Australia, among others, maintained or reinstituted certain social restrictions during 2021 and, as a result, our revenues in these regions during the nine months ended September 30, 2021 did not experience the year-over-year growth that we experienced in other regions, such as China, the U.S., South Korea, Canada, Hong Kong and Taiwan. As the COVID-19 pandemic remains a very fluid situation, it is difficult to predict what impact, if any, existing and new social restrictions may have on our revenues for the remainder of 2021. See “Risk Factors—Risks Relating to COVID-19—The ongoing COVID-19 pandemic, the rapidly evolving reaction of governments, private sector participants and the public to that pandemic and/or the associated economic impact of the pandemic and the reactions to it, has impacted us in the past, and could in the future adversely and materially impact our business, financial condition, cash flows and results of operations.”

Operating Expenses

Cost of Goods Sold (excluding amortization of intangible assets)

Cost of goods sold was $49.1 million and $42.8 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $6.3 million, or 15%, primarily driven by net higher volumes, as previously discussed. Cost of goods sold as a percentage of revenues was 22.5% and 25.9% for the nine months ended September 30, 2021 and 2020, respectively, a decrease of 3.4 percentage points. Costs of goods sold as a percentage of revenues was favorably impacted as a result of: (i) higher percentage of sales of tips and other consumables which generally have higher gross margins and (ii) higher net realized pricing.

Selling, General and Administrative Expenses

SG&A expenses were $54.7 million and $42.5 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $12.2 million, or 29%. The increase was primarily attributable to: (i) higher selling, advertising and promotion expenses in support of the launch of the next generation Clear + Brilliant^® Touch system and (ii) the impacts of the non-recurrence of certain profit protection measures taken in 2020, such as reducing advertising, selling and other promotional activities, to manage certain operating expenses during the COVID-19 pandemic.

In 2021, we began allocating more resources to selling and other promotional activities in support of our existing products, product launches and products in development. Should the pace of recovery accelerate in the geographies in which we operate, we expect to allocate more resources to these activities to drive sustainable revenue and profit growth, in continued support of the launches of our Thermage^® FLX and Clear + Brilliant^® Touch systems in their current and additional markets. As a result, if the recovery from the COVID-19 pandemic continues, we expect our operating expenses for the remainder of 2021 to exceed our operating expenses in 2020 for the same period.

Research and Development Expenses

R&D expenses were $12.4 million and $10.7 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $1.7 million, or 16%. R&D expenses as a percentage of revenues were approximately 6% and 6% for the nine months ended September 30, 2021 and 2020, respectively.

105

Amortization of Intangible Assets

Amortization of intangible assets was $13.5 million and $14.0 million for the nine months ended September 30, 2021 and 2020, respectively, a decrease of $0.5 million, or 4%, and is due to fully amortized intangible assets no longer being amortized in 2021.

See Note 6, “INTANGIBLE ASSETS” to our unaudited interim Combined Financial Statements for further details related to our intangible assets.

Income Taxes

Income taxes were $16.2 million and $10.4 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $5.8 million, which was primarily attributable to the year over year increase in our pre-tax earnings.

See Note 9, “INCOME TAXES” to our unaudited interim Combined Financial Statements for further details regarding income taxes.

Annual Results of Operations

Our results for the years 2020, 2019 and 2018 were as follows:


	Years Ended December 31,								Change
(in millions)	2020		2019			2018			2019 to 2020			2018 to 2019
Revenues	$	252.6	$	193.9		$	135.2		$	58.7		$	58.7

Expenses
Cost of goods sold (excluding amortization of intangible assets)		62.9		52.3			40.8			10.6			11.5
Selling, general and administrative		62.6		58.6			50.2			4.0			8.4
Research and development		15.4		12.7			10.6			2.7			2.1
Amortization of intangible assets		18.7		18.7			18.7			—			—
Asset impairments		—		3.6			—			(3.6	)		3.6
Other expense (income), net		—		0.8			(0.6	)		(0.8	)		1.4

		159.6		146.7			119.7			12.9			27.0

Operating income		93.0		47.2			15.5			45.8			31.7
Foreign exchange and other		0.6		(0.5	)		(0.6	)		1.1			0.1

Income before income taxes		93.6		46.7			14.9			46.9			31.8
Income taxes		17.5		5.8			1.2			11.7			4.6

Net income	$	76.1	$	40.9		$	13.7		$	35.2		$	27.2

106

2020 Compared with 2019

Revenues

Our revenues by franchise, category and region for the years 2020 and 2019 were follows:


	Years Ended December 31,										Change
	2020					2019					2019 to 2020
(in millions)	Amount		Pct.			Amount		Pct.			Amount			Pct.
*Revenues by Franchise*
Thermage^®	$	210.4		84	%	$	142.8		74	%	$	67.6			47	%
Clear + Brilliant^®		13.3		5	%		18.0		9	%		(4.7	)		(26	)%
Fraxel^®		12.2		5	%		13.7		7	%		(1.5	)		(11	)%
VASER^®		15.8		6	%		18.1		9	%		(2.3	)		(13	)%
Other		0.9		—	%		1.3		1	%		(0.4	)		(31	)%

Total revenues	$	252.6		100	%	$	193.9		100	%	$	58.7			30	%

*Revenues by Category*
Systems	$	78.3		31	%	$	61.1		32	%	$	17.2			28	%
Tips and other consumables		168.3		67	%		126.9		65	%		41.4			33	%

Revenues from product sales		246.6		98	%		188.0		97	%		58.6			31	%
Other revenues		6.0		2	%		5.9		3	%		0.1			2	%

Total revenues	$	252.6		100	%	$	193.9		100	%	$	58.7			30	%

*Revenues by Region*
Asia Pacific	$	171.1		68	%	$	115.7		60	%	$	55.4			48	%
North America		57.7		23	%		62.5		32	%		(4.8	)		(8	)%
Europe/Middle East		22.2		8	%		13.2		7	%		9.0			68	%
Other		1.6		1	%		2.3		1	%		(0.7	)		(30	)%

Total revenues	$	252.6		100	%	$	193.9		100	%	$	58.9			30	%

Our revenues were $252.6 million and $193.9 million for 2020 and 2019, respectively, an increase of $58.7 million, or 30%. The increase was primarily driven by: (i) net higher volumes of $50.3 million due to increased demand for Thermage^® systems and Thermage^® tips and other consumables, partially offset by lower sales related to our Clear + Brilliant^®, Fraxel^® and VASER^® franchises primarily due to the impacts of social restrictions and other precautionary measures taken in response to the COVID-19 pandemic, as discussed in “—Business Trends—Impacts of COVID-19 Pandemic,” (ii) higher pricing of $5.8 million and (iii) the favorable effect of foreign currencies of $2.6 million.

The increased demand for Thermage^® systems and Thermage^® tips and other consumables is primarily attributable to additional launches of next generation Thermage^® FLX, a fourth-generation non-invasive treatment option using an RF platform designed to optimize key functional characteristics and improve patient outcomes. Next generation Thermage^® FLX was launched in Hong Kong, Japan, Korea, Chinese Taipei, Philippines, Singapore, Indonesia, Malaysia, China, Thailand, Vietnam, and Australia during 2018 and 2019. These launches have been successful as next generation Thermage^® FLX revenues for systems and tips and other consumables for 2020 and 2019 were $142.5 million and $77.5 million, respectively. We expect additional launches of next generation Thermage^® FLX in Europe in the near term, paced by country-specific regulatory registrations.

Presuming there continues to be increased availability of effective vaccines and any resurgence of the COVID-19 virus and variant strains such as the Delta and Omicron variants do not have a material adverse impact on efforts to contain the COVID-19 virus, the Business anticipates an ongoing, gradual global recovery from the significant social and macroeconomic impacts of the pandemic and we anticipate that our revenues for our Clear + Brilliant^®, Fraxel^® and VASER^® franchises will likely return to their pre-pandemic levels in 2021. However, the rates of recovery will vary by geography and will be dependent upon, among other things, the availability and effectiveness of vaccines for

107

the COVID-19 virus and variant strains thereof, government responses, rates of economic recovery, precautionary measures taken by patients and customers, the rate at which remaining social restrictions are lifted and once lifted, the presumption that social restrictions will not be materially reenacted in the event of a resurgence of the virus or variant strains thereof and other actions taken in response to the COVID-19 pandemic.

Operating Expenses

Cost of Goods Sold (excluding amortization of intangible assets)

Cost of goods sold was $62.9 million and $52.3 million for 2020 and 2019, respectively, an increase of $10.6 million, or 20%, primarily driven by net higher volumes, as previously discussed. Cost of goods sold as a percentage of revenues was 24.9% and 27.0% for 2020 and 2019, respectively, a decrease of 2.1 percentage points. Costs of goods sold as a percentage of revenues was favorably impacted as a result of: (i) higher sales of tips and other consumables which generally have higher gross margins and (ii) higher pricing.

Selling, General and Administrative Expenses

SG&A expenses were $62.6 million and $58.6 million for 2020 and 2019, respectively, an increase of $4.0 million, or 7%. The increase was primarily attributable to higher selling, advertising and promotion expenses in support of our launches of next generation Thermage^® FLX system into new regions, as previously discussed.

In 2021, we began allocating more resources to selling and other promotional activities in support of our existing products, product launches and products in development. Should the pace of recovery in each geography accelerate, we expect to allocate more resources to these activities to drive sustainable revenue and profit growth, including the continued support of our launches of our next generation Thermage^® FLX and Clear + Brilliant^® Touch system. As a result, if the recovery from the COVID-19 pandemic continues, we expect to see our operating expenses in 2021 exceed our operating expenses in 2020.

Research and Development Expenses

R&D expenses were $15.4 million and $12.7 million for 2020 and 2019, respectively, an increase of $2.7 million, or 21%. The increase is primarily attributable to higher R&D costs specifically identified to the Business in 2020 as compared to 2019. R&D expenses as a percentage of revenues were approximately 6% and 7% for 2020 and 2019, respectively.

Amortization of Intangible Assets

Amortization of intangible assets was $18.7 million and $18.7 million for 2020 and 2019, respectively.

See Note 7, “Intangible Assets and Goodwill” to our audited combined financial statements for further details related to our intangible assets.

Asset impairments

Asset impairments, were $0 and $3.6 million for 2020 and 2019, respectively, a decrease of $3.6 million. Asset impairments in 2019 represents the full impairment of certain acquired IPR&D.

Other expense (income), net

Other expense (income), net for 2020 and 2019 consists of the following:


(in millions)	2020		2019
Litigation and other matters	$	—	$	0.9
Acquisition-related contingent consideration		—		(0.1	)

Other expense (income), net	$	—	$	0.8

108

Foreign Exchange and Other

Foreign exchange and other was a gain of $0.6 million and a loss of $0.5 million for 2020 and 2019, respectively, a favorable net change of $1.1 million.

Income Taxes

Income taxes were $17.5 million and $5.8 million in 2020 and 2019, respectively, an increase of $11.7 million, which was primarily attributable to the year over year increase in our pre-tax earnings.

In 2020 and 2019, our effective tax rate differs from the Canadian income tax rate primarily due to foreign tax rate differentials. Our consolidated foreign rate differential reflects the net total tax cost or benefit on income earned or losses incurred in jurisdictions outside of Canada as compared to the net total tax cost or benefit of such income (on a jurisdictional basis) at the Canadian statutory rate of 26.9%. Tax costs below the Canadian statutory rate generate a beneficial foreign rate differential as do tax benefits generated in jurisdictions where the statutory tax rate exceeds the Canadian statutory tax rate. The net total foreign rate differentials generated in each jurisdiction in which we operate is not expected to bear a direct relationship to the net total amount of foreign income (or loss) earned outside of Canada.

See Note 14, “Income Taxes” to our audited combined financial statements for further details regarding income taxes.

2019 Compared with 2018

Revenues

Our revenues by franchise, category and region for the years 2019 and 2018 were follows:


	Years Ended December 31,										Change
	2019					2018					2018 to 2019
(in millions)	Amount		Pct.			Amount		Pct.			Amount			Pct.
*Revenues by Franchise*
Thermage^®	$	142.8		74	%	$	84.8		63	%	$	58.0			68	%
Clear + Brilliant^®		18.0		9	%		16.3		12	%		1.7			10	%
Fraxel^®		13.7		7	%		15.1		11	%		(1.4	)		(9	)%
VASER^®		18.1		9	%		16.3		12	%		1.8			11	%
Other		1.3		1	%		2.7		2	%		(1.4	)		(52	)%

Total revenues	$	193.9		100	%	$	135.2		100	%	$	58.7			43	%

*Revenues by Category*
Systems	$	61.1		32	%	$	43.4		32	%	$	17.7			41	%
Tips and other consumables		126.9		65	%		85.9		64	%		41.0			48	%

Revenues from product sales		188.0		97	%		129.3		96	%		58.7			45	%
Other revenues		5.9		3	%		5.9		4	%		—			—	%

Total revenues	$	193.9		100	%	$	135.2		100	%	$	58.7			43	%

*Revenues by Region*
Asia Pacific	$	115.7		60	%	$	69.8		52	%	$	45.9			66	%
North America		62.5		32	%		52.9		39	%		9.6			18	%
Europe/Middle East		13.4		7	%		10.3		7	%		3.1			30	%
Other		2.3		1	%		2.2		2	%		0.1			5	%

Total revenues	$	193.9		100	%	$	135.2		100	%	$	58.7			43	%

109

Our revenues were $193.9 million and $135.2 million for 2019 and 2018, respectively, an increase of $58.7 million, or 43%, primarily driven by: (i) net higher volumes of $59.3 million primarily due to increased demand for Thermage^® systems and Thermage^® tips and other consumables and (ii) higher pricing of $2.2 million, partially offset by the unfavorable effect of foreign currencies of $2.8 million.

The increase in revenue is primarily attributable to launches of next generation Thermage^® FLX. Next generation Thermage^® FLX was launched in the U.S. at the end of 2017 and launched in Hong Kong, Japan, Korea, Chinese Taipei, Philippines, Singapore, Indonesia, Malaysia, China, Thailand, Vietnam, and Australia during 2018 and 2019.

Operating Expenses

Cost of Goods Sold (excluding amortization of intangible assets)

Cost of goods sold was $52.3 million and $40.8 million in 2019 and 2018, respectively, an increase of $11.5 million, or 28%, primarily driven by net higher volumes, as previously discussed. Cost of goods sold as a percentage of revenues was 27.0% and 30.2% for 2019 and 2018, respectively, a decrease of 3.2 percentage points and is primarily attributable to: (i) higher sales of tips and other consumables which generally have higher gross margins and (ii) higher pricing.

Selling, General and Administrative Expenses

SG&A expenses were $58.6 million and $50.2 million for 2019 and 2018, respectively, an increase of $8.4 million, or 17%. The increase was primarily attributable to higher selling, advertising and promotion expenses in support of our launches of next generation Thermage^® FLX system into new regions, as previously discussed.

Research and Development Expenses

R&D expenses were $12.7 million and $10.6 million for 2019 and 2018, respectively, an increase of $2.1 million, or 20%. The increase is primarily attributable to higher R&D costs specifically identified to the Business in 2019 as compared to 2018. R&D expenses as a percentage of revenues were approximately 7% and 8% for 2019 and 2018, respectively.

Amortization of Intangible Assets

Amortization of intangible assets was $18.7 million and $18.7 million for 2019 and 2018, respectively.

Asset impairments

Asset impairments, were $3.6 million and $0 for 2019 and 2018, respectively, an increase of $3.6 million. Asset impairments in 2019 represents the full impairment of certain acquired IPR&D.

Other expense (income), net

Other expense (income), net for 2019 and 2018 consists of the following:


(in millions)	2019			2018
Litigation and other matters	$	0.9		$	0.1
Acquisition-related contingent consideration		(0.1	)		(0.7	)

Other expense (income), net	$	0.8		$	(0.6	)

110

Litigation and other matters includes other amounts provided for certain matters discussed in Note 15, “Legal Proceedings” to our audited combined financial statements.

Foreign Exchange and Other

Foreign exchange and other was a loss of $0.5 million and $0.6 million for 2019 and 2018, respectively.

Income Taxes

Income taxes were $5.8 million and $1.2 million for 2019 and 2018, respectively, an increase of $4.6 million which was primarily attributable to the year over year increase in our pre-tax earnings. In 2019 and 2018, our effective tax rate differs from the Canadian income tax rate primarily due to foreign tax rate differentials.

See Note 14, “Income Taxes” to our audited combined financial statements for further details regarding income taxes.

Non-GAAP Information

To supplement the financial measures prepared in accordance with U.S. GAAP, the Business uses certain non-GAAP financial measures, including: (i) Contribution (non-GAAP), (ii) Contribution margin (non-GAAP), (iii) Adjusted net income (non-GAAP), (iv) EBITDA (non-GAAP), (v) Adjusted EBITDA (non-GAAP), (vi) Adjusted EBITDA margin (non-GAAP) and (vii) Free cash flows (non-GAAP) to provide supplemental information to readers. Management believes that these non-GAAP measures, along with the U.S. GAAP measures used by management, most appropriately reflect how the Business measures its business internally and sets operational goals and incentives. In particular, the Business believes that these non-GAAP measures are useful in evaluating current performance and focus management on the Business’s underlying operational results. As a result, the Business uses these non-GAAP measures both to assess the actual financial performance of the Business and to forecast future results as part of its guidance.

However, these non-GAAP measures are not prepared in accordance with U.S. GAAP nor do they have a standardized meaning under U.S. GAAP. In addition, other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP measures may not be comparable to such similarly titled non-GAAP financial measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider it with the most directly comparable GAAP measure. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation. These non-GAAP measures should be considered supplements to, not substitutes for, or superior to, the corresponding measures calculated in accordance with GAAP.

Contribution (non-GAAP) and Contribution margin (non-GAAP)

We define Contribution (non-GAAP) as U.S. GAAP Gross profit (its most directly comparable U.S. GAAP financial measure) adjusted for amortization of intangible assets. In accordance with U.S. GAAP, Gross profit represents Revenues less Costs of goods sold (excluding amortization of intangible assets) less Amortization of intangible assets as presented in the Business’s Combined Statements of Income. Contribution margin (non-GAAP) is Contribution (non-GAAP) divided by Revenues. Contribution (non-GAAP) and Contribution margin (non-GAAP) are measures used by our management to understand and evaluate our operating performance and trends. Contribution (non-GAAP) excludes amortization of intangible assets, which is a non-cash charge that can be impacted by, among other things, the timing and magnitude of acquisitions. We believe that the assessment of our operations excluding non-cash charges for amortization of intangible assets is relevant to our assessment of internal operations and comparisons to the performance of our competitors.

111

The unaudited reconciliation of U.S. GAAP Gross profit to Contribution (non-GAAP) is presented below:


	Nine Months Ended September 30,						Years Ended December 31,
(in millions)	2021			2020			2020			2019			2018
Revenues	$	218.7		$	165.5		$	252.6		$	193.9		$	135.2
Costs of goods sold (excluding amortization of intangible assets)		(49.1	)		(42.8	)		(62.9	)		(52.3	)		(40.8	)
Amortization of intangible assets		(13.5	)		(14.0	)		(18.7	)		(18.7	)		(18.7	)

Gross profit		156.1			108.7			171.0			122.9			75.7
Amortization of intangible assets		13.5			14.0			18.7			18.7			18.7

Contribution (non-GAAP)	$	169.6		$	122.7		$	189.7		$	141.6		$	94.4

Adjusted Net Income (non-GAAP)

Adjusted net income (non-GAAP) is Net income (its most directly comparable U.S. GAAP financial measure) adjusted for amortization of intangible assets, as described above, and further adjusted for asset impairments, IT infrastructure costs, litigation and other matters, and acquisition-related contingent consideration, as these adjustments are described below:

•

Asset impairments: The Business has excluded the impact of impairments of finite-lived and indefinite-lived intangible assets as such amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions and divestitures. The Business believes that the adjustments of these items correlate with the sustainability of the Business’s operating performance. Although the Business excludes impairments of intangible assets from measuring the performance of its business, the Business believes that it is important for investors to understand that intangible assets contribute to revenue generation.

•

IT infrastructure costs: The Business has excluded IT infrastructure investment, that are the result of other, non-comparable events to measure operating performance. These events arise outside of the ordinary course of continuing operations. However, investors should understand that many of these costs could recur.

•

Litigation and other matters: The Business has excluded certain legal costs and other professional fees. Given the unique nature of the matters relating to these costs, the Company believes these items are not routine operating expenses. For example, legal settlements and judgments vary significantly, in their nature, size and frequency, and, due to this volatility, the Company believes the costs associated with legal settlements and judgments are not routine operating expenses. The Business believes that the exclusion of such out-of-the-ordinary-course amounts provides supplemental information to assist in the comparison of the financial results of the Business from period to period and, therefore, provides useful supplemental information to investors. However, investors should understand that many of these costs could recur and that companies in our industry often face litigation.

•

Acquisition-related contingent consideration: The Business has excluded the impact of acquisition-related contingent consideration non-cash adjustments due to the inherent uncertainty and volatility associated with such amounts based on changes in assumptions with respect to fair value estimates, and the amount and frequency of such adjustments is not consistent and is significantly impacted by the timing and size of the Business’s acquisitions, as well as the nature of the agreed-upon consideration.

112

Adjusted net income (non-GAAP) excludes the impact of these certain items that may obscure trends in the Business’ underlying performance. Management uses Adjusted net income (non-GAAP) for strategic decision making, forecasting future results and evaluating current performance. The unaudited reconciliation of Net income, which is a U.S. GAAP measure, to Adjusted net income (non-GAAP) is presented below:


	Nine Months Ended September 30,						Years Ended December 31,
(in millions)	2021			2020			2020			2019			2018
Net income	$	72.8		$	45.3		$	76.1		$	40.9		$	13.7
Adjustments:
Amortization of intangible assets		13.5			14.0			18.7			18.7			18.7
Asset impairments		—			—			—			3.6			—
IT infrastructure costs		0.7			0.5			0.7			0.6			—
Litigation and other matters		—			—			—			0.9			0.1
Acquisition-related contingent consideration		—			—			—			(0.1	)		(0.7	)
Tax effect of non-GAAP adjustments		(3.3	)		(3.4	)		(4.5	)		(5.5	)		(4.2	)

Adjusted net income (non-GAAP)	$	83.7		$	56.4		$	91.0		$	59.1		$	27.6

EBITDA (non-GAAP), Adjusted EBITDA (non-GAAP) and Adjusted EBITDA margin (non-GAAP)

EBITDA (non-GAAP) is Net income (its most directly comparable U.S. GAAP financial measure) adjusted for interest income, net, income taxes, depreciation and amortization. We define Adjusted EBITDA (non-GAAP) as EBITDA (non-GAAP) adjusted for asset impairments, IT infrastructure costs, litigation and other matters, and acquisition-related contingent consideration, as these adjustments are described above, and share-based compensation as described below:

•

Share-based compensation: The Business has excluded costs relating to share-based compensation. The Business believes that the exclusion of share-based compensation expense assists investors in the comparisons of operating results to peer companies. Share-based compensation expense is a recurring expense that can vary significantly from period to period based on the timing, size and nature of awards granted.

Adjusted EBITDA (non-GAAP) is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors. In addition, cash bonuses for the Business’s executive officers and other key employees are based, in part, on the achievement of certain Adjusted EBITDA (non-GAAP) targets.

Adjusted EBITDA margin (non-GAAP) is Adjusted EBITDA (non-GAAP) divided by Revenues. The unaudited reconciliation of Net income, which is a U.S. GAAP measure, to EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP) is presented below:


	Nine Months Ended September 30,					Years Ended December 31,
(in millions)	2021			2020		2020		2019		2018
Net income	$	72.8		$	45.3	$	76.1	$	40.9	$	13.7
Interest income, net		(0.1	)		—		—		—		—
Income taxes		16.2			10.4		17.5		5.8		1.2
Depreciation and amortization		15.2			15.3		20.5		20.2		21.0

EBITDA (non-GAAP)		104.1			71.0		114.1		66.9		35.9

113


	Nine Months Ended September 30,				Years Ended December 31,
(in millions)	2021		2020		2020		2019			2018
Adjustments:
Asset impairments		—		—		—		3.6			—
IT infrastructure costs		0.7		0.5		0.7		0.6			—
Share-based compensation		3.4		2.5		3.5		2.5			1.7
Litigation and other matters		—		—		—		0.9			0.1
Acquisition-related contingent consideration		—		—		—		(0.1	)		(0.7	)

Adjusted EBITDA (non-GAAP)	$	108.2	$	74.0	$	118.3	$	74.4		$	37.0

Consistent with how our parent company, BHC, defines Adjusted net income (non-GAAP) and Adjusted EBITDA (non-GAAP), these non-GAAP measures would also include adjustments for restructuring and integration costs, IPO costs, IPO-related costs, net gain/loss on sale of assets and certain other costs not incurred in the ordinary course of business, when and if such costs are incurred.

Free cash flows (non-GAAP)

We define Free cash flows (non-GAAP) as Cash flows from operating activities (its most directly comparable U.S. GAAP financial measure) less cash payments for capital expenditures. Management believes that Free cash flows (non-GAAP) is a useful measure of the Business’s ability to generate cash to make investments, repay debt (if and when incurred) and return capital to shareholders. Free cash flows (non-GAAP) adjusts for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash that is available than most comparable GAAP measures. The Business believes that Free cash flows (non-GAAP) focuses management on the Business’s underlying operational results and business performance. As a result, the Business uses Free cash flows (non-GAAP) to assess the actual financial performance of the Business and help forecast future results as part of its guidance.

The unaudited reconciliation of Cash flows from operating activities, which is a U.S. GAAP measure, to Free cash flows (non-GAAP) is presented below:


	Nine Months Ended September 30,						Years Ended December 31,
(in millions)	2021			2020			2020			2019			2018
Cash flows from operating activities	$	87.7		$	67.1		$	100.7		$	68.6		$	35.9
Purchases of property, plant and equipment		(1.4	)		(3.1	)		(4.6	)		(2.4	)		(1.7	)

Free cash flows (non-GAAP)	$	86.3		$	64.0		$	96.1		$	66.2		$	34.2

The non-GAAP measures as presented above have been prepared as if Solta’s operations had been conducted independently from its parent, BHC and therefore includes certain BHC corporate and shared costs allocated to the Business. Prior to and in connection with the announcement of the proposed Solta IPO, BHC’s management from time to time publicly provided a management view of certain non-GAAP measures. The management view of these non-GAAP measures, which is used internally by management to evaluate the Business’s performance and financial results, does not include the BHC corporate and shared costs allocated to the Business discussed in Note 2, “Significant Accounting Policies” to our audited combined financial statements, which are included elsewhere in this prospectus and will differ from those presented above. Management believes the cost allocations are a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Business during the periods presented, though the allocations may not be indicative of the actual costs that would have been incurred or are expected to be incurred, if the Business were to operate as a standalone public company.

114

Liquidity and Capital Resources

Interim Cash Flows

Summarized cash flows information for the nine months ended September 30, 2021 and 2020 is as follows:


	Nine Months Ended September 30,
(in millions)	2021			2020			Change
Net cash provided by operating activities	$	87.7		$	67.1		$	20.6
Net cash used in investing activities		(1.3	)		(3.1	)		1.8
Net cash used in financing activities		(79.7	)		(64.0	)		(15.7	)

Net increase in cash		6.7			—			6.7
Cash, beginning of period		1.0			—			1.0

Cash, end of period	$	7.7		$	—		$	7.7

Cash as presented in this prospectus consists of cash in bank accounts that are legally owned by the Business. These balances currently participate in BHC’s cash pooling system, however these balances will be removed from participation prior to the closing of this offering.

Operating Activities

Net cash provided by operating activities was $87.7 million and $67.1 million for the nine months ended September 30, 2021 and 2020, respectively, an increase of $20.6 million. The increase is primarily attributable to: (i) the increase in our operating results, as previously discussed, and (ii) the timing of payments in the ordinary course of business partially offset by: (i) higher inventory in 2021 and (ii) the timing of collections of trade receivable. The higher inventory in 2021 was due to: (i) an increase in raw materials in support of the current year launch of our next generation Clear + Brilliant^® Touch system and (ii) reinstituted social restrictions within certain regions during 2021, as a result of the COVID-19 pandemic, which negatively impacted volumes in those regions, as previously discussed. We expect the higher inventory to be depleted to some extent as we continue with the launch of our Clear + Brilliant^® Touch system and as social restrictions within the certain regions are lifted.

Investing Activities

Net cash used in investing activities was $1.3 million and $3.1 million for the nine months ended September 30, 2021 and 2020, respectively, and reflects cash paid for property, plant and equipment.

Financing Activities

Net cash used in financing activities was $79.7 million and $64.0 million for the nine months ended September 30, 2021 and 2020, respectively, and reflects Net transfers to BHC. For further details regarding Net transfers to BHC, see Note 4, “RELATED PARTIES” to our unaudited interim Combined Financial Statements, which are included elsewhere in this prospectus.

115

Annual Cash Flows

Summarized cash flows information for the years 2020, 2019 and 2018 is as follows:


	Years Ended December 31,									Change
(in millions)	2020			2019			2018			2019 to 2020			2018 to 2019
Net cash provided by operating activities	$	100.7		$	68.6		$	35.9		$	32.1		$	32.7
Net cash used in investing activities		(4.6	)		(2.4	)		(1.7	)		(2.2	)		(0.7	)
Net cash used in financing activities		(95.2	)		(66.2	)		(34.2	)		(29.0	)		(32.0	)
Effect of exchange rate changes on cash		0.1			—			—			0.1			—

Net increase in cash		1.0			—			—			1.0			—
Cash, beginning of year		—			—			—			—			—

Cash, end of year	$	1.0		$	—		$	—		$	1.0		$	—

Operating Activities

Net cash provided by operating activities was $100.7 million, $68.6 million and $35.9 million for the years 2020, 2019 and 2018, respectively.

Net cash provided by operating activities was $100.7 million and $68.6 million for the years 2020 and 2019, respectively, an increase of $32.1 million. The increase was primarily attributable to: (i) the increase in our operating results driven by the increase in our revenues, as previously discussed, and (ii) the collections of trade receivable in 2020.

Net cash provided by operating activities was $68.6 million and $35.9 million for the years 2019 and 2018, respectively, an increase of $32.7 million. The increase was primarily attributable to the increase in our operating results driven by the increase in our revenues, as previously discussed.

Investing Activities

Net cash used in investing activities was $4.6 million, $2.4 million and $1.7 million for the years 2020, 2019 and 2018, respectively, and represents cash paid for property, plant and equipment.

Financing Activities

Net cash used in financing activities was $95.2 million, $66.2 million and $34.2 million for the years 2020, 2019 and 2018 and primarily represents net transfers to BHC. For further details regarding net transfers to BHC, see Note 3, “Related Parties” to our audited combined financial statements, which are included elsewhere in this prospectus.

Liquidity

Future Sources of Liquidity

We currently participate in BHC’s cash management arrangements, and generally all of our excess cash is transferred to BHC periodically. Cash disbursements for operations and/or investing activities are funded as

116

needed by BHC. Cash as presented in this prospectus consists of cash in bank accounts that are legally owned by the Business. These balances currently participate in BHC’s cash pooling system, however these balances will be removed from participation prior to the closing of this offering.

We continue to finalize our go-forward business plan as a standalone company, including our cash requirements. As part of this plan, we are in the process of negotiating a multi-year revolving line of credit with a syndicate of banks, which is expected to be in an amount of $ million and to be undrawn at the closing of this offering.

Following the completion of offering, we will begin operating independently from BHC and will no longer participate in BHC’s cash management arrangements. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. Our primary sources of liquidity will be cash on hand, cash collected from customers and funds as available from the undrawn revolving credit facility as referenced above. We believe these sources will be sufficient to meet our current liquidity needs for the next twelve months.

While we believe our cash on hand, our operating cash flows, and funds as available from the undrawn revolving credit facility will be sufficient to support our future cash needs, we can provide no assurance that our liquidity and capital resources will meet future funding requirements. We will remain a restricted subsidiary under BHC’s credit facilities and indentures, under which BHC had an aggregate amount of $22.6 billion in outstanding indebtedness as of September 30, 2021. Although neither we nor our subsidiaries will be guarantors of such debt, our status as a restricted subsidiary means that our ability to take certain actions upon completion of this offering will be restricted by the terms of these credit facilities and indentures. We will remain a restricted subsidiary until we are no longer a consolidated subsidiary of BHC or BHC designates us as “unrestricted”. See “Risk Factors—Risks Relating to the Separation and Our Relationship with BHC—We will remain a restricted subsidiary under certain of BHC’s credit facilities and indentures upon completion of this offering and will be subject to various covenants under these facilities and indentures, which may adversely affect our operations.” In addition, the global financial markets recently have undergone and may continue to experience significant volatility and disruption. The timing and sustainability of an economic recovery is uncertain and additional macroeconomic, business and financial disruptions may arise. As markets change, there can be no assurance that the challenging economic environment or a further economic downturn would not impact our liquidity or our ability to obtain future financing.

We will regularly evaluate market conditions, our liquidity profile, and various financing alternatives for opportunities to enhance our capital structure upon the completion of this offering. If opportunities are favorable, we may from time to time enter into new financing arrangements or issue additional equity and equity-linked securities.

Accounts Receivable

We regularly monitor our accounts receivable for collectability, particularly in markets where economic conditions remain uncertain. We believe that our allowance for doubtful accounts is appropriate. Our assessment is based on such factors as past due history, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment.

Off-Balance Sheet Arrangements and Contractual Obligations

We have no off-balance sheet arrangements that have a material current effect or that are reasonably likely to have a material future effect on our results of operations, financial condition, capital expenditures, liquidity or capital resources.

We do not expect to pay dividends on our common shares for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future, if any, will be used for the operation and growth of our business.

117

Any future determination to pay dividends on our common shares will be at the discretion of our Board of Directors and will depend upon many factors, including our financial position, results of operations, liquidity, legal requirements and other factors deemed relevant by our Board of Directors.

Other Future Cash Requirements

Our other future cash requirements relate to working capital, capital expenditures and Solta IPO and Separation costs. Further, we may use cash to enter into licensing arrangements and/or to make strategic acquisitions.

In addition, we also expect our primary cash requirements for the remainder of 2021 to include:

Pharmaceutical Innovations, Inc. Asset Acquisition

On November 1, 2021 the Business entered into a binding letter of intent with Pharmaceutical Innovations, Inc. (“PI”). Under the terms of the binding letter of intent, the Business expects to acquire a certain formulation used with its Thermage^® products, that is currently manufactured by PI for the Business, together with related intellectual property. Under the terms of the binding letter of intent, the Business will pay an initial purchase price of $3.0 million to PI upon the completion of certain closing conditions, which is expected to occur in 2022, and may be obligated to make future payments of up to $1.0 million upon the achievement by PI of certain supply-related milestones, the first of which is anticipated in 2021 with the remainder in 2022. In addition, as part of the binding letter of intent, the Business has committed to purchasing approximately $3.6 million of inventory from PI, of which the Business has prepaid approximately $1.8 million in November 2021 and the remaining amount will be purchased during 2022.

Solta IPO and Separation Costs

In connection with the Solta IPO, BHC will incur costs associated with activities taken to: (i) separate the Solta Business from BHC and (ii) register the Solta Business as an independent publicly traded entity and these costs could be material. See the notes to the Unaudited Pro Forma Condensed Combined Financial Statements included elsewhere in this prospectus for an estimate of such costs. During 2021 and until the proposed Solta IPO is completed, if completed, in addition to amounts paid for internal costs incurred in preparing for the Solta IPO we anticipate making cash payments for third-party costs. These third-party costs include amounts for, but not limited to: (i) legal, audit and advisory fees, (ii) talent acquisition costs and (iii) costs associated with establishing new boards of directors and related board committees for the Solta entity. BHC will also incur, separation-related costs which are incremental costs indirectly related to activities to effectuate the Solta IPO. These costs include, but are not limited to: (i) IT infrastructure and software licensing costs, (ii) rebranding costs and (iii) costs associated with facility relocation and/or modification. The Business continues to make progress toward internal objectives necessary for the Solta IPO. BHC estimates that the costs to: (i) separate the Solta Business from BHC and (ii) complete the Solta IPO that will ultimately be charged to Solta will be approximately $ million, in the aggregate, however differences between this estimate and the actual costs are expected, and those differences could be material.

Unrecognized Tax Benefits

As of December 31, 2020, the Business had unrecognized tax benefits totaling $3.4 million, of which $3.3 million would affect the effective income tax rate. The remaining unrecognized tax benefits would not impact the effective tax rate as the tax positions are offset against existing tax attributes or are timing in nature. A reliable estimate of the period in which uncertain tax positions will be payable, if ever, cannot be made.

Quantitative and Qualitative Disclosures About Market Risk

Our business and financial results are affected by fluctuations in world financial markets, including the impacts of foreign currency exchange rate and interest rate movements. We evaluate our exposure to such risks

118

on an ongoing basis, and seek ways to manage these risks to an acceptable level, based on management’s judgment of the appropriate trade-off between risk, opportunity and cost. We may use derivative financial instruments from time to time as a risk management tool and not for trading or speculative purposes.

Foreign Currency Risk

During the year ended December 31, 2020, a majority of our expense activities and capital expenditures were denominated in U.S. dollars. We have exposure to multiple foreign currencies, including, among others, Chinese yuan, Chinese Taipei dollar, South Korean won and the euro. Our operations are subject to risks inherent in conducting business abroad, including price and currency exchange controls and fluctuations in the relative values of currencies. In addition, to the extent that we require, as a source of debt repayment, earnings and cash flows from some of our operations located in foreign countries, we are subject to risk of changes in the value of the U.S. dollar, relative to all other currencies in which we operate, which may materially affect our results of operations. Where possible, we manage foreign currency risk by managing same currency revenues in relation to same currency expenses. Further strengthening of the U.S. dollar and/or further devaluation of foreign currencies will have a negative impact on our reported revenue and reported results. As of December 31, 2020, a 1% change in foreign currency exchange rates would have impacted our equity by approximately $0.4 million.

Seasonality

Our revenues and results of operations are subject to seasonal fluctuations which differ by geography. For instance, in APAC, which includes China, we believe our results are impacted by a pattern of increased sales particularly for consumables in our fourth quarter. We believe this increased demand for consumables is in anticipation of the increase in procedures prior to the Lunar New Year celebrations, typically held in February. In the U.S. we believe our results are impacted by a pattern of increased systems sales in the fourth quarter as customers typically try to take advantage of tax incentives offered for capital equipment acquired prior to year-end.

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those policies and estimates that are most important and material to the preparation of our combined financial statements, and which require management’s most subjective and complex judgments due to the need to select policies from among alternatives available, and to make estimates about matters that are inherently uncertain. We base our estimates on historical experience and other factors that we believe to be reasonable under the circumstances. On an ongoing basis, we review our estimates to ensure that these estimates appropriately reflect changes in our business and new information as it becomes available. If historical experience and other factors we use to make these estimates do not reasonably reflect future activity, our results of operations and financial condition could be materially impacted.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on recognizing revenue from contracts with customers. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue model to contracts within its scope, an entity will: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In addition to these provisions, the new standard provides implementation guidance on several other topics, including the accounting for certain revenue-related costs, as well as enhanced disclosure requirements. The new guidance requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising

119

from contracts with customers. The Business adopted this guidance effective January 1, 2018 using the modified retrospective approach. Based upon review of customer contracts, the Business concluded the implementation of the new guidance did not have a material quantitative impact on its 2018 Combined Financial Statements as the timing of revenue recognition did not significantly change. The new guidance did however result in additional disclosures as to the nature, amounts, and concentrations of revenue.

Product Sales

A contract with the Business’s customers exists for each product sale. Each contract contains a single performance obligation. The transaction price is adjusted for variable consideration as discussed below. Revenues from sales of systems and sales of treatment tips and other consumables are recognized at a point in time when control transfers to the customer under the contracted delivery terms which vary by customer and geography. Generally, the Business utilizes a common carrier for shipments in the U.S. and control transfers to the customer upon shipment. In China, sales are done through a distributor who takes control and ownership of the goods upon delivery. The Business offers standard one or two-year warranties for systems sold in the U.S. and warranties of one-year or less elsewhere. Estimated costs to repair or replace products under the standard warranty are recorded as a liability at the time of sale and are discussed in more detail in Note 8, “Accrued and Other Current Liabilities” to our audited combined financial statements.

Other Revenues

Other revenue primarily consists of: (i) services for extended warranty contracts and (ii) fees for services and repairs not covered by a warranty contract. Amounts for extended warranty contracts are recorded as deferred revenue and are recognized on a straight-line basis over the extended warranty contract period, which reflects the pattern of service provided. Deferred revenues are included in Accrued and other current liabilities in the Combined Balance Sheets. The non-current portion of deferred revenues is not material. Revenue from services and repairs not covered by warranty contracts is recognized at a point in time when the service or repair is delivered or performed.

Product Sales Provisions

The transaction price for product sales is typically adjusted for variable consideration, which may be in the form of distributor discounts, returns, and rebates. Provisions for variable consideration are established to reflect the Business’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future period.

Provisions for these deductions are recorded concurrently with the recognition of gross product sales revenue and include distributor discounts and rebates. Returns provision balances are included in Accrued and other current liabilities. Discounts and rebates are included in Trade receivables, net, and Accrued and other current liabilities.

The Business continually monitors its variable consideration provisions and evaluates the estimates used as additional information becomes available. Adjustments will be made to these provisions periodically to reflect new facts and circumstances that may indicate that historical experience may not be indicative of current and/or future results. The Business is required to make subjective judgments based primarily on its evaluation of current market conditions and trade inventory levels related to the Business products. These judgments include the potential impact of the COVID-19 pandemic on customer behaviors. This evaluation may result in an increase or decrease in the experience rate that is applied to current and future sales, or require an adjustment related to past sales, or both.

The development and application of the critical accounting policies associated with the current revenue recognition guidance, including the policies associated with each of our sales provisions and the table showing

120

the activity and ending balances for our product sales provisions, are discussed in more detail in Note 2, “Significant Accounting Policies” to our audited combined financial statements.

Income Taxes

We have operations in various countries that have differing tax laws and rates. Our tax structure is supported by current domestic tax laws in the countries in which we operate and the application of tax treaties between the various countries in which we operate. Our income tax reporting is subject to audit by domestic and foreign tax authorities. Our effective tax rate may change from year to year based on changes in the mix of activities and income earned under our intercompany arrangements among the different jurisdictions in which we operate, changes in tax laws in these jurisdictions, changes in tax treaties between various countries in which we operate, changes in our eligibility for benefits under those tax treaties and changes in the estimated values of deferred tax assets and liabilities. Such changes could result in an increase in the effective tax rate on all or a portion of our income and/or any of our subsidiaries.

Our provision for income taxes is based on a number of estimates and assumptions made by management. Our consolidated income tax rate is affected by the amount of income earned in our various operating jurisdictions, the availability of benefits under tax treaties and the rates of taxes payable in respect of that income. We enter into many transactions and arrangements in the ordinary course of business in which the tax treatment is not entirely certain. We must therefore make estimates and judgments based on our knowledge and understanding of applicable tax laws and tax treaties, and the application of those tax laws and tax treaties to our business, in determining our consolidated tax provision. For example, certain countries could seek to tax a greater share of income than has been provided for by us. The final outcome of any audits by taxation authorities may differ from the estimates and assumptions we have used in determining our consolidated income tax provisions and accruals. This could result in a material effect on our consolidated income tax provision, results of operations, and financial condition for the period in which such determinations are made.

Our income tax returns are subject to audit in various jurisdictions. Existing and future audits by, or other disputes with, tax authorities may not be resolved favorably for us and could have a material adverse effect on our reported effective tax rate and after-tax cash flows. We record liabilities for uncertain tax positions, which involve significant management judgment. New laws and new interpretations of laws and rulings by tax authorities may affect the liability for uncertain tax positions. Due to the subjectivity and complex nature of the underlying issues, actual payments or assessments may differ from our estimates. To the extent that our estimates differ from amounts eventually assessed and paid our income and cash flows may be materially and adversely affected.

We assess whether it is more likely than not that we will realize the tax benefits associated with our deferred tax assets and establish a valuation allowance for assets that are not expected to result in a realized tax benefit. A significant amount of judgment is used in this process, including preparation of forecasts of future taxable income and evaluation of tax planning initiatives. If we revise these forecasts or determine that certain planning events will not occur, an adjustment to the valuation allowance will be made to tax expense in the period such determination is made.

New Accounting Standards

Information regarding the recently issued new accounting guidance (adopted and not adopted as of September 30, 2021) is contained in Note 2, “Significant Accounting Policies” to our unaudited interim Combined Financial Statements and information regarding the recently issued new accounting guidance (adopted and not adopted as of December 31, 2020) is contained in Note 2, “Significant Accounting Policies” to our audited Combined Financial Statements.

121

BUSINESS

Overview

LOGO

122

Our comprehensive portfolio of aesthetic medical devices is built to deliver clear benefits to consumers across a wide range of use cases. Our products are built on key, clinically-proven energy-based technologies including monopolar RF, non-ablative fractional lasers, and ultrasound that offer compelling differentiated advantages relative to alternative treatment options and competitor technologies. Our portfolio offers an ability to treat all skin types through minimally-invasive treatment solutions that offer minimal downtime. We address many fast-growing areas of consumer aesthetic needs, including skin tightening, body contouring, smoothing fine lines, wrinkles, reducing pore size, collagen boosting, skin tone, pigment, skin permeability, sun damage, AK, acne scars, surgical scars, wrinkles, melasma, and unwanted fat. As a result, we believe the breadth and synergistic nature of our products allows us to meet a consumers’ aesthetic needs across their lifetime, promoting consumer loyalty to our brand and sustaining our growth.


	Nine Months Ended September 30,										Years Ended December 31,
	2021					2020					2020					2019					2018
(in millions)	Amount		Pct.			Amount		Pct.			Amount		Pct.			Amount		Pct.			Amount		Pct.
*Revenues by Franchise*
Thermage^®	$	170.2		78	%	$	139.6		84	%	$	210.4		84	%	$	142.8		74	%	$	84.8		63	%
Clear + Brilliant^®		18.5		8	%		7.8		5	%		13.3		5	%		18.0		9	%		16.3		12	%
Fraxel^®		12.4		6	%		7.0		4	%		12.2		5	%		13.7		7	%		15.1		11	%
VASER^®		16.6		8	%		10.4		6	%		15.8		6	%		18.1		9	%		16.3		12	%
Other		1.0		—	%		0.7		1	%		0.9		—	%		1.3		1	%		2.7		2	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	252.6		100	%	$	193.9		100	%	$	135.2		100	%

*Revenues by Category*
Systems	$	56.9		26	%	$	51.4		32	%	$	78.3		31	%	$	61.1		32	%	$	43.4		32	%
Tips and other consumables		156.0		71	%		110.0		66	%		168.3		67	%		126.9		65	%		85.9		64	%

123


	Nine Months Ended September 30,										Years Ended December 31,
	2021					2020					2020					2019					2018
(in millions)	Amount		Pct.			Amount		Pct.			Amount		Pct.			Amount		Pct.			Amount		Pct.
Revenues from product sales		212.9		97	%		161.4		98	%		246.6		98	%		188.0		97	%		129.3		96	%
Other revenues		5.8		3	%		4.1		2	%		6.0		2	%		5.9		3	%		5.9		4	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	252.6		100	%	$	193.9		100	%	$	135.2		100	%

*Revenues by Region*
Asia Pacific	$	147.2		67	%	$	116.6		71	%	$	171.1		68	%	$	115.7		60	%	$	69.8		51	%
North America		58.2		27	%		33.0		19	%		57.7		23	%		62.5		32	%		52.9		39	%
Europe/Middle East		11.5		5	%		15.1		9	%		22.2		8	%		13.4		7	%		10.3		8	%
Other		1.8		1	%		0.8		1	%		1.6		1	%		2.3		1	%		2.2		2	%

Total revenues	$	218.7		100	%	$	165.5		100	%	$	252.6		100	%	$	193.9		100	%	$	135.2		100	%

Industry Overview

Other tailwinds driving industry growth include:

•

124

Established and Emerging Markets

According to the International Society of Aesthetic Plastic Surgery, North America was the largest aesthetics market globally in 2019. We believe the fastest growing region for aesthetics over the medium term will be APAC. In addition to growing consumer knowledge and increased interest in cosmetic procedures, we believe global marketing campaigns, rising medical tourism, and widened acceptance are all likely to stimulate the market in the APAC region. Other significant markets include EMEA and Latin America.

Market Opportunity

Current Treatment Landscape

Numerous procedure types—ranging from surgical to non-invasive—are currently commercially available, but each bears its own limitations:

Surgical and Minimally-Invasive Procedures

•

Physician dependent: The aesthetic results often depend on a particular physician’s skill and training. In addition, these procedures require significant physician time.

•

Non-Invasive Procedures

•

125

•

We believe our portfolio of diverse products addresses many of the shortcomings present across the current treatment continuum and offers an attractive value proposition for aesthetic physicians.

Our Products

Product Applications and Procedures

LOGO


Technology and Delivery	• Monopolar RF	• Non-ablative Fractional Laser • 1440 nm: Diode Laser • 1927 nm: Diode Laser	• Non-ablative Fractional Laser • 1550 nm: Erbium-Doped Fiber Laser • 1927 nm: Thulium Laser	• Precise Ultrasound-Assisted Liposuction

Description	Utilizes MRF to heat the deeper collagen rich layers of the skin, which can cause an immediate collagen contraction and tightening. As the collagen is deposited and remodeled, it enables tightening over time and improved collagen density.	Utilizes fractional laser technology to create microchannels that penetrate into the dermis. By utilizing the principle of factional photothermolysis, the laser stimulates collagen remodeling and promotes elastic tissue formation.	Creates microscopic laser columns that penetrate into the dermis to expedite the body’s remodeling of collagen.	Acoustic energy delivered through a probe results in dislodging of fat cells, then the groves on the probe create a large fluid that further separates the fat cells while leaving other tissues intact.

126



Key Differentiators	• AccuREP technology • Non-invasive • Can treats across a variety of skin types • Little to no downtime • Results in a single treatment that also can improve over time	• Complete Treatment allows you to treat superficial and deeper concerns • Non-invasive • Can treats across a variety of skin types • Minimal downtime	• Non-invasive • Treats all skin types • Minimal downtime	• Minimally-invasive • Immediate results • Reduced surgeon fatigue

Helps Address	Skin tightening, body contouring, smoothing, fine lines, wrinkles	Original (1440 nm): Fine lines, pore size, and boosts collagen Permea (1927 nm): Skin tone, pigment, and skin permeability	Dyschromia, pigment, sun damage, AK, acne scars, surgical scars, wrinkles, and melasma	Stubborn, unwanted fat

Treatment Areas	Eyes, Face, Body	Face, Body	Eyes, Face, Body	Face, Body

Thermage^® FLX System

Four different tips can be interchanged in order to deliver precise and effective treatment to various parts of the body. The current tip offerings include:

•

Total Tip – 4.0 cm²: Precise heating to address lines and wrinkles and up to 25% faster than Total Tip 3.0 cm²

•

Total Tip – 3.0 cm²: Precise heating to address lines and wrinkles

•

Eye Tip – 0.25 cm²: Precise, shallow heating to treat wrinkles around the periorbital area and/or the eyelid itself

•

Body Tip – 16.0 cm²: Offers vibration enhancements to aid in patient comfort

127

The Thermage^® system has been a leader in non-invasive skin tightening treatments for over 18 years. The benefits and safety profile have been demonstrated by more than 75 clinical publications. Based on surveys completed by patients who have completed a qualified visit to a provider’s office as reported by RealPatientRatings.com, approximately 90% of the respondents are satisfied with their treatments using the Thermage^® system. Furthermore, the system provides compelling physician economics and return on investment. With more than two and a half million procedures performed since the system’s inception, we believe the Thermage^® system has completed the most procedures of any tightening product on the market.

Clear + Brilliant^® System

Treatments typically take about 30 minutes or less, and many patients choose to have routine treatments as part of their overall skincare regimen. The Clear + Brilliant^® system uses our patented technology, the IOTS to provide even application to all treatment areas. Additionally, the Clear + Brilliant^® Perméa handpiece increases the skin’s permeability and can result in enhanced absorption of skincare products.

We believe we have been a leader in the preventative laser treatments space since 2011 and have been recognized on multiple occasions for our innovative technology. Clear + Brilliant^® was named RealSelf’s most worth-it non-invasive laser in 2016 and then named New Beauty’s best laser for glowy skin in 2020. Based on surveys completed by patients who have completed a qualified visit to a provider’s office as reported by RealPatientRatings.com, approximately 96% of the respondents are satisfied with their Clear + Brilliant^® treatments. With over two and a half million procedures and counting, Clear + Brilliant^® creates touchpoints with the consumer early and often making it an essential part of the consumer’s skin care regimen.

Fraxel^®System

The Fraxel^® system is designed to improve tone, texture and radiance for aging,

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Solta Medical Corp S-1