SkinHealth Systems Inc.

Previous wording

During thethree months ended March 31, 2026, we continued to strengthen the foundation of the business while expanding our footprint by selling and placing our patented hydradermabrasion delivery systems (“Delivery Systems”) worldwide, driving consumables, which consist of single-use tips, solutions, serums, and other products used to provide a Hydrafacial treatment (collectively “Consumables”), investing in our community of providers, partners, and consumers, driving brand awareness, advancing our science-backed innovation product pipeline, and optimizing our global infrastructure. Although we believe we can be successful in our current operating environment, various factors may impact our business in unpredictable ways such as:

Current wording

During thethree and six months ended June 30, 2026, we continued to strengthen the foundation of the business while expanding our footprint by selling and placing our patented hydradermabrasion delivery systems (“Delivery Systems”) worldwide, driving consumables, which consist of single-use tips, solutions, serums, and other products used to provide a Hydrafacial treatment (collectively “Consumables”), investing in our community of providers, partners, and consumers, driving brand awareness, advancing our science-backed innovation product pipeline, and optimizing our global infrastructure. Although we believe we can be successful in our current operating environment, various factors may impact our business in unpredictable ways such as:

Previous wording

Business and macroeconomic factors may also negatively impact, in the short-term or long-term, the global economy, the beauty health industry, our providers and their budgets with us, our business, the Company’s brand reputation, financial condition, and results of operations. We remain attentive to these business and macroeconomic conditions that may materially impact our business, and we continue to explore and implement reporting and quality management systems and risk mitigation strategies in the face of these unfolding conditions to remain agile in adopting to changing circumstances.

Current wording

Business and macroeconomic factors may also negatively impact, in the short-term or long-term, the global economy, the beauty health industry, our providers and their budgets with us, our business, the Company’s brand reputation, financial condition, and results of operations. We remain attentive to these business and macroeconomic conditions that may materially impact our business, and we continue to explore and implement reporting and quality management systems and risk mitigation strategies in the face of these unfolding conditions to remain agile in adapting to changing circumstances.

Previous wording

Total net sales for the three months ended March 31, 2026 decreased $4.7 million, or 6.7%, compared to the three months ended March 31, 2025. Delivery Systems net sales for the three months ended March 31, 2026 decreased $1.7 million, or 8.3%, compared to the three months ended March 31, 2025, with decreases in the Americas and Europe, the Middle East, and Africa. Delivery Systems net sales were negatively impacted globally by unfavorable macroeconomic and credit conditions.

Current wording

Total net sales for the three months ended June 30, 2026 decreased $6.1 million, or 7.8%, compared to the three months ended June 30, 2025. Delivery Systems net sales for the three months ended June 30, 2026 decreased $4.1 million, or 18.4%, compared to the three months ended June 30, 2025, with decreases across all regions. Delivery Systems net sales were negatively impacted globally by unfavorable macroeconomic and credit conditions.

Previous wording

Research and development expense for the three months ended March 31, 2026 increased slightly compared to the three months ended March 31, 2025, reflecting increased investment in future product development.

Current wording

Research and development expense for the three months ended June 30, 2026 increased $0.2 million, or 12.5%, compared to the three months ended June 30, 2025, reflecting increased investment in future product development.

Previous wording

Interest expense for the three months ended March 31, 2026 increased $3.8 million compared to the three months ended March 31, 2025, primarily due to interest and amortization of debt issuance costs related to the 7.95% Convertible Senior Secured Notes due November 15, 2028 (the “2028 Notes”), partially offset by lower outstanding balances related to the 1.25% Convertible Senior Notes due October 2026 (the “2026 Notes”).

Current wording

Interest expense for the three months ended June 30, 2026 increased $2.2 million compared to the three months ended June 30, 2025, primarily due to interest and amortization of debt issuance costs related to the 7.95% Convertible Senior Secured Notes due November 15, 2028 (the “2028 Notes”), partially offset by lower outstanding balances related to the 1.25% Convertible Senior Notes due October 2026 (the “2026 Notes”).

Previous wording

Interest income for the three months ended March 31, 2026 decreased $1.5 million compared to the three months ended March 31, 2025 primarily due to lower average invested balances and interest rates during the three months ended March 31, 2026.

Current wording

Interest income for the three months ended June 30, 2026 decreased $1.9 million compared to the three months ended June 30, 2025 primarily due to lower average invested balances and interest rates during the three months ended June 30, 2026.

Previous wording

Other income, net for the three months ended March 31, 2026 included $1.0 million net gain related to the repurchase of the 2026 Notes.

Current wording

Other income, net for the three months ended June 30, 2025 included $18.1 million net gain related to the exchange and repurchases of the 2026 Notes.

Previous wording

Consumables net sales for the three months ended March 31, 2026 decreased $3.0 million, or 6.1%, compared to the three months ended March 31, 2025, with decreases across all regions. Consumables net sales were negatively impacted by the transition to a distributor model in China, the timing of distributor orders, and promotions in the fourth quarter of 2025.

Current wording

Consumables net sales for thesix months ended June 30, 2026 decreased $5.0 million, or 4.7%, compared to thesix months ended June 30, 2025, with decreases across all regions, impacted by pressure on treatment volume and the transition to a distributor model in China in the prior year.

Previous wording

Selling and marketing expense for the three months ended March 31, 2026 decreased $2.8 million, or 10.9%, compared to the three months ended March 31, 2025. The decrease is primarily driven by lower depreciation expense, sales commission expense, and marketing-related spend.

Current wording

Selling and marketing expense for the six months ended June 30, 2026 decreased $4.9 million, or 10.0%, compared to the six months ended June 30, 2025. The decrease is primarily driven by lower personnel-related expenses, including severance, share-based compensation expense and sales commission expense, and depreciation expense.

Previous wording

General and administrative expense for the three months ended March 31, 2026 decreased $11.6 million, or 34.6%, compared to the three months ended March 31, 2025. The decrease is primarily driven by lower personnel-related expenses, including severance and share-based compensation expense, legal fees, and depreciation and amortization expense.

Current wording

General and administrative expense for thesix months ended June 30, 2026 decreased$15.7 million, or 25.8%, compared to thesix months ended June 30, 2025. The decrease is primarily driven by lower legal fees, personnel-related expenses, including share-based compensation expense and severance, professional fees, and depreciation and amortization expense, partially offset by the costs associated with the proposed settlement the Company has reached with the plaintiffs in the Securities Class Action.

Previous wording

Our primary sources of capital have been (i) cash flow from operating activities, (ii) net proceeds received from the consummation of the Business Combination, (iii) net proceeds received from the Notes, and (iv) net proceeds received from the exercise of public and private placement warrants. As of March 31, 2026, we had cash, cash equivalents, and restricted cash of $204.4 million.

Current wording

Our primary sources of capital are (i) cash flow from operating activities, (ii) net proceeds received from the consummation of the Business Combination, and (iii) net proceeds received from the Notes. As of June 30, 2026, we had cash, cash equivalents, and restricted cash of $206.1 million.

Previous wording

On May 21, 2025, the Company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders (the “Exchanging Holders”) of the 2026 Notes. Pursuant to the Exchange Agreements, the Company exchanged and repurchased $413.2 million aggregate principal amount of the 2026 Notes. Of the $413.2 million aggregate principal amount of the 2026 Notes, $263.2 million principal amount were exchanged at a weighted-average price equal to 95% for $250.0 million principal amount of new 2028 Notes, and $150.1 million principal amount were repurchased at a weighted-average price equal to 95% for $142.6 million.

Current wording

On May 21, 2025, the Company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders (the “Exchanging Holders”) of the 2026 Notes. Pursuant to the Exchange Agreements, the Company exchanged and repurchased $413.2 million aggregate principal amount of the 2026 Notes. Of the $413.2 million aggregate principal amount of the 2026 Notes, $263.2 million principal amount were exchanged at a weighted-average price equal to 95% for $250.0 million principal amount of new 2028 Notes, and $150.1 million principal amount were repurchased at a weighted-average price equal to 95% for $142.6 million. The exchange and repurchase resulted in a net gain of $16.6 million, which includes $3.1 million of unamortized debt issuance costs and $0.9 million of other related fees.

Previous wording

During the three months ended March 31, 2026, the Company repurchased $21.3 million principal amount of its 2026 Notes at a weighted-average price equal to 94.875% for $20.2 million and recognized a net gain of $1.0 million, which includes $0.1 million of unamortized debt issuance costs. During the three months ended March 31, 2025, there were no repurchases related to the 2026 Notes. Since inception through December 31, 2025, the Company exchanged and repurchased in total $625.5 million principal amount of its 2026 Notes. For more information, see Part I, Item 1 “Financial Statements — Note 5 - “Long-term Debt” in this Quarterly Report on Form 10-Q.

Current wording

During the three and six months ended June 30, 2025, the Company repurchased $20.0 million principal amount of the 2026 Notes for $18.4 million and recognized a net gain of $1.5 million, which includes $0.1 million of unamortized debt issuance costs related to the repurchase. Since inception through December 31, 2025, the Company exchanged and repurchased in total $625.5 million principal amount of its 2026 Notes. For more information, see Part I, Item 1 “Financial Statements — Note 5 - “Long-term Debt” in this Quarterly Report on Form 10-Q.

Previous wording

Net cash used for operating activities for the three months ended March 31, 2026 was $5.6 million, as compared to net cash provided by operating activities of $3.0 million for the three months ended March 31, 2025. The change in cash used for operating activities was primarily related to changes in working capital and net loss.

Current wording

Net cash used for operating activities for the six months ended June 30, 2026 was $2.9 million, as compared to net cash provided by operating activities of $12.6 million for the six months ended June 30, 2025. The change in cash used for operating activities was primarily related to changes in working capital, net loss, and non-cash adjustments. The prior year net income and non-cash adjustments include $18.1 million of net gain, as compared to $1.0 million of net gain in the current year related to the 2026 Notes.

Previous wording

Net cash used for investing activities for the three months ended March 31, 2026 was $1.6 million, as compared to $1.1 million for the three months ended March 31, 2025. The change in cash used for investing activities was due to higher capital expenditures during the three months ended March 31, 2026.

Current wording

Net cash used for investing activities for the six months ended June 30, 2026 was $2.9 million, as compared to $2.7 million for the six months ended June 30, 2025. The change in cash used for investing activities was due to higher capital expenditures during the six months ended June 30, 2026.

Previous wording

Net cash used for financing activities for the three months ended March 31, 2026 was $20.9 million, as compared to $0.3 million for the three months ended March 31, 2025. The cash used for financing activities for the three months ended March 31, 2026 was primarily related to the repurchase of the Company’s 2026 Notes.

Current wording

Net cash used for financing activities for the six months ended June 30, 2026 was $21.1 million, as compared to $173.6 million for the six months ended June 30, 2025. The cash used for financing activities for the six months ended June 30, 2026 was primarily related to the repurchase of the Company’s 2026 Notes. The cash used for financing activities for the six months ended June 30, 2025 was primarily related to the exchange and repurchases of the Company’s 2026 Notes.