Securities Class Action


 

On June 17, 2026, SkinHealth Systems Inc., f/k/a The Beauty Health Company (the "Company"), entered into a Stipulation and Agreement of Settlement to settle the securities class action pending in the United States District Court for the Central District of California, captioned Alghazwi v. The Beauty Health Company, et al., Case No. 2:23-cv-09733-SPG-MAA (the "Securities Class Action" and the proposed settlement, the "Proposed Securities Settlement").


 

The Company entered into the Proposed Securities Settlement to eliminate the uncertainty, burden, and expense of protracted litigation. The Proposed Securities Settlement does not assign or reflect any admission of wrongdoing or liability by the Company or the individual defendants, all of whom deny any wrongdoing. The Proposed Securities Settlement is subject in all respects to court approval and there can be no assurance that the court will approve the Proposed Securities Settlement.


 

If approved by the court, the Proposed Securities Settlement will fully resolve the Securities Class Action claims against the Company and the individual defendants, Andrew Stanleick and Liyuan Woo. As consideration for the Proposed Securities Settlement, the Company will cause to be paid a total cash settlement payment of $18,000,000 ( the "Cash Payment"), of which, the Company will be responsible to pay only $3,000,000 of the Cash Payment from its own funds, while the remaining $15,000,000 of the Cash Payment will come from certain of the Company’s insurers to facilitate the resolution of the Securities Class Action with the members of the putative class in the Proposed Securities Settlement. The Cash Payment will be placed into an escrow account within 30 days of the later of (i) the court’s entry of a Preliminary Approval Order, or (ii) the date the Company receives payment instructions for the Cash Payment for the benefit of all persons or entities which, between May 10, 2022 and November 13, 2023, inclusive, purchased or otherwise acquired the Company’s Class A Common Stock, par value $0.0001 per share, or Company call options, or all persons or entities which sold or otherwise disposed of Company put options, and were damaged thereby (the "Settlement Class Members"). Plaintiffs will seek attorney’s fees and costs, the amount of which is estimated not to exceed 30% of the Cash Payment, or $5,400,000. The Settlement Class Members will receive from the escrow account the Cash Payment, less Plaintiffs attorneys’ fees and costs, administrative expenses, taxes and tax expenses, any awards to plaintiffs Priscilla Dijkgraaf and Martijn Dijkgraaf, and other fees and expenses authorized by the court.