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THE BEAUTY HEALTH COMPANY

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BEAUTY HEALTH CO : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (form 8-K)

09/14/2021 | 04:58pm EDT

Item 1.01. Entry Into or Amendment of a Material Definitive Agreement.

Indenture and Notes


On September 14, 2021, The Beauty Health Company (the "Company") issued
$750,000,000 principal amount of its 1.25% Convertible Senior Notes due 2026
(the "Notes"). The Notes were issued pursuant to, and are governed by, an
indenture (the "Indenture"), dated as of September 14, 2021, between the Company
and U.S. Bank National Association, as trustee (the "Trustee"). Pursuant to the
purchase agreement between the Company and the initial purchasers of the Notes,
the Company granted the initial purchasers an option to purchase, for settlement
within a period of 13 days from, and including, the date the Notes are first
issued, up to an additional $100,000,000 principal amount of Notes. The Notes
issued on September 14, 2021 include $100,000,000 principal amount of Notes
issued pursuant to the full exercise by the initial purchasers of such option.

The Notes will be the Company's senior, unsecured obligations and will be (i)
equal in right of payment with the Company's existing and future senior,
unsecured indebtedness; (ii) senior in right of payment to the Company's
existing and future indebtedness that is expressly subordinated to the Notes;
(iii) effectively subordinated to the Company's existing and future secured
indebtedness, to the extent of the value of the collateral securing that
indebtedness; and (iv) structurally subordinated to all existing and future
indebtedness and other liabilities, including trade payables, and (to the extent
the Company is not a holder thereof) preferred equity, if any, of the Company's
subsidiaries.

The Notes will accrue interest at a rate of 1.25% per annum, payable
semi-annually in arrears on April 1 and October 1 of each year, beginning on
April 1, 2022. The Notes will mature on October 1, 2026, unless earlier
repurchased, redeemed or converted. Before April 1, 2026, noteholders will have
the right to convert their Notes only upon the occurrence of certain events.
From and after April 1, 2026, noteholders may convert their Notes at any time at
their election until the close of business on the second scheduled trading day
immediately before the maturity date. The Company will settle conversions by
paying or delivering, as applicable, cash, shares of its common stock or a
combination of cash and shares of its common stock, at the Company's election.
The initial conversion rate is 31.4859 shares of common stock per $1,000
principal amount of Notes, which represents an initial conversion price of
approximately $31.76 per share of common stock. The conversion rate and
conversion price will be subject to customary adjustments upon the occurrence of
certain events. In addition, if certain corporate events that constitute a
"Make-Whole Fundamental Change" (as defined in the Indenture) occur, then the
conversion rate will, in certain circumstances, be increased for a specified
period of time.

The Notes will be redeemable, in whole or in part (subject to certain
limitations described below), at the Company's option at any time, and from time
to time, on or after October 6, 2024, and on or before the 40th scheduled
trading day immediately before the maturity date, but only if certain liquidity
conditions are satisfied and the last reported sale price per share of the
Company's common stock exceeds 130% of the conversion price on (i) each of at
least 20 trading days, whether or not consecutive, during the 30 consecutive
trading days ending on, and including, the trading day immediately before the
date the Company sends the related redemption notice; and (ii) the trading day
immediately before the date the Company sends such notice. However, the Company
may not redeem less than all of the outstanding notes unless at least $100.0
million aggregate principal amount of notes are outstanding and not called for
redemption as of the time the Company sends the related redemption notice. The
redemption price will be a cash amount equal to the principal amount of the
Notes to be redeemed, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date. In addition, calling any Note for redemption
will constitute a Make-Whole Fundamental Change with respect to that Note, in
which case the conversion rate applicable to the conversion of that Note will be
increased in certain circumstances if it is converted after it is called for
redemption.

If certain corporate events that constitute a "Fundamental Change" (as defined
in the Indenture) occur, then, subject to a limited exception for certain cash
mergers, noteholders may require the Company to repurchase their Notes at a cash
repurchase price equal to the principal amount of the Notes to be repurchased,
plus accrued and unpaid interest, if any, to, but excluding, the fundamental
change repurchase date. The definition of Fundamental Change includes certain
business combination transactions involving the Company and certain de-listing
events with respect to the Company's common stock.

The Notes will have customary provisions relating to the occurrence of "Events
of Default" (as defined in the Indenture), which include the following: (i)
certain payment defaults on the Notes (which, in the case of a default in the
payment of interest on the Notes, will be subject to a 30-day cure period); (ii)
the Company's failure to send certain notices under the Indenture within
specified periods of time; (iii) the Company's failure to convert a Note upon
the exercise of the conversion right with respect to such Note, subject to a
three business-day cure period; (iv) the Company's failure to comply with
certain covenants in the Indenture relating to the Company's ability to
consolidate with or merge with or into, or sell, lease or otherwise transfer, in
one transaction or a series of transactions, all or substantially all of the
assets of the Company and its subsidiaries, taken as a whole, to another person;
(v) a default by the Company in its other obligations or agreements under the
Indenture or the Notes if such default is not cured or waived within 60 days
after notice is given in

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accordance with the Indenture; (vi) certain defaults by the Company or any of
its subsidiaries with respect to indebtedness for money borrowed of at least
$45,000,000; (vii) the rendering of certain judgments against the Company or any
of its significant subsidiaries for the payment of at least $45,000,000, where
such judgments are not discharged or stayed within 60 days after the date on
which the right to appeal has expired or on which all rights to appeal have been
extinguished and (viii) certain events of bankruptcy, insolvency and
reorganization involving the Company or any of its significant subsidiaries.

If an Event of Default involving bankruptcy, insolvency or reorganization events
with respect to the Company (and not solely with respect to a significant
subsidiary of the Company) occurs, then the principal amount of, and all accrued
and unpaid interest on, all of the Notes then outstanding will immediately
become due and payable without any further action or notice by any person. If
any other Event of Default occurs and is continuing, then, the Trustee, by
. . .


Item 2.03. Creation of a Direct Financial Obligation or an Off-Balance Sheet Arrangement.

The disclosure set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

Item 3.02. Unregistered Sales of Equity Securities.


The disclosure set forth in Item 1.01 above is incorporated by reference into
this Item 3.02. The Notes were issued to the initial purchasers in reliance upon
Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities
Act"), in transactions not involving any public offering. The Notes were resold
by the initial purchasers to persons whom the initial purchasers reasonably
believe are "qualified institutional buyers," as defined in, and in accordance
with, Rule 144A under the Securities Act. Any shares of the Company's common
stock that may be issued upon conversion of the Notes will be issued in reliance
upon Section 3(a)(9) of the Securities Act as involving an exchange by the
Company exclusively with its security holders. Initially, a maximum of
31,289,100 shares of the Company's common stock may be issued upon

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conversion of the Notes, based on the initial maximum conversion rate of 47.7188
shares of common stock per $1,000 principal amount of Notes, which is subject to
customary anti-dilution adjustment provisions.


Item 9.01 Financial Statements and Exhibits.

Exhibit No.                                                   Description
  4.1*                             Indenture, dated as of September 14, 2021, between The Beauty
                                 Health Company and U.S. Bank National Association, as trustee.
  4.2*                             Form of certificate representing the

1.25% Convertible Senior Notes

                                 due 2026 (included as Exhibit A to Exhibit 4.1).
  10.1*                            Form of Confirmation for Capped Call Transactions
104                              Cover page interactive data file (embedded within the inline XBRL
                                 document).



* Filed herewith.

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© Edgar Online, source Glimpses

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