UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 21, 2019

STRATA SKIN SCIENCES, INC.

(Exact Name of Registrant Specified in Charter)

 

  

  

Registrant's telephone number, including area code:   215-619-3200

 (Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

□	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

□          Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

□          Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company □

 

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 13(a) of the Exchange Act. □

 

Item 4.02. Non-Reliance on Previously Issued Financial Statements of a Related Audit Report or Completed Interim Report

The conclusion to prevent future reliance on the aforementioned financial statements resulted from the determination that such consolidated financial statements did not properly account for one or more of the following:

•	a non-cash embedded conversion feature arising from debentures issued in June 2015 (which converted into Series C Preferred Stock in September 2017);

•	the derivative accounting for warrants issued, and other warrants modified, in June 2015 (of which the modified warrants expired in July 2019);

•	accruals of liabilities related to sales and use tax for the years ended December 31, 2018, 2017, 2016, and 2015; and

•	adjustments to the impairment assessment and related impairment charge for intangible assets which was performed at the intangible asset level, as opposed to the asset group level, for the year ended December 31, 2017.

Based on its preliminary assessment, the Company is providing the following estimates regarding the aggregate impact on selected items included in the Company’s consolidated statement of operations and balance sheet for and as of the periods indicated below, which were calculated in accordance with accounting principles generally accepted in the United States, from the information originally reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and the Quarterly reports on Form 10-Q for the periods ended March 31, June 30, September 30, 2018, in thoursands except share and per share amounts.

						unaudited				unaudited				unaudited				unaudited				unaudited				unaudited				unaudited
		As reported				As restated				As reported				As restated				As reported				As restated				As reported				As restated
		12/31/17				12/31/17				3/31/18				3/31/18				6/30/18				6/30/18				9/30/18				9/30/18
Intangible assets, net			11,325				11,825				10,672				11,122				10,270				10,670				9,867				10,217
Other accrued liabilities			2,360				3,269				2,216				3,206				2,330				3,413				2,697				3,855
Senior secured convertible debentures, net			-				-				-				-				-				-				-				-
Derivative liability senior secured convertible debentures			-				-				-				-				-				-				-				-
Warrant liability			3				208				-				133				-				471				104				1,485
Series C Convertible Preferred Stock $.10 par value			4				4				4				4				1				1				1				1
Common Stock $.001 par value			4				4				4				4				30				30				30				30
Additional paid-in capital			251,643				222,815				251,662				222,834				266,487				237,659				266,854				238,026
Accumulated deficit			(229,406	)			(201,192	)			(231,863	)			(203,705	)			(233,218	)			(205,541	)			(233,508	)			(206,866	)
net equity			22,245				21,631				19,807				19,137				33,300				32,149				33,377				31,191
General and administrative			7,401				7,091				1,803				1,934				2,333				2,476				2,184				2,309
Other income (expense), net			(16,292	)			(14,568	)			(342	)			(267	)			(369	)			(707	)			(318	)			(1,228	)
Net loss			(18,831	)			(16,797	)			(2,223	)			(2,279	)			(1,355	)			(1,836	)			(290	)			(1,325	)
Common net loss per share		$	(2.85	)		$	(2.55	)		$	(0.13	)		$	(0.13	)		$	(0.06	)		$	(0.08	)		$	(0.01	)		$	(0.04	)
Loss attributable to common stock		$	(7,747	)		$	(6,910	)		$	(547	)		$	(561	)		$	(797	)		$	(1,080	)		$	(257	)		$	(1,176	)
Common shares used in computing net loss per share			2,713,782				2,713,782				4,371,369				4,371,369				13,734,384				13,734,384				29,912,827				29,912,827
Preferred stock loss per share		$	(1,061.25	)		$	(946.62	)		$	(46.54	)		$	(47.72	)		$	(21.60	)		$	(29.26	)		$	(3.23	)		$	(14.85	)
Loss attributable to preferred stock		$	(11,084	)		$	(9,887	)		$	(1,676	)		$	(1,718	)		$	(558	)		$	(756	)		$	(33	)		$	(149	)
Preferred shares used in computing net loss per share			10,444				10,444				36,002				36,002				25,847				25,847				10,049				10,049

The Company does not believe it will meet the August 30, 2019 deadline, and intends to request a further extension from the Staff, through September 30, 2019, to regain compliance with the Filing Requirement. There can be no assurance that the Staff will grant such an extension; notwithstanding, in the event the Staff denies the Company’s request and issues a delisting determination, any such determination would be automatically stayed upon the Company’s request for a hearing before the Nasdaq Hearings Panel (the “Panel”) for a period of 15 days. The Company is entitled to request a further stay from the Panel to ensure continued trading on Nasdaq at least pending the hearing and the ultimate conclusion of the hearing process. At the hearing, the Company would present its plan to evidence compliance with the Filing Requirement and request an extension of time within which to do so.

Forward-Looking Statements

 

Certain statements contained in this report are not based on historical facts and are forward-looking statements within the meaning of federal securities laws and regulations. These statements are based on management’s current expectations, assumptions, estimates and observations of future events and include any statements that do not directly relate to any historical or current fact. These forward-looking statements include statements regarding the circumstances that resulted in the decision that these historical financial statements could no longer be relied upon; and also include estimates regarding the expected impact of potential adjustments that might result after final audit is complete. There can be no assurance that the Company’s Board of Directors, Audit Committee, management or independent registered public accounting firms will not reach conclusions that are different from management’s current estimates or identify additional issues or that these issues will not require additional corrections to the Company’s prior period financial statements. These statements are subject to risks and uncertainties which may cause actual results to differ materially from those stated in this report. These risks and uncertainties include the risk that additional information may become available in preparing and auditing the financial statements which would require the Company to make additional corrections, the cost, time and effort required to complete the review and potential restatement of the financial statements, the ramifications of the Company’s potential inability to timely file periodic and other reports with the SEC, including potential delisting of the Company’s common stock on Nasdaq and the risk of litigation or governmental investigations or proceedings relating to these matters. Certain risks and uncertainties related to our business are or will be described in greater detail in our filings with the SEC. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those set forth in forward-looking statements. The Company intends these forward-looking statements to speak only at the time of this Current Report on Form 8-K and does not undertake to update or revise these statements as more information becomes available except as required under federal securities laws and the rules and regulations of the SEC.

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SIGNATURE

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

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