|
Delaware
(State or other jurisdiction
of incorporation or organization)
|
|
13-3986004
(I.R.S. Employer
Identification No.)
|
|
Title of each class
|
Trading
Symbol(s) |
Name of each exchange on which registered
|
Common Stock, $0.001 par value per share
|
SSKN
|
The NASDAQ Stock Market LLC
|
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
|||
Non-accelerated filer [x]
|
Smaller reporting company [x]
|
|||
Emerging growth company [ ]
|
Part I. Financial Information:
|
PAGE
|
||
a.
|
1
|
||
b.
|
2
|
||
c.
|
3
|
||
d.
|
4
|
||
e.
|
5
|
||
f.
|
6
|
||
g.
|
7
|
||
23
|
|||
32
|
|||
32
|
|||
33
|
|||
33
|
|||
33
|
|||
33
|
|||
33
|
|||
33
|
|||
33
|
|||
34
|
|||
E-31.1
|
September 30, 2020
|
December 31, 2019
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
11,063
|
$
|
8,129
|
||||
Restricted cash
|
7,397
|
7,500
|
||||||
Accounts receivable, net of allowance for doubtful accounts of $249 and $184, respectively
|
2,510
|
4,386
|
||||||
Inventories
|
3,502
|
3,027
|
||||||
Prepaid expenses and other current assets
|
464
|
513
|
||||||
Total current assets
|
24,936
|
23,555
|
||||||
Property and equipment, net
|
5,258
|
5,369
|
||||||
Operating lease right-of-use assets, net
|
1,072
|
1,314
|
||||||
Intangible assets, net
|
6,697
|
7,955
|
||||||
Goodwill
|
8,803
|
8,803
|
||||||
Other assets
|
298
|
347
|
||||||
Total assets
|
$
|
47,064
|
$
|
47,343
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Note payable
|
$
|
7,275
|
$
|
7,275
|
||||
Current portion of long-term debt
|
1,134
|
-
|
||||||
Accounts payable
|
3,488
|
1,880
|
||||||
Other accrued liabilities
|
4,558
|
5,134
|
||||||
Current portion of operating lease liabilities
|
361
|
313
|
||||||
Deferred revenues
|
1,864
|
2,832
|
||||||
Total current liabilities
|
18,680
|
17,434
|
||||||
Long-term liabilities:
|
||||||||
Long-term debt, net
|
1,394
|
-
|
||||||
Deferred tax liability
|
207
|
-
|
||||||
Long-term operating lease liabilities, net
|
804
|
1,078
|
||||||
Other liabilities
|
52
|
178
|
||||||
Total liabilities
|
21,137
|
18,690
|
||||||
Commitments and contingencies (see Note 15)
|
||||||||
Stockholders' equity:
|
||||||||
Series C Convertible Preferred Stock, $.10 par value, 10,000,000 shares authorized; 0 and 2,103 shares issued and outstanding at September 30, 2020 and, December 31, 2019, respectively
|
-
|
1
|
||||||
Common Stock, $.001 par value, 150,000,000 shares authorized; 33,754,909 and 32,932,273 shares issued and outstanding at September 30, 2020 and, December 31, 2019,
respectively
|
34
|
33
|
||||||
Additional paid-in capital
|
244,423
|
243,180
|
||||||
Accumulated deficit
|
(218,530
|
)
|
(214,561
|
)
|
||||
Total stockholders' equity
|
25,927
|
28,653
|
||||||
Total liabilities and stockholders’ equity
|
$
|
47,064
|
$
|
47,343
|
For the Three Months Ended
September 30,
|
||||||||
2020
|
2019
|
|||||||
Revenues, net
|
$
|
5,613
|
$
|
7,480
|
||||
Cost of revenues
|
2,383
|
2,855
|
||||||
Gross profit
|
3,230
|
4,625
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Engineering and product development
|
411
|
249
|
||||||
Selling and marketing
|
2,051
|
2,887
|
||||||
General and administrative
|
1,929
|
2,218
|
||||||
|
4,391
|
5,354
|
||||||
Loss from operations
|
(1,161
|
)
|
(729
|
)
|
||||
|
||||||||
Other expense, net:
|
||||||||
Interest expense, net
|
(21
|
)
|
(153
|
)
|
||||
(21
|
)
|
(153
|
)
|
|||||
Loss before income taxes
|
(1,182
|
)
|
(882
|
)
|
||||
Income tax (expense) benefit
|
(72
|
)
|
22
|
|||||
Net loss
|
$
|
(1,254
|
)
|
$
|
(860
|
)
|
||
Loss attributable to common shares
|
$
|
(1,254
|
)
|
$
|
(840
|
)
|
||
Loss attributable to Series C Convertible Preferred shares
|
$
|
-
|
$
|
(20
|
)
|
|||
Loss per common share:
|
||||||||
Basic
|
$
|
(0.04
|
)
|
$
|
(0.03
|
)
|
||
Diluted
|
$
|
(0.04
|
)
|
$
|
(0.03
|
)
|
||
Shares used in computing loss per common share:
|
||||||||
Basic
|
33,754,909
|
32,903,287
|
||||||
Diluted
|
33,754,909
|
32,903,287
|
||||||
Loss per Series C Convertible Preferred share basic and diluted
|
$
|
-
|
$
|
(9.58
|
)
|
|||
Shares used in computing loss per basic and diluted Series C Convertible Preferred shares
|
-
|
2,103
|
For the Nine Months Ended
September 30,
|
||||||||
2020
|
2019
|
|||||||
Revenues, net
|
$
|
16,373
|
$
|
22,688
|
||||
Cost of revenues
|
6,780
|
8,544
|
||||||
Gross profit
|
9,593
|
14,144
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Engineering and product development
|
950
|
788
|
||||||
Selling and marketing
|
6,446
|
8,911
|
||||||
General and administrative
|
5,921
|
7,398
|
||||||
|
13,317
|
17,097
|
||||||
Loss from operations
|
(3,724
|
)
|
(2,953
|
)
|
||||
|
||||||||
Other expense, net:
|
||||||||
Interest expense, net
|
(38
|
)
|
(433
|
)
|
||||
(38
|
)
|
(433
|
)
|
|||||
Loss before income taxes
|
(3,762
|
)
|
(3,386
|
)
|
||||
Income tax (expense) benefit
|
(207
|
)
|
111
|
|||||
Net loss
|
$
|
(3,969
|
)
|
$
|
(3,275
|
)
|
||
Loss attributable to common shares
|
$
|
(3,947
|
)
|
$
|
(3,079
|
)
|
||
Loss attributable to Series C Convertible Preferred shares
|
$
|
(22
|
)
|
$
|
(196
|
)
|
||
Loss per common share:
|
||||||||
Basic
|
$
|
(0.12
|
)
|
$
|
(0.10
|
)
|
||
Diluted
|
$
|
(0.12
|
)
|
$
|
(0.10
|
)
|
||
Shares used in computing loss per common share:
|
||||||||
Basic
|
33,551,070
|
31,663,355
|
||||||
Diluted
|
33,551,070
|
31,663,355
|
||||||
Loss per Series C Convertible Preferred share basic and diluted
|
$
|
(43.73
|
)
|
$
|
(36.14
|
)
|
||
Shares used in computing loss per basic and diluted Series C Convertible Preferred shares
|
491
|
5,412
|
Convertible
Preferred Stock – Series C
|
Common Stock
|
Additional Paid-In
|
Accumulated
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||||
BALANCE, January 1, 2019
|
9,968
|
$
|
1
|
29,943,086
|
$
|
30
|
$
|
241,988
|
$
|
(210,771
|
)
|
$
|
31,248
|
|||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
323
|
-
|
323
|
|||||||||||||||||||||
Conversion of convertible preferred stock into common stock
|
(3,090
|
)
|
-
|
1,148,698
|
1
|
(1
|
)
|
-
|
-
|
|||||||||||||||||||
Exercise of stock options
|
-
|
-
|
28,824
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,333
|
)
|
(1,333
|
)
|
|||||||||||||||||||
BALANCE, March 31, 2019
|
6,878
|
$
|
1
|
31,120,608
|
$
|
31
|
$
|
242,310
|
$
|
(212,104
|
)
|
$
|
30,238
|
Conversion of convertible preferred stock into common stock
|
(4,775
|
)
|
-
|
1,775,093
|
2
|
(2
|
)
|
-
|
-
|
|||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
303
|
-
|
303
|
|||||||||||||||||||||
Exercise of stock options
|
-
|
-
|
7,586
|
-
|
-
|
|||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,082
|
)
|
(1,082
|
)
|
|||||||||||||||||||
BALANCE, June 30, 2019
|
2,103
|
$
|
1
|
32,903,287
|
$
|
33
|
$
|
242,611
|
$
|
(213,186
|
)
|
$
|
29,459
|
|||||||||||||||
Stock based compensation
|
-
|
-
|
-
|
-
|
257
|
-
|
257
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(860
|
)
|
(860
|
)
|
|||||||||||||||||||
BALANCE, September 30, 2019
|
2,103
|
$
|
1
|
32,903,287
|
$
|
33
|
$
|
242,868
|
$
|
(214,046
|
)
|
$
|
28,856
|
|||||||||||||||
Convertible
Preferred Stock – Series C
|
Common Stock
|
Additional Paid-In
|
Accumulated
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||||
BALANCE, January 1, 2020
|
2,103
|
$
|
1
|
32,932,273
|
$
|
33
|
$
|
243,180
|
$
|
(214,561
|
)
|
$
|
28,653
|
|||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
430
|
-
|
430
|
|||||||||||||||||||||
Conversion of convertible preferred stock into common stock
|
(2,103
|
)
|
(1
|
)
|
782,089
|
1
|
-
|
-
|
-
|
|||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,035
|
)
|
(1,035
|
)
|
|||||||||||||||||||
BALANCE, March 31, 2020
|
-
|
$
|
-
|
33,714,362
|
$
|
34
|
$
|
243,610
|
$
|
(215,596
|
)
|
$
|
28,048
|
|||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
410
|
-
|
410
|
||||||||||||||||||||||
Issuance of restricted stock
|
-
|
-
|
40,547
|
-
|
- |
- |
-
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
- |
- |
- |
(1,680
|
)
|
(1,680
|
)
|
|||||||||||||||||||
BALANCE, June 30, 2020
|
-
|
$
|
-
|
33,754,909
|
$
|
34
|
$
|
244,020
|
$
|
(217,276
|
)
|
$
|
26,778
|
|||||||||||||||
Stock based compensation
|
-
|
-
|
-
|
-
|
403
|
-
|
403
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(1,254
|
)
|
(1,254
|
)
|
|||||||||||||||||||
BALANCE, September 30, 2020
|
-
|
$
|
-
|
33,754,909
|
$
|
34
|
$
|
244,423
|
$
|
(218,530
|
)
|
$
|
25,927
|
|||||||||||||||
For the Nine Months Ended
September 30,
|
||||||||
2020
|
2019
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net loss
|
$
|
(3,969
|
)
|
$
|
(3,275
|
)
|
||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
2,793
|
3,437
|
||||||
Amortization of right-of-use asset
|
242
|
240
|
||||||
Provision for doubtful accounts
|
65
|
9
|
||||||
Loss on disposal of property and equipment and lasers placed in service
|
23
|
29
|
||||||
Stock-based compensation
|
1,243
|
883
|
||||||
Deferred taxes
|
207
|
(111
|
)
|
|||||
Amortization of debt discount
|
-
|
43
|
||||||
Amortization of deferred financing costs
|
-
|
64
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
1,811
|
(261
|
)
|
|||||
Inventories
|
(475
|
)
|
(792
|
)
|
||||
Prepaid expenses and other assets
|
98
|
76
|
||||||
Accounts payable
|
1,608
|
233
|
||||||
Other accrued liabilities
|
(576
|
)
|
437
|
|||||
Other liabilities
|
(126
|
)
|
(61
|
)
|
||||
Operating lease liabilities
|
(226
|
)
|
(219
|
)
|
||||
Deferred revenues
|
(968
|
)
|
384
|
|||||
Net cash provided by operating activities
|
1,750
|
1,116
|
||||||
Cash Flows From Investing Activities:
|
||||||||
Lasers placed-in-service
|
(1,430
|
)
|
(1,370
|
)
|
||||
Purchases of property and equipment
|
(17
|
)
|
(5
|
)
|
||||
Net cash used in investing activities
|
(1,447
|
)
|
(1,375
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Proceeds from note payable and long-term debt
|
2,528
|
-
|
||||||
Net cash provided by financing activities
|
2,528
|
-
|
||||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
2,831
|
(259
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
15,629
|
16,487
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
18,460
|
$
|
16,228
|
||||
Cash and cash equivalents
|
$
|
11,063
|
$
|
16,228
|
||||
Restricted cash
|
7,397
|
-
|
||||||
$
|
18,460
|
$
|
16,228
|
|||||
Supplemental information of cash and non-cash transactions:
|
||||||||
Cash paid for interest
|
$
|
157
|
$
|
604
|
||||
Lease liabilities arising from obtaining right-of-use assets
|
$
|
-
|
$
|
1,632
|
|
•
|
Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.
|
|
•
|
Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
|
|
•
|
Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date.
The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity,
credit, market and/or other risk factors.
|
Three Months Ended
September 30, 2020
|
Nine Months Ended
September 30, 2020
|
|||||||||||||||
Common Stock
|
Series C
Convertible Preferred Stock
|
Common Stock
|
Series C
Convertible Preferred Stock
|
|||||||||||||
Loss attributable to each class
|
$
|
(1,254
|
)
|
$
|
-
|
$
|
(3,947
|
)
|
$
|
(22
|
)
|
|||||
Weighted average number of shares outstanding during the period
|
33,754,909
|
-
|
33,551,070
|
491
|
||||||||||||
Basic and Diluted loss per share
|
$
|
(0.04
|
)
|
$
|
-
|
$
|
(0.12
|
)
|
$
|
(43.73
|
)
|
Three Months Ended
September 30, 2019
|
Nine Months Ended
September 30, 2019
|
|||||||||||||||
Common Stock
|
Series C
Convertible Preferred Stock
|
Common Stock
|
Series C
Convertible Preferred Stock
|
|||||||||||||
Loss attributable to each class
|
$
|
(840
|
)
|
$
|
(20
|
)
|
$
|
(3,079
|
)
|
$
|
(196
|
)
|
||||
Weighted average number of shares outstanding during the period
|
32,903,287
|
2,105
|
31,663,355
|
5,412
|
||||||||||||
Basic and Diluted loss per share
|
$
|
(0.03
|
)
|
$
|
(9.58
|
)
|
$
|
(0.10
|
)
|
$
|
(36.14
|
)
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||
|
|
2020
|
|
2019
|
2020
|
2019
|
||
Common stock purchase warrants
|
|
149,901
|
|
1,073,319
|
530,923
|
1,776,216
|
||
Restricted stock units
|
119,330
|
120,773
|
149,637
|
123,675
|
||||
Common stock options
|
|
4,908,038
|
|
4,033,038
|
4,908,038
|
4,178,663
|
||
Total
|
|
5,177,269
|
|
5,227,130
|
5,588,598
|
6,078,554
|
Three Months Ended
September 30, 2020
|
||||||||||||
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Domestic
|
$
|
3,690
|
$
|
261
|
$
|
3,951
|
||||||
Foreign
|
145
|
1,517
|
1,662
|
|||||||||
Total
|
$
|
3,835
|
$
|
1,778
|
$
|
5,613
|
Nine Months Ended
September 30, 2020
|
||||||||||||
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Domestic
|
$
|
11,957
|
$
|
701
|
$
|
12,658
|
||||||
Foreign
|
375
|
3,340
|
3,715
|
|||||||||
Total
|
$
|
12,332
|
$
|
4,041
|
$
|
16,373
|
Three Months Ended
September 30, 2019
|
||||||||||||
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Domestic
|
$
|
5,991
|
$
|
241
|
$
|
6,232
|
||||||
Foreign
|
-
|
1,248
|
1,248
|
|||||||||
Total
|
$
|
5,991
|
$
|
1,489
|
$
|
7,480
|
Nine Months Ended
September 30, 2019
|
||||||||||||
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Domestic
|
$
|
17,142
|
$
|
943
|
$
|
18,085
|
||||||
Foreign
|
-
|
4,603
|
4,603
|
|||||||||
Total
|
$
|
17,142
|
$
|
5,546
|
$
|
22,688
|
Remaining 2020
|
$
|
148
|
||
2021
|
618
|
|||
2022
|
618
|
|||
2023
|
551
|
|||
2024
|
267
|
|||
Thereafter
|
2
|
|||
Total
|
$
|
2,204
|
September 30, 2020
|
December 31, 2019
|
|||||||
Raw materials and work-in-process
|
$
|
3,071
|
$
|
2,651
|
||||
Finished goods
|
431
|
376
|
||||||
Total inventories
|
$
|
3,502
|
$
|
3,027
|
September 30, 2020
|
December 31, 2019
|
|||||||
Lasers placed-in-service
|
$
|
22,239
|
$
|
20,925
|
||||
Equipment, computer hardware and software
|
146
|
146
|
||||||
Furniture and fixtures
|
234
|
234
|
||||||
Leasehold improvements
|
43
|
26
|
||||||
22,662
|
21,331
|
|||||||
Accumulated depreciation and amortization
|
(17,404
|
)
|
(15,962
|
)
|
||||
Property and equipment, net
|
$
|
5,258
|
$
|
5,369
|
Balance
|
Accumulated
Amortization
|
Intangible
assets, net
|
||||||||||
Core technology
|
$
|
5,700
|
$
|
(2,993
|
)
|
$
|
2,707
|
|||||
Product technology
|
2,000
|
(2,000
|
)
|
-
|
||||||||
Customer relationships
|
6,900
|
(3,623
|
)
|
3,277
|
||||||||
Tradenames
|
1,500
|
(787
|
)
|
713
|
||||||||
$
|
16,100
|
$
|
(9,403
|
)
|
$
|
6,697
|
Remaining 2020
|
$
|
352
|
||
2021
|
1,410
|
|||
2022
|
1,410
|
|||
2023
|
1,410
|
|||
2024
|
1,410
|
|||
2025
|
705
|
|||
Total
|
$
|
6,697
|
September 30, 2020
|
December 31, 2019
|
|||||||
Accrued warranty, current
|
$
|
107
|
$
|
170
|
||||
Accrued compensation, including commissions and vacation
|
780
|
1,193
|
||||||
Accrued state sales, use and other taxes
|
3,094
|
3,193
|
||||||
Accrued professional fees and other accrued liabilities
|
577
|
578
|
||||||
Total other accrued liabilities
|
$
|
4,558
|
$
|
5,134
|
Three Months Ended,
September 30,
|
Nine Months Ended,
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Accrual at beginning of period
|
$
|
139
|
$
|
291
|
$
|
232
|
$
|
238
|
||||||||
Additions charged to warranty expense
|
37
|
26
|
46
|
169
|
||||||||||||
Expiring warranties/claimed satisfied
|
(41
|
)
|
(61
|
)
|
(143
|
)
|
(151
|
)
|
||||||||
Total
|
135
|
256
|
135
|
256
|
||||||||||||
Less: current portion
|
(107
|
)
|
(179
|
)
|
(107
|
)
|
(179
|
)
|
||||||||
Total long-term accrued warranty costs
|
$
|
28
|
$
|
77
|
$
|
28
|
$
|
77
|
September 30, 2020
|
||||
Term notes
|
2,528
|
|||
Less: current portion
|
(1,134
|
)
|
||
Total long-term debt
|
$
|
1,394
|
Issue Date
|
Expiration Date
|
Total Warrants
|
Exercise Price
|
|||||||
December 30, 2015
|
December 30, 2020
|
130,089
|
$
|
5.65
|
||||||
January 29, 2016
|
January 29, 2021
|
19,812
|
$
|
5.30
|
||||||
149,901
|
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Revenues
|
$
|
3,835
|
$
|
1,778
|
$
|
5,613
|
||||||
Costs of revenues
|
1,368
|
1,015
|
2,383
|
|||||||||
Gross profit
|
2,467
|
763
|
3,230
|
|||||||||
Gross profit %
|
64.3
|
%
|
42.9
|
%
|
57.5
|
%
|
||||||
Allocated operating expenses:
|
||||||||||||
Engineering and product development
|
329
|
82
|
411
|
|||||||||
Selling and marketing
|
1,883
|
168
|
2,051
|
|||||||||
Unallocated operating expenses
|
-
|
-
|
1,929
|
|||||||||
2,212
|
250
|
4,391
|
||||||||||
Income (loss) from operations
|
255
|
513
|
(1,161
|
)
|
||||||||
Interest expense, net
|
-
|
-
|
(21
|
)
|
||||||||
Income (loss) before income taxes
|
$
|
255
|
$
|
513
|
$
|
(1,182
|
)
|
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Revenues
|
$
|
12,332
|
$
|
4,041
|
$
|
16,373
|
||||||
Costs of revenues
|
4,534
|
2,246
|
6,780
|
|||||||||
Gross profit
|
7,798
|
1,795
|
9,593
|
|||||||||
Gross profit %
|
63.2
|
%
|
44.4
|
%
|
58.6
|
%
|
||||||
Allocated operating expenses:
|
||||||||||||
Engineering and product development
|
828
|
122
|
950
|
|||||||||
Selling and marketing
|
6,021
|
425
|
6,446
|
|||||||||
Unallocated operating expenses
|
-
|
-
|
5,921
|
|||||||||
6,849
|
547
|
13,317
|
||||||||||
Income (loss) from operations
|
949
|
1,248
|
(3,724
|
)
|
||||||||
Interest expense, net
|
-
|
-
|
(38
|
)
|
||||||||
Income (loss) before income taxes
|
$
|
949
|
$
|
1,248
|
$
|
(3,762
|
)
|
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Revenues
|
$
|
5,991
|
$
|
1,489
|
$
|
7,480
|
||||||
Costs of revenues
|
1,966
|
889
|
2,855
|
|||||||||
Gross profit
|
4,025
|
600
|
4,625
|
|||||||||
Gross profit %
|
67.2
|
%
|
40.3
|
%
|
61.8
|
%
|
||||||
Allocated operating expenses:
|
||||||||||||
Engineering and product development
|
226
|
23
|
249
|
|||||||||
Selling and marketing
|
2,762
|
125
|
2,887
|
|||||||||
Unallocated operating expenses
|
-
|
-
|
2,218
|
|||||||||
2,988
|
148
|
5,354
|
||||||||||
Income (loss) from operations
|
1,037
|
452
|
(729
|
)
|
||||||||
Interest expense, net
|
-
|
-
|
(153
|
)
|
||||||||
Income (loss) before income taxes
|
$
|
1,037
|
$
|
452
|
$
|
(882
|
)
|
Dermatology Recurring Procedures
|
Dermatology Procedures Equipment
|
TOTAL
|
||||||||||
Revenues
|
$
|
17,142
|
$
|
5,546
|
$
|
22,688
|
||||||
Costs of revenues
|
5,492
|
3,052
|
8,544
|
|||||||||
Gross profit
|
11,650
|
2,494
|
14,144
|
|||||||||
Gross profit %
|
68.0
|
%
|
45.0
|
%
|
62.3
|
%
|
||||||
Allocated operating expenses:
|
||||||||||||
Engineering and product development
|
666
|
122
|
788
|
|||||||||
Selling and marketing
|
8,301
|
610
|
8,911
|
|||||||||
Unallocated operating expenses
|
-
|
-
|
7,398
|
|||||||||
8,967
|
732
|
17,097
|
||||||||||
Income (loss) from operations
|
2,683
|
1,762
|
(2,953
|
)
|
||||||||
Interest expense, net
|
-
|
-
|
(433
|
)
|
||||||||
Income (loss) before income taxes
|
$
|
2,683
|
$
|
1,762
|
$
|
(3,386
|
)
|
For the year ending December 31,
|
Amount
|
|||
Remaining 2020
|
$
|
115
|
||
2021
|
456
|
|||
2022
|
371
|
|||
2023
|
242
|
|||
2024
|
186
|
|||
Total remaining lease payments
|
1,370
|
|||
Less: imputed interest
|
(205
|
)
|
||
Total lease liabilities
|
$
|
1,165
|
•
|
XTRAC® Excimer Laser. XTRAC received FDA clearance in 2000 and has since become a widely recognized treatment among dermatologists for psoriasis and other skin
diseases. The XTRAC System delivers ultra-narrowband ultraviolet B (“UVB”) light to affected areas of skin. Following a series of treatments typically performed twice weekly, psoriasis remission can
be achieved, and vitiligo patches can be re-pigmented. XTRAC is endorsed by the National Psoriasis Foundation, and its use for psoriasis is covered by nearly all major insurance companies, including Medicare. We estimate that more than half
of all major insurance companies now offer reimbursement for vitiligo as well, a figure that is increasing.
|
|
•
|
In the third quarter of 2018, we announced the FDA granted clearance for our Multi Micro Dose (MMD) tip for our XTRAC excimer laser. The MMD Tip accessory is indicated for use in conjunction with the XTRAC
laser system to filter the Narrow Band UVB (“NB-UVB”) light at delivery in order to calculate and individualize the maximum non-blistering dose for a particular patient.
|
|
•
|
In the third quarter of 2018, we announced the launch of our S3®, the next generation XTRAC. The S3 is smaller, faster and has a smart user interface.
|
|
•
|
In January 2020, we announced the FDA granted clearance of our XTRAC Momentum Excimer Laser Platform.
|
|
•
|
VTRAC® Lamp. VTRAC received FDA clearance in 2005 and provides targeted therapeutic efficacy demonstrated by excimer technology with the simplicity of design and
reliability of a lamp system.
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Dermatology Recurring Procedures
|
$
|
3,835
|
$
|
5,991
|
$
|
12,332
|
$
|
17,142
|
||||||||
Dermatology Procedures Equipment
|
1,778
|
1,489
|
4,041
|
5,546
|
||||||||||||
Total Revenues
|
$
|
5,613
|
$
|
7,480
|
$
|
16,373
|
$
|
22,688
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Dermatology Recurring Procedures
|
$
|
1,368
|
$
|
1,966
|
$
|
4,534
|
$
|
5,492
|
||||||||
Dermatology Procedures Equipment
|
1,015
|
889
|
2,246
|
3,052
|
||||||||||||
Total Cost of Revenues
|
$
|
2,383
|
$
|
2,855
|
$
|
6,780
|
$
|
8,544
|
Company Profit Analysis
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenues
|
$
|
5,613
|
$
|
7,480
|
$
|
16,373
|
$
|
22,688
|
||||||||
Percent decrease
|
(25.0
|
)%
|
(27.8
|
)%
|
||||||||||||
Cost of revenues
|
2,383
|
2,855
|
6,780
|
8,544
|
||||||||||||
Percent decrease
|
(16.5
|
)%
|
(20.6
|
)%
|
||||||||||||
Gross profit
|
$
|
3,230
|
$
|
4,625
|
$
|
9,593
|
$
|
14,144
|
||||||||
Gross profit percentage
|
57.5
|
%
|
61.8
|
%
|
58.6
|
%
|
62.3
|
%
|
Dermatology Recurring Procedures
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenues
|
$
|
3,835
|
$
|
5,991
|
$
|
12,332
|
$
|
17,142
|
||||||||
Percent decrease
|
(35.9
|
)%
|
(28.1
|
)%
|
||||||||||||
Cost of revenues
|
1,368
|
1,966
|
4,534
|
5,492
|
||||||||||||
Percent decrease
|
(30.4
|
)%
|
(17.4
|
)%
|
||||||||||||
Gross profit
|
$
|
2,467
|
$
|
4,025
|
$
|
7,798
|
$
|
11,650
|
||||||||
Gross profit percentage
|
64.3
|
%
|
67.2
|
%
|
63.2
|
%
|
68.0
|
%
|
Dermatology Procedures Equipment
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenues
|
$
|
1,778
|
$
|
1,489
|
$
|
4,041
|
$
|
5,546
|
||||||||
Percent increase (decrease)
|
19.4
|
%
|
(27.1
|
)%
|
||||||||||||
Cost of revenues
|
1,015
|
889
|
2,246
|
3,052
|
||||||||||||
Percent increase (decrease)
|
14.2
|
%
|
(26.4
|
)%
|
||||||||||||
Gross profit
|
$
|
763
|
$
|
600
|
$
|
1,795
|
$
|
2,494
|
||||||||
Gross profit percentage
|
42.9
|
%
|
40.3
|
%
|
44.4
|
%
|
45.0
|
%
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Net Loss
|
$
|
(1,254
|
)
|
$
|
(860
|
)
|
$
|
(3,969
|
)
|
$
|
(3,275
|
)
|
||||
Adjustments:
|
||||||||||||||||
Depreciation/amortization*
|
890
|
1,183
|
3,035
|
3,677
|
||||||||||||
Income taxes
|
72
|
(22
|
)
|
207
|
(111
|
)
|
||||||||||
Interest expense, net
|
21
|
153
|
38
|
433
|
||||||||||||
Non-GAAP EBITDA
|
(271
|
)
|
454
|
(689
|
)
|
724
|
||||||||||
Stock compensation
|
403
|
257
|
1,243
|
883
|
||||||||||||
Non-GAAP adjusted EBITDA
|
$
|
132
|
$
|
711
|
$
|
554
|
$
|
1,607
|
•
|
refinanced our long-term debt credit facility with MidCap Financial Trust in December 2019 by obtaining the Note with a commercial bank;
|
•
|
obtained the PPP loan on April 22, 2020; and
|
•
|
obtained the EIDL Loan on May 22, 2020, which was fully funded on June 12, 2020.
|
•
|
forecasts of future business performance, consumer trends and macro-economic conditions, including the timing and pace of physician practices opening back up and
remaining open after the COVID-19 pandemic subsides and/or regional, statewide, or country-wide restrictions are re-imposed, and our ability and its effectiveness to stimulate recurring revenue by generating patient referrals to our
provider customers
|
•
|
descriptions of market and/or competitive conditions;
|
•
|
descriptions of plans or objectives of management for future operations, products or services;
|
•
|
our estimates regarding the sufficiency of our cash resources, expenses, capital requirements and needs for additional financing, compliance with the terms of the PPP
loan and related regulations, the terms of the EIDL loan and our ability to obtain additional financing;
|
•
|
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
|
•
|
our ability to obtain and maintain regulatory approvals of our products;
|
•
|
anticipated results of existing or future litigation;
|
•
|
health emergencies, the spread of infectious diseases; and
|
•
|
descriptions or assumptions underlying or related to any of the above items.
|
3.1
|
||
3.2
|
||
3.3
|
||
3.4
|
||
3.5
|
||
3.6
|
||
3.7
|
3.8
|
||
3.9
|
||
10.1
|
31.1
|
||
31.2
|
||
32.1*
|
||
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Schema
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase
|
*
|
The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not
be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
STRATA SKIN SCIENCES, INC.
|
|
Date November 10, 2020
|
By:
|
/s/ Dolev Rafaeli
|
|
|
|
Name Dolev Rafaeli
|
|
|
|
Title President & Chief Executive Officer
|
|
Date November 10, 2020
|
By:
|
/s/ Matthew C. Hill
|
|
|
|
Name Matthew C. Hill
|
|
|
|
Title Chief Financial Officer
|
|
(1) |
I have reviewed this quarterly report on Form 10-Q of STRATA Skin Sciences, Inc.;
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
(4) |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5) |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
|
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
|
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: November 10, 2020
|
By:
|
/s/ Dolev Rafaeli
|
|
|
|
Name: Dolev Rafaeli
|
|
|
|
Title: Chief Executive Officer
|
|
(1) |
I have reviewed this quarterly report on Form 10-Q of STRATA Skin Sciences, Inc.;
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
(4) |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5) |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
|
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
|
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: November 10, 2020
|
By:
|
/s/ Matthew C. Hill
|
|
Name: Matthew C. Hill
|
|||
Title: Chief Financial Officer
|
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, and
|
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
|
|
By:
|
/s/ Dolev Rafaeli
|
|
|
|
|
Name: Dolev Rafaeli
|
|
|
|
|
Title: Chief Executive Officer
|
|
|
|
|
|
|
|
|
By:
|
/s/ Matthew C. Hill
|
|
|
|
|
Name: Matthew C. Hill
|
|
|
|
|
Title: Chief Financial Officer
|
|
(1)
|
This certification accompanies the Quarterly Report on Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing
of STRATA Skin Sciences, Inc. under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing. A signed
original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to STRATA Skin Sciences, Inc. and will be retained by STRATA Skin Sciences, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.
|