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(State or Other Jurisdiction of Incorporation)
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(I.R.S. Employer Identification No.)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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STRATA SKIN SCIENCES, INC.
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Date: August 10, 2022
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By:
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/s/ Christopher Lesovitz
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Christopher Lesovitz
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Chief Financial Officer
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•
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Revenue in the second quarter 2022 of $9.1 million a 23% increase over
the second quarter of 2021
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•
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Cash and cash equivalents at June 30, 2022 were $10.0 million
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•
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Domestic installed base increased to 915 XTRAC devices
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•
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Entered the estimated $5.5 billion acne care market with initial commercial launch of TheraClear®X, an FDA-cleared device for in-office
treatment of acne
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•
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Appointed Michael E. Goodman to the executive leadership team as head of international sales
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For the Three Months Ended
June 30,
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||||||||
2022
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2021
|
|||||||
Net income (loss)
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$
|
(1,892
|
)
|
$
|
1,082
|
|||
Adjustments:
|
||||||||
Depreciation and amortization
|
1,339
|
873
|
||||||
Amortization of right-of-use asset
|
92
|
88
|
||||||
Loss on disposal of property and equipment
|
18
|
63
|
||||||
Income tax expense
|
-
|
4
|
||||||
Gain on forgiveness of debt
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-
|
(2,028
|
)
|
|||||
Interest expense, net
|
198
|
19
|
||||||
Non-GAAP EBITDA
|
(245
|
)
|
101
|
|||||
Stock-based compensation
|
452
|
581
|
||||||
Non-GAAP adjusted EBITDA
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$
|
207
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$
|
682
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Three Months Ended
June 30, |
||||||||
2022
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2021
|
|||||||
Gross domestic recurring billings
|
$
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5,956
|
$
|
5,482
|
||||
Co-Pay adjustments
|
(204
|
)
|
(186
|
)
|
||||
Other discounts
|
(46
|
)
|
(41
|
)
|
||||
Deferred revenue from prior quarters
|
1,970
|
1,769
|
||||||
Deferral of revenue to future quarters
|
(2,499
|
)
|
(1,897
|
)
|
||||
GAAP Recorded domestic revenue
|
$
|
5,177
|
$
|
5,127
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For the Three Months Ended
June 30,
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||||||||
2022
|
2021
|
|||||||
Gross profit
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$
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4,993
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$
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4,761
|
||||
Amortization of acquired intangible assets
|
532
|
138
|
||||||
Non-GAAP gross profit
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$
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5,525
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$
|
4,899
|
||||
Gross profit percentage
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54.8
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%
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64.5
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%
|
||||
Non-GAAP gross profit percentage
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60.7
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%
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66.4
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%
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Jack Droogan
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(203) 585-4140
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ir@strataskin.com
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June 30, 2022
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December 31, 2021
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|||||||
Assets
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(unaudited)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,036
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$
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12,586
|
||||
Accounts receivable, net of allowance for doubtful accounts of $228 and $275 at June
30, 2022 and December 31, 2021, respectively
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2,989
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3,433
|
||||||
Inventories
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4,907
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3,489
|
||||||
Prepaid expenses and other current assets
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696
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462
|
||||||
Total current assets
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18,628
|
19,970
|
||||||
Property and equipment, net
|
6,685
|
6,883
|
||||||
Operating lease right-of-use assets
|
457
|
638
|
||||||
Intangible assets, net
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18,829
|
10,083
|
||||||
Goodwill
|
8,803
|
8,803
|
||||||
Other assets
|
185
|
216
|
||||||
Total assets
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$
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53,587
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$
|
46,593
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
4,241
|
$
|
2,822
|
||||
Accrued expenses and other current liabilities
|
6,144
|
6,377
|
||||||
Deferred revenues
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3,253
|
3,285
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||||||
Current portion of operating lease liabilities
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224
|
318
|
||||||
Current portion of contingent consideration
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500
|
-
|
||||||
Total current liabilities
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14,362
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12,802
|
||||||
Long-term debt
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7,395
|
7,319
|
||||||
Deferred revenues and other liabilities
|
313
|
400
|
||||||
Deferred tax liability
|
266
|
266
|
||||||
Operating lease liability, net of current portion
|
289
|
392
|
||||||
Contingent consideration, net of current portion
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8,622
|
-
|
||||||
Total liabilities
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31,247
|
21,179
|
||||||
Stockholders' equity:
|
||||||||
Series C convertible preferred stock, $0.10 par value; 10,000,000 shares authorized; no shares issued and
outstanding
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-
|
-
|
||||||
Common stock, $0.001 par value, 150,000,000 shares authorized; 34,723,046 and 34,364,679, shares issued
and outstanding at June 30, 2022 and December 31, 2021, respectively
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35
|
34
|
||||||
Additional paid-in capital
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248,378
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247,059
|
||||||
Accumulated deficit
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(226,073
|
)
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(221,679
|
)
|
||||
Total stockholders' equity
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22,340
|
25,414
|
||||||
Total liabilities and stockholders’ equity
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$
|
53,587
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$
|
46,593
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For the Three Months Ended
June 30,
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||||||||
2022
|
2021
|
|||||||
$
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9,105
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$
|
7,382
|
|||||
Cost of revenues
|
4,112
|
2,621
|
||||||
Gross profit
|
4,993
|
4,761
|
||||||
|
||||||||
Operating expenses:
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||||||||
Engineering and product development
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209
|
403
|
||||||
Selling and marketing
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4,146
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3,160
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||||||
General and administrative
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2,332
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2,121
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||||||
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6,687
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5,684
|
||||||
Loss from operations
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(1,694
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)
|
(923
|
)
|
||||
Other income (expense):
|
||||||||
Gain on debt extinguishment
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-
|
2,028
|
||||||
Interest expense
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(208
|
)
|
(26
|
)
|
||||
Interest income
|
10
|
7
|
||||||
(198
|
)
|
2,009
|
||||||
(Loss) income before income taxes
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(1,892
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)
|
1,086
|
|||||
Income tax expense
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-
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(4
|
)
|
|||||
Net (loss) income
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$
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(1,892
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)
|
$
|
1,082
|
|||
Net (loss) earnings per share of common stock:
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||||||||
Basic
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$
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(0.05
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)
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$
|
0.03
|
|||
Diluted
|
$
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(0.05
|
)
|
$
|
0.03
|
|||
Weighted average shares of common stock outstanding:
|
||||||||
Basic
|
34,723,046
|
33,876,568
|
||||||
Diluted
|
34,723,046
|
34,318,495
|
||||||
For the Six Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
Revenues, net
|
$
|
16,146
|
$
|
13,209
|
||||
Cost of revenues
|
7,025
|
4,735
|
||||||
Gross profit
|
9,121
|
8,474
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Engineering and product development
|
372
|
787
|
||||||
Selling and marketing
|
7,762
|
6,092
|
||||||
General and administrative
|
4,984
|
4,910
|
||||||
|
13,118
|
11,789
|
||||||
Loss from operations
|
(3,997
|
)
|
(3,315
|
)
|
||||
|
||||||||
Other income (expense):
|
||||||||
Gain on debt extinguishment
|
-
|
2,028
|
||||||
Interest expense
|
(407
|
)
|
(56
|
)
|
||||
Interest income
|
10
|
15
|
||||||
(397
|
)
|
1,987
|
||||||
Loss before income taxes
|
(4,394
|
)
|
(1,328
|
)
|
||||
Income tax expense
|
-
|
(8
|
)
|
|||||
Net loss
|
$
|
(4,394
|
)
|
$
|
(1,336
|
)
|
||
Net loss per share of common stock, basic and diluted
|
$
|
(0.13
|
)
|
$
|
(0.04
|
)
|
||
Weighted average shares of common stock outstanding, basic and diluted
|
34,701,267
|
33,839,554
|
For the Six Months Ended
June 30,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(4,394
|
)
|
$
|
(1,336
|
)
|
||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||
Amortization of intangible assets
|
1,436
|
705
|
||||||
Amortization of right-of-use assets
|
181
|
174
|
||||||
Depreciation and amortization
|
1,224
|
1,001
|
||||||
Amortization of deferred financing costs and debt discount
|
76
|
-
|
||||||
Provision for doubtful accounts
|
(47
|
)
|
(68
|
)
|
||||
Stock-based compensation
|
820
|
1,243
|
||||||
Loss on disposal of property and equipment
|
35
|
63
|
||||||
Gain on debt extinguishment
|
-
|
(2,028
|
)
|
|||||
Deferred taxes
|
-
|
8
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
491
|
158
|
||||||
Inventories
|
(898
|
)
|
395
|
|||||
Prepaid expenses and other assets
|
(203
|
)
|
(162
|
)
|
||||
Accounts payable
|
1,419
|
(122
|
)
|
|||||
Accrued expenses and other liabilities
|
(217
|
)
|
411
|
|||||
Deferred revenues
|
(135
|
)
|
128
|
|||||
Operating lease liabilities
|
(197
|
)
|
(183
|
)
|
||||
Net cash (used in) provided by operating activities
|
(409
|
)
|
387
|
|||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(1,510
|
)
|
(1,466
|
)
|
||||
Cash paid in connection with TheraClear asset acquisition
|
(631
|
)
|
-
|
|||||
Net cash used in investing activities
|
(2,141
|
)
|
(1,466
|
)
|
||||
Net decrease in cash, cash equivalents and restricted cash
|
(2,550
|
)
|
(1,079
|
)
|
||||
Cash, cash equivalents and restricted cash, beginning of period
|
12,586
|
18,112
|
||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
10,036
|
$
|
17,033
|
||||
Cash and cash equivalents
|
$
|
10,036
|
$
|
9,576
|
||||
Restricted cash
|
-
|
7,457
|
||||||
$
|
10,036
|
$
|
17,033
|
|||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
329
|
$
|
57
|
||||
Supplemental disclosure of non-cash operating, investing and financing activities:
|
||||||||
Inventories acquired in connection with TheraClear asset acquisition
|
$
|
71
|
$
|
-
|
||||
Intangible assets acquired in connection with TheraClear asset acquisition
|
$
|
10,182
|
$
|
-
|
||||
Contingent consideration issued in connection with TheraClear asset acquisition
|
$
|
9,122
|
$
|
-
|
||||
Common stock issued in connection with TheraClear asset acquisition
|
$
|
500
|
$
|
-
|
||||
Transfer of property and equipment to inventories
|
$
|
449
|
$
|
-
|