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 ☒ | Smaller reporting company ☒ | |||
Emerging growth company ☐ |
Part I. Financial Information: | PAGE | ||
ITEM 1. Financial Statements: | |||
a. | 1 | ||
b. | 2 | ||
c. | 3 | ||
d. | 4 | ||
e. | 5 | ||
f. | 6 | ||
23 | |||
Part II. Other Information: | |||
33 | |||
34 | |||
34 | |||
34 | |||
35 | |||
Certifications | E-31.1 |
ITEM 1. | Financial Statements |
June 30, 2023 | December 31, 2022 | |||||||||||||||
June 30, 2022 | December 31, 2021 | (unaudited) | ||||||||||||||
Assets | (unaudited) | |||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 10,036 | $ | 12,586 | $ | 9,034 | $ | 5,434 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $228 and $275 at June 30, 2022 and December 31, 2021, respectively | 2,989 | 3,433 | ||||||||||||||
Restricted cash | 1,361 | 1,361 | ||||||||||||||
Accounts receivable, net of allowance for credit losses of $244 and $382 at June 30, 2023 and December 31, 2022, respectively | 4,401 | 4,471 | ||||||||||||||
Inventories | 4,907 | 3,489 | 5,921 | 5,547 | ||||||||||||
Prepaid expenses and other current assets | 696 | 462 | 528 | 691 | ||||||||||||
Total current assets | 18,628 | 19,970 | 21,245 | 17,504 | ||||||||||||
Property and equipment, net | 6,685 | 6,883 | 8,319 | 7,498 | ||||||||||||
Operating lease right-of-use assets | 457 | 638 | 807 | 975 | ||||||||||||
Intangible assets, net | 18,829 | 10,083 | 15,959 | 17,394 | ||||||||||||
Goodwill | 8,803 | 8,803 | 8,803 | 8,803 | ||||||||||||
Other assets | 185 | 216 | 71 | 98 | ||||||||||||
Total assets | $ | 53,587 | $ | 46,593 | $ | 55,204 | $ | 52,272 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 4,241 | $ | 2,822 | $ | 3,880 | $ | 3,425 | ||||||||
Accrued expenses and other current liabilities | 6,144 | 6,377 | 6,731 | 6,555 | ||||||||||||
Deferred revenues | 3,253 | 3,285 | 2,436 | 2,778 | ||||||||||||
Current portion of operating lease liabilities | 224 | 318 | 392 | 355 | ||||||||||||
Current portion of contingent consideration | 500 | 0 | 681 | 313 | ||||||||||||
Total current liabilities | 14,362 | 12,802 | 14,120 | 13,426 | ||||||||||||
Long-term debt | 7,395 | 7,319 | ||||||||||||||
Long-term debt, net | 14,987 | 7,476 | ||||||||||||||
Deferred revenues and other liabilities | 313 | 400 | 596 | 314 | ||||||||||||
Deferred tax liability | 266 | 266 | 306 | 306 | ||||||||||||
Operating lease liability, net of current portion | 289 | 392 | ||||||||||||||
Operating lease liabilities, net of current portion | 387 | 610 | ||||||||||||||
Contingent consideration, net of current portion | 8,622 | 0 | 7,899 | 8,309 | ||||||||||||
Total liabilities | 31,247 | 21,179 | 38,295 | 30,441 | ||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Series C convertible preferred stock, $0.10 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | 0 | 0 | ||||||||||||||
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 | 35 | 34 | ||||||||||||||
Series C convertible preferred stock, $0.10 par value; 10,000,000 shares authorized; no shares issued and outstanding | — | — | ||||||||||||||
Common stock, $0.001 par value; 150,000,000 shares authorized; 34,881,453 and 34,723,046 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 35 | 35 | ||||||||||||||
Additional paid-in capital | 248,378 | 247,059 | 250,085 | 249,024 | ||||||||||||
Accumulated deficit | (226,073 | ) | (221,679 | ) | (233,211 | ) | (227,228 | ) | ||||||||
Total stockholders’ equity | 22,340 | 25,414 | 16,909 | 21,831 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 53,587 | $ | 46,593 | $ | 55,204 | $ | 52,272 |
For the Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Revenues, net | $ | 9,105 | $ | 7,382 | ||||
Cost of revenues | 4,112 | 2,621 | ||||||
Gross profit | 4,993 | 4,761 | ||||||
Operating expenses: | ||||||||
Engineering and product development | 209 | 403 | ||||||
Selling and marketing | 4,146 | 3,160 | ||||||
General and administrative | 2,332 | 2,121 | ||||||
6,687 | 5,684 | |||||||
Loss from operations | (1,694 | ) | (923 | ) | ||||
Other income (expense): | ||||||||
Gain on debt extinguishment | 0 | 2,028 | ||||||
Interest expense | (208 | ) | (26 | ) | ||||
Interest income | 10 | 7 | ||||||
(198 | ) | 2,009 | ||||||
(Loss) income before income taxes | (1,892 | ) | 1,086 | |||||
Income tax expense | 0 | (4 | ) | |||||
Net (loss) income | $ | (1,892 | ) | $ | 1,082 | |||
Net (loss) earnings per share of common stock: | ||||||||
Basic | $ | (0.05 | ) | $ | 0.03 | |||
Diluted | $ | (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 |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Revenues, net | $ | 8,250 | $ | 9,105 | ||||
Cost of revenues | 3,932 | 4,112 | ||||||
Gross profit | 4,318 | 4,993 | ||||||
Operating expenses: | ||||||||
Engineering and product development | 374 | 209 | ||||||
Selling and marketing | 3,416 | 4,146 | ||||||
General and administrative | 2,490 | 2,332 | ||||||
6,280 | 6,687 | |||||||
Loss from operations | (1,962 | ) | (1,694 | ) | ||||
Other (expense) income: | ||||||||
Loss on debt extinguishment | (909 | ) | — | |||||
Interest expense | (298 | ) | (208 | ) | ||||
Interest income | 21 | 10 | ||||||
(1,186 | ) | (198 | ) | |||||
Net loss | $ | (3,148 | ) | $ | (1,892 | ) | ||
Net loss per share of common stock, basic and diluted | $ | (0.09 | ) | $ | (0.05 | ) | ||
Weighted average shares of common stock outstanding, basic and diluted | 34,881,453 | 34,723,046 |
For the Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Revenues, net | $ | 16,146 | $ | 13,209 | $ | 15,817 | $ | 16,146 | ||||||||
Cost of revenues | 7,025 | 4,735 | 7,111 | 7,025 | ||||||||||||
Gross profit | 9,121 | 8,474 | 8,706 | 9,121 | ||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and product development | 372 | 787 | 689 | 372 | ||||||||||||
Selling and marketing | 7,762 | 6,092 | 7,158 | 7,762 | ||||||||||||
General and administrative | 4,984 | 4,910 | 5,407 | 4,984 | ||||||||||||
13,118 | 11,789 | 13,254 | 13,118 | |||||||||||||
Loss from operations | (3,997 | ) | (3,315 | ) | (4,548 | ) | (3,997 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Gain on debt extinguishment | 0 | 2,028 | ||||||||||||||
Other (expense) income: | ||||||||||||||||
Loss on debt extinguishment | (909 | ) | — | |||||||||||||
Interest expense | (407 | ) | (56 | ) | (584 | ) | (407 | ) | ||||||||
Interest income | 10 | 15 | 58 | 10 | ||||||||||||
(397 | ) | 1,987 | (1,435 | ) | (397 | ) | ||||||||||
Loss before income taxes | (4,394 | ) | (1,328 | ) | ||||||||||||
Income tax expense | 0 | (8 | ) | |||||||||||||
Net loss | $ | (4,394 | ) | $ | (1,336 | ) | $ | (5,983 | ) | $ | (4,394 | ) | ||||
Net loss per share of common stock, basic and diluted | $ | (0.13 | ) | $ | (0.04 | ) | $ | (0.17 | ) | $ | (0.13 | ) | ||||
Weighted average shares of common stock outstanding, basic and diluted | 34,701,267 | 33,839,554 | 34,871,826 | 34,701,267 |
Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance at January 1, 2022 | 34,364,679 | $ | 34 | $ | 247,059 | $ | (221,679 | ) | $ | 25,414 | ||||||||||
Stock-based compensation | - | 0 | 368 | 0 | 368 | |||||||||||||||
Issuance of common stock for acquisition | 358,367 | 1 | 499 | 0 | 500 | |||||||||||||||
Net loss | - | 0 | 0 | (2,502 | ) | (2,502 | ) | |||||||||||||
Balance at March 31, 2022 | 34,723,046 | 35 | 247,926 | (224,181 | ) | 23,780 | ||||||||||||||
Stock-based compensation | - | 0 | 452 | 0 | 452 | |||||||||||||||
Net loss | - | 0 | 0 | (1,892 | ) | (1,892 | ) | |||||||||||||
Balance at June 30, 2022 | 34,723,046 | $ | 35 | $ | 248,378 | $ | (226,073 | ) | $ | 22,340 |
Additional | Total | |||||||||||||||||||
Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance at January 1, 2023 | 34,723,046 | $ | 35 | $ | 249,024 | $ | (227,228 | ) | $ | 21,831 | ||||||||||
Stock-based compensation expense | — | — | 325 | — | 325 | |||||||||||||||
Issuance of restricted stock | 158,407 | — | — | — | — | |||||||||||||||
Net loss | — | — | — | (2,835 | ) | (2,835 | ) | |||||||||||||
Balance at March 31, 2023 | 34,881,453 | 35 | 249,349 | (230,063 | ) | 19,321 | ||||||||||||||
Stock-based compensation expense | — | — | 352 | — | 352 | |||||||||||||||
Modification of common stock warrants | — | — | 384 | — | 384 | |||||||||||||||
Net loss | — | — | — | (3,148 | ) | (3,148 | ) | |||||||||||||
Balance at June 30, 2023 | 34,881,453 | $ | 35 | $ | 250,085 | $ | (233,211 | ) | $ | 16,909 |
Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance at January 1, 2021 | 33,801,045 | $ | 34 | $ | 244,831 | $ | (218,973 | ) | $ | 25,892 | ||||||||||
Stock-based compensation | - | 0 | 662 | 0 | 662 | |||||||||||||||
Issuance of restricted stock | 16,260 | 0 | 0 | 0 | 0 | |||||||||||||||
Net loss | - | 0 | 0 | (2,418 | ) | (2,418 | ) | |||||||||||||
Balance at March 31, 2021 | 33,817,305 | 34 | 245,493 | (221,391 | ) | 24,136 | ||||||||||||||
Stock-based compensation | - | 0 | 581 | 0 | 581 | |||||||||||||||
Issuance of restricted stock | 71,934 | 0 | 0 | 0 | 0 | |||||||||||||||
Net income | - | 0 | 0 | 1,082 | 1,082 | |||||||||||||||
Balance at June 30, 2021 | 33,889,239 | $ | 34 | $ | 246,074 | $ | (220,309 | ) | $ | 25,799 |
Additional | Total | |||||||||||||||||||
Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Balance at January 1, 2022 | 34,364,679 | $ | 34 | $ | 247,059 | $ | (221,679 | ) | $ | 25,414 | ||||||||||
Stock-based compensation expense | — | — | 368 | — | 368 | |||||||||||||||
Issuance of common stock for acquisition | 358,367 | 1 | 499 | — | 500 | |||||||||||||||
Net loss | — | — | — | (2,502 | ) | (2,502 | ) | |||||||||||||
Balance at March 31, 2022 | 34,723,046 | 35 | 247,926 | (224,181 | ) | 23,780 | ||||||||||||||
Stock-based compensation expense | — | — | 452 | — | 452 | |||||||||||||||
Net loss | — | — | — | (1,892 | ) | (1,892 | ) | |||||||||||||
Balance at June 30, 2022 | 34,723,046 | $ | 35 | $ | 248,378 | $ | (226,073 | ) | $ | 22,340 |
For the Six Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (4,394 | ) | $ | (1,336 | ) | $ | (5,983 | ) | $ | (4,394 | ) | ||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation and amortization | 1,390 | 1,224 | ||||||||||||||
Amortization of operating lease right-of-use assets | 168 | 181 | ||||||||||||||
Amortization of intangible assets | 1,436 | 705 | 1,435 | 1,436 | ||||||||||||
Amortization of right-of-use assets | 181 | 174 | ||||||||||||||
Depreciation and amortization | 1,224 | 1,001 | ||||||||||||||
Amortization of deferred financing costs and debt discount | 76 | 0 | 83 | 76 | ||||||||||||
Provision for doubtful accounts | (47 | ) | (68 | ) | ||||||||||||
Stock-based compensation | 820 | 1,243 | ||||||||||||||
Change in allowance for credit losses | (138 | ) | (47 | ) | ||||||||||||
Stock-based compensation expense | 677 | 820 | ||||||||||||||
Loss on disposal of property and equipment | 35 | 63 | 24 | 35 | ||||||||||||
Gain on debt extinguishment | 0 | (2,028 | ) | |||||||||||||
Deferred taxes | 0 | 8 | ||||||||||||||
Loss on debt extinguishment | 909 | — | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | 491 | 158 | 208 | 491 | ||||||||||||
Inventories | (898 | ) | 395 | (272 | ) | (898 | ) | |||||||||
Prepaid expenses and other assets | (203 | ) | (162 | ) | 190 | (203 | ) | |||||||||
Accounts payable | 1,419 | (122 | ) | 351 | 1,419 | |||||||||||
Accrued expenses and other liabilities | (217 | ) | 411 | 211 | (217 | ) | ||||||||||
Deferred revenues | (135 | ) | 128 | (95 | ) | (135 | ) | |||||||||
Operating lease liabilities | (197 | ) | (183 | ) | (186 | ) | (197 | ) | ||||||||
Net cash (used in) provided by operating activities | (409 | ) | 387 | |||||||||||||
Net cash used in operating activities | (1,028 | ) | (409 | ) | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property and equipment | (1,510 | ) | (1,466 | ) | (2,337 | ) | (1,510 | ) | ||||||||
Cash paid in connection with TheraClear asset acquisition | (631 | ) | 0 | — | (631 | ) | ||||||||||
Net cash used in investing activities | (2,141 | ) | (1,466 | ) | (2,337 | ) | (2,141 | ) | ||||||||
Net decrease in cash, cash equivalents and restricted cash | (2,550 | ) | (1,079 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from long-term debt | 7,000 | — | ||||||||||||||
Payment of deferred financing costs | (35 | ) | — | |||||||||||||
Net cash provided by financing activities | 6,965 | — | ||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,600 | (2,550 | ) | |||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 12,586 | 18,112 | 6,795 | 12,586 | ||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 10,036 | $ | 17,033 | $ | 10,395 | $ | 10,036 | ||||||||
Cash and cash equivalents | $ | 10,036 | $ | 9,576 | $ | 9,034 | $ | 10,036 | ||||||||
Restricted cash | 0 | 7,457 | 1,361 | — | ||||||||||||
$ | 10,036 | $ | 17,033 | $ | 10,395 | $ | 10,036 | |||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||
Cash paid for interest | $ | 329 | $ | 57 | $ | 497 | $ | 329 | ||||||||
Supplemental disclosure of non-cash operating, investing and financing activities: | ||||||||||||||||
Inventories acquired in connection with TheraClear asset acquisition | $ | 71 | $ | 0 | $ | — | $ | 71 | ||||||||
Intangible assets acquired in connection with TheraClear asset acquisition | $ | 10,182 | $ | 0 | $ | — | $ | 10,182 | ||||||||
Contingent consideration issued in connection with TheraClear asset acquisition | $ | 9,122 | $ | 0 | $ | — | $ | 9,122 | ||||||||
Common stock issued in connection with TheraClear asset acquisition | $ | 500 | $ | 0 | $ | — | $ | 500 | ||||||||
Modification of common stock warrants | $ | 384 | $ | — | ||||||||||||
Transfer of property and equipment to inventories | $ | 449 | $ | 0 | $ | 102 | $ | 449 | ||||||||
Accrued payment of contingent consideration | $ | 42 | $ | — | ||||||||||||
Accrued exit fee recorded as debt discount | $ | 450 | $ | — | ||||||||||||
Deferred financing costs in accounts payable | $ | 62 | $ | — |
STRATA Skin Sciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share amounts and number of lasers) (unaudited) |
• | Level 1 – quoted market prices in active markets for identical assets or liabilities. | |
• | Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
• | Level 3 – inputs that are generally unobservable and typically reflect the Company’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Balance, beginning of period | $ | 229 | $ | 99 | ||||
Additions | 93 | 60 | ||||||
Expirations and claims satisfied | (53 | ) | (26 | ) | ||||
Total | 269 | 133 | ||||||
Less current portion within accrued expenses and other current liabilities | (163 | ) | (98 | ) | ||||
Balance within deferred revenues and other liabilities | $ | 106 | $ | 231 |
Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Balance, beginning of period | $ | 207 | $ | 79 | ||||
Additions | 120 | 94 | ||||||
Expirations and claims satisfied | (58 | ) | (40 | ) | ||||
Total | 269 | 133 | ||||||
Less current portion within accrued expenses and other current liabilities | (163 | ) | (98 | ) | ||||
Balance within deferred revenues and other liabilities | $ | 106 | $ | 231 |
June 30, | ||||||||
2022 | 2021 | |||||||
Unvested restricted stock units | 75,540 | 20,000 | ||||||
Stock options | 4,544,714 | 6,925,478 | ||||||
Common stock warrants | 373,626 | 0 | ||||||
Total | 4,993,880 | 6,945,478 |
June 30, | ||||||||
2023 | 2022 | |||||||
Restricted stock units | 119,597 | 75,540 | ||||||
Stock options | 5,369,714 | 4,544,714 | ||||||
Common stock warrants | 800,000 | 373,626 | ||||||
Total | 6,289,311 | 4,993,880 |
• | identification of the contract, or contracts, with a customer; | |
• | identification of the performance obligations in the contract; | |
• | determination of the transaction price; | |
• | allocation of the transaction price to the performance obligations in the contract; and | |
• | recognition of revenue when, or as, performance obligations are satisfied. |
Remaining 2022 | $ | 617 | ||||||
2023 | 1,193 | |||||||
Remaining 2023 | $ | 641 | ||||||
2024 | 835 | 1,103 | ||||||
2025 | 218 | 530 | ||||||
2026 | 4 | 312 | ||||||
2027 | 90 | |||||||
Total | $ | 2,867 | $ | 2,676 |
Consideration: | ||||
Cash payment | $ | 500 | ||
Common stock issued | 500 | |||
Transaction costs | 131 | |||
Contingent consideration | 9,122 | |||
Total consideration | $ | 10,253 | ||
Assets acquired: | ||||
Technology intangible asset | $ | 10,182 | ||
Inventories | 71 | |||
Total assets acquired | $ | 10,253 |
June 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | |||||||||||||
Raw materials and work-in-process | $ | 4,485 | $ | 3,201 | $ | 5,622 | $ | 5,418 | ||||||||
Finished goods | 422 | 288 | 299 | 129 | ||||||||||||
Total inventories | $ | 4,907 | $ | 3,489 | $ | 5,921 | $ | 5,547 |
June 30, 2022 | December 31, 2021 | June 30, 2023 | December 31, 2022 | |||||||||||||
Lasers placed-in-service | $ | 26,984 | $ | 25,949 | ||||||||||||
Dermatology devices placed-in-service | $ | 30,767 | $ | 28,790 | ||||||||||||
Equipment, computer hardware and software | 268 | 238 | 293 | 293 | ||||||||||||
Furniture and fixtures | 227 | 213 | 235 | 235 | ||||||||||||
Leasehold improvements | 63 | 254 | 96 | 136 | ||||||||||||
27,542 | 26,654 | 31,391 | 29,454 | |||||||||||||
Accumulated depreciation and amortization | (20,857 | ) | (19,771 | ) | (23,072 | ) | (21,956 | ) | ||||||||
Property and equipment, net | $ | 6,685 | $ | 6,883 | $ | 8,319 | $ | 7,498 |
Balance | Accumulated Amortization | Intangible Assets, net | ||||||||||
June 30, 2023 | ||||||||||||
Core technology | $ | 5,700 | $ | (4,560 | ) | $ | 1,140 | |||||
Product technology | 12,182 | (3,527 | ) | 8,655 | ||||||||
Customer relationships | 6,900 | (5,520 | ) | 1,380 | ||||||||
Tradenames | 1,500 | (1,200 | ) | 300 | ||||||||
Pharos customer lists | 5,314 | (830 | ) | 4,484 | ||||||||
$ | 31,596 | $ | (15,637 | ) | $ | 15,959 | ||||||
December 31, 2022 | ||||||||||||
Core technology | $ | 5,700 | $ | (4,275 | ) | $ | 1,425 | |||||
Product technology | 12,182 | (3,018 | ) | 9,164 | ||||||||
Customer relationships | 6,900 | (5,175 | ) | 1,725 | ||||||||
Tradenames | 1,500 | (1,125 | ) | 375 | ||||||||
Pharos customer lists | 5,314 | (609 | ) | 4,705 | ||||||||
$ | 31,596 | $ | (14,202 | ) | $ | 17,394 |
Balance | Accumulated Amortization | Intangible Assets, net | ||||||||||
Core technology | $ | 5,700 | $ | (3,990 | ) | $ | 1,710 | |||||
Product technology | 12,182 | (2,510 | ) | 9,672 | ||||||||
Customer relationships | 6,900 | (4,830 | ) | 2,070 | ||||||||
Tradenames | 1,500 | (1,050 | ) | 450 | ||||||||
Pharos customer lists | 5,314 | (387 | ) | 4,927 | ||||||||
$ | 31,596 | $ | (12,767 | ) | $ | 18,829 |
Balance | Accumulated Amortization | Intangible Assets, net | ||||||||||
Core technology | $ | 5,700 | $ | (3,705 | ) | $ | 1,995 | |||||
Product technology | 2,000 | (2,000 | ) | 0 | ||||||||
Customer relationships | 6,900 | (4,485 | ) | 2,415 | ||||||||
Tradenames | 1,500 | (975 | ) | 525 | ||||||||
Pharos customer lists | 5,314 | (166 | ) | 5,148 | ||||||||
$ | 21,414 | $ | (11,331 | ) | $ | 10,083 |
Remaining 2022 | $ | 1,436 | ||||||
2023 | 2,871 | |||||||
Remaining 2023 | $ | 1,436 | ||||||
2024 | 2,871 | 2,871 | ||||||
2025 | 2,166 | 2,166 | ||||||
2026 | 1,461 | 1,461 | ||||||
2027 | 1,461 |
June 30, 2022 | December 31, 2021 | |||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||
Warranty obligations | $ | 98 | $ | 59 | $ | 163 | $ | 136 | ||||||||
Compensation and related benefits | 1,545 | 2,052 | 2,145 | 1,997 | ||||||||||||
State sales, use and other taxes | 3,739 | 3,697 | 4,203 | 3,986 | ||||||||||||
Professional fees and other | 762 | 569 | 220 | 436 | ||||||||||||
Total accrued expenses and other current liabilities | $ | 6,144 | $ | 6,377 | $ | 6,731 | $ | 6,555 |
STRATA Skin Sciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share amounts and number of lasers) (unaudited) |
2024 | $ | 1,000 | ||
2025 | 4,000 | |||
2026 | 3,000 | |||
Total | $ | 8,000 |
2026 | $ | 3,750 | ||
2027 | 7,500 | |||
2028 | 3,750 | |||
15,000 | ||||
Exit fee | 450 | |||
15,450 | ||||
Less: unamortized debt discount | (463 | ) | ||
Long-term debt, net | $ | 14,987 |
Number of shares | Weighted average exercise price per share | Weighted average remaining contractual term (years) | ||||||||||
Outstanding at January 1, 2022 | 3,938,613 | $ | 1.90 | |||||||||
Granted | 970,000 | $ | 1.43 | |||||||||
Exercised | (15,000 | ) | $ | 1.29 | ||||||||
Forfeited and expired | (348,899 | ) | $ | 2.97 | ||||||||
Outstanding at June 30, 2022 | 4,544,714 | $ | 1.72 | 8.5 | ||||||||
Exercisable at June 30, 2022 | 1,532,912 | $ | 1.92 | 7.4 | ||||||||
Vested and expected to vest | 4,544,714 | $ | 1.72 | 8.5 |
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (in years) | ||||||||||
Outstanding at January 1, 2023 | 4,474,714 | $ | 1.72 | |||||||||
Granted | 905,000 | $ | 1.06 | |||||||||
Exercised | — | $ | — | |||||||||
Forfeited and expired | (10,000 | ) | $ | 1.45 | ||||||||
Outstanding at June 30, 2023 | 5,369,714 | $ | 1.61 | 7.9 | ||||||||
Exercisable at June 30, 2023 | 2,787,390 | $ | 1.81 | 7.1 | ||||||||
Vested and expected to vest | 5,369,714 | $ | 1.61 | 7.9 |
Expected volatility | 71.4 | % | ||
Risk‑free interest rate | 3.6 | % | ||
Expected term (in years) | 6.2 | |||
Expected dividend yield | 0.0 | % |
Number of shares | Weighted average grant date fair value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Unvested at January 1, 2022 | 90,540 | $ | 1.45 | |||||||||||||
Unvested at January 1, 2023 | 119,597 | $ | 0.93 | |||||||||||||
Granted | 28,003 | $ | 1.13 | — | $ | — | ||||||||||
Vested | (43,003 | ) | $ | 1.24 | (79,730 | ) | $ | 0.93 | ||||||||
Unvested at June 30, 2022 | 75,540 | $ | 1.45 | |||||||||||||
Unvested at June 30, 2023 | 39,867 | $ | 0.93 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Three Months Ended June 30, 2023 | ||||||||||||
Revenues, net | $ | 5,456 | $ | 2,794 | $ | 8,250 | ||||||
Cost of revenues | 2,205 | 1,727 | 3,932 | |||||||||
Gross profit | 3,251 | 1,067 | 4,318 | |||||||||
Gross profit % | 59.6 | % | 38.2 | % | 52.3 | % | ||||||
Allocated expenses: | ||||||||||||
Engineering and product development | 289 | 85 | 374 | |||||||||
Selling and marketing | 2,850 | 566 | 3,416 | |||||||||
Unallocated expenses | — | — | 2,490 | |||||||||
3,139 | 651 | 6,280 | ||||||||||
Income (loss) from operations | 112 | 416 | (1,962 | ) | ||||||||
Loss on debt extinguishment | — | — | (909 | ) | ||||||||
Interest expense | — | — | (298 | ) | ||||||||
Interest income | — | — | 21 | |||||||||
Net income (loss) | $ | 112 | $ | 416 | $ | (3,148 | ) |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Six Months Ended June 30, 2023 | ||||||||||||
Revenues, net | $ | 10,665 | $ | 5,152 | $ | 15,817 | ||||||
Cost of revenues | 4,225 | 2,886 | 7,111 | |||||||||
Gross profit | 6,440 | 2,266 | 8,706 | |||||||||
Gross profit % | 60.4 | % | 44.0 | % | 55.0 | % | ||||||
Allocated expenses: | ||||||||||||
Engineering and product development | 534 | 155 | 689 | |||||||||
Selling and marketing | 6,203 | 955 | 7,158 | |||||||||
Unallocated expenses | — | — | 5,407 | |||||||||
6,737 | 1,110 | 13,254 | ||||||||||
(Loss) income from operations | (297 | ) | 1,156 | (4,548 | ) | |||||||
Loss on debt extinguishment | — | — | (909 | ) | ||||||||
Interest expense | — | — | (584 | ) | ||||||||
Interest income | — | — | 58 | |||||||||
Net (loss) income | $ | (297 | ) | $ | 1,156 | $ | (5,983 | ) |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | |||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||
Revenues, net | $ | 5,582 | $ | 3,523 | $ | 9,105 | $ | 5,582 | $ | 3,523 | $ | 9,105 | ||||||||||||
Costs of revenues | 2,298 | 1,814 | 4,112 | |||||||||||||||||||||
Cost of revenues | 2,298 | 1,814 | 4,112 | |||||||||||||||||||||
Gross profit | 3,284 | 1,709 | 4,993 | 3,284 | 1,709 | 4,993 | ||||||||||||||||||
Gross profit % | 58.8 | % | 48.5 | % | 54.8 | % | 58.8 | % | 48.5 | % | 54.8 | % | ||||||||||||
Allocated operating expenses: | ||||||||||||||||||||||||
Allocated expenses: | ||||||||||||||||||||||||
Engineering and product development | 133 | 76 | 209 | 133 | 76 | 209 | ||||||||||||||||||
Selling and marketing | 3,629 | 517 | 4,146 | 3,629 | 517 | 4,146 | ||||||||||||||||||
Unallocated operating expenses | 0 | 0 | 2,332 | |||||||||||||||||||||
Unallocated expenses | — | — | 2,332 | |||||||||||||||||||||
3,762 | 593 | 6,687 | 3,762 | 593 | 6,687 | |||||||||||||||||||
(Loss) income from operations | (478 | ) | 1,116 | (1,694 | ) | (478 | ) | 1,116 | (1,694 | ) | ||||||||||||||
Interest expense | 0 | 0 | (208 | ) | — | — | (208 | ) | ||||||||||||||||
Interest income | 0 | 0 | 10 | — | — | 10 | ||||||||||||||||||
(Loss) income before income taxes | $ | (478 | ) | $ | 1,116 | $ | (1,892 | ) | ||||||||||||||||
Net (loss) income | $ | (478 | ) | $ | 1,116 | $ | (1,892 | ) |
STRATA Skin Sciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share amounts and number of lasers) (unaudited) |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Six Months Ended June 30, 2022 | ||||||||||||
Revenues, net | $ | 10,649 | $ | 5,497 | $ | 16,146 | ||||||
Cost of revenues | 4,330 | 2,695 | 7,025 | |||||||||
Gross profit | 6,319 | 2,802 | 9,121 | |||||||||
Gross profit % | 59.3 | % | 51.0 | % | 56.5 | % | ||||||
Allocated expenses: | ||||||||||||
Engineering and product development | 259 | 113 | 372 | |||||||||
Selling and marketing | 6,929 | 833 | 7,762 | |||||||||
Unallocated expenses | — | — | 4,984 | |||||||||
7,188 | 946 | 13,118 | ||||||||||
(Loss) income from operations | (869 | ) | 1,856 | (3,997 | ) | |||||||
Interest expense | — | — | (407 | ) | ||||||||
Interest income | — | — | 10 | |||||||||
Net (loss) income | $ | (869 | ) | $ | 1,856 | $ | (4,394 | ) |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Revenues, net | $ | 10,649 | $ | 5,497 | $ | 16,146 | ||||||
Costs of revenues | 4,330 | 2,695 | 7,025 | |||||||||
Gross profit | 6,319 | 2,802 | 9,121 | |||||||||
Gross profit % | 59.3 | % | 51.0 | % | 56.5 | % | ||||||
Allocated operating expenses: | ||||||||||||
Engineering and product development | 259 | 113 | 372 | |||||||||
Selling and marketing | 6,929 | 833 | 7,762 | |||||||||
Unallocated operating expenses | 0 | 0 | 4,984 | |||||||||
7,188 | 946 | 13,118 | ||||||||||
(Loss) income from operations | (869 | ) | 1,856 | (3,997 | ) | |||||||
Interest expense | 0 | 0 | (407 | ) | ||||||||
Interest income | 0 | 0 | 10 | |||||||||
(Loss) income before income taxes | $ | (869 | ) | $ | 1,856 | $ | (4,394 | ) |
Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Dermatology recurring procedures | $ | 1,238 | $ | 1,059 | ||||
Dermatology procedures equipment | 187 | 277 | ||||||
Unallocated expenses | 3 | 3 | ||||||
Consolidated total | $ | 1,428 | $ | 1,339 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Revenues, net | $ | 5,452 | $ | 1,930 | $ | 7,382 | ||||||
Costs of revenues | 1,635 | 986 | 2,621 | |||||||||
Gross profit | 3,817 | 944 | 4,761 | |||||||||
Gross profit % | 70.0 | % | 48.9 | % | 64.5 | % | ||||||
Allocated operating expenses: | ||||||||||||
Engineering and product development | 319 | 84 | 403 | |||||||||
Selling and marketing | 2,909 | 251 | 3,160 | |||||||||
Unallocated operating expenses | 0 | 0 | 2,121 | |||||||||
3,228 | 335 | 5,684 | ||||||||||
Income (loss) from operations | 589 | 609 | (923 | ) | ||||||||
Gain on debt extinguishment | 0 | 0 | 2,028 | |||||||||
Interest expense | 0 | 0 | (26 | ) | ||||||||
Interest income | 0 | 0 | 7 | |||||||||
Income before income taxes | $ | 589 | $ | 609 | $ | 1,086 |
Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Dermatology recurring procedures | $ | 2,451 | $ | 2,211 | ||||
Dermatology procedures equipment | 367 | 442 | ||||||
Unallocated expenses | 7 | 7 | ||||||
Consolidated total | $ | 2,825 | $ | 2,660 |
STRATA Skin Sciences, Inc. and Subsidiary Notes to Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share amounts and number of lasers) (unaudited) |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Revenues, net | $ | 10,131 | $ | 3,078 | $ | 13,209 | ||||||
Costs of revenues | 3,136 | 1,599 | 4,735 | |||||||||
Gross profit | 6,995 | 1,479 | 8,474 | |||||||||
Gross profit % | 69.0 | % | 48.1 | % | 64.2 | % | ||||||
Allocated operating expenses: | ||||||||||||
Engineering and product development | 680 | 107 | 787 | |||||||||
Selling and marketing | 5,711 | 381 | 6,092 | |||||||||
Unallocated operating expenses | 0 | 0 | 4,910 | |||||||||
6,391 | 488 | 11,789 | ||||||||||
Income (loss) from operations | 604 | 991 | (3,315 | ) | ||||||||
Gain on debt extinguishment | 0 | 0 | 2,028 | |||||||||
Interest expense | 0 | 0 | (56 | ) | ||||||||
Interest income | 0 | 0 | 15 | |||||||||
Income (loss) before income taxes | $ | 604 | $ | 991 | $ | (1,328 | ) |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Three Months Ended June 30, 2023 | ||||||||||||
Domestic | $ | 5,141 | $ | 926 | $ | 6,067 | ||||||
Foreign | 315 | 1,868 | 2,183 | |||||||||
Total | $ | 5,456 | $ | 2,794 | $ | 8,250 |
Six Months Ended June 30, 2023 | ||||||||||||
Domestic | $ | 9,988 | $ | 1,422 | $ | 11,410 | ||||||
Foreign | 677 | 3,730 | 4,407 | |||||||||
Total | $ | 10,665 | $ | 5,152 | $ | 15,817 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Three Months Ended June 30, 2022 | ||||||||||||
Domestic | $ | 5,177 | $ | 547 | $ | 5,724 | ||||||
Foreign | 405 | 2,976 | 3,381 | |||||||||
Total | $ | 5,582 | $ | 3,523 | $ | 9,105 |
Six Months Ended June 30, 2022 | ||||||||||||
Domestic | $ | 9,866 | $ | 1,242 | $ | 11,108 | ||||||
Foreign | 783 | 4,255 | 5,038 | |||||||||
Total | $ | 10,649 | $ | 5,497 | $ | 16,146 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Domestic | $ | 5,177 | $ | 547 | $ | 5,724 | ||||||
Foreign | 405 | 2,976 | 3,381 | |||||||||
Total | $ | 5,582 | $ | 3,523 | $ | 9,105 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Domestic | $ | 9,866 | $ | 1,242 | $ | 11,108 | ||||||
Foreign | 783 | 4,255 | 5,038 | |||||||||
Total | $ | 10,649 | $ | 5,497 | $ | 16,146 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Domestic | $ | 5,127 | $ | 336 | $ | 5,463 | ||||||
Foreign | 325 | 1,594 | 1,919 | |||||||||
Total | $ | 5,452 | $ | 1,930 | $ | 7,382 |
Dermatology Recurring Procedures | Dermatology Procedures Equipment | TOTAL | ||||||||||
Domestic | $ | 9,553 | $ | 594 | $ | 10,147 | ||||||
Foreign | 578 | 2,484 | 3,062 | |||||||||
Total | $ | 10,131 | $ | 3,078 | $ | 13,209 |
Amount | ||||||||
Remaining 2022 | $ | 144 | ||||||
2023 | 242 | |||||||
Remaining 2023 | $ | 220 | ||||||
2024 | 186 | 386 | ||||||
2025 | 195 | |||||||
2026 | 55 | |||||||
Total remaining lease payments | 572 | $ | 856 | |||||
Less: imputed interest | (59 | ) | (77 | ) | ||||
Total lease liabilities | $ | 513 | $ | 779 |
• | 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 January 2020, we announced the FDA granted clearance of our XTRAC Momentum Excimer Laser Platform. In February 2022, we announced the commercial launch, with the first installation in the U.S. market, of our next generation excimer laser system, XTRAC Momentum® 1.0. |
• | 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. |
• | TheraClear® X Acne Treatment Device. The TheraClear® Acne |
For the Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Dermatology Recurring Procedures | $ | 5,582 | $ | 5,452 | ||||
Dermatology Procedures Equipment | 3,523 | 1,930 | ||||||
Total Revenues | $ | 9,105 | $ | 7,382 |
For the Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Dermatology recurring procedures | $ | 5,456 | $ | 5,582 | ||||
Dermatology procedures equipment | 2,794 | 3,523 | ||||||
Total revenues | $ | 8,250 | $ | 9,105 |
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Dermatology Recurring Procedures | $ | 10,649 | $ | 10,131 | ||||
Dermatology Procedures Equipment | $ | 5,497 | 3,078 | |||||
Total Revenues | $ | 16,146 | $ | 13,209 |
For the Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Dermatology recurring procedures | $ | 10,665 | $ | 10,649 | ||||
Dermatology procedures equipment | 5,152 | 5,497 | ||||||
Total revenues | $ | 15,817 | $ | 16,146 |
For the Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Dermatology Recurring Procedures | $ | 2,298 | $ | 1,635 | ||||
Dermatology Procedures Equipment | 1,814 | 986 | ||||||
Total Cost of Revenues | $ | 4,112 | $ | 2,621 |
For the Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Dermatology recurring procedures | $ | 2,205 | $ | 2,298 | ||||
Dermatology procedures equipment | 1,727 | 1,814 | ||||||
Total cost of revenues | $ | 3,932 | $ | 4,112 |
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Dermatology Recurring Procedures | $ | 4,330 | $ | 3,136 | ||||
Dermatology Procedures Equipment | 2,695 | 1,599 | ||||||
Total Cost of Revenues | $ | 7,025 | $ | 4,735 |
For the Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Dermatology recurring procedures | $ | 4,225 | $ | 4,330 | ||||
Dermatology procedures equipment | 2,886 | 2,695 | ||||||
Total cost of revenues | $ | 7,111 | $ | 7,025 |
Company Profit Analysis | For the Three Months Ended June 30, | |||||||
2022 | 2021 | |||||||
Revenues | $ | 9,105 | $ | 7,382 | ||||
Cost of revenues | 4,112 | 2,621 | ||||||
Gross profit | $ | 4,993 | $ | 4,761 | ||||
Gross profit percentage | 54.8 | % | 64.5 | % |
For the Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 8,250 | $ | 9,105 | ||||
Cost of revenues | 3,932 | 4,112 | ||||||
Gross profit | $ | 4,318 | $ | 4,993 | ||||
Gross profit percentage | 52.3 | % | 54.8 | % |
Company Profit Analysis | For the Six Months Ended June 30, | |||||||||||||||
For the Six Months Ended June 30, | ||||||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
Revenues | $ | 16,146 | $ | 13,209 | $ | 15,817 | $ | 16,146 | ||||||||
Cost of revenues | 7,025 | 4,735 | 7,111 | 7,025 | ||||||||||||
Gross profit | $ | 9,121 | $ | 8,474 | $ | 8,706 | $ | 9,121 | ||||||||
Gross profit percentage | 56.5 | % | 64.2 | % | 55.0 | % | 56.5 | % |
Dermatology Recurring Procedures | For the Three Months Ended June 30, | |||||||
2022 | 2021 | |||||||
Revenues | $ | 5,582 | $ | 5,452 | ||||
Cost of revenues | 2,298 | 1,635 | ||||||
Gross profit | $ | 3,284 | $ | 3,817 | ||||
Gross profit percentage | 58.8 | % | 70.0 | % |
Dermatology Recurring Procedures | For the Six Months Ended June 30, | |||||||
2022 | 2021 | |||||||
Revenues | $ | 10,649 | $ | 10,131 | ||||
Cost of revenues | 4,330 | 3,136 | ||||||
Gross profit | $ | 6,319 | $ | 6,995 | ||||
Gross profit percentage | 59.3 | % | 69.0 | % |
For the Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 5,456 | $ | 5,582 | ||||
Cost of revenues | 2,205 | 2,298 | ||||||
Gross profit | $ | 3,251 | $ | 3,284 | ||||
Gross profit percentage | 59.6 | % | 58.8 | % |
For the Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 10,665 | $ | 10,649 | ||||
Cost of revenues | 4,225 | 4,330 | ||||||
Gross profit | $ | 6,440 | $ | 6,319 | ||||
Gross profit percentage | 60.4 | % | 59.3 | % |
For the Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 2,794 | $ | 3,523 | ||||
Cost of revenues | 1,727 | 1,814 | ||||||
Gross profit | $ | 1,067 | $ | 1,709 | ||||
Gross profit percentage | 38.2 | % | 48.5 | % |
For the Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 5,152 | $ | 5,497 | ||||
Cost of revenues | 2,886 | 2,695 | ||||||
Gross profit | $ | 2,266 | $ | 2,802 | ||||
Gross profit percentage | 44.0 | % | 51.0 | % |
Dermatology Procedures Equipment | For the Three Months Ended June 30, | |||||||
2022 | 2021 | |||||||
Revenues | $ | 3,523 | $ | 1,930 | ||||
Cost of revenues | 1,814 | 986 | ||||||
Gross profit | $ | 1,709 | $ | 944 | ||||
Gross profit percentage | 48.5 | % | 48.9 | % |
Dermatology Procedures Equipment | For the Six Months Ended June 30, | |||||||
2022 | 2021 | |||||||
Revenues | $ | 5,497 | $ | 3,078 | ||||
Cost of revenues | 2,695 | 1,599 | ||||||
Gross profit | $ | 2,802 | $ | 1,479 | ||||
Gross profit percentage | 51.0 | % | 48.1 | % |
For the Three Months Ended June 30, | ||||||||||||||||
2022 | 2021 | For the Three Months Ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||||
Gross profit | $ | 4,993 | $ | 4,761 | $ | 4,318 | $ | 4,993 | ||||||||
Amortization of acquired intangible assets | 532 | 138 | 508 | 532 | ||||||||||||
Non-GAAP gross profit | $ | 5,525 | $ | 4,899 | $ | 4,826 | $ | 5,525 | ||||||||
Gross profit percentage | 54.8 | % | 64.5 | % | 52.3 | % | 54.8 | % | ||||||||
Non-GAAP gross profit percentage | 60.7 | % | 66.4 | % | 58.5 | % | 60.7 | % |
For the Six Months Ended June 30, | ||||||||||||||||
2022 | 2021 | For the Six Months Ended June 30, | ||||||||||||||
2023 | 2022 | |||||||||||||||
Gross profit | $ | 9,121 | $ | 8,474 | $ | 8,706 | $ | 9,121 | ||||||||
Amortization of acquired intangible assets | 1,016 | 284 | 1,016 | 1,016 | ||||||||||||
Non-GAAP gross profit | $ | 10,137 | $ | 8,758 | $ | 9,722 | $ | 10,137 | ||||||||
Gross profit percentage | 56.5 | % | 64.2 | % | 55.0 | % | 56.5 | % | ||||||||
Non-GAAP gross profit percentage | 62.8 | % | 66.3 | % | 61.5 | % | 62.8 | % |
For the Three Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (3,148 | ) | $ | (1,892 | ) | ||
Adjustments: | ||||||||
Depreciation and amortization | 1,428 | 1,339 | ||||||
Amortization of operating lease right-of-use assets | 63 | 92 | ||||||
Loss on disposal of property and equipment | 24 | 18 | ||||||
Interest expense, net | 277 | 198 | ||||||
Non-GAAP EBITDA | (1,356 | ) | (245 | ) | ||||
Stock-based compensation expense | 352 | 452 | ||||||
Loss on debt extinguishment | 909 | — | ||||||
Non-GAAP adjusted EBITDA | $ | (95 | ) | $ | 207 |
For the Three Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net (loss) income | $ | (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 debt extinguishment | - | (2,028 | ) | |||||
Interest expense, net | 198 | 19 | ||||||
Non-GAAP EBITDA | (245 | ) | 101 | |||||
Stock-based compensation | 452 | 581 | ||||||
Non-GAAP adjusted EBITDA | $ | 207 | $ | 682 |
For the Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (5,983 | ) | $ | (4,394 | ) | ||
Adjustments: | ||||||||
Depreciation and amortization | 2,825 | 2,660 | ||||||
Amortization of operating lease right-of-use assets | 168 | 181 | ||||||
Loss on disposal of property and equipment | 24 | 35 | ||||||
Interest expense, net | 526 | 397 | ||||||
Non-GAAP EBITDA | (2,440 | ) | (1,121 | ) | ||||
Stock-based compensation expense | 677 | 820 | ||||||
Loss on debt extinguishment | 909 | — | ||||||
Non-GAAP adjusted EBITDA | $ | (854 | ) | $ | (301 | ) |
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
Net loss | $ | (4,394 | ) | $ | (1,336 | ) | ||
Adjustments: | ||||||||
Depreciation and amortization | 2,660 | 1,706 | ||||||
Amortization of right-of-use asset | 181 | 174 | ||||||
Loss on disposal of property and equipment | 35 | 63 | ||||||
Income tax expense | - | 8 | ||||||
Gain on debt extinguishment | - | (2,028 | ) | |||||
Interest expense, net | 397 | 41 | ||||||
Non-GAAP EBITDA | (1,121 | ) | (1,372 | ) | ||||
Stock-based compensation | 820 | 1,243 | ||||||
Non-GAAP adjusted EBITDA | $ | (301 | ) | $ | (129 | ) |
ITEM 3. | Quantitative and Qualitative Disclosure about Market Risk |
ITEM 1. | Legal Proceedings |
- | it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt, resulting in possible defaults on and acceleration of such indebtedness; |
- | our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions or other general corporate purposes may be impaired; |
- | a substantial portion of cash flow from operations may be dedicated to the payment of principal and interest on our debt, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities, acquisitions and other purposes; |
- | we are more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited; |
- | our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt; and |
- | our ability to borrow additional funds or to refinance debt may be limited. |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
ITEM 3. | Defaults Upon Senior Securities. |
ITEM 4. | Mine Safety Disclosures |
ITEM 5. | Other Information |
ITEM 6. | Exhibits |
Amendment No. 3 to Credit and Security Agreement, dated as of June 30, 2023, among STRATA Skin Sciences, Inc., MidCap Financial Trust, as administrative agent, and the lenders identified therein. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 6, 2023.) | |
Credit & Security Agreement, dated as of September 30, 2021, as amended January 10, 2022, September 6, 2022 and June 30, 2023, among STRATA Skin Sciences, Inc., MidCap Financial Trust, as administrative agent, and the lenders identified therein (Incorporated by reference to Exhibit A to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 6, 2023.) | |
Letter Agreement, dated as of June 30, 2023, between STRATA Skin Sciences, Inc. and MidCap Financial Trust, as administrative agent. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed July 6, 2023.) | |
Amended and Restated Warrant Agreement to Purchase Shares of the Common Stock of STRATA Skin Sciences, Inc., dated as of June 30, 2023, between STRATA Skin Sciences, Inc. and MidCap Funding XXVII Trust. (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed July 6, 2023.) | |
Amended and Restated Registration Rights Agreement, dated as of June 30, 2023, between STRATA Skin Sciences, Inc. and MidCap Funding XXVII Trust. (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed July 6, 2023.) | |
Intellectual Property Security Agreement Supplement, dated July 5, 2023, between STRATA Skin Sciences, Inc. and MidCap Financial Trust | |
Rule 13a-14(a) Certificate of Chief Executive Officer (attached hereto) | |
Rule 13a-14(a) Certificate of Chief Financial Officer (attached hereto) | |
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (attached hereto) | |
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 August | By: | /s/ Robert J. Moccia | ||
Name: Robert J. Moccia | ||||
Title: President & Chief Executive Officer |
Date August | By: | /s/ Christopher Lesovitz | ||
Name: Christopher Lesovitz | ||||
Title: Chief Financial Officer |