We have identified some of the important factors that could cause future events to differ from our current expectations and they are described in this prospectus under the caption “Risk Factors” as well as in our most recent Annual Report on Form 10‑K, including without limitation under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other documents that we may file with the SEC, all of which you should review carefully. Please consider our forward-looking statements in light of those risks as you read this prospectus, documents incorporated herein by reference and in other documents that we may file with the SEC.
Neither the SEC, any state securities commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus is dated , 2015.
TABLE OF CONTENTS
In this prospectus, unless we indicate otherwise, “we,” “us,” “our,” “the Company” and “MELA” refer to MELA Sciences, Inc.
This prospectus contains referencesand incorporates by reference market data, industry statistics and other data that have been obtained from, or compiled from, information made available by third parties. Although we believe these third-party sources are reliable, we have not independently verified the information. Except as may otherwise be noted, none of the sources cited in this prospectus has consented to the inclusion of any data from its reports, nor have we sought their consent. In addition, some data are based on our good faith estimates. Such estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as our own management’s experience in the industry, and are based on assumptions made by us based on such data and our knowledge of such industry and markets, which we believe to be reasonable. However, none of our estimates have been verified by any independent source. See “Special Note Regarding Forward-Looking Statements” above.
STRATAPEN®, XTRAC®, XTRAC S3®, VTRAC®, MELAFIND®, and PHAROS® are our registered trademarks. These trademarks are important to our
United States registered trademarks: MELA®, MELA Sciences®, MelaFind®, MELARecord®,VTRAC®, XTRAC® and XTRAC VELOCITY®. Allbusiness. Although we may have omitted the “®” or “TM” trademark designation for such trademarks in this prospectus, all rights to such trademarks are nevertheless reserved. Unless otherwise noted, other trademarks
tradenames and service marks appearingused in this prospectus are the property of their respective
owners.You should rely only on theholders.
The following summary highlights selected information contained in this prospectus.
We have not authorized any other person to provide you with different information. This prospectus may only be used where it is legal to sell these securities. The information in this prospectus is accurate as of the date on the front cover. You should not assume that the information contained in this prospectus is accurate as of any other date.This prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus in any jurisdiction to or from any person to whom or from whom it is unlawful to make an offer or solicitation of an offer in that jurisdiction.
PROSPECTUS SUMMARY
This summary highlights certain information appearing elsewhere in this prospectus and in the documents we incorporate by reference. This summary is not complete and does not contain all the information that may be important to you in deciding whether to invest in our securities. After you read this summary, youyou. You should read and consider carefully the more detailed information and financial statements and related notes that we includecontained in and/or incorporate by reference into this prospectus, especiallyincluding but not limited to, the section entitled ‘‘Risk Factors’’ before making an investment decision. If you investrisk factors beginning on page 10.
Unless the context requires otherwise, in
our securities, you are assuming a high degree of risk.Our Company
this prospectus, the terms “STRATA,” the “Company,” “we,” “us,” “our” and similar terms refer to STRATA Skin Sciences, Inc. and its subsidiary, PhotoMedex India Private Limited.
Business Overview
We are a medical technology company in dermatology dedicated to developing, commercializing and commercializingmarketing innovative products for the diagnosis and treatment of serious dermatological disorders. dermatologic conditions. Our products include the XTRAC® and Pharos® excimer lasers and VTRAC® lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions.
Recent Developments
Pharos Business. On August 16, 2021, we acquired (the “Pharos Transaction”) certain assets and certain liabilities related to the Pharos U.S. dermatology business of Ra Medical Systems, Inc., a Delaware corporation (“Ra Medical”), pursuant to the terms and conditions of an Asset Purchase Agreement (the “Purchase Agreement”) entered into between us and Ra Medical. The purchase price paid by us to Ra Medical was equal to $3.7 million, in cash, and the assumption of existing customer warranty and service agreements.
The Purchase Agreement contains customary representations and warranties related to the assets acquired and the Pharos Transaction in general. Both parties agreed to certain post-closing covenants as set forth more fully in the Purchase Agreement. For seven years following the closing, Ra Medical agreed to non-competition and non-solicitation restrictive covenants in favor of us.
Both parties have agreed to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and other liabilities, subject to certain limitations.
In June 2015connection with the closing of the Pharos Transaction, both parties entered into certain additional ancillary documents, including a services agreement (the “Services Agreement”) and certain other customary agreements.
Pursuant to the Services Agreement, Ra Medical has agreed to provide a number of services to us as we completedintegrate the acquired assets into the Company. The services include but are not limited to, providing chambers, spare parts and consumables; training our field service and customer service teams; customer, telephonic and software support; and technical and regulatory consulting services. These services are provided on an as-needed basis only, as our field service technicians will provide on-site service to Pharos users.
The acquisition of these assets and liabilities allows us to market our full business solutions to Ra Medical’s existing customer base comprised of 400 dermatology practices offering opportunities to increase its recurring revenue base and a pathway to gain additional placements for the Company’s XTRAC excimer laser system
MidCap Financing. On September 30, 2021, we completed an $8.0 million senior secured financing (the “Senior Financing”) with MidCap Financial Trust (“MidCap”), of which the full amount was drawn by us on September 30, 2021. Borrowings under the facility bear interest at a rate per annum equal to LIBOR (with a LIBOR floor rate of 0.50%) plus 7.50%. In connection with this financing, we repaid $7.275 million, plus interest due, on our loan with Israel Discount Bank of New York and $500,000, plus interest, satisfying its obligations under our loan from the United States Small Business Administration pursuant to its Economic Injury Disaster Loan assistance program. As a result, we had no outstanding borrowings from either lender. On September 30, 2021, in connection with the financing with MidCap, we also issued a warrant, with a ten-year term, to purchase 373,626 shares of our common stock to an affiliate of MidCap and agreed to register the shares issuable thereunder pursuant to the terms and conditions of a registration rights agreement.
XTRAC and Pharos Systems and VTRAC Systems
The XTRAC and Pharos excimer
lamp from PhotoMedex, Inc., products approved for the treatment of psioriasis, vitiligo and otherlaser technology emits highly concentrated UV light targeted primarily towards autoimmune dermatological skin disorders
for which there are no cures. The purchase price was $42.5 million plus the assumption of certain business-related liabilities. These products generated $30.6 million in revenues in 2014 and achieved year-over-year growth of 41% with a gross margin of 60.1%. We intend to use this business to finance our combined operations, to provide us the capability with which to continue to commercialize our legacy product, the MelaFind® system, or MelaFind, and to become a platform on which to transform MELA into a leading medical dermatology company.XTRAC is an ultraviolet light excimer laser system utilized to treatsuch as psoriasis, vitiligo, atopic dermatitis, and other skin diseases.eczema, among others. The XTRAC system received FDAU.S. Food and Drug Administration (“FDA”) clearance in 2000 and the Pharos in 2004 and excimer laser has since become a widely recognized treatment among dermatologists.for psoriasis, vitiligo and other skin diseases. Psoriasis and vitiligo alone affect up to 13 million people in the U.S. and 190 million people worldwide. VTRAC is a UV light lamp system that works in much the same way as the XTRAC. It received FDA clearance in August 2005 and Conformité Européenne (“CE”) mark approval in January 2006 and has been marketed exclusively in international markets. The device delivers targetedacquisition of the Pharos assets acquired in the Pharos Transaction allows us to market our full business solutions to Ra Medical’s existing customer base offering opportunities to increase its recurring revenue base and a pathway to gain additional placements for the Company’s XTRAC excimer laser system.
Present in natural sunlight, ultraviolet B (“UVB”) is an accepted psoriasis treatment that penetrates the skin to slow the growth of damaged skin cells thereby placing the disease into remission for a period of time. Studies have shown that the remission time can last three to six months or longer. In our XTRAC system, our targeted therapy approach delivers optimum amounts of UVB light directly to affected areasskin lesions, sparing healthy tissue. Many peer reviewed studies have proven that the XTRAC excimer laser can clear psoriasis faster and produce longer remissions than other UVB modalities, resulting in fewer treatments to produce the desired result.
We currently market four XTRAC excimer models. In October 2018, we announced the launch of skin. A seriesXTRAC S3®, which, as compared to previous XTRAC generations, is smaller, faster and has a new user interface. In January 2020, we announced the FDA granted clearance for our XTRAC Momentum Excimer Laser System platform. This clearance is the first full platform clearance since 2008. Momentum has an increased power range to improve patient safety and treatment efficiency; a new and exclusive proprietary short-hair tip, providing ease of treatments can resultuse in clearingdifficult-to-treat scalp psoriasis; and an enhanced user interface and database. We continue to market the XTRAC Velocity, our third-generation laser and the XTRAC Ultra Plus, which is also a highly effective model marketed primarily in certain international markets. The Momentum, S3, Velocity and the Ultra Plus are capable of treating mild, moderate and severe psoriasis, plaque or vitiligo, repigmentation. As of March 31, 2015, there were 640 installedatopic dermatitis and leukoderma.
The XTRAC systemsexcimer laser is marketed in the United States, up from 527 atU.S. mainly under a recurring revenue model in which we place the endsystem in the physician’s office for no upfront charge and generate our revenue on a per-use basis. We estimate that there are over 1,000 XTRAC lasers in use in the U.S., of March 2014.which 832 systems were, as of December 31, 2020, included in our recurring revenue model.�� The Pharos business provides the opportunity to for us to convert its customer base to our recurring revenue model. The target U.S. audience for XTRAC lasers comprises approximately 3,500 dermatologists who perform disease management. Until 2019, in markets outside the U.S. the XTRAC laser had been marketed primarily as a capital sale through a master international distributor to distributors in over twenty-five countries. The VTRAC is marketed exclusively in international markets through the same master international distributor.
Since 2019, we have been transitioning our international equipment sales through our master distributor to a direct distribution model for equipment sales and recurring revenue on a country by country basis. We have signed contracts in Korea (in 2019), Japan (in 2020), and China (in January 2021).
Studies have concluded that XTRAC treatment leads to significant improvement in psoriasis plaques and severity scores in as few as six to ten treatments. Treatment protocols recommend that patients receive two treatments per week with a minimum of 48 hours between treatments. Our data shows that treatment with XTRAC excimer lasers has an 89% efficacy rate and produces only minimal side effects. In support of its clinical effect, the XTRAC excimer lasers have been cited in over 45 clinical studies and research programs, with findings published in peer-reviewed medical journals around the world. The XTRAC excimer laser has also been endorsed by the National Psoriasis Foundation, and its use for psoriasis is covered by nearly all major insurance companies, including Medicare. The VTRAC Excimer Lamp system, offered internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with the simplicity of design and reliability ofXTRAC treatment is a lamp system.reimbursable procedure for psoriasis under three Current Procedural Terminology (“CPT”) codes. There are three applicable CPT codes that differ based on the total skin surface area being treated. Insurance Reimbursement to physicians varies based upon insurance company and location. The national CPT code reimbursement established by the Center for Medicaid Services (“CMS”), which forms the basis for most insurance companies’ reimbursement levels, ranges for the three codes between $160 per treatment to $250 per treatment. (See “Third Party Reimbursement” below.)
Psoriasis, the disease
The World Health Organization describes psoriasis as a chronic, noncommunicable, painful, disfiguring and disabling disease for which there is no cure, which generates a significant negative impact on patients’ quality of life. It manifests itself in many forms and typically causes raised, red, scaly patches that appear on the skin and may cause itchiness, burning or stinging. Psoriasis is also associated with other serious health conditions such as diabetes, heart disease and depression.
Psoriasis Treatment Options
There are essentially three main types of psoriasis treatments, as listed below:
Topical therapies: | These can include corticosteroids, vitamin D3 derivatives, coal tar, anthralin and retinoids, among others, that are sold as a cream, gel, liquid, spray, or ointment. The efficacy of topical agents varies from person to person, although these products are commonly associated with a loss of potency over time as people develop resistance. |
Phototherapy: | This is the area in which we operate. Our XTRAC Excimer Systems are FDA-cleared, reimbursed by insurance, and exhibit none of the significant side-effects associated with some alternative therapies. |
Systemic medications: | There are a number of prescription medications available for psoriasis, which are given either by mouth or as an injection. The popularity and use of these medications are growing significantly, notwithstanding their cost and their potentially severe side-effects. |
XTRAC excimer lasers are particularly significant and beneficial for mild to moderate psoriasis patients who prefer a noninvasive treatment approach without the side effects of invasive, systemic agents, or to patients who have developed a resistance to topical agents. In many cases, patients treated with topical or systemic therapies are also candidates for phototherapy.
Using the XTRAC and Pharos Excimer Lasers to Treat Vitiligo and Other Skin Diseases
UV light therapy is considered to be an effective and safe treatment for many skin disorders beyond psoriasis. To this effect, the XTRAC technology is FDA cleared for the treatment of not only psoriasis but also vitiligo (a skin pigment deficiency), atopic dermatitis (eczema) and leukoderma, which is a localized loss of skin pigmentation that occurs after an inflammatory skin condition such as a burn, intralesional steroid injection, or post dermabrasion.
XTRAC technology for vitiligo patients typically requires more therapy sessions than for psoriasis but is dependent on the severity of the disease. In the treatment of vitiligo, we believe the XTRAC functions to reactivate the skin’s melanocytes (the cells that produce melanin), which causes pigment to return. To date, there is not sufficient data to confirm how long patients can expect their vitiligo to be in remission after XTRAC therapy. Based on anecdotal reports, we believe that re‑pigmentation may last for several years. Historically, vitiligo treatments had been considered cosmetic procedures by insurance companies, and as such were not reimbursed. However, over the past several years, there has been a significant increase in insurance coverage for these procedures and we estimate that currently approximately 7.5 million people in76% of insurers consider XTRAC treatments to be medically necessary for the United Statestreatment of vitiligo and up to 125 million people worldwide sufferingtherefore provide coverage.
We believe that several factors have limited the growth of the use of XTRAC treatments from those who suffer from psoriasis and 1% to 2%vitiligo. Specifically, we believe that awareness of the world’s population sufferspositive effects of XTRAC treatments has not been high enough among both sufferers and providers; and that the treatment regimen requiring sometimes up to 12 or more treatments has limited XTRAC use to certain patient populations. Addressing the lack of knowledge issue, we have a direct to patient advertising campaign aimed at motivating psoriasis and vitiligo
patients to seek out XTRAC treatments from vitiligo. our physician partners. Specific advertisements encourage prospective patients to contact our patient advocacy center via telephone or web site, wherein we provide information on the treatment and insurance coverage, and ultimately we can schedule an appointment for the prospective patient to be evaluated by a physician within our customer network, convenient to their location, to determine if they would benefit from XTRAC treatments.
STRATAPEN
In 2014, over 300,000January 2017, we entered into an OEM agreement with Esthetic Education, LLC to private label the STRATAPEN device. STRATAPEN® MicroSystems is a micropigmentation device that provides advanced technology offering exceptional results. This contract expired in January 2020, but we continue to sell this product on a purchase order basis.
Competition
Our XTRAC
laserproduct line competes with pharmaceutical compounds and methodologies used to treat an array of skin conditions. Such alternative treatments
were performed on approximately 19,000 patientsmay be in the
United States.form of topical products, systemic medications, and phototherapies from both large pharmaceutical and smaller devices companies. Our major competitors for dermatological solutions include The financial resultsDaavlin Company, National Biologic Corporation, and pharmaceutical companies producing topical products and systemic and biologic medications. Currently, our XTRAC system is believed to be a competitive therapy to alternative treatments on the basis of its recognized clinical effect, minimal side effect profile, cost-effectiveness and reimbursement.
Manufacturing
We manufacture our XTRAC products at our 17,000 sq. ft. facility in Carlsbad, California. Our California facility is certified as ISO 13485 compliant. ISO 13485 is an International standardization written by the International Organization for Standardization, which publishes requirements for a comprehensive quality management system for the design and manufacture of medical devices. Certification to the standard is awarded by accredited third parties. We believe that our present manufacturing capacity at these facilities is sufficient to meet foreseeable demand for our products.
Research and Development Efforts
Our research and development team, including engineers, consists of approximately four employees. We conduct research and development activities at our facility located in Carlsbad, California. Currently, our research and development efforts are focused on the application of our XTRAC system for the treatment of inflammatory skin disorders.
Intellectual Property
Our policy is to protect our intellectual property by obtaining U.S. and foreign patents to protect technology, inventions and improvements important to the development of our business. As of December 31, 2020, 26 issued U.S. patents are in force, and many of these patents have foreign counterparts issued and pending. Of those issued, 10 U.S. patents and one German patent relate to the XTRAC and VTRAC businessesproduct lines and eighteen U.S. patents. Additionally, the Company maintains 16 patents from Mela Sciences, Inc. related to the MelaFind product.
We also rely on trade secrets and technical know-how in the manufacture and marketing of our products. We require our employees, consultants and contractors to execute confidentiality agreements with respect to our proprietary information.
In February 2021, the license for the exclusive rights for patents related to the delivery of treatment to vitiligo with the Icahan School of Medicine at Mount Sinai expired. We do not believe that this will have a material impact on our business.
We believe that our patented methods and apparatus, together with proprietary trade-secret technology and registered trademarks, give us a competitive advantage; however, whether a patent is infringed or is valid, or whether or not a patent application should be includedgranted, are all complex matters of science and law, and therefore, we cannot be certain that, if challenged, our patented methods and apparatus and/or trade-secret technology would be upheld. If one or more of our patented methods, patented apparatus or trade-secret technology rights, or our trademark rights, are invalidated, rejected or found unenforceable, that could reduce or eliminate any competitive advantage we might otherwise have had.
Third-Party Reimbursement
Our ability to market our phototherapy products successfully depends in large part on the extent to which various third parties are willing to reimburse patients or providers for the cost of medical procedures utilizing our resultstreatment products. These third parties include government authorities, private health insurers and other organizations, such as health maintenance organizations. Third-party payers are systematically challenging the prices charged for medical products and services. They may deny reimbursement if they determine that a prescribed device is not used in accordance with cost-effective treatment methods as determined by the payer, or is experimental, unnecessary or inappropriate. Accordingly, if less costly drugs or other treatments are available, third-party payers may not authorize, or may limit, reimbursement for the use of operations beginning June 23, 2015. The assets ofour products, even if our products are safer or more effective than the businesses purchasedalternatives. Additionally, they may require changes to our pricing structure and liabilities assumed willrevenue model before authorizing reimbursement.
Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be
consolidated as of June 23, 2015obtained on a country-by-country basis. Many international markets have government-managed healthcare systems that control reimbursement for new devices and
will be reported in our second quarter financial statements at June 30, 2015.We anticipate that the acquisition of the XTRAC and VTRAC businesses will help to facilitate the commercialization of MelaFind,procedures. In most markets, there are private insurance systems, as well as government-managed systems. Our XTRAC products remain substantially without approval for reimbursement in many international markets under either government or private reimbursement systems.
Many private plans key their reimbursement rates to rates set by the further designCMS under three distinct CPT codes based on the total skin surface area being treated.
As of December 31, 2020, the national rates were as follows:
96920 – designated for: the total area less than 250 square centimeters. CMS assigned a 2020 national payment of $166.37 per treatment;
96921 – designated for: the total area 250 to 500 square centimeters. CMS assigned a 2020 national payment of $182.25 per treatment; and development
96922 – designated for: the total area over 500 square centimeters. CMS assigned a 2020 national payment of $248.66 per treatment. The national rates are adjusted by overhead factors applicable to each state.
Customers
Domestically, our customers consist of dermatologists and dermatological group clinics who partner with us in our recurring revenue model. As of December 31, 2020, we have 832 partner clinics throughout the United States.
Internationally, we have been transitioning our international equipment sales through our master distributor to a direct distribution model for equipment sales and recurring revenue on a country by country basis. We have signed contracts in Korea (in 2019), Japan (in 2020) and China (in January 2021). The change from equipment sales to a recurring revenue business model, internationally, will decrease sales in the short term, but is expected to increase overall sales in the long term.
Our Corporate Information
Our principal executive offices are located at 5 Walnut Grove Drive, Suite 140, Horsham, Pennsylvania 19044, and our telephone number is (215) 619‑3200. We maintain an Internet website at www.strataskinsciences.com. Information on or accessible through our website does not constitute part of this
technology. MelaFind is a non-invasive, point-of-care (i.e., in the doctor’s office) instrument to aid in the detection of melanoma. MelaFind provides information to assist in the management of the patient’s disease, including information useful in the dermatologist’s biopsy decision. We anticipate that it will require several years of continued effort before the success of our strategy to commercialize MelaFind canprospectus and should not be
assessed. We expect the insurance reimbursement process to take several years to complete.To finance the purchase of the XTRAC and VTRAC businesses, we entered into a securities purchase agreement with institutional investorsrelied upon in connection with a private placement. We sold $10.0 million aggregate principal amount of Notes bearing interest at 9% per year,making any investment decision with a maturity date of the earlier of 30 days after the Company obtains stockholder approval of stock issuances under the Debentures and the Warrants or November 30, 2015. The Purchasers of the Notes were issued Warrants to purchase an aggregate of 3.0 million shares of common stock, having an exercise price of $0.75 per share. We also issued $32.5 million aggregate principal amount of Debentures that, subject to certain ownership limitations and stockholder approval conditions, will be convertible into 43,333,333 shares of common stock at an initial conversion price of $0.75 per share. The Debentures bear interest at the rate of 2.25% per year, and, unless previously converted, will mature on the five-year anniversary of the date of issuance. Our obligations under the Notes and Debentures are secured by a first priority lien on all of our assets. Under the terms of the Debentures and the Warrants, the issuances of shares of the common stock, including the Shares, upon conversion of the Debentures and upon exercise of the Warrants are subjectrespect to the Stockholder Approval Requirement. Effective upon the date the Stockholder Approval Requirement is satisfied, of which we provide no assurance, we have also agreed to reprice outstanding Warrants heldsecurities offered by certain investors to reduce the exercise price to $0.75 per share.
Historically, we have not generated significant revenues and as a result we have experienced recurring losses from operations. For the year ended December 31, 2014 and the three months ended March 31, 2015 our net losses amounted to approximately $14.1 million and $7.3 million, respectively. In their opinion issued in connection with the audit of our 2014 financial statements, our independent registered public accountants expressed substantial doubt about our ability to continue as a going concern. Following the completion of our acquisition of the XTRAC and VTRAC businesses, we believe that our cash as of March 31, 2015 of $8.2 million combined with our anticipated revenues from the sale of our products will be sufficient to cover our operations for the foreseeable future.
Corporate Information
this prospectus.
We were incorporated in the State of New York in 1989 under the name Electro-Optical Sciences, Inc. and subsequently reincorporated under the laws of the State of Delaware in 1997. In April 2010, we changed our name to MELA Sciences, Inc. Our executive offices are located at 100 Lakeside Drive, Suite 100, Horsham, Pennsylvania 19044. Our telephone numberOn January 5, 2016, we changed our name to STRATA Skin Sciences, Inc.
The following summary contains basic terms about this offering and our common stock and is (215) 619-3200. Our websitenot intended to be complete. It may not contain all of the information that is www.melasciences.com. Theimportant to you. You should read the more detailed information contained in this prospectus, including, but not limited to, the risk factors beginning on page 10. For a more complete description of the terms of the common stock, see “Description of our websiteCapital Stock.”
| Issuer | STRATA Skin Sciences, Inc.
|
| Securities Offered by the Selling Stockholders | 373,626 shares of common stock issuable upon the exercise of the Warrant issued to the selling stockholder in connection with the Senior Financing.
|
Common stock to be outstanding after this offering if the Warrant is exercised in full (1) | 34,738,305 shares of common stock
|
| Offering Plan | Selling stockholders may sell the shares of common stock from time to time in various ways at different prices, including prevailing market prices in the public market or in negotiated transactions. See the section titled “Plan of Distribution” in this prospectus.
|
| Use of Proceeds | We will not receive any of the proceeds from the sale of shares to be offered by the selling stockholder. However, we will receive proceeds upon any cash exercise of the common stock purchase warrant. Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we plan to use the net proceeds from the cash exercise of such Warrant for working capital, general corporate purposes and growth initiatives, including organic growth and potential future acquisitions. See the section titled “Use of Proceeds” in this prospectus.
|
| Dividend Policy for Common Stock | We do not anticipate paying cash dividends on our common stock in the foreseeable future. |
(1)
| The number of shares of common stock to be outstanding immediately after this offering as shown above is based on 34,364,679 shares of common stock outstanding as of November 7, 2021. The number of outstanding shares excludes 3,788,613 shares of common stock reserved for issuance pursuant to grants under our Equity Incentive Plan, 4,028,314 shares of common stock reserved for future issuance under our Equity Incentive Plan and shares of common stock issued pursuant to an equity distribution agreement with Ladenburg Thalmann & Co. Inc. (Ladenburg). |
| Listing | Our common stock is listed on the Nasdaq Capital Market under the symbol “SSKN.”
|
| Risk Factors | Our business is subject to substantial risk. Please carefully consider the “Risk Factors” section of this prospectus and other information included and incorporated by reference in this prospectus prospectus including, but not limited to, the “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2020 (together with any material changes thereto contained in any subsequent filed Quarterly Reports on Form 10‑Q), for a discussion of the factors you should consider carefully before deciding to purchase these securities. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. You should be able to bear a complete loss of your investment. |
Investing in our securities involves a
parthigh degree of
risk. You should carefully consider and evaluate all of the information contained in this prospectus and
should not be relied upon. We have includedin the documents we incorporate by reference into this prospectus, including our
website address in this document as an inactive textual reference only.RISK FACTORS
Investing in our common stock involves risk. Before deciding whether to invest in our common stock, you should consider carefullyconsolidated financial statements and accompanying notes and the risks and uncertainties described below. You should also consider the risks, uncertainties and assumptions discussedinformation under the heading “Risk Factors” included in our most recent annual report on Form 10-K, before you decide to purchase our securities. See the section of this prospectus entitled “Incorporation of Certain Information by Reference.” The risks and uncertainties described in this prospectus and the documents incorporated by reference herein are not the only ones we face. Additional risks and uncertainties that we do not presently know about or that we currently believe are not material may also adversely affect our business, business prospects, results of operations or financial condition. Any of the risks and uncertainties set forth herein and the documents incorporated by reference herein, as revised or supplementedupdated by our most recentannual, quarterly report on Form 10-Q and our currentother reports on Form 8-K, each of which is onand documents that we file with the SEC and is incorporated hereinincorporate by reference into this prospectus could materially and which may be amended, supplemented or superseded from timeadversely affect our business, results of operations and financial condition. The trading price of our securities could decline due to time by other reports we file with the SEC in the future including any applicable prospectus supplement. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Ifmaterialization of any of these risks, actually occurs,and you may lose all or part of your investment.
Risks Related to this Offering and Ownership of Shares of Our Common Stock
The market for our business, business prospects,common stock may not provide investors with adequate liquidity.
Our common stock is listed on the Nasdaq Capital Market. However, the trading market for our common stock may not be maintained and may not provide investors with adequate liquidity. The liquidity of the market for our common stock depends on a number of factors, including prevailing interest rates, our financial condition orand operating results, the number of operations could be seriously harmed. This could causeholders of our common stock, the market for similar securities and the interest of securities dealers in making a market in our common stock. We cannot predict the extent to which investor interest in our Company will maintain the trading market in our common stock, or how liquid that market will be. If an active market is not maintained, investors may have difficulty selling shares of our common stock.
The market price of our common stock is variable and could be substantially affected by various factors.
The market price of our common stock could be subject to
decline, resultingwide fluctuations in
a loss ofresponse to numerous factors. These fluctuations could cause you to lose all or part of your
investment. Please also read carefullyinvestment in our common stock since you might be unable to sell your shares at or above the
section below titled “Special Note Regarding Forward-Looking Statements.”Risks Relatingprice you paid in this offering. The price of the common stock that will prevail in the market after this offering may be higher or lower than before this offering depending on many factors, some of which are beyond our control and may not be directly related to our operating performance.
These factors include, but are not limited to, the
Private Placement Transaction
The Debenturesfollowing:
shift in our investor base;
general economic and financial market conditions;
government action or regulation;
changes in accounting standards, policies, guidance, interpretations or principles;
changes to the
Notes contain covenants that could limit our financing optionsmarket and
liquidity position, which would limit our ability to grow our business.The Debenturesindustry conditions as a result of the recent global outbreak of the COVID‑19 coronavirus;
the financial condition, operations, stock price performance and the Notes contain certain covenants and representations limiting our ability to incur additional indebtedness, other than specified permitted indebtedness, and from entering into or creating any liens on our assets, other than certain permitted liens. Our obligations under the Notes and Debentures are secured by a first priority lien on allprospects of our assets, except for a second lien oncompetitors;
announcements by us or our intellectual property. These restrictions may limit our ability to obtain additional financing, withstand downturnscompetitors of significant acquisitions, dispositions or software developments;
changes in
our businessfinancial estimates or
take advantage of business opportunities. Moreover, additional debt financing we may seek may contain terms that include more restrictive covenants, may require repayment on an accelerated schedule or may impose other obligations that limit our ability to grow our business, acquire needed assets, or take other actions we might otherwise consider appropriate or desirable.
Our failure to avoid events of default as defined in the Debentures and the Notes could require us to redeem such Debentures and Notes at a premium.
��
The Debentures and the Notes provide that, upon the occurrence of an “Event of Default,” the interest rate on the Debentures and the Notes increases to 12%. Events of Default under the Debentures and the Notes include, among other things: (1) suspension or removal from the Nasdaq Capital Market or other permissible trading market for specified time periods; (2) failure to pay principal, interest, late charges and other amounts due under the Debentures or the Notes; (3) certain events of bankruptcy or insolvency of our company; (4) failure to make paymentrecommendations by securities analysts with respect to any indebtedness in excess of $150,000 to any third party,us or the occurrence of a default or event of default under certain agreements binding our company; and (5) our failure to satisfy the Stockholder Approval Requirement by November 30, 2015.
Our ability to avoid such Events of Default may be affected by changescompetitors in our business condition industry;
our issuance of preferred equity and/or debt securities; and
actual or anticipated variations in annual and quarterly operating results of us and our operations, orcompetitors.
As a result of these and other
events beyondfactors, investors who purchase our
control. If we were tocommon stock in this offering may experience
an Event of Defaulta decrease, which could be substantial and
rapid, in the
holders elected to have us redeem their Debentures and Notes, we may not have sufficient resources to do so, and we may have to seek additional debt or equity financing to cover the costs of redeeming the Debentures and the Notes. Any additional debt or equity financing that we may need may not be available on terms favorable to us, or at all.
Issuance of sharesmarket price of our common stock, upon the exerciseincluding decreases unrelated to our operating performance or prospects.
Future sales of
options or warrants and upon conversion of convertible debentures will dilute the ownership interestsubstantial amounts of our
existing stockholders andcommon stock or other securities, or the possibility that such sales could occur, could adversely affect the market price of our common stock.
The exercise of outstanding stock options and warrants and conversions of outstanding convertible debentures, including
We cannot predict the Debentures and the Warrants, and theeffect, if any, that future issuances or sales of our common stock issuable pursuant to them would reduce a stockholder's percentage voting and ownership interest. The exercise, or potential exercise,other securities will have on the market price of these options andour common stock. Issuances or sales of substantial amounts of our common stock, preferred stock, warrants, andor debt securities convertible into or exercisable or exchangeable for common stock, or the conversion,perception that such issuances or potential conversion, of the debenturessales might occur, could adversely affectnegatively impact the market price of our common stock and the terms onupon which we couldmay obtain additional financing. Theequity financing in the future.
Your percentage ownership interest of our existing stockholders maywill be further diluted through adjustmentsin the future.
Your percentage ownership in our common stock will be diluted in the future because of equity awards that we expect will be granted to
certain outstanding Warrantsour directors, officers and
Debentures underemployees. Our Equity Incentive Plan provides for the
termsgrant of
their anti-dilution provisions.
We may become obligatedequity-based awards, including restricted stock, restricted stock units, stock options, stock appreciation rights and other equity-based awards to pay liquidated damages if we fail to file, obtain effectivenessour directors, officers and maintain effectiveness of a registration statement under a registration rights agreementother employees, advisors and consultants. In October 2021, we entered into an equity distribution agreement with the Selling Stockholders.
We have granted to the Purchasers resale registration rights with respect to the shares of common stock underlying the Debentures and the WarrantsLadenburg pursuant to the terms of a registration rights agreement. In additionwhich we may sell up to the registration rights, the Selling Stockholders are entitled to receive liquidated damages upon the occurrence of a number of events relating to filing, becoming effective and maintaining an effective registration statement covering the shares underlying the Debentures and the Warrants. The liquidated damages will be payable upon the occurrence of each of those events and each monthly anniversary thereof until cured. The amount of liquidated damages payable is equal to 2.0% of the aggregate purchase price paid by each Purchaser, provided, however, the maximum aggregate liquidated damages payable to a Purchaser shall be 12% of the aggregate subscription amount paid by such Purchaser pursuant to the Purchase Agreement. The liquidated damages shall accrue interest at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law), accruing on a daily basis for each event until such event is cured.
Risks Relating to Our Common Stock
An active trading market for our common stock may not be sustained if our common stock is delisted from Nasdaq.
Currently, our common stock trades on the Nasdaq Capital Market. If we fail to maintain compliance with any Nasdaq listing requirements, we could be delisted. If that were to occur, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’ coverage of us may be reduced. Furthermore, while we believe that our common stock would trade on the OTC Bulletin Board, we would lose various advantages attendant to listing on a national securities exchange, including but not limited to, eligibility to register the sale or resale of our shares on Form S-3 and the automatic exemption from registration under state securities laws for exchange listed securities, which could have a negative effect on our ability to raise funds.
Our stock price may be volatile, meaning purchasers$11.0 million of our common stock could incur substantial losses.
Our stock price has been and is likely to continue toin registered “at-the-market” offerings. The shares will be volatile. The stockoffered at prevailing market in general and the market for medical technology companies in particular have experienced extreme volatility that has often been unrelated to the operating performanceprices. As a result of particular companies. The following factors,shares sold thereunder, your percentage ownership in addition to other risk factors described in this section and general market and economic conditions, may have a significant impact on the market price of our common stock:
| · | failure of any of our products to achieve or continue to have commercial success; |
| · | the timing of regulatory approval for our future products; |
| · | results of our research and development efforts and our clinical trials; |
| · | the announcement of new products or product enhancements by us or our competitors; |
| · | regulatory developments in the United States and foreign countries; |
| · | our ability to manufacture our products to commercial standards; |
| · | developments concerning our clinical collaborators, suppliers or marketing partners; |
| · | changes in financial estimates or recommendations by securities analysts; |
| · | public concern over our products; |
| · | developments or disputes concerning patents or other intellectual property rights; |
| · | product liability claims and litigation against us or our competitors; |
| · | the departure of key personnel; |
| · | the strength of our balance sheet; |
| · | variations in our financial results or those of companies that are perceived to be similar to us; |
| · | changes in the structure of third-party reimbursement in the United States and other countries; |
| · | changes in accounting principles or practices; |
| · | general economic, industry and market conditions; and |
| · | future sales of our common stock. |
A decline in the market price of our common stock could cause you to lose some or all of your investment, limit your ability to sell your shares of stock and may adversely impact our ability to attract and retain employees and raise capital. In addition, stockholders have, and maywill be diluted in the future, initiate securities class action lawsuits if the market price of our stock drops significantly. Whether or not meritorious, litigation brought against us could result in substantial costs and could divert the time and attention of our management. Our insurance to cover claims of this sort may not be adequate.
Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable and could also limit the market price of our stock.
Provisions of our restated certificate of incorporation and bylaws and applicable provisions of Delaware law may make it more difficult for or prevent a third party from acquiring control of us without the approval of our board of directors. These provisions:
| · | limit who may call a special meeting of stockholders; |
| · | establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings; |
| · | do not permit cumulative voting in the election of our directors, which would otherwise permit less than a majority of stockholders to elect directors; |
| · | prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; and |
| · | provide our board of directors the ability to designate the terms of and issue a new series of preferred stock without stockholder approval. |
In addition, Section 203 of the Delaware General Corporation Law generally limits our ability to engage in any business combination with certain persons who own 15% or more of our outstanding voting stock or any of our associates or affiliates who at any time in the past three years have owned 15% or more of our outstanding voting stock.
These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained or incorporated by reference in this prospectus that are not historical facts are forward-looking. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, our expectations regarding sales, earnings or other future financial performance and liquidity, conduct and completion of clinical trials, product introductions, entry into new geographic regions, and general optimism about future operations or operating results. Some of these statements can be identified by the use of forward-looking terminology such as “prospects,” “outlook,” “believes,” “estimates,” “intends,” “may,” “will,” “should,” “anticipates,” “expects” or “plans,” or the negative or other variation of these or similar words, or by discussion of trends and conditions, strategy or risks and uncertainties.
These forward-looking expectations are based on current assumptions within the bounds of management’s knowledge of our business and operations and which management believes are reasonable. These assumptions are subject to risks and uncertainties, and actual results could differ materially from expectations because of issues and uncertainties such as those listed under the caption “Risk Factors” and elsewhere in this prospectus and in documents incorporated into this prospectus which, among others, should be considered in evaluating our future financial performance. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this prospectus. Readers are advised to consult any further disclosures we may make on related subjects in subsequent reports filed with the SEC.
Additional information on factors that may affect our business and financial results can be found in our filings with the SEC. All forward-looking statements should be considered in light of these risks and uncertainties. We assume no responsibility to update forward-looking statements made in this prospectus.
USE OF PROCEEDS
future.
We will not receive any of the proceeds from the sale of the
securities by the Selling Stockholders.SELLING STOCKHOLDERS
This prospectus relates to the possible resale by the Selling Stockholders of up to 2,992,259 Shares that we may issue upon conversion of a portion
We will not receive any of the
Debentures that we issued toproceeds from the
Selling Stockholders. We are filing the registration statement, of which this prospectus forms a part, and are registering the Shares pursuant to the provisionssale of the
registration rights agreement (the “Registration Rights Agreement”) we entered into withshares in this offering. However, any sale of the
Purchasers on June 22, 2015. Each Selling Stockholder may from time to time offer and sell pursuant toshares of our common stock in this
prospectus anyoffering presumes that the warrant holders will have exercised some or all of the
Shares that it acquires upon conversionWarrant at an exercise price of
a portion$1.82 per share. We will receive proceeds from the cash exercise of
its respective Debentures.The following table presents information regarding the Selling Stockholders, and the Shares that they may offer and sell from timeWarrant which, if exercised with respect to time under this prospectus. This table is prepared based on information supplied to us by the Selling Stockholders. As used in this prospectus, the term “Selling Stockholder” includes any donees, pledges, transferees or other successors in interest selling Shares received after the date of this prospectus from a Selling Stockholder as a gift, pledge, or other non-sale related transfer. The number of Shares in the column “Number of Shares Being Offered” represents all of the Shares that373,626 shares of common stock, would result in gross proceeds of $680,000 to us. To the Selling Stockholders may offer underextent we receive proceeds from the cash exercise of the Warrant, we intend to use such proceeds for working capital and general corporate purposes to support our growth.
All shares of our common stock offered by this
prospectus. The Selling Stockholders may sell some, all or noneprospectus are being registered for the account of
its respective Shares.the selling stockholder. We
dowill not
know how longreceive any
selling stockholder will hold their respective Shares before selling them, and we currently have no agreements, arrangements or understandings with any Selling Stockholder regardingof the proceeds from the sale of
anythese shares. Any sale of these shares presumes that the warrant holders will have exercised some or all of the
Shares.Beneficial ownershipWarrant at an exercise price of $1.82 per share. We will receive proceeds from the cash exercise of the Warrant which, if exercised with respect to all of the 373,626 shares of common stock, would result in gross proceeds of $680,000 to us.
Unless we inform you otherwise in a prospectus supplement or free writing prospectus, we plan to use the net proceeds from the cash exercise of such Warrant for working capital, general corporate purposes and growth initiatives, including organic growth and potential future acquisitions. While the Company has a pipeline of acquisition targets, as is determinedtypically the case, the Company has no present arrangements or agreements for any such acquisitions.
We have not allocated any specific portion of the net proceeds to any particular purpose, and our management will have the discretion to allocate the proceeds as it determines. Furthermore, the amount and timing of our actual expenditures will depend on numerous factors, including the cash used in
accordance with Rule 13d-3(d) promulgatedor generated by our operations, the pace of the integration of acquired businesses, the level of our sales and marketing activities and the attractiveness of any additional acquisitions or investments.
If you invest in our common stock in this offering, you will experience dilution to the extent of the difference between the price per share of our common stock you pay in this offering and the pro forma net tangible book value per share of our common stock immediately after this offering.
Our net tangible book value on September 30, 2021 was approximately $6.8 million, or approximately $0.20 per share. “Net tangible book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The percentagetotal number of shares of common stock beneficially owned afteroutstanding at September 30, 2021.
After giving effect to the offering shownissuance of the common stock to investors exercising for cash the Warrant for all 373,626 shares of common stock issuable pursuant thereto at $1.82 per share, our as adjusted net tangible book value as of September 30, 2021 would be approximately $7.5 million or $0.22 per share. This represents an immediate increase in net tangible book value of $0.02 per share to our existing stockholders and an immediate dilution in net tangible book value of $1.60 per share to investors exercising the Warrant at $1.82 per share.
For illustrative purposes, the following table belowillustrates this dilution per share to investors who purchased the shares at the same price which was paid by the selling stockholder to exercise their Warrant:
Exercise price per share | | | | | $ | 1.82 | |
| Pro forma net tangible book value per share as of September 30, 2021 | | $ | 0.20 | | | | | |
| Increase per share attributable to new investors | | | | | | | | |
Pro forma as adjusted net tangible book value per share after this offering | | | | | | | | |
Dilution in net tangible book value per share to new investors | | | | | | | | |
The table above is based on
34,364,679 shares of common stock outstanding as of September 30, 2021, and excludes, as of such date: 3,963,889 shares of common stock issuable upon the exercise of options with a weighted average exercise price of $2.05;
144,497 shares of common stock issuable upon the vesting and settlement of outstanding restricted stock units;
3,853,038 shares of common stock reserved for issuance pursuant to unvested grants under our equity compensation plans; and
shares of common stock, having an aggregate offering price of 8,996,686up to $11.0 million, issued pursuant to an equity distribution agreement with Ladenburg.
The shares of our common stock
outstandingbeing offered by the selling stockholder are those issuable to the selling stockholder upon the exercise of the Warrant to purchase 373,626 shares of common stock that we issued on
JuneSeptember 30,
2015.| Selling Stockholder | | Shares
Owned Prior to the
Offering | | | Number of
Shares Being
Offered(1) | | | Shares Owned
After the Offering | | | Percentage of
Ownership After
the Offering | |
| | | | | | | | | | | | | |
Broadfin Healthcare Master Fund,
LTD(2) | | | 383,615 | (3) | | | 1,381,043 | | | | 383,615 | (3) | | | 9.99 | % |
| | | | | | | | | | | | | | | | | |
| Sabby Healthcare Master Fund Ltd.(4) | | | 225,128 | (5) | | | 1,104,834 | | | | 225,128 | (5) | | | 9.99 | % |
| | | | | | | | | | | | | | | | | |
| Sabby Volatility Warrant Master Fund Ltd.(6) | | | 279,331 | (7) | | | 460,347 | | | | 279,331 | (7) | | | 9.99 | % |
| | | | | | | | | | | | | | | | | |
| Intracoastal Capital, LLC(8) | | | 104,515 | (9) | | | 46,035 | | | | 58,480 | (9) | | | 4.99 | % |
2021 in connection with the Senior Financing. This prospectus generally covers the resale of the shares of common stock issuable upon the exercise of the Warrant. The selling stockholder may resell, from time to time, all, some or none of the shares of our common stock covered by this prospectus, as provided in this prospectus under “Plan of Distribution.” However, we do not know when or in what amount the selling stockholder may offer their shares for sale under this prospectus, if any.
The following tables set forth the name and address of the selling stockholder, the number of shares beneficially owned by such selling stockholder and the number of shares to be offered by such selling stockholder pursuant to this prospectus. The tables also provide information regarding the beneficial ownership of our common stock with respect to such selling stockholder, as adjusted to reflect the assumed sale of all of the shares of common stock offered under this prospectus by such selling stockholder. Information concerning the selling stockholder may change from time to time and, if necessary, we will supplement this prospectus accordingly. In computing the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we deemed as outstanding any shares of our common stock that such person has the right to acquire within 60 days of the date of this prospectus. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Beneficial ownership as shown in the following table has been determined in accordance with the rules of the SEC.
As of September 30, 2021, there were 34,364,679 shares of our common stock outstanding.
Name and Address of Selling Stockholder | Common Shares Beneficially
Owned Prior to This Offering | Number of Shares Underlying Warrant (1) | Common Shares Beneficially Owned After This Offering |
| | | | | | |
MidCap Funding XLVII Trust (2) 7255 Woodmont Ave, Suite 300 Bethesda, MD 20814 | 373,626 | 1.08% | 373,626 | 0 | 0% |
| Total of Selling Stockholder: | 373,626 | 1.08% | 373,626 | 0 | 0% |
| (1) | Assumes that $2,244,194 aggregate principal of Debentures are converted to Shares, in full without regard to any conversion limitations contained therein; provided, however, that the issuance of the Shares is subject to the Stockholder Approval Requirement. |
| |
(2) | The business address of Broadfin Healthcare Master Fund, LTD (“Broadfin”) is 20 Genesis Close Ansbacher House, Second Floor, P.O. Box 1344, Grand Cayman KY1-1108, Cayman Islands and the business address of each of Broadfin Capital, LLC and Kevin Kotler is 237 Park Avenue, 9th Floor, New York, NY 10017. Broadfin, Broadfin Capital, LLC and Kevin Kotler have shared voting and investment control of the securities held by Broadfin. |
(3) | Broadfin holds the following securities: (i) 383,615 shares of common stock; (ii) warrants to purchase 1,559,454 shares of common stock at $2.45 per share; (iii) warrants to purchase 1,267,849 shares of common stock at $2.45 per share; (iv) warrants to purchase 432,433 shares of common stock at $7.40 per share; and (v) 1,267,849Represents shares of common stock issuable upon conversion of $3,252,033 principal amount of 4% convertible debentures issuedif the Warrant is exercised in July 2014. In addition, subject to the Stockholder Approval Requirement, (a) 20,000,000 shares of common stock issuable upon conversion of $15,000,000 principal amount of Debentures, including 1,381,043 Shares covered by this prospectus, and (b) Warrants to purchase 1,500,000 shares of common stock at an exercise price of $.75 per share. The conversion of all debentures and the exercise of all warrants referenced in this footnote are subject to a 9.99% blocker. This information is based upon a Selling Stockholder Notice and Questionnaire provided by Broadfin on July 14, 2015.full. |
| (2) | |
(4) | The business address of Sabby Healthcare Master Fund Ltd.Apollo Capital Management, L.P. (“Sabby HMF”Apollo”) is c/o Sabbythe investment manager for MidCap Funding XXVII Trust (“MCFXXVII”). Apollo is a registered investment advisor with the SEC. Howard Widra is an authorized signatory for Apollo Capital Management GP, LLC, 10 Mountainview Road, Suite 205, Upper Saddle River, NJ 07458. Sabby Management, LLC serveswhich is the general partner of Apollo. Accordingly, Mr. Widra is permitted to make decisions on behalf of Apollo, acting in its capacity as the investment manager of Sabby HMF. Hal Mintz is the manager of Sabby Management, LLCMCFXXVII, and has voting and investment control of the securities held by Sabby HMF. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities beneficially owned by Sabby HMF excepttherefore may be deemed to the extent of their respective pecuniary interest therein. |
| |
(5) | Sabby HMF holds the following securities: (i) 225,128 shares of common stock; (ii) warrants to purchase 514,285 shares of common stock at $8.50 per share; (iii) warrants to purchase 2,183,603 shares of common stock at $2.45 per share; (iv) warrants to purchase 2,339,181 shares of common stock at $2.45 per share; (v) warrants to purchase 648,648 shares of common stock at $7.40 per share; (vi) 2,339,182 shares upon conversion of $6,000,000 of Series B convertible preferred stock and (vii) 2,183,603 shares of common stock issuable upon conversion of $5,600,941 principal amount of 4% convertible debentures issued in July 2014. In addition, subject to the Stockholder Approval Requirement, (a) 16,000,000 shares of common stock issuable upon conversion of $12,000,000 principal amount of Debentures, including 1,104,834Shares covered by this prospectus, and (b) warrants to purchase 1,500,000 shares of common stock at an exercise price of $.75 per share. The conversion of all debentures and the exercise of all warrants referenced in this footnote are subject to a 9.99% blocker. This information is based upon a Selling Stockholder Notice and Questionnaire provided by Sabby HMF on July 16, 2015. |
| |
(6) | The business address of Sabby Volatility Warrant Master Fund Ltd. (“Sabby VWMF”) is c/o Sabby Management LLC, 10 Mountainview Road, Suite 205, Upper Saddle River, NJ 07458. Sabby Management, LLC serves as the investment manager of Sabby VWMF. Hal Mintz is the manager of Sabby Management, LLC and has voting and investment control of the securities held by Sabby VWMF. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities beneficially owned by Sabby VWMF except to the extent of their respective pecuniary interest therein. |
| |
(7) | Sabby VWMF holds the following securities: (i) 279,331 shares of common stock; (ii) warrants to purchase 171,428 shares of common stock at $8.50 per share; (iii) warrants to purchase 837,048 shares of common stock at $2.45 per share; (iv) warrants to purchase 896,686 shares of common stock at $2.45 per share ; (v) warrants to purchase 248,648 shares of common stock at $7.40 per share; (vi) 196,687 shares upon conversion of $504,500 of Series B convertible preferred stock and (vii) 837,048 shares of common stock issuable upon conversion of $2,147,028 principal amount of 4% convertible debentures issued in July 2014. In addition, subject to the Stockholder Approval Requirement, 6,666,667 shares of common stock issuable upon conversion of $5,000,000 principal amount of Debentures, including 460,347 Shares covered by this prospectus. The conversion of all debentures and the exercise of all warrants referenced in this footnote are subject to a 9.99% blocker. This information is based upon a Selling Stockholder Notice and Questionnaire provided by Sabby VWMF on July 16, 2015. |
| |
(8) | The business address of Intracoastal Capital, LLC (“Intracoastal”) is 245 Palm Trail, Delray Beach, FL 33483. Mitchell P. Kopin and Daniel B Asher, each of whom are managers of Intracoastal, have shared voting control and investment discretion over these securities that are held by Intracoastal, which are described in footnote (9) below, and may be deemed to have beneficial ownership of such securities. Mr. Kopin is the president, the sole member and the sole member of the Board of Directors of Cranshire Capital Advisors, LLC (“CCA”), which is the investment manager of Cranshire Capital Master Fund, Ltd. (“Cranshire Master Fund”), As the owner of voting control over CCA, Mr. Kopin and CCA may be deemed to have beneficial ownership of the securities held by Cranshire Master Fund, which are described in footnote (9) below. Mr. Asher, who is a manager of Intracoastal, is also a control person of a broker-dealer. As a result of such common control, Intracoastal may be deemed to be an affiliate of a broker-dealer. Intracoastal acquiredMCFXXVII as reported herein. |
Set forth below is our cash and capitalization as of September 30, 2021:
as adjusted basis, reflecting the
issuance of 373,626 shares of
common stock being registered hereunder in the ordinary course of business, and at the time of the acquisition of the shares of common stock and warrants described herein, Intracoastal did not have any arrangements or understandings with any person to distribute such securities.(9) | Intracoastal holds warrants to purchase 58,480 shares of common stock at $2.45 per share. In addition, subject to the Stockholder Approval Requirement, Intracoastal holds 666,667 shares of common stock issuable upon conversion of $500,000 principal amount of Debentures, including 46,035 Shares covered by this prospectus. Mr. Kopin may also be deemed to own the following securities held by Cranshire Master Fund: (i) warrants to purchase 331,394 shares of common stock at $2.45 per share and (ii) 39,966 shares issuable upon conversion $102,513 principal amount of 4% convertible debentures issued in July 2014. The conversion of all debentures and the exercise of all warrants referenced in this footnote are subject to a 4.99% blocker. This information is based upon a Selling Stockholder Notice and Questionnaire provided by Intracoastal on July 20, 2015. |
Relationships with Selling Stockholders
On October 29, 2013, we entered into a securities purchase agreement with certain funds managed by Sabby Management, LLC in connection with a $6.0 million registered offering of our common stock pursuant to which we issued 422,819 sharesoffered by this prospectus, as a result of our common stock, fully paid Series B prefunded warrantsexercising the Warrant to purchase up to 434,325 shares of our common stock and additional warrants to purchase up to 685,715373,626 shares of our common stock at an exercise price of $8.50 per share. The offering closed on October 31, 2013.
On February 5, 2014, pursuant to a securities purchase agreement, dated as of January 31, 2014, with certain funds managed by Sabby Management, LLC and Broadfin Capital, LLC, we sold (i) an aggregate of 12,300 shares of Series A Convertible Preferred Stock, par value $0.10 and a stated value of $1,000$1.82 per share, convertible intoassuming net proceeds to us of approximately 1.5 million$650,000, after deducting estimated offering expenses payable by us.
The information below should be read in conjunction with our condensed financial statements for the nine months ended September 30, 2021 and with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both of which are included in our Form 10-Q for the nine months ended September 30, 2021 and incorporated by reference in this prospectus.
| | | | |
| | | | | | | |
| | | (in thousands, except share data) | |
Cash and cash equivalents | | | | | | | | |
Current portion of long-term debt | | $ | - | | | $ | - | |
Long-term debt, net of current portion | | | | | | | | |
| Total debt | | | 7,282 | | | �� | 7,282 | |
Stockholders’ equity | | | | | | | | |
| Common stock, $0.001 par value - authorized, 150,000,000 shares; issued and outstanding, 34,364,679 shares actual and 34,738,305 as adjusted | | | 34 | | | | 35 | |
| Additional paid-in capital | | | 246,979 | | | | 247,628 | |
| Accumulated deficit | | | (220,830 | ) | | | (220,830 | ) |
| Total stockholders’ equity | | | | | | | | |
| Total capitalization | | | | | | | | |
The table above is based on 34,364,679 shares of common stock at an initial conversion priceoutstanding as of $8.40,September 30, 2021, and (ii) warrants to purchase up to approximately 1.3 millionexcludes, as of such date:
| • | 3,963,889 shares of common stock issuable upon the exercise of options with a weighted average exercise price of $2.05;
|
144,497 shares of common stock
for aggregate gross proceedsissuable upon the vesting and settlement of
$12.3 million. The warrants have an exercise price of $7.40 per share, are immediately exercisable and have a term of five years.As part of the February 2014 financing, we entered into an agreement granting to Broadfin the right to designate one director to our Board of Directors, so as long as Broadfin retained 30% of its investment in the Series A Preferred Stock (or theoutstanding restricted stock units;
3,853,038 shares of common stock underlyingreserved for issuance pursuant to unvested grants under our equity compensation plans; and
shares of common stock having an aggregate offering price of up to $11.0 million issued pursuant to an equity distribution agreement with Ladenburg.
DESCRIPTION OF OUR CAPITAL STOCK General
The following description of the material provisions of our capital stock (which includes a description of securities we may offer pursuant to the registration statement of which this prospectus, as the same may be supplemented, forms a part) does not purport to be complete and is based on and qualified by our Certificate of Incorporation, as amended and restated (the “Charter”), our Bylaws, and our Warrant Agreement to Purchase Shares of the Common Stock of STRATA Skin Sciences, Inc., dated as of September 30, 2021, between us and MidCap Funding XXVII Trust (“Warrant Agreement”), each of which is incorporated by reference in the registration statement of which this prospectus is a part. The summary below is also qualified by reference to provisions of the Delaware General Corporation Law (“DGCL”).
Our authorized capital stock consists of 160,000,000 shares, consisting of 150,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares of preferred stock, $0.10 par value per share. As of November 7, 2021, our outstanding capital stock consists of 34,364,679 shares of common stock, and no shares of preferred stock. These figures do not include securities that may be issued upon exercise or vesting of our outstanding derivative securities including our options to purchase shares of common stock and restricted stock units under our equity incentive plans and a stock purchase warrant.
We, directly or through agents, dealers or underwriters designated from time to time, may offer, issue and sell, together or separately, up to $25,000,000 in the aggregate of:
secured or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities, senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities;
warrants to purchase our securities;
rights to purchase our securities; or
units comprised of, or other combinations of, the foregoing securities.
We may issue the debt securities as exchangeable for or convertible into shares of common stock, preferred stock or other securities. The preferred stock may also be exchangeable for and/or convertible into shares of common stock, another series of preferred stock or other securities. The debt securities, the preferred stock, the common stock and the warrants are collectively referred to in this prospectus as the “securities.” When a particular series of securities is offered, a supplement to this prospectus will be delivered with this prospectus, which will set forth the terms of the offering and sale of the offered securities.
Common Stock
As of November 7, 2021, there were 34,364,679 shares of common stock issued and outstanding. The outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.
Voting Power
Except as otherwise required by law or as provided in any certificate of designation for any series of Preferred Stock)Stock, the holders of common stock possess all the voting power for the election of our directors and all other matters requiring stockholder action. Holders of common stock are entitled to one vote per share held of record on matters to be voted on by stockholders.
Dividends
Holders of common stock will be entitled to receive such dividends, if any, as may be declared from time to time by our board of directors in its discretion out of funds legally available therefor and shall share equally on a per share basis in such dividends and distributions, provided that such holder is not an Unsuitable Person (as defined below).
Liquidation, Dissolution and Winding-Up
In the event of our voluntary or heldinvoluntary liquidation, dissolution, distribution of assets or winding-up, the holders of our common stock will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders, after the rights of our creditors and the rights of holders of Preferred Stock, if any, warrants. Samuel Navarro, Managing Partnerhave been satisfied.
Preemptive or Other Rights
There are no sinking fund provisions applicable to the common stock. Our stockholders have no preemptive or other subscription rights.
Preferred Stock
Our board of directors has the authority to issue up to an aggregate of 10,000,000 shares of Preferred Stock in one or more series, and to fix the designations, preferences, rights, qualifications, limitations and restrictions thereof or thereon, without any further vote or action by the stockholders. No shares of Preferred Stock are outstanding as of the date hereof.
You should refer to any filing with the SEC relating to the series of preferred stock being offered for the specific terms of that series, including:
the title of the series and the number of shares in the series;
the price at Gravitas Healthcare, LLC,which the preferred stock will be offered;
the dividend rate or rates or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends on the preferred stock being offered will cumulate;
the voting rights, if any, of the holders of shares of the preferred stock being offered;
the provisions for a firmsinking fund, if any, and the provisions for redemption, if applicable, of the preferred stock being offered, including any restrictions on the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;
the liquidation preference per share;
the terms and conditions, if applicable, upon which provides strategic advisory servicesthe preferred stock being offered will be convertible into our common stock, including the conversion price, or the manner of calculating the conversion price, and the conversion period;
the terms and conditions, if applicable, upon which the preferred stock being offered will be exchangeable for debt securities, including the exchange price, or the manner of calculating the exchange price, and the exchange period;
any listing of the preferred stock being offered on any securities exchange;
a discussion of any material federal income tax considerations applicable to medical technology companies, was appointedthe preferred stock being offered;
the relative ranking and preferences of the preferred stock being offered as to servedividend rights and rights upon liquidation, dissolution or the winding up of our affairs;
any limitations on the issuance of any class or series of preferred stock ranking senior or equal to the series of preferred stock being offered as to dividend rights and rights upon liquidation, dissolution or the winding up of our affairs; and
any additional rights, preferences, qualifications, limitations and restrictions of the series.
Upon issuance, the shares of preferred stock will be fully paid and nonassessable, which means that its holders will have paid their purchase price in full and we may not require them to pay additional funds.
Any preferred stock terms selected by our board of directors could decrease the amount of earnings and assets available for distribution to holders of our common stock or adversely affect the rights and power, including voting rights, of the holders of our common stock without any further vote or action by the stockholders. The rights of holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued by us in the future. The issuance of preferred stock could also have the effect of delaying or preventing a change in control of our company or make removal of management more difficult.
Certain Anti-Takeover Provisions of Our Charter and Bylaws and Certain Provisions of Delaware Law
Our Charter and Bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors. These provisions include:
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being able to fill vacancies on our Boardboard of Directors in March 2014 pursuant to this designation right. On March 31, 2014, Broadfin and we agreed to terminate this designation right. Notwithstanding this termination, our Board of Directors determined that having Mr. Navarro on directors;
the Board of Directors would be in our best interests and thoseability of our board of directors to determine whether to issue shares of our Preferred Stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
limiting the liability of, and providing indemnification to, our directors and officers;
specifying the Court of Chancery of the State of Delaware as the exclusive forum for adjudication of disputes;
controls over the procedures for the conduct and scheduling of stockholder meetings; and
advance notice procedures that stockholders and therefore decidedmust comply with in order to include Mr. Navarro onnominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to be nominatedobtain control of us.
These provisions, singly or together, could delay hostile takeovers and changes in control of us or changes in our board of directors and management.
As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock. Any provision of our Charter or Bylaws, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for election atour stockholders to receive a premium for their shares of our common stock and could also affect the 2014 annual meetingprice that some investors are willing to pay for our common stock.
MidCap Warrant
As of
stockholders.In July 2014, we raised additional net proceeds of approximately $13.8 million through the issuance of 4% senior secured convertible debentures due July 2019 and 6.2 million warrants expiring five years from the date of issuance from certain funds managed by Sabby Management, LLCthis prospectus, there is a warrant outstanding exercisable for 373,626 shares of common stock (the “Warrant”).
The Warrant was originally issued in connection with a loan and Broadfin Capital, LLCsecurity agreement between us and other investors. The debentures were convertible at any time into an aggregateMidCap. Pursuant to the terms of approximately 5.8 millionthe Warrant Agreement, the Warrant entitles the registered holder to purchase 373,626 shares of our common stock at a per share price of $2.565 per share. Our obligations under the debentures are secured by$1.82, subject to adjustment as discussed below. The Warrant may be exercised only for a first priority lien on allwhole number of shares of our intellectual property. In connection withcommon stock. The Warrant is exercisable and will expire on September 30, 2031, which shall be automatically exercised on a “cashless” basis upon expiration if the transaction, we also exchanged 12,300 sharesfair market value of Series B Preferred Stock, convertibleour common stock is greater than the exercise price of the Warrant on the expiration date of the Warrant.
The Warrant provides that the holder thereof may elect to exercise the warrant on a net “cashless” basis at any time
into an aggregate of approximately 4.8 million shares of common stock at a conversion price of $2.565 per share, for all of our outstanding Series A Preferred Stock that was issued in February 2014. We also issued warrants to purchase common stock at an exercise price of $2.45 per share, with 4.8 million warrants expiring in eighteen months from the date of issuance. In September 2014, we amended the registration statement relatedprior to the
Series A Preferred Stockexpiration thereof. Pursuant to
deregister those shares that would have been issuable upon conversion of the Series A Preferred Stock. We entered into a registration rights agreement,
with the investors pursuant to which we
were obligatedagreed to file a registration statement
to registercovering the resale of the shares
of common stock issuable upon conversion ofunderlying the
Series B Preferred Stock and Debentures and upon exercise of the warrants. That registration statement was declared effective in October 2014.On June 22, 2015, we entered into a securities purchase agreement with the Purchasers inWarrant by November 14, 2021.
In connection with a
private placement. We sold $10.0 million aggregate principal amountMerger Event (defined below) that is a Liquid Sale (defined below) where the value per share of
Notes bearing interest at 9% per year, with a maturity dateour common stock is greater than the exercise price then in effect, the Warrant shall, on and after the closing of the
earlierMerger Event, automatically and without further action on the part of
30 days afterany party or other person, represent the
Company obtains stockholder approvalright to receive, in lieu of
the shares of our common stock
issuancesthat are issuable under the
DebenturesWarrant Agreement as of immediately prior to the closing of such Merger Event, the consideration payable on or in respect of such shares of our common stock less the amount equal to then-effective exercise price multiplied by the number of shares of our common stock as to which the Warrant is then exercised (such amount being the “purchase price”) for all such shares of our common stock (such consideration to include both the consideration payable at the closing of such Merger Event and
all deferred consideration payable thereafter, if any, including, but not limited to, payments of amounts deposited at such closing into escrow and payments in the
Warrantsnature of earn-outs, milestone payments or
November 30, 2015. The Purchasersother performance-based payments), and such Merger Event consideration shall be paid to the holder of the
Notes were issued WarrantsWarrant as and when it is paid to
purchase an aggregatethe holders of
3.0 millionthe outstanding shares of
our common
stock, havingstock; provided, however, in the event of a Merger Event that is an
exercise pricearm’s length sale of
$0.75 per share. We also issued $32.5 million aggregate principal amount of Debentures that, subject to certain ownership limitations and stockholder approval conditions, will be convertible into 43,333,333 shares of common stock at an initial conversion price of $0.75 per share. The Debentures bear interest at the rate of 2.25% per year, and, unless previously converted, will mature on the five-year anniversary of the date of issuance. Our obligations under the Notes and Debentures are secured by a first priority lien onall or substantially all of our assets
except for(and only its assets) to a
second lien on our intellectual property. Underthird party that is not an affiliate of us (a “True Asset Sale”), the
termsholder of the
DebenturesWarrant may either (a) exercise its conversion or purchase right under the Warrant and
such exercise will be deemed effective immediately prior to the
Warrants,consummation of such Merger Event, or (b) permit the
issuances of sharesWarrant to continue for the term of the
common stock, includingWarrant Agreement if we continue as a going concern following the
Shares, upon conversionclosing of
the Debentures and upon exercise of the Warrants are subject to the Stockholder Approval Requirement. Effective upon the date the Stockholder Approval Requirement is satisfied, of which we provide no assurance, we have also agreed to reprice outstanding Warrants held by certain investors to reduce the exercise price to $0.75 per share.any such True Asset Sale. In connection with a Merger Event that is not a Liquid Sale, we shall cause the successor or surviving entity to assume the Warrant Agreement and our obligations thereunder on the closing thereof, and thereafter the Warrant shall be exercisable for the same number, class, and type of securities or other property as the holder of the Warrant would have received in consideration for the shares of our common stock issuable under the Warrant Agreement had it exercised the Warrant in full as of immediately prior to such closing, at an aggregate exercise price no greater than the aggregate exercise price in effect as of immediately prior to such closing, and subject to further adjustment from time to time in accordance with the provisions of this financing,Agreement. This provision shall similarly apply to successive Merger Events. For purposes of this section of the Prospectus:
A “Merger Event” means any of the following: (i) a sale, lease or other transfer of all or substantially all of our assets, (ii) any merger or consolidation involving us in which we also grantedare not the surviving entity or in which our outstanding shares of capital stock are otherwise converted into or exchanged for shares of capital stock or other securities or property of another entity or converted into the right to receive cash, or (iii) any sale by holders of our outstanding voting equity securities in a single transaction or series of related transactions of shares constituting a majority of the Purchasers resale registrationoutstanding combined voting power of us; and
A “Liquid Sale” means the closing of a Merger Event in which the consideration received by us and/or our stockholders, as applicable, consists solely of cash and/or securities meeting all of the following requirements:
| o | the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act and is then current in its filing of all required reports and other information under the Act and the Exchange Act;
|
| o | the class and series of shares or other security of the issuer that would be received by the holder of the Warrant in connection with the Merger Event were the holder to exercise the Warrant on or prior to the closing thereof is then traded on a national securities exchange or over-the-counter market; and
|
| o | following the closing of such Merger Event, the holder of the Warrant would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by the holder in such Merger Event were the holder to exercise the Warrant in full on or prior to the closing of such Merger Event, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Merger Event. |
Except for Merger Events discussed above, if we at any time shall, by combination, reclassification, exchange or subdivision of securities or otherwise, change any of the securities as to which purchase rights under the Warrant Agreement exist into the same or a different number of securities of any other class or classes of securities, the Warrant Agreement shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the shares ofsecurities which were subject to the purchase rights under the Warrant Agreement immediately prior to such combination, reclassification, exchange, subdivision or other change. This provision shall similarly apply to successive combination, reclassification, exchange, subdivision or other change.
If we at any time shall combine or subdivide our common stock,
underlying(i) in the
Debentures andcase of a subdivision, the
Warrants pursuant to the termsexercise price of the
Registration Rights Agreement. In addition to the registration rights, the Selling Stockholders are entitled to receive liquidated damages upon the occurrence of a number of events relating to filing, becoming effective and maintaining an effective registration statement covering the shares underlying the DebenturesWarrant shall be proportionately decreased and the
Warrants, including a failure to file a resale registration statement by no later than July 22, 2015, and a failure to have such resale registration statement declared effective by the SEC by no later than October 20, 2015. The liquidated damages will be payable upon the occurrence of each of those events and each monthly anniversary thereof until cured. The amount of liquidated damages payable is equal to 2.0% of the aggregate purchase price paid by each Purchaser, provided, however, the maximum aggregate liquidated damages payable to a Purchaser shall be 12% of the aggregate subscription amount paid by such Purchaser pursuant to the Purchase Agreement. The liquidated damages shall accrue interest at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law), accruing on a daily basis for each event until such event is cured.The Registration Rights Agreement requires us to file one or more registration statements for all of the securities that may be issued upon conversion of the Debentures and exercise of the Warrants issued to the Purchasers. Pursuant to the applicable transaction documents, however, no Purchaser may exercise its conversion/exercise rights for that number of shares for which the Warrant is exercisable shall be proportionately increased, or (ii) in the case of common stocka combination, the exercise price of the Warrant shall be proportionately increased and the number of shares for which togetherthe Warrant is exercisable shall be proportionately decreased.
If we at any time while the Warrant Agreement is outstanding and unexpired shall pay a dividend with
all other shares owned by it and its affiliates would result in more than 9.99% of our issued andrespect to the outstanding shares of
our common stock
calculated onpayable in additional shares of our common stock, then the
basisexercise price of the
then outstanding shares. UnderWarrant shall be adjusted to that price determined by multiplying the
terms of the Debentures and the Warrants, the issuances of shares of the common stock upon conversion of the Debentures and upon exercise
of the Warrants are subject the Stockholder Approval Requirement.The term “Stockholder Approval Requirement,” as usedprice in this prospectus, is subjecteffect immediately prior to the condition that until the later of (i) six months after the initial issuesuch date of determination by a fraction (i) the Debentures and the Warrants (December 22, 2015), or (ii) such later date that the Company no longer seeks stockholder approval at the requestnumerator of the holders of the Debentures or the Warrants, the holders will have the right to convert the Debentures and exercise the Warrants so that in the aggregatewhich shall be the total number of shares of our common stock outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of shares of our common stock outstanding immediately after such dividend or distribution, and the number of shares of our common stock for which the Warrant is exercisable shall be proportionately increased.
If we at any time while the Warrant Agreement is outstanding and unexpired shall make any other dividend or distribution on or with respect to our common stock, except any dividend or distribution (i) in cash, or (ii) specifically provided for in any other clause of the Company issuableWarrant Agreement, then, in each such case, provision shall be made by us such that the holder of the Warrant shall receive upon exercise or conversion of the Warrant a proportionate share of any such conversions or exercises,distribution as though it were the holder of our common stock (or other stock for which our common stock is convertible) as of the record date fixed for the determination of our stockholders entitled to receive such distribution.
MidCap Credit Facility
On September 30, 2021, we entered into an $8.0 million senior secured credit facility (the “Credit Facility”) with MidCap pursuant to that certain Credit and Security Agreement with MidCap as agent and the lenders party thereto (the “MidCap Credit Agreement”), of which the full amount was drawn by us on September 30, 2021. Borrowings under the Credit Facility bear interest at a rate per annum equal to LIBOR (with a LIBOR floor rate of 0.50%) plus 7.50%. We are obligated to make only interest payments (payable monthly in arrears) through September 30, 2024. Commencing on October 1, 2024 and continuing for the remaining twenty-four months of the facility, we will be required to make monthly interest payments and monthly principal payments based on the amortization schedule set forth in the
aggregate amongst all holders, willMidCap Credit Agreement, subject to certain adjustments as described in the MidCap Credit Agreement. The final maturity date under the MidCap Credit Agreement is September 1, 2026, unless earlier terminated. Further, the MidCap Credit Agreement contains a quarterly financial covenant that requires us to not
exceed 1,622,612 shares.have less than $24.0 million of net revenue (raised to $30.0 million by December 31, 2023) for the trailing 12-month period as of September 30, 2021, with compliance measured on the last day of each fiscal quarter beginning on September 30, 2021. Further, there are additional covenants that, among other things, restrict our ability and certain of our subsidiaries to (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or redeem or repurchase capital stock; (iii) make other restricted payments; (iv) incur liens; (v) redeem debt that is junior in right of payment to the Credit Facility; (vi) sell or otherwise dispose of assets, including capital stock of subsidiaries; (vii) enter into mergers or consolidations; and (viii) enter into transactions with affiliates. These covenants are subject to a number of exceptions and qualifications.
Each
Selling Stockholderselling stockholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the Nasdaq Stock Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A
Selling Stockholderselling stockholder may use any one or more of the following methods when selling securities:
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| · | block trades in which the broker will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
| · | privately negotiated transactions; |
| · | settlement of short sales; |
| · | in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security; |
| · | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| · | a combination of any such methods of sale; or |
| · | any other method permitted pursuant to applicable law. |
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
settlement of short sales;
in transactions through broker-dealers that agree with the selling stockholders to sell a specified number of such securities at a stipulated price per security;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
a combination of any such methods of sale; or
any other method permitted pursuant to applicable law.
The
Selling Stockholdersselling stockholders may also sell securities under Rule 144 under the Securities Act,
of 1933, as amended (the “Securities Act ”), if available, rather than under this prospectus.
Broker-dealers engaged by the
Selling Stockholdersselling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the
Selling Stockholdersselling stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with
the Financial Industry Regulatory Authority (“FINRA”)FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA
IM-2440.IM‑2440.
In connection with the sale of the securities or interests therein, the
Selling Stockholdersselling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The
Selling Stockholdersselling stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The
Selling Stockholdersselling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The
Selling Stockholdersselling stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each
Selling Stockholderselling stockholder has informed
the Companyus that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities. In no event shall any broker-dealer receive fees, commissions and markups which, in the aggregate, would exceed eight percent (8%).
The Company is
We are required to pay certain fees and expenses incurred by the Company incident to the registration of the securities.
The Company hasWe have agreed to indemnify the
Selling Stockholdersselling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because
Selling Stockholdersselling stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The
Selling Stockholdersselling stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the
Selling Stockholders.selling stockholders.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the
Selling Stockholdersselling stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the
Selling Stockholdersselling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the
Selling Stockholdersselling stockholders or any other person. We will make copies of this prospectus available to the
Selling Stockholdersselling stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
The validity of the
Sharesissuance of the securities offered hereby
and other certain legal matters will be passed upon
by Duane Morris LLP,Stevens & Lee, P.C., Philadelphia, Pennsylvania.
The
financial statementsconsolidated balance sheets of
MELASTRATA Skin Sciences, Inc.
and Subsidiary as of December 31,
20142020 and
2013,2019, and the related
consolidated statements of operations,
changes in stockholders’ equity, and cash flows for
each of the years then ended,
included in the 2020 Annual Report on Form 10-K, and the related notes, have been audited by
EisnerAmperMarcum LLP, independent registered public accounting firm, as
statedset forth in their report
thereon which is incorporated herein by
reference, which report contained an explanatory paragraph about the existence of substantial doubt concerning the Company’s ability to continue as a going concern.reference. Such financial statements have been incorporated
herein by reference in reliance
onupon the report
pertaining to such financial statements of such firm given upon their authority as experts in accounting and auditing.
The financial statements of XTRAC/VTRAC division (a carve-out of PhotoMedex, Inc.) as of December 31, 2014 and 2013, and for each of the two years then ended, incorporated in this prospectus by reference from our Current Report on Form 8-K dated June 23, 2015, have been audited by Fahn Kanne & Co. Grant Thornton Israel, independent certified public accountants, as stated in their report which is incorporated herein by reference. Such financial statements have been incorporated herein by reference in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Federal securities laws require us to file information with the SEC concerning our business and operations. Accordingly, we file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s public reference rooms, including those located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on public reference rooms. Our SEC filings are also available to the public from the SEC’s web site at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-3with the Securities and Exchange Commission under the Securities Act with respect to the securities being offering undershares of our common stock offered by this prospectus. This prospectus which is a part of that registration statement and does not includecontain all the information containedincluded in the registration statement and its exhibits. statement.
For further information with respect to our
Companycommon stock and
the securities,us, you should
consultrefer to the registration statement,
its exhibits and
its exhibits.the material incorporated by reference therein. Portions of the exhibits have been omitted as permitted by the rules and regulations of the Securities and Exchange Commission. Statements
containedmade in this prospectus
concerningas to the
provisionscontents of any
documentscontract, agreement or other document referred to are
summaries of those documents, andnot necessarily complete. In each instance, we refer you to the
document filed withcopy of the
SEC for more information. The registration statement and any of its amendments, including exhibitscontracts or other documents filed as
a part of the registration statement or an
amendmentexhibit to the registration statement,
and these statements are
available for inspectionhereby qualified in their entirety by reference to the contract or document. The registration statement may be obtained from the web site that the Securities and
copying as described above.Exchange
Commission maintains at http://www.sec.gov. We file annual, quarterly and current reports and other information with the Securities and Exchange Commission.
INCORPORATION OF CERTAIN
DOCUMENTSINFORMATION BY REFERENCE
The SEC allows us to “incorporate
We are “incorporating by reference” certain informationdocuments we file with them in this prospectus. Thisthe SEC, which means that we can disclose important information to you by referring you to the other information we have filed with the SEC.those documents. The information that we incorporatein the documents incorporated by reference is considered to be part of this prospectus. InformationStatements contained in documents that we file later with the SEC and that are incorporated by reference in this prospectus will automatically update and supersede information contained in this information. Further, all filings we make under the Exchange Act prior to the termination of the offering shall be deemed to beprospectus, including information in previously filed documents or reports that have been incorporated by reference intoin this prospectus. Theprospectus, to the extent the new information differs from or is inconsistent with the old information. We have filed or may file the following documents with the SEC and they are incorporated herein by reference as of their respective dates of filing:
our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 25, 2021;
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, as filed with the SEC on May 13, 2021, June 30, 2021, as filed with the SEC on August 16, 2021, and September 30, 2021, as filed with the SEC on November 12, 2021;
Our Current Reports on Form 8-K and/or their amendments as filed with the SEC on January 4, 2021, January 12, 2021, March 1, 2021, March 9, 2021, March 15, 2021, March 24, 2021, April 12, 2021, May 12, 2021, July 7, 2021, August 17, 2021, August 20, 2021, October 4, 2021, October 18, 2021 and October 28, 2021; and
the description of our Capital Stock set forth in Form 8-A, as filed with the SEC on August 8, 2005, and as it may be further amended from time to time.
In addition, all documents filed by us
with the SEC and any future filings under Sectionspursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
(File No. 000-51481) made prior toafter the
date hereof and before the termination
or completion of this offering
are incorporated by reference: | · | our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 30, 2015, as amended on Form 10-K/A for the year ended December 31, 2014, filed with the SEC on April 28, 2015; |
| · | our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 14, 2015; |
| · | our Current Reports on Form 8-K filed on March 10, 2015, June 23, 2015 and July 21, 2015; and |
| · | the description of our common stock contained in our registration statement on Form 8-A, filed with the SEC on August 8, 2005, and any amendments or reports filed for the purpose of updating such description. |
In addition, all reports and other documents filed by us pursuant to the Exchange Act after the date of the initial registration statement and prior to effectiveness of the registration statementour securities shall be deemed to be incorporated by reference intoin this prospectus.
This prospectus may containand to be a part of it from the filing dates of such documents, except in each case for information contained in any such filing where we indicate that updates, modifiessuch information is being furnished and is not to be considered “filed” under the Securities Exchange Act of 1934, as amended.
Any statement contained in a document incorporated or
is contrarydeemed to
information in one or more of the documentsbe incorporated by reference in this
prospectus. Reports we file with the SEC after the dateprospectus shall be deemed modified, superseded or replaced for purposes of this prospectus
may also contain informationto the extent that
updates, modifies or is contrary to informationa statement contained in this prospectus, or in
documentsany subsequently filed document that also is deemed to be incorporated by reference in this
prospectus. Investors should review these reportsprospectus, modifies, supersedes or replaces such statement. Any statement so modified, superseded or replaced shall not be deemed, except as
they may discloseso modified, superseded or replaced, to constitute a
change in our business, prospectus, financial condition or other affairs after the datepart of this prospectus.
We will also provide paper copies of our filings free of charge upon written or oral request. You can request a free copy None of the above filingsinformation that we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K or any filings subsequentlycorresponding information, either furnished under Item 9.01 or included as an exhibit thereto, that we may from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in, this prospectus, except as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information appearing in this prospectus is qualified in its entirety by the information appearing in the documents incorporated by reference.
You may request, orally or in writing,
or calling us at:MELAa copy of these documents, which will be provided to you at no cost, by contacting STRATA Skin Sciences, Inc.
100 Lakeside, 5 Walnut Grove Drive, Suite 100
140, Horsham, Pennsylvania, 19044
Attention: Michael R. Stewart
General Counsel. The Company can be reached via telephone at (215) 619-3200
WE HAVE NOT AUTHORIZED ANY DEALER, SALES PERSON OR OTHER PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER OF THESE SECURITIES IN ANY STATE WHERE AN OFFER IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE OF THIS PROSPECTUS AND YOU SHOULD NOT ASSUME THAT THIS PROSPECTUS IS ACCURATE AS OF ANY OTHER DATE.
619-3200.
DISCLOSURE OF COMMISSION POSITION ONINDEMNIFICATION FOR SECURITIES ACT LIABILITIES PROSPECTUS
, 2015
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 14. | Other Expenses of Issuance and Distribution. |
The following table sets forth the costs and expenses payable by MELA in connection with the issuance and distribution of the shares of common stock being registered. The selling stockholder will not bear any portion of such expenses. All such expenses are estimated except for the SEC registration fee.
| SEC registration fee | | $ | 415.50 | |
| | | | | |
| Legal fees and expenses(1) | | | 25,000.00 | |
| | | | | |
| Accounting fees and expenses(1) | | | 15,000.00 | |
| | | | | |
| Printing and miscellaneous expenses(1) | | | 1,584.50 | |
| | | | | |
| TOTAL(1) | | $ | 42,000.00 | |
| Item 15. | Indemnification of Directors and Officers. |
Our amended and restated certificate of incorporation includes provisions that eliminate, to the fullest extent permitted by the Delaware General Corporation Law (the “DGCL”), the personal liability of our directors to us or our stockholders for monetary damages for breach of fiduciary duty as a director. Our amended and restated bylaws require us to indemnify our directors and officers to the fullest extent permittedare indemnified as provided by the DGCL. Pursuant to these provisions, we have entered into indemnity agreements with our directors and officers.
Pursuant to Section 145 of the DGCL, a corporation generally has the powerGeneral Corporation Law of Delaware and our amended and restated bylaws. We have agreed to indemnify its presenteach of our directors and former directors,certain officers employees and agents against expenses incurred by them in connection with any suit to which they are, or are threatened to be made, a party by reason of their serving in such positions so long as they acted in good faith and in a manner that they reasonably believed to be in, or not opposed to,certain liabilities, including liabilities under the best interests of the corporation and, with respect to any criminal action, had no reasonable cause to believe their conduct was unlawful.
These provisions do not eliminate the duty of care, and in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, may remain available under Delaware law. Each director will continue to be subject to liability for breach of the director’s duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, for unlawful payments of dividends or unlawful stock repurchases or redemptions under Section 174 of the DGCL or for any transaction from which the director derived an improper personal benefit. These provisions also generally do not affect a director’s responsibilities under any other laws, such as the federal securities laws.
Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
STRATA Skin Sciences, Inc.
373,626 Shares of Common Stock
Issuable upon Exercise of an Outstanding Warrant
____________________________
PROSPECTUS
____________________________
____________________________
________________, 2021
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the Company’s estimates (other than the SEC registration fee) of the expenses in connection with the issuance and distribution of the securities being registered.
| | | | |
SEC registration fee | | $ | 63.04 | |
Printing expenses | | $ | (1 | ) |
Legal fees and expenses | | $ | (1 | ) |
Accounting fees and expenses | | $ | (1 | ) |
Transfer agent fees and expenses | | $ | (1 | ) |
Miscellaneous | | | | |
Total | | | | |
| (1) | These fees are calculated based on the securities offered and the number of issuance and accordingly cannot be estimated at this time. |
Item 15. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the General Corporation Law of Delaware (the “DGCL”) empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification may be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith; that indemnification or advancement of expenses provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and empowers the corporation to purchase and maintain insurance on behalf of a director, officer, employee or agent of the corporation against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such whether or not the corporation would have the power to indemnify him against such liabilities under Section 145.
Reference is also made to Section 102(b)(7) of the DGCL, which enables a corporation in its certificate of incorporation to eliminate or limit the personal liability of a director for monetary damages for violations of a director’s fiduciary duty, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which the director derived an improper personal benefit.
Our certificate of incorporation, as amended, provides that to the fullest extent permitted by the DGCL, a director shall not be personally liable to the Company or its stockholders for monetary damages for monetary damages for breach of fiduciary duty as a director. The Company may indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, by reason of the fact that he, his testator or intestate is or was a director, officer or employee of the Company or serves or served at any other enterprise as a director, officer or employee at the request of the Company. Article V of our amended and restated by-laws provides that we shall indemnify our directors and officers, or former directors and officers, against any and all expenses and liabilities, to the fullest extent permitted by the DGCL.
We have entered into agreements to indemnify our directors and officers. These agreements, among other things, will indemnify and advance expenses to our directors and officers for all expenses, including, but not limited to, attorney’s fees, witness fees, damages, judgments, fines, penalties and settlement amounts incurred by any such person in any action or proceeding, including any action by us arising out of such person’s services as our director or officer, or any other company or enterprise to which the person provides services at our request.
Item 16. Exhibits
The following exhibits are filed with this Registration statement.
No. | | |
| | of Document |
| 3.1 | | |
| | August 13, 2021).
|
| 3.2 | | Certificate of Amendment to Fifth |
| | |
3.3 | | Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of the Company. (Incorporatedincorporated herein by reference to Exhibit 3.1 contained in our3.2 to the Current Report on Form 8-K, (File No. 000-51481), filed on July 10, 2014.) |
| | |
3.5 | | Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock. (Incorporated by reference to Exhibit 3.1 contained in our Current Report on Form 8-K (File No. 000-51481), filed on July 24, 2014.) |
| | |
3.6 | | Fourth Amended and Restated By-laws of Company. (Incorporated by reference to Exhibit 3.2 contained in our Current Report on Form 8-K (File No. 000-51481), as filed with the SEC on July 21, 2015.) |
| | |
4.1 | | Form of 2015 Warrant to purchase common stock issued to Purchasers. Incorporated by reference to Exhibit 4.1 contained in our Current Report on Form 8-K (File No. 000-51481), filed on June 23, 2015.) |
| | |
4.2 | | Form of Senior Secured Convertible Debenture issued to Purchasers. (Incorporated by reference to Exhibit 4.2 contained in our Current Report on Form 8-K (File No. 000-51481), filed on June 23, 2015.) |
| | January 8, 2016.
|
| 5.1 | | |
| | Stevens & Lee, P.C.*
|
| 10.1 | | Form |
| | |
10.2 | | Formdated as of Registration Rights Agreement. (Incorporated by reference to Exhibit 10.2 contained in our Current Report on Form 8-K (File No. 000-51481), filed on June 23, 2015.) |
| | |
10.3 | | Form of Security Agreement. (IncorporatedSeptember 30, 2021, between STRATA Skin Sciences, Inc. and MidCap Funding XXVII Trust, incorporated by reference to Exhibit 10.3 contained in our Current Report on Form 8-K, (File No. 000-51481),as filed with the SEC on June 23, 2015.)October 4, 2021.
|
| 10.2 |
|
| 23.1 |
|
| 23.2 |
|
| 24.1 | |
| | | |
23.1 | | Consent of Duane Morris LLP (to be included in Exhibit 5.1, to be filed by amendment) |
| | |
23.2 | | Consent of Independent Registered Public Accounting Firm (filed herewith) |
| | |
23.3 | | Consent of Independent Certified Public Accountants (filed herewith) |
| | |
24.1 | | Powers of Attorney (included in signature pages) |
Item 17. Undertakings
(a) The undersigned registrant hereby
undertake:undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act;(ii) toAct of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in
thisthe registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
and(iii) to
(iii) To include any material information with respect to the plan of distribution not previously disclosed in
thisthe registration statement or any material change to such information in
thisthe registration
statement;provided,statement.
Provided, however, that
the undertakings set forth in paragraphs
(a)(1)(i),
(a)(1)(ii) and
(a)(1)(iii) above do not apply if
the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those
clausesparagraphs is contained in reports filed with or furnished to the
SECCommission by
usthe registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act that are incorporated by reference in
thisthe registration
statement,statements or is contained in a form of prospectus filed pursuant to Rule 424(b) that is
a part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser:
(i) If we are relying on Rule 430B:
(A)
(i) Each prospectus filed by
usthe registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5)
, or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii)
, or (x) for the purpose of providing the information required by
Sectionsection 10(a) of the Securities Act
of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which
thethat prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(iiII-3) If we are subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining
our liability
of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities,
we undertakethe undersigned registrant undertakes that in a primary offering of
our securities
of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,
wethe undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of
oursthe undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Anyany free writing prospectus relating to the offering prepared by or on behalf of
usthe undersigned registrant or used or referred to by
us;the undersigned registrant;
(iii)
Thethe portion of any other free writing prospectus relating to the offering containing material information about
usthe undersigned registrant or
ourits securities provided by or on behalf of
us;the undersigned registrant; and
(iv)
Anyany other communication that is an offer in the offering made by
usthe undersigned registrant to the purchaser.
(6) That,
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act
of 1933, as amended, each filing of
ourthe registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act
(and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in
thethis registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to
our directors, officers and controlling persons
of the registrant pursuant to the
foregoing provisions
described in Item 15 above, or otherwise,
we havethe registrant has been advised that in the opinion of the
SECSecurities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act
of 1933 and is therefore unenforceable. In the event that a claim for indemnification against such liabilities
other(other than the payment by
usthe registrant of expenses incurred or paid by a director, officer or controlling person of
usthe registrant in the successful defense of any action, suit or
proceeding,proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
that wethe registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act
of 1933, and will be governed by the final adjudication of such issue.
(d) If and when applicable, the undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.
Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on
this Form S-3 and has duly caused this
registration statementRegistration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Horsham,
Commonwealth of Pennsylvania on
July 22, 2015. | MELA SCIENCES, INC. |
| |
| By: | /s/ Michael R. Stewart |
| | Michael R. Stewart |
| | President and Chief Executive Officer |
Know all men by these present,the 15th day of November, 2021.
STRATA SKIN SCIENCES, INC.
By: /s/ Robert J. Moccia
Robert J. Moccia
Chief Executive Officer (Principal Executive Officer)
KNOW ALL MEN BY THESE PRESENTS, that each
person whose signature appears belowof the undersigned directors and officers of STRATA Skin Sciences, Inc. constitutes and appoints
Michael R. Stewart and Robert
W. Cook, and eachJ. Moccia, Christopher Lesovitz or
either of them,Jay Sturm as
such person’shis or her true and lawful
attorneys-in-factattorney-in-fact and
agents,agent, with full
powerpowers of substitution
and re-substitution, for
such person,him or her and in
such person’shis or her name, place and stead, in any and all capacities, to sign any or all amendments
or(including post-effective
amendmentsamendments) to this
Registration Statement,registration statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents,
with full power to act alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as
such personhe or she might or could do in person,
and hereby ratifying and confirming all that
the said
attorneys-in-factattorney-in-fact and
agents,agent, or
any of themhis substitute or
their substitutes,substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act
the registration statementof 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| | Title | | |
| | | | |
/s/ Michael R. StewartRobert J. Moccia
Robert J. Moccia
| | President and Chief Executive Officer and Director
(Principal Executive Officer) | | July 22, 2015November 15, 2021 |
Michael R. Stewart | | (principal executive officer) | | |
| | | | |
/s/ Robert W. Cook | Christopher Lesovitz
Christopher Lesovitz
| Chief Financial Officer Secretary
(Principal Financial Officer and Principal Accounting Officer) | | July 22, 2015November 15, 2021 |
Robert W. Cook/s/ William D. Humphries
William D. Humphries
| Director, Chairperson of the Board of Directors | Treasurer (principal financial and accounting officer) | | November 15, 2021 |
| | | | |
/s/ Jeffrey O’Donnell | | Director | | July 22, 2015 |
Jeffrey O’Donnell | | | | |
| | | | |
/s/ Samuel E. Navarro | | Director | | July 22, 2015 |
Samuel E. Navarro | | | | |
| | | | |
/s/ David K. Stone | | Director | | July 22, 2015 |
David K. Stone | | | | |
| | | | |
/s/ Kathryn Swintek | | Director | | July 22, 2015 |
Kathryn Swintek | | | | |
| | | | |
/s/ LuAnn Via
LuAnn Via
| Director, Vice Chairperson of the Board of Directors | November 15, 2021 |
/s/ Uri Geiger
Uri Geiger
| Director | | July 22, 2015November 15, 2021 |
LuAnn Via/s/ Samuel Rubinstein
Samuel Rubinstein
| Director | November 15, 2021 |
/s/ Nachum Shamir
Nachum Shamir
| Director | November 15, 2021 |
/s/ Douglas Strang
Douglas Strang | Director | November 15, 2021 |
II-5
