Attention: Hal D. Mintz, Manager
Strata Skin Sciences, Inc. (the "Company") acknowledges receipt of your letter dated January 2, 2018. The Company has also reviewed the Schedule 13D Sabby and its affiliates filed with the Securities and Exchange Commission on January 2, 2018. Our response is set forth below.
The terms referenced in your letter regarding a proposed equity investment in the Company by a med-tech investor (the "Proposed Investor") correctly describe certain facts. Your letter, however, fails to include other terms sought by the Proposed Investor essential to an understanding of its proposed investment. Your letter therefore creates misleading impressions. We do not know whether you were aware of all elements of the proposal when you wrote your letter and decided purposely to omit essential terms or were unaware of those terms and thus did not include them. Either way, in an effort to address the misleading impressions created by your letter, the Company calls to your attention the following terms of the proposed investment omitted from your letter:
The Company's Board of Directors met immediately following the receipt of the initial letter to consider the proposal and determined, in the exercise of its fiduciary duties, that the interests of ALL stockholders would not be served by the execution of the letter of intent on the timeframe demanded by the Potential Investor. The Company also engaged in discussions with the Proposed Investor and sought to negotiate certain of the terms of the letter of intent in an effort to benefit all stockholders. The discussions resulted only in the minimally revised proposal containing many of the same coercive provisions as the original proposal.
After the receipt of the revised letter, the Company's Board of Directors met again and, after considering the interests of all of the Company's stockholders, determined to seek strategic alternatives for the Company and began the process of hiring an investment banker to identify and advise the Board with respect to a potential strategic transaction. The Company issued a press release to this effect before the opening of trading on December 18, 2017.
The Company also informed the Prospective Investor of the Board's decision to consider strategic alternatives and to make a public announcement to that effect. Regrettably, following the issuance of the Company's press release, the Proposed Investor withdrew its offer.
As contemplated by the press release, the Company has engaged Fairmount Partners as its financial adviser in connection with the process led by the Company's Board of Directors of exploring and reviewing strategic alternatives focused on enhancing stockholder value.
Apart from the proposed investment in the Company by the Proposed Investor, your letter also addressed the Board's appointment of a new Chair. Indeed, the Board determined to appoint the new Chair based upon a number of factors, including Ms. Via's extensive leadership experience in publicly traded companies. In your letter, you accurately described Ms. Via's significant business experience, though you did not mention the deep experience, within the healthcare industry and the medical device sector, of members of management, as well as among the Board of Directors, available to Ms. Via as she serves the Company as Chair of our Board of Directors.
We appreciate your stated open-mindedness in considering viable alternatives. We are hopeful for the opportunity to identify attractive strategic alternatives through the process we announced previously and will keep you and our other investors apprised of the results of the process at an appropriate time.
