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As filed with the Securities and Exchange Commission on
July 22, 2015August 9, 2023
Registration
Statement No.
_____________333-
SECURITIES AND EXCHANGE COMMISSION
THE SECURITIES ACT OF 1933MELA Sciences, Inc.
STRATA SKIN SCIENCES, INC.
(Exact name of Registrantregistrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | | | (I.R.S. Employer Identification No.) Number) |
MELA Sciences, Inc.
100 Lakeside
5 Walnut Grove Drive, Suite
100140
Horsham, Pennsylvania 19044
(215) 619-3200
(Address, including zip code, and telephone number, including area code,
of Registrant’sregistrant’s principal executive offices)
Michael R. Stewart
President and
Robert J. Moccia
Chief Executive Officer
MELA
STRATA Skin Sciences, Inc.
100 Lakeside
5 Walnut Grove Drive, Suite
100140
Horsham, Pennsylvania 19044
(215) 619-3200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
John W. Kauffman,
Sunjeet S. Gill, Esq.
Duane Morris LLP
30 South 17th Street
Philadelphia
Stevens & Lee, P.C.
620 Freedom Business Center Drive, Suite 200
King of Prussia, PA
19103(215) 979-1227
19406
(610) 205-6000
Fax: (610) 337-4374
Approximate date of commencement of proposed sale to the
public:public: From time to time after the effective date of this registration statement.Registration Statement.
If the only securities being registered on this
formForm are being offered pursuant to dividend or interest reinvestment plans, please check the following
box.¨box: ☐
If any of the securities being registered on this
formForm are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, other than securities offered only in connection with dividend or interest reinvestment plans, check the following
box.xIf this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.¨
☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨ ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
¨ ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨ ☐
Indicate by check mark whether the
registrantRegistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting
company or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated
filer”filer,” “smaller reporting company” and
“smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
(Check one):Large accelerated filer¨ | | | ☐ | | | Accelerated filer | | | ¨☐
|
| |
Non-accelerated filer¨ | | | ☒ | | | Smaller reporting companyx | | | ☒ |
(Do not check if a smaller reporting company) | | | | | | Emerging growth company | | | ☐ |
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be registered | | Amount to be
registered(1) | | | Proposed
maximum
offering price
per unit(2) | | | Proposed
maximum
aggregate
offering price | | | Amount of
registration fee | |
| | | | | | | | | | | | | | | | | |
| Common stock, $0.001 per share | | | 2,992,259 | (3) | | | 1.195 | (2) | | $ | 3,575,749.51 | (2) | | $ | 415.50 | |
(1) Pursuant
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
STATEMENT PURSUANT TO RULE 429
As described in greater detail in the prospectus contained in this registration statement on Form S-3 (the “Registration Statement”), the shares of common stock to be offered for resale by the selling stockholder include (a) 426,374 shares of common stock that are newly registered hereunder and (b) 373,626 shares of common stock that were previously registered and currently remain unsold pursuant to the registration statement on Form S-3 (File No. 333-261090) previously filed by the registrant and declared effective by the Securities and Exchange Commission on November 24, 2021 (the “Prior Registration Statement”).
The registrant is filing a single prospectus in this registration statement, pursuant to Rule
416429 under the Securities Act of 1933, as amended (the “Securities Act”)
, this registration statement includes. The prospectus is a combined prospectus relating to (i) an
indeterminate numberaggregate of
additional shares that may be offered and sold to prevent dilution resulting from stock splits, stock dividends or similar transactions.(2) In accordance with Rule 457(c) under the Securities Act, the aggregate offering price of the common stock is estimated solely for the calculation of the registration fees due for this filing. This estimate was based on the average of the high and low sales price of our stock reported by The Nasdaq Capital Market on July 17, 2015.
(3) Represents373,626 shares of common stock that may be issued uponare currently registered and remain unsold under the conversionPrior Registration Statement and (ii) 426,374 shares of convertible debenturescommon stock, resales of which are being newly registered hereunder, in each case as described in the fee table filed as an exhibit to this registration statement. Pursuant to Rule 429, this registration statement constitutes a post-effective amendment to the Prior Registration Statement with a principal amountrespect to the offerings of $2,244,194.
such unsold shares thereunder. Such post-effective amendment will become effective concurrently with the effectiveness of this registration statement in accordance with Section 8(c) of the Securities Act.
The registrantRegistrant hereby amends this registration statementRegistration Statement on such date or dates as may be necessary to delay its effective date until the registrantRegistrant shall file a further amendment which specifically states that this registration statementRegistration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 as amended, or until the registration statementthis Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may not sell
thesethe securities until the
registration statementRegistration Statement filed with the Securities and Exchange Commission,
is effective. Thisof which this prospectus is
not an offer to sell these securities anda part, is
not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.Subject to completion, dated July 22, 2015
PROSPECTUS
MELA SCIENCES, INC.
2,992,259effective.
STRATA Skin Sciences, Inc.
800,000 Shares of Common Stock
Issuable upon Exercise of an Outstanding Warrant
This prospectus relates to the resale,
from time to time, of up to
2,992,259800,000 shares
(the “Shares”) of our common stock,
$0.001 par value per share, issuable upon exercise of an outstanding common stock purchase warrant by the selling
stockholders named herein, or the Selling Stockholders. On June 22, 2015, we entered into a securities purchase agreement with the investors identified therein, or together, the Purchasers, pursuant to which we sold to the Purchasers an aggregate of $32,500,000 of 2.25% senior secured convertible debentures, or the Debentures, convertible into 43,333,333 shares of common stock based upon an initial conversion price of $0.75 per share, an aggregate of $10,000,000 senior secured notes, or the Notes, and warrants, or the Warrants, to the Purchasers of the Notes, to purchase up to 3,000,000 shares of common stock at an exercise price of $0.75 per share. Under 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, including the Shares covered by this prospectus, are subject to stockholder
approval of such issuances and an amendment to our certificate of incorporation to increase our authorized shares of common stock, or, as more fully described
below, the Stockholder Approval Requirement. The Shares offered under this prospectus relate to up to 2,992,259 Shares issuable upon conversion of up to $2,244,194 aggregate principal amount of Debentures at a conversion price of $0.75 per Share, subject to the Stockholder Approval Requirement. To the extent that one or more Purchasers elects to convert their Debentures to acquire Shares, this prospectus may be used by the Selling Stockholders named under the section titled “Selling Stockholders” to resell their Shares. We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of Shares by any Selling Stockholder.The Selling Stockholders may sell their respective Shares described in this prospectus in a number of different ways and at varying prices. We provide more information about how the Selling Stockholders may resell their respective Shares in the section titled “Plan of Distribution” beginning on page 14. Although we will pay the expenses incurred in registering the Shares, we will not be paying any underwriting discounts or commissions in connection with the resale of the Shares.
herein.
Our common stock is listed on the Nasdaq Capital Market under the symbol
“MELA.“SSKN.” On
July 17, 2015,August 8, 2023, the last reported sale price of our common stock
as reported on the Nasdaq Capital Market was
$1.20$0.87 per share.
All of the shares of common stock offered hereby are issuable upon the exercise of the warrant to purchase up to 800,000 shares of common stock. The warrant was originally issued by us on September 30, 2021 (the “Original Warrant”) in connection with an $8.0 million senior secured financing with MidCap Financial Trust (“MidCap”), of which the full amount was drawn by us on September 30, 2021 (the “Original Credit Facility”). On June 30, 2023, we entered into Amendment No. 3 of the Credit Agreement which increased to $20 million the amount available under the Credit Facility, as amended (the “Amended Credit Facility”) and we amended and restated the Original Warrant (as amended, the “Warrant”). We will not receive any proceeds from the sale or distribution of the common stock by the selling stockholder. The registration of the shares covered by this prospectus does not necessarily mean that any of the shares will be offered or sold by the selling stockholder. The timing and amount of any sale is within the selling stockholder’s sole discretion, subject to certain restrictions. The selling stockholder may sell the shares described in the prospectus in a number of different ways and at varying prices. For additional information about how the selling stockholders may sell their shares of common stock, you should refer to the section entitled “Plan of Distribution” in this prospectus. The shares offered by this prospectus and any prospectus supplement may be offered by the selling stockholder directly to investors or to or through underwriters, dealers, or other agents. If any underwriters or agents are involved in the sale of any shares with respect to which this prospectus is being delivered, the names of such underwriters or agents and any applicable commissions or discounts and over-allotment options will be set forth in a prospectus supplement.
We are registering the offer and sale of the common stock by the selling stockholders to satisfy certain registration rights we have granted to the selling stockholder. We are not selling any shares of common stock under this prospectus and will not receive any proceeds from the sale of shares by the selling stockholder. We will, however, receive proceeds from the cash exercise of the Warrant which, if exercised in cash with respect to all of the 800,000 shares of common stock, would result in gross proceeds of $704,000 to us.
Investing in our
securitiescommon stock involves
a high degree of risk. We refer you to “Risk Factors”significant risks. You should carefully consider the risk factors beginning on page
5, as well as the risks discussed under the caption “Risk Factors” in the documents we have filed and will subsequently file with the Securities and Exchange Commission, or 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 adequacy7 of this prospectus. Any representation toprospectus and the contrary is a criminal offense.
Thisrisk factors incorporated by reference into this prospectus before purchasing any of the shares offered by this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is
dated , 2015. TABLE OF CONTENTS
In
IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS This prospectus relates to shares of our common stock which the selling stockholder named in this prospectus unlessmay sell from time to time. We will not receive any of the proceeds from these sales. We have agreed to pay the expenses incurred by us in registering these shares.
You should rely only on the information contained in, or incorporated by reference into, this prospectus. Neither we indicate otherwise, “we,nor any agent have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor any agent is making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
You should not assume that the information in this prospectus or any other offering materials are accurate as of any date other than the date on the front of each document, regardless of the time of delivery of this prospectus or any sale of securities. Our business, financial condition, results of operations and prospects may have changed since then.
This prospectus is not an offer or solicitation in respect to these securities in any jurisdiction in which such offer or solicitation would be unlawful. This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”). The registration statement that contains this prospectus (including the exhibits to the registration statement) contains additional information about our company and the securities offered under this prospectus. That registration statement can be read at the SEC website or at the SEC’s offices listed under the heading “Where You Can Find More Information.” “us,You should also read this prospectus together with the additional information described under “Where You Can Find More Information” and “Incorporation of Information by Reference.”
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS All statements contained in this prospectus, any prospectus supplement and the documents incorporated by reference herein and therein, other than statements of historical facts, that address future activities, events or developments are forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to, among others, our plans, objectives and expectations for our business, operations and financial performance and condition, and can be identified by terminology such as “may,” “our,“should,” “the Company”“expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “will,” “could,” “project,” “target,” “potential,” “continue” and “MELA” refersimilar expressions that do not relate solely to MELA Sciences, Inc.historical matters. Forward-looking statements are based on management’s belief and assumptions and on information currently available to management. Although we believe that the expectations reflected in forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements.
Forward-looking statements include, but are not limited to, statements about:
forecasts of future business performance, consumer trends and macro-economic conditions;
descriptions of market, competitive conditions, and competitive product introductions;
descriptions of plans or objectives of management for future operations, products or services;
actions by the FDA or other regulatory agencies with respect to our products or product candidates;
changes to third-party reimbursement of laser treatments using our devices;
our estimates regarding the sufficiency of our cash resources, expenses, capital requirements and needs for additional financing and our ability to obtain additional financing;
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
anticipated results of existing or future litigation or government actions;
health emergencies, the spread of infectious disease or pandemics; and
descriptions or assumptions underlying or related to any of the above items and other factors.
These statements are based on certain assumptions and analyses made by us in light of our experience and our assessment of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties that may cause actual results to differ materially.
You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date of this prospectus, the date on the cover of any prospectus supplement, or, in the case of forward-looking statements incorporated by reference, as of the date of the filing that includes the statement. New risks and uncertainties arise from time to time, and it is impossible for us to predict these matters or how they may affect us. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our security holders. We do not undertake and specifically decline any obligation to update any forward-looking statements or to publicly announce the results of any revisions to any statements to reflect new information or future events or developments.
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 and in our subsequent Quarterly Reports on Form 10-Q, including without limitation under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results
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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.
INDUSTRY AND MARKET DATA
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.
TRADEMARKS
STRATAPEN®, XTRAC®, XTRAC S3®, VTRAC®, MELAFIND®, THERACLEAR®, MOMENTUM®, 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.holders.
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You should rely only on the
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 7.
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. In June 2015 we completeddermatologic conditions. Our products include the
acquisition of the XTRAC
® and Pharos® excimer
laserlasers and
the VTRAC
excimer® lamp
from PhotoMedex, Inc., products approved forsystems utilized in the treatment of
psioriasis, vitiligo and other 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 treat psoriasis, vitiligo and various other skin diseases. XTRAC received FDA clearance in 2000 and has since become a widely recognized treatment among dermatologists. The device delivers targeted ultraviolet B, or UVB, light to affected areas of skin. A series of treatments can result in clearing of psoriasis plaque or vitiligo repigmentation. As of March 31, 2015, there were 640 installed XTRAC systemsconditions. Our products also include the TheraClear® Acne Therapy System utilized in the United States, up from 527 at the endtreatment of March 2014. XTRAC is endorsed by the National Psoriasis Foundation,mild to moderate inflammatory, comedonal 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 of a lamp system. There are approximately 7.5 million people in the United States and up to 125 million people worldwide suffering from psoriasis, and 1% to 2% of the world’s population suffers from vitiligo. In 2014, over 300,000 XTRAC laser treatments were performed on approximately 19,000 patients in the United States.
The financial results of the XTRAC and VTRAC businesses will be included in our results of operations beginning June 23, 2015. The assets of the businesses purchased and liabilities assumed will be consolidated as of June 23, 2015 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, as well as the further design and development 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 can 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 investors in connection with a private placement. We sold $10.0 million aggregate principal amount of Notes bearing interest at 9% per year, 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 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.
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
pustular acne.
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. On January 5, 2016, we changed our name to STRATA Skin Sciences, Inc. In June 2015, we completed the acquisition of the XTRAC® Excimer Laser and the VTRAC® excimer lamp businesses from PhotoMedex, Inc. (the “Acquisition”). Prior to the Acquisition, the Company’s only product was the MelaFind® system, or MelaFind, a device for aiding dermatologists in the evaluation of clinically atypical pigmented skin lesions. We have discontinued the MelaFind business.
In August 2021 and January 2022, we acquired the Pharos U.S. dermatology business and the TheraClear acne treatment business, respectively.
XTRAC and Pharos Systems and VTRAC Systems
The XTRAC and Pharos excimer laser technology emits highly concentrated-UV light targeted primarily towards autoimmune dermatological skin disorders such as psoriasis, vitiligo, atopic dermatitis, and eczema, among others. The XTRAC system received U.S. Food and Drug Administration (“FDA”) clearance in 2000 and the Pharos in 2004, and excimer laser has since become a widely recognized treatment for psoriasis, vitiligo and other skin diseases. Psoriasis and vitiligo alone affect up to 13 million people in the U.S. and 195 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 Conformite Européenne (“CE”) mark approval in January 2006 and has been marketed exclusively in international markets.
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 skin 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 XTRAC 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 use in difficult-to-treat scalp psoriasis; and an enhanced user interface and database. In February 2022, we announced the commercial launch of our next generation excimer laser system, XTRAC Momentum® 1.0, which delivers higher power and a faster repetition rate than the current models, along with a new user interface and slim design. 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, vitiligo, atopic dermatitis and leukoderma.
The XTRAC excimer laser is marketed in the U.S. mainly under a recurring revenue model in which we place the system in the physician’s office for no upfront charge and generate our revenue on a per-use basis (referred to
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herein as the dermatology recurring procedures model or segment). We estimate that there are over 1,000 XTRAC lasers in use in the U.S., of which 909 systems were, as of December 31, 2022, included in our dermatology recurring procedures revenue model. The Pharos business provides the opportunity for us to convert the customer base to our XTRAC excimer laser system. 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 dermatology procedures equipment sales through distributors in over twenty-five countries. The VTRAC is marketed exclusively in international markets through the same distributors.
Since 2019, we have been transitioning our international dermatology procedures equipment sales through our master distributor to a direct distribution model for equipment sales and recurring revenue on a country by country basis. In January 2022, our agreement with our master distributor expired. We have signed distributor contracts by year as follows: 2019 — Korea, 2020 — Japan, 2021 — China, Israel, Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, UAE, Jordan, Iraq and 2023 — Mexico.
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. XTRAC treatment is a 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 $162 per treatment to $240 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, and which generates a great 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
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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 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 76% of insurers consider XTRAC treatments to be medically necessary for the treatment of vitiligo and therefore provide coverage.
We believe that several factors have limited the growth of the use of XTRAC treatments from those who suffer from psoriasis and vitiligo. Specifically, we believe that awareness of the positive 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 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 January 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 consumable supplies for this product on a purchase order basis.
THERACLEAR
In January 2022, we acquired the TheraClear assets from Theravant Corporation. The TheraClear Acne Therapy System delivers a two-part process for treating inflammatory acne, pustular acne and comedonal acne that combines a vacuum and broadband light that has been proven to clear skin rapidly for fast and visible reduction in acne and associated redness. Treatments are very comfortable, take 10 minutes to perform, are highly effective, and can be used on all skin types. We market the device under the Theraclear®X trade name.
Competition
Our XTRAC product line competes with pharmaceutical compounds and methodologies used to treat an array of skin conditions. Such alternative treatments may be in the form of topical products, systemic medications, and phototherapies from both large pharmaceutical and smaller devices companies. Our major competitors for dermatological solutions include The Daavlin 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.
Our TheraClear device competes with a range of over the counter treatment methodologies, as well as prescription only medications, and in-office treatment methodologies.
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.
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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. 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 June 30, 2023, 19 issued U.S. patents are in force, and some of these patents have foreign counterparts issued and pending.
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 Icahn 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 granted, 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 treatment 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 our products, even if our products are safer or more effective than the alternatives. Additionally, they may require changes to our pricing structure and revenue model before authorizing reimbursement.
Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis. Many international markets have government-managed healthcare systems that control reimbursement for new devices and 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. To date, patients of the TheraClear products have had limited success in obtaining third party reimbursement for such treatments.
Many private plans key their reimbursement rates to rates set by the CMS under three distinct CPT codes based on the total skin surface area being treated.
As of December 31, 2022, the national rates were as follows:
96920 – designated for: the total area less than 250 square centimeters. CMS assigned a 2022 national payment of $162 per treatment;
96921 – designated for: the total area 250 to 500 square centimeters. CMS assigned a 2022 national payment of $176 per treatment; and
96922 – designated for: the total area over 500 square centimeters. CMS assigned a 2022 national payment of $240 per treatment.
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The national rates are adjusted by overhead factors applicable to each state.
Employees
As of June 30, 2023, we had 109 full-time employees, which consisted of 2 executive officesofficers, 3 vice presidents, 55 sales and marketing staff, 17 people engaged in manufacturing of lasers, 16 customer-field service personnel, 4 engaged in research and development. and 12 finance and administration staff.
Customers
Domestically, our XTRAC customers consist of dermatologists and dermatological group clinics who partner with us primarily in our dermatology procedures recurring revenue model. As of December 31, 2022, we have 909 partner clinics throughout the United States. Internationally, we have been transitioning our international dermatology procedures 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 distributor contracts by year as follows: 2019 — Korea, 2020 — Japan, 2021 — China, Israel, Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, UAE, Jordan, Iraq and 2023 — Mexico.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with the Commission. These filings are locatedavailable to the public on the Internet at 100 Lakeside Drive, Suite 100, Horsham, Pennsylvania 19044. the Commission’s website at http://www.sec.gov.
Our telephone numberInternet address is (215) 619-3200. Ourhttp://www.strataskinsciences.com (this website address is www.melasciences.com. Thenot intended to function as a hyperlink and the information contained on our website is not intended to be a part of this prospectus). We make available free of charge on https://strataskinsciencesinc.gcs-web.com/sec-filings our annual, quarterly and current reports, and amendments to those reports, as soon as reasonably practical after we electronically file such material with, or furnish it to, the Commission. We may from time to time provide important disclosures to investors by posting them in the Investor Relations section of our website, as allowed by the Commission’s rules. The information on the website listed above is not and should not be considered part of this prospectus and should notis intended to be relied upon. We have included our website address in this document as an inactive textual reference only.
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RISK FACTORS
Investing inThe following summary contains basic terms about this offering and our common stock involvesand is not intended to be complete. It may not contain all of the information that is important to you. You should read the more detailed information contained in this prospectus, including, but not limited to, the risk factors beginning on page 7. For a more complete description of the terms of the common stock, see “Description of our Capital Stock.”
Issuer
STRATA Skin Sciences, Inc.
Securities Offered by the Selling Stockholders
800,000 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)
35,681,453 shares of common stock
Offering Plan
The selling stockholder 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.
Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “SSKN.”
Risk Factors
Our business is subject to substantial risk. Before deciding whetherPlease carefully consider the “Risk Factors” section of this prospectus and other information included and incorporated by reference in this prospectus including, but not limited to, investthe “Risk Factors” in our common stock,Annual Report on Form 10-K for the year ended December 31, 2022 (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 thebefore deciding to purchase these securities. Additional risks and uncertainties described below.not presently known to us or that we currently deem immaterial may also impair our business operations. You should alsobe able to bear a complete loss of your investment.
(1)
| The number of shares of common stock to be outstanding immediately after this offering as shown above is based on 34,881,453 shares of common stock outstanding as of June 30, 2023. The number of outstanding shares excludes, as of June 30, 2023, 5,489,311 shares of common stock reserved for issuance pursuant to grants under our Equity Incentive Plan, 2,298,706 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). |
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Investing in our securities involves a high degree of risk. You should carefully consider and evaluate all of the risks, uncertaintiesinformation contained in this prospectus and assumptions discussedin the documents we incorporate by reference into this prospectus, including our consolidated financial statements and accompanying notes and the information under the heading “Risk Factors” included in our most recent annual report on Form 10-K as revised or supplemented byand in our most recentsubsequent quarterly reportreports on Form 10-Q, 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 currentbusiness, 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 updated by annual, quarterly and other 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, financial condition or results of operations couldcommon 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 seriously harmed. This could causemaintained and may not provide investors with adequate liquidity.
On June 29, 2023, we received written notification (the “Notice”) from the tradingNASDAQ Stock Market (“NASDAQ”) that the closing bid price of our common stock had been below the minimum $1.00 per share for the previous 30 consecutive business days, and that we are therefore not in compliance with the requirements for continued listing on the NASDAQ Capital market under NASDAQ Listing Rule 5550(a)(2). The Notice provides us with an initial period of 180 calendar days, or until December 26, 2023, to decline, resultingregain compliance with the listing rules. We will regain compliance if the closing bid price of its common stock is $1.00 per share or higher for a minimum period of ten consecutive business days during this compliance period, as confirmed by written notification from NASDAQ.
If we do not achieve compliance by December 26, 2023, we expect that NASDAQ would provide notice that its securities are subject to delisting from the NASDAQ Capital Market, unless an additional extension to regaining compliance is then available.
We will continue to monitor the closing bid price for its common stock and to assess its options for maintaining the listing of its common stock on the NASDAQ Capital Market in light of this Notice. We will consider all available options to regain compliance with the minimum bid requirements, including an application to NASDAQ for an extension of the compliance period or an appeal to a lossHearings Panel should its closing bid price not have regained compliance during the compliance period.
The liquidity of the market for our common stock depends on a number of factors, including prevailing interest rates, our financial condition and operating results, the number of holders 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 wide fluctuations in response 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;
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government action or regulation;
changes in accounting standards, policies, guidance, interpretations or principles;
changes to the Notes contain covenants that could limitmarket and industry conditions as a result of the global outbreak of the COVID-19 coronavirus;
an inability to maintain an uninterrupted supply of gasses used to power our financing optionslasers as the Russia-Ukraine War has disrupted supplies of rare gasses;
the financial condition, operations, stock price performance and
liquidity position, which would limit our ability to grow our business.The Debentures 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 or results of our operations, or other events beyond our control. If we were to experience an Event of Default and industry;
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 sharespossible delisting of our common stock uponon the exerciseNASDAQ Capital Market;
our issuance of options preferred equity and/or warrantsdebt securities; and upon conversion
actual or anticipated variations in annual and quarterly operating results of convertible debentures will diluteus and our competitors.
As a result of these and other factors, investors who purchase our common stock in this offering may experience a decrease, which could be substantial and rapid, in the ownership interestmarket price of our existing stockholders andcommon stock, including decreases unrelated to our operating performance or prospects.
Future sales of substantial amounts of our common 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 portionWe 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$0.88 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 that800,000 shares of common stock, would result in gross proceeds of $704,000 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.
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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 holder will have exercised some or all of the
Shares.Beneficial ownershipWarrant at an exercise price of $0.88 per share. We will receive proceeds from the cash exercise of the Warrant which, if exercised with respect to all of the 800,000 shares of common stock, would result in gross proceeds of $704,000 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.
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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 June 30, 2023 was approximately $(7.9) million, or approximately $(0.23) per share. “Net tangible book value” is total assets minus the sum of liabilities, goodwill 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 June 30, 2023.
After giving effect to the offering shownissuance of the common stock to investors exercising for cash the Warrant for all 800,000 shares of common stock issuable pursuant thereto at $0.88 per share, our as adjusted net tangible book value as of June 30, 2023 would be approximately $(7.1) million or $(0.23) 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 $1.08 per share to investors exercising the Warrant at $0.88 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 | | | | | | $0.88 |
Net tangible book value per share as of June 30, 2023 | | | $(0.23) | | | |
Increase per share attributable to new investors | | | 0.02 | | | |
Pro forma as adjusted net tangible book value per share after this offering | | | | | | $(0.20) |
Dilution in net tangible book value per share to new investors | | | | | | $1.08 |
The table above is based on 34,881,453 shares of common stock outstanding as of June 30, 2023, and excludes, as of such date:
5,369,714 shares of common stock issuable upon the exercise of options with a weighted average exercise price of $1.61;
119,597 shares of common stock issuable upon the vesting and settlement of outstanding restricted stock units;
2,298,706 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.
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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 800,000 shares of common stock that we issued on September 30, 2021 in connection with the Senior Financing as amended on June 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 | % |
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 June 30, 2023, there were 34,881,453 shares of our common stock outstanding.
MidCap Funding XLVII Trust(2)
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814 | | | 800,000 | | | 2.24% | | | 800,000 | | | 0 | | | 0% |
Total of Selling Stockholder: | | | 800,000 | | | 2.24% | | | 800,000 | | | 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. |
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Set forth below is our cash and capitalization as of June 30, 2023:
on an actual basis; and
as adjusted basis, reflecting the
issuance of 800,000 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 685,715800,000 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$0.88 per share, convertible intoassuming net proceeds to us of approximately 1.5 million$704,000, after deducting estimated offering expenses payable by us.
The information below should be read in conjunction with our condensed consolidated financial statements for the six months ended June 30, 2023 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 six months ended June 30, 2023 and incorporated by reference in this prospectus.
Cash and cash equivalents | | | $9,034 | | | $9,738 |
Current portion of long-term debt | | | $— | | | $— |
Long-term debt, net of current portion | | | 14,987 | | | 14,987 |
Total debt | | | 14,987 | | | 14,987 |
Stockholders’ equity
| | | | | | |
Common stock, $0.001 par value - authorized, 150,000,000 shares; issued and outstanding, 34,881,453 shares actual and 35,681,453 as adjusted | | | 35 | | | 36 |
Additional paid-in capital | | | 250,085 | | | 250,788 |
Accumulated deficit | | | (233,211) | | | (233,211) |
Total stockholders’ equity | | | 16,909 | | | 17,613 |
Total capitalization | | | $31,896 | | | $32,600 |
The table above is based on 34,881,453 shares of common stock at an initial conversion priceoutstanding as of $8.40,June 30, 2023, and (ii) warrants to purchase up to approximately 1.3 millionexcludes, as of such date:
5,369,714 shares of common stock
for aggregate gross proceedsissuable upon the exercise of
$12.3 million. The warrants have anoptions with a weighted average 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 the$1.61;
119,597 shares of common stock underlyingissuable upon the vesting and settlement of outstanding restricted stock units;
2,298,706 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 up to $11.0 million issued pursuant to an equity distribution agreement with Ladenburg.
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DESCRIPTION OF OUR CAPITAL STOCK General
The following description of the material provisions of our capital stock (which includes a description of securities that may be offered by the selling stockholder 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 as amended and restated on June 30, 2023 (as amended, the “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 June 30, 2023, our outstanding capital stock consists of 34,881,453 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:
common stock;
preferred stock;
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 June 30, 2023, there were 34,881,453 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).
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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;
any preemptive rights;
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
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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 800,000 shares of common stock (the “Warrant”).
The Warrant was originally issued on September 30, 2021, 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 as amended and restated on June 30, 2023. Pursuant to the terms of approximately 5.8 millionthe Warrant Agreement, the Warrant entitles the registered holder to purchase 800,000 shares of our common stock at a per share price of $2.565$0.88, subject to adjustment as discussed below. The Warrant may be exercised only for a whole number of shares of our common stock. The Warrant is exercisable and will expire on June 30, 2033, which shall be automatically exercised on a “cashless” basis upon expiration if the fair market value of our 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 prior to the expiration thereof. Pursuant to a registration rights agreement, we agreed to file a registration statement covering the resale of the shares underlying the Warrant by the 45th day following June 30, 2023.
In connection with a Merger Event (defined below) that is a Liquid Sale (defined below) where the value per share. Our obligationsshare of our common stock is greater than the exercise price then in effect, the Warrant shall, on and after the closing of the Merger Event, automatically and without further action on the part of any party or other person, represent the
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right to receive, in lieu of the shares of our common stock that are issuable under the debentures are securedWarrant 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 nature of earn-outs, milestone payments or other performance-based payments), and such Merger Event consideration shall be paid to the holder of the Warrant as and when it is paid to the holders of the outstanding shares of our common stock; provided, however, in the event of a first priority lien onMerger Event that is an arm’s length sale of all or substantially all of our intellectual property. assets (and only its assets) to a third party that is not an affiliate of us (a “True Asset Sale”), the holder of the Warrant may either (a) exercise its conversion or purchase right under the Warrant and such exercise will be deemed effective immediately prior to the consummation of such Merger Event, or (b) permit the Warrant to continue for the term of the Warrant Agreement if we continue as a going concern following the closing of 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 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 are 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 outstanding 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:
| ○ | 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; |
| ○ | 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 |
| ○ | 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 securities 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.
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If we at any time shall combine or subdivide our common stock, (i) in the case of a subdivision, the exercise price of the Warrant shall be proportionately decreased and the number of shares for which the Warrant is exercisable shall be proportionately increased, or (ii) in the case of a combination, the exercise price of the Warrant shall be proportionately increased and the number of shares for which the 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 respect to the outstanding shares of our common stock payable in additional shares of our common stock, then the exercise price of the Warrant shall be adjusted to that price determined by multiplying the exercise price in effect immediately prior to such date of determination by a fraction (i) the numerator of which 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 Warrant 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 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 with MidCap pursuant to that certain Credit and Security Agreement with MidCap as agent and the lenders party thereto, of which the full amount was drawn by us on September 30, 2021. On June 30, 2023, we entered into (a) the Amendment No. 3 to the Credit and Security Agreement (the “Amendment”) among MidCap, as administrative agent, and the lenders identified therein, which amended the Credit and Security Agreement, dated as of September 30, 2021, as amended January 10, 2022 and September 6, 2022 (as amended by the Amendment, the “MidCap Credit Agreement”), (b) the Amended and Restated Warrant Agreement (the “A&R Warrant”) with MidCap Funding XXVII Trust (together with any registered holder from time to time or any holder of the shares issuable or issued upon the exercise or conversion of the warrant, the “Warrantholder”), which amended and restated the warrant agreement to purchase shares of our common stock, dated as of September 30, 2021 (the “Prior Warrant”), with the Warrantholder; (c) the Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) with the Warrantholder, which amended and restated the registration rights agreement, dated as of September 30, 2021, with the Warrantholder; and (d) a letter agreement (the “Fee Letter Agreement”) with MidCap, as agent.
In connection with the transaction, we also exchanged 12,300 sharesAmendment, the MidCap Credit Agreement provides for a senior secured term loan facility of Series B Preferred Stock, convertible$20.0 million, of which $8.0 million was drawn down by the Company on September 30, 2021 (“Credit Facility #1”), $7.0 million was drawn down by the Company on June 30, 2023 (“Credit Facility #2”) and an additional $5.0 million tranche (“Credit Facility #3”), which can be drawn by the Company if the Company’s Dermatology Recurring Procedures Revenue (as defined in the Credit Agreement) for the preceding twelve calendar months (ending on the last day of the calendar month for which a compliance certificate is delivered) is greater than or equal to $30.0 million (such condition, the “Applicable Funding Condition”). Credit Facility #3 can be drawn beginning on the later of the satisfaction of the Applicable Funding Condition and January 1, 2024, with such commitment terminating on the earlier to occur of December 31, 2024 and the delivery of a written notice by MidCap to the Company terminating the applicable commitments following an Event of Default (as defined in the MidCap Credit Agreement) that has not been waived or cured at the time such notice is delivered.
Borrowings under the MidCap Credit Agreement bear interest at a rate per annum equal to the sum of (a) the greater of (i) the sum of (A) 30 day forward-looking term rate of one month Secured Overnight Financing Rate (“SOFR”), as published by CME Group Benchmark Administration Limited, from time to time, plus (B) 0.10%, and (ii) the applicable floor rate of 3.50%, with such sum reset monthly, and (b) 7.50%. The Company is obligated to make only interest payments (payable monthly in arrears) through June 1, 2026. Commencing on July 1, 2026 and continuing for the remaining twenty-four months of the facility, the Company will be required to make monthly interest payments and monthly principal payments based on a straight-line amortization schedule set forth in the MidCap Credit Agreement, subject to certain adjustments as described in the MidCap Credit Agreement. The final maturity date under the MidCap Credit Agreement is June 1, 2028, unless earlier terminated. The MidCap Credit Agreement requires us to dedicate 100% of certain insurance proceeds to the prepayment of outstanding term loan,
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subject to certain exceptions and net of certain expenses and repayments. We may voluntarily prepay the outstanding term loan under the MidCap Credit Agreement, with such prepayment at least $5.0 million, at any time intoupon 30 days’ written notice.
Subject to customary exceptions and exclusions, all obligations under the MidCap Credit Agreement are secured pursuant to the terms of the MidCap Credit Agreement and an intellectual property security agreement, dated as of September 30, 2021, between us and MidCap. All borrowings under the MidCap Credit Agreement are secured by substantially all of the Company’s assets.
The MidCap Credit Agreement contains certain customary representations and warranties, affirmative covenants and conditions. The MidCap Credit Agreement also contains a number of negative covenants that, among other things and subject to certain exceptions and waivers, restrict the Company’s ability to:
incur additional indebtedness;
pay cash dividends on its capital stock or redeem, repurchase or retire its capital stock (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements or similar plans in an aggregate amount not exceed $500,000 in any twelve month period);
make investments, loans and acquisitions;
engage in transactions with its affiliates;
sell assets;
materially alter the business it conducts;
consolidate or merge;
establish any new deposit accounts or security accounts not subject to an account control agreement;
make or permit payment on any subordinated debt;
incur liens;
make any significant change in accounting treatment or reporting practices; and
amend, modify or waive certain material agreements (if the effect on the Company or loans would be material) or its organizational documents.
Further, the MidCap Credit Agreement contains (a) a quarterly financial covenant that requires the Company to not have less than $29.0 million of approximately 4.8net revenue (raised to $40.0 million by December 31, 2025 and, for periods ending after December 31, 2025, such net revenue as determined in good faith by MidCap, which shall not be less than the applicable minimum net revenue amount for the immediately preceding period and $40.0 million) for the trailing 12 month period as of June 30, 2023, and (b) a minimum of unrestricted cash (as defined in the MidCap Credit Agreement), at all times, of not less than $3.0 million.
The MidCap Credit Agreement contains various events of default, including the following:
failure to make any payment of principal or interest under the MidCap Credit Agreement when due;
failure to comply with any term contained in the MidCap Credit Agreement or related documents;
making any incorrect representation, warranty, certification or statement with respect to the MidCap Credit Agreement or related document;
failure to pay when due any other outstanding debt in the excess of $100,000;
commencing a voluntary case or other proceeding, or having such case or proceeding commenced against us, seeking liquidation, reorganization or other relief with respect to debts under any bankruptcy or insolvency;
any payments of any subordinated debt (other than specifically permitted payments);
if our common stock fails to remain publicly traded and registered with a public securities exchange;
a change in control (as defined in the MidCap Credit Agreement) occurs; and
occurrence of any event that could reasonably be expected to result in a material adverse effect.
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Upon the occurrence and during the continuance of an event of default, MidCap may, and at the direction of a requisite percentage of the lenders must, (i) suspend or terminate the term loan commitment and Midcap and the other lenders’ obligations with respect thereto, and (ii) by notice to us, declare all or any portion of the obligations under the MidCap Credit Agreement to be immediately due and payable. In addition to MidCap’s other rights and available remedies, but subject to applicable cure periods, upon the occurrence and during the continuance of an event of default, MidCap may, and at the direction of a requisite percentage of the lenders must, terminate the MidCap Credit Agreement.
Pursuant to, and in accordance with, the terms and conditions of the A&R Warrant, which amended and restated the Prior Warrant, the Warrantholder can purchase 800,000 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 purchasethe Company’s common stock at an exercise price
of $2.45 per share,equal to $0.88 for a period ending on June 30, 2033. Pursuant to the A&R Registration Rights Agreement, the Company shall register the shares underlying the A&R Warrant, with
4.8 million warrants expiring in eighteen months froman initial filing due no later than the 45th day following the date of
issuance. In September 2014, we amended the
registration statement relatedA&R Registration Rights Agreement. Pursuant to the
Series A Preferred StockFee Letter Agreement, the Company agreed to
deregister those shares that would have been issuable upon conversionpay MidCap, as administrative agent, the following fees: (a) an origination fee on June 30, 2023 in an amount equal to (i) the Credit Extensions (as defined in the MidCap Credit Agreement) in respect of Credit Facility #2, multiplied by (ii) 0.50%; (b) on the maturity date of the
Series A Preferred Stock. We entered into a registration rights agreement withMidCap Credit Agreement or any earlier date on which the
investors pursuantobligations thereunder become due and payable in full or are otherwise paid full (such date, the “Full Exit Fee Payment Date”), the Company shall pay an exit fee equal to
which we were obligated to file a registration statement to register the resale(i) 3.0% of the
shares of common stock issuable upon conversion of 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 in connection with a private placement. We sold $10.0 milliontotal aggregate principal amount of Notes bearing interest at 9% per year, with a maturityCredit Extensions (as defined in the MidCap Credit Agreement) made pursuant to the MidCap Credit Agreement (regardless of any repayment or prepayment thereof) as of the Full Exit Fee Payment Date (such aggregate amount, the “Exit Fee Base Amount”), less (ii) any Partial Exit Fee (as defined below) previously paid; (c) on the date of any voluntary or mandatory partial prepayment of the earlier of 30 days afterborrowings under the MidCap Credit Agreement (or on the date such mandatory prepayment becomes due and payable) (each such date, a “Partial Exit Fee Payment Date”), the Company obtains stockholder approvalshall pay an exit fee equal to 3.0% 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, except for a second lien on our intellectual property. 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 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.
In connection with this financing, we also granted to the Purchasers resale registration rights with respect to the shares of common stock underlying the Debentures and the Warrants pursuant to the terms 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 Debentures 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 pricecredit facilities 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 annumor prepaid (or such lesser maximum amount that is permittedrequired to be paid by applicable law), accruing onin the case of 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 allmandatory prepayment) as of the securities that may be issued upon conversion ofPartial Exit Fee Payment Date (such amount, the Debentures“Partial Exit Fee”); and exercise of(d) an origination fee payable contemporaneously with funding Credit Facility #3 in an amount equal to (i) 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 of common stock which, together with all other shares owned by it and its affiliates would result in more than 9.99% of our issued and outstanding shares of common stock calculated on the basis of the then outstanding shares. Under 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 used in this prospectus, is subject to the condition that until the later of (i) six months after the initial issue date of the Debentures and the Warrants (December 22, 2015), or (ii) such later date that the Company no longer seeks stockholder approval at the request of the holders of the Debentures or the Warrants, the holders will have the right to convert the Debentures and exercise the Warrants so thatCredit Extensions (as defined in the aggregate the total numberMidCap Credit Agreement) in respect of shares of common stock of the Company issuable upon such conversions or exercises, in the aggregate amongst all holders, will not exceed 1,622,612 shares.
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PLAN OF DISTRIBUTION
Each Selling Stockholder
The selling stockholder of the securities and any of
theirits 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 StockholderThe selling 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.
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
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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).
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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,
20142022 and
2013,2021, and the related
consolidated statements of operations,
changes in stockholders’ equity, and cash flows for
each of the years then ended,
included in the 2022 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.
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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
filed by us with the SEC and
any future filings under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (File No. 000-51481) made prior to the termination of this offeringthey 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, 2014,2022, as filed with the SEC on March 30, 2015,31, 2023 as amended on Form 10-K/A for the year ended December 31, 2014,by Amendment No. 1, filed with the SEC on April 28, 2015;May 1, 2023; |
| • | · | our Quarterly ReportReports on Form 10-Q for the quarter ended March 31, 2015,2023, as filed with the SEC on May 14, 2015;15, 2023, and for the quarter ended June 30, 2023, as filed with the SEC on August 9, 2023; |
| • | · | the description of our common stock contained in Exhibit 4.2 to our registration statementAnnual Report on Form 8-A, filed with10-K for the SEC on August 8, 2005, andyear ended December 31, 2022, including any amendmentsamendment or reportsreport filed for the purpose of updating suchthe description. |
In addition, all
reports and other documents filed by us pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
hereof and before the termination or completion of
the initial registration statement and prior to effectivenessthis offering 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) 619-3200619-3200.
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 OFFERTABLE 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.
CONTENTS
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
2,992,259 Shares
Common Stock
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.TABLE OF CONTENTS
STRATA Skin Sciences, Inc.
800,000 Shares of Common Stock
Issuable upon Exercise of an Outstanding Warrant
PROSPECTUS
August 9, 2023
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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.
No. | | DescriptionAmount |
SEC registration fee | | | $107 |
3.1Printing expenses | | | $ (1) |
Legal fees and expenses | | | $ (1) |
Accounting fees and expenses | | | $ (1) |
Transfer agent fees and expenses | | | $ (1) |
Miscellaneous | | | $(1) |
Total | | | $(1) |
(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
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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.
The following exhibits are filed with this Registration statement.
| | | Fifth Amended and Restated Certificate of Incorporation of the Company. (IncorporatedSTRATA Skin Sciences, Inc., incorporated by reference to Exhibit 3.1 contained in our Registration Statement on Form S-3 (File No. 333-167113)333-258814), as filed with the SEC on May 26, 2010.)August 13, 2021). |
| | |
3.2 | | Certificate of Amendment to FifthFourth Amended and Restated CertificateBylaws of Incorporation of the Company (Incorporated by reference to our Registration Statement on Form S-3 (File No. 333-189118)STRATA Skin Sciences, Inc., as filed on June 5, 2013.) |
| | |
3.3 | | Certificate of Amendment to Fifth Amended and Restated Certificate of Incorporation of the Company. (Incorporatedincorporated herein by reference to Exhibit 3.13.2 to the Current Report on Form 8-K, as filed with the SEC on January 8, 2016. |
| | | Opinion of Stevens & Lee, P.C. |
| | | Amended and Restated Warrant Agreement to Purchase Shares of the Common Stock of STRATA Skin Sciences, Inc., dated as of June 30, 2023, between STRATA Skin Sciences, Inc. and MidCap Funding XXVII Trust, incorporated by reference to Exhibit 10.4 contained in our Current Report on Form 8-K, (File No. 000-51481),as filed with the SEC on July 10, 2014.)6, 2023. |
| | |
3.5 | | CertificateAmended and Restated Registration Rights Agreement, dated as of Designation of Preferences, RightsJune 30, 2023, between STRATA Skin Sciences, Inc. and Limitations of Series B Convertible Preferred Stock. (IncorporatedMidCap Funding XXVII Trust, incorporated by reference to Exhibit 3.110.5 contained in our Current Report on Form 8-K, (File No. 000-51481),as filed with the SEC on July 24, 2014.)6, 2023. |
| | | Consent of Marcum LLP |
3.6 | | Fourth Amended and Restated By-laws | Consent of Company. (Incorporated by reference toStevens & Lee, P.C. (included in Exhibit 3.2 contained in our Current Report on Form 8-K (File No. 000-51481), as filed on July 21, 2015.)5.1) |
| | | Power of Attorney |
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.) |
| | |
5.1 | | Opinion of Duane Morris LLP (to be filed by amendment) |
| | |
10.1 | | Form of Securities Purchase Agreement. (Incorporated by reference to Exhibit 10.1 contained in our Current Report on Form 8-K (File No. 000-51481), filed on June 23, 2015.) |
| | |
10.2 | | Form 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. (Incorporated by reference to Exhibit 10.3 contained in our Current Report on Form 8-K (File No. 000-51481), filed on June 23, 2015.) |
| | |
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)Filing Fee Table |
(a)
| The undersigned registrant hereby 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 include any prospectus required by Section 10(a)(3) of the Securities Act 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 the 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) |
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We hereby undertake:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;
(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 this 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 the registration statement or any material change to such information in the registration statement. |
Provided, however, that the plan of distribution not previously disclosedundertakings set forth in this registration statement or any material change to such information in this registration statement;provided, however, that 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)
| Each prospectus filed by the 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 |
(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 section 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 that 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. |
(5)
| That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of 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, the 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 the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
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(2) That, for the purpose of determining any liability under the Securities Act, 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, to any purchaser:
(i) If we are relying on Rule 430B:
(A) Each prospectus filed by us 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) 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 Section 10(a) of the Securities Act 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 the 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.
II-3(ii)
| any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii)
| the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv)
| any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b)
| The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act that is incorporated by reference in this 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 directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities 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 than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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, the 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. |
(ii) 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 under the Securities Act, to any purchaser in the initial distribution of the securities, we undertake that in a primary offering of our securities 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, we 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 ours relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of us or used or referred to by us;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about us or our securities provided by or on behalf of us; and
(iv) Any other communication that is an offer in the offering made by us to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act, each filing of our annual report pursuant to Section 13(a) or Section 15(d) of the 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 the 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.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described in Item 15 above, or otherwise, we have been advised that in the opinion of the SEC 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 the payment by us of expenses incurred or paid by a director, officer or controlling person of us 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, that we 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 and will be governed by the final adjudication of such issue.
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SIGNATURES
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.
the 9th day of August, 2023. | MELA | | STRATA SKIN SCIENCES, INC. |
| | | | | | |
| By: | | By: | | | /s/ Michael R. StewartRobert J. Moccia |
| | Michael R. Stewart | | | | Robert J. Moccia |
| | President and | | | | Chief Executive Officer (Principal Executive Officer) |
Know all men by these present,
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
an 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
exhibitsexhibit thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-factattorneys 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.
| | | | | | |
/s/ Michael R. StewartRobert J. Moccia | | President and | Chief Executive Officer and Director
(Principal Executive Officer) | | July 22, 2015 | August 9, 2023 |
Michael R. StewartRobert J. Moccia | | (principal executive officer) | | |
| | | | | | |
/s/ Robert W. CookChristopher Lesovitz | | | Chief Financial Officer Secretary
(Principal Financial Officer and Principal Accounting Officer) | | July 22, 2015 | August 9, 2023 |
Robert W. CookChristopher Lesovitz | | Treasurer (principal financial and accounting officer) | | |
| | | | | | |
/s/ Jeffrey O’DonnellUri Geiger | | Director | Director, Chairperson of the Board of Directors | July 22, 2015 | | August 9, 2023 |
Jeffrey O’DonnellUri Geiger | | | | | | |
| | | | | | |
/s/ William D. Humphries | | | Director | | | August 9, 2023 |
William D. Humphries | | | | | | |
| | | | | | |
/s/ Samuel E. NavarroRubinstein | | Director | Director | July 22, 2015 | | August 9, 2023 |
Samuel E. NavarroRubinstein | | | | | | |
| | | | | | |
/s/ David K. StoneNachum Shamir | | Director | Director | July 22, 2015 | | August 9, 2023 |
David K. StoneNachum Shamir | | | | | | |
| | | | | | |
/s/ Kathryn SwintekDouglas Strang | | Director | Director | July 22, 2015 | | August 9, 2023 |
Kathryn SwintekDouglas Strang | | | | | | |
| | | | | | |
/s/ LuAnn ViaPatricia Walker | | Director | Director | July 22, 2015 | | August 9, 2023 |
LuAnn ViaPatricia Walker | | | | |
| | 