8-K
STRATA Skin Sciences, Inc. (SSKN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 11, 2024
STRATA SKIN SCIENCES, INC.
(Exact Name of Registrant Specified in Charter)
| Delaware | 000-51481 | 13-3986004 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 5 Walnut Grove Drive, Suite 140, Horsham, Pennsylvania | 19044 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant's telephone number, including area code: 215-619-3200
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
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 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.001 par value per share | SSKN | The NASDAQ Stock Market LLC |
| Item 7.01. | Regulation FD Disclosure. |
|---|
On December 11, 2024, STRATA Skin Sciences, Inc. (the “Company”) posted an investor presentation to its website at https://strataskinsciencesinc.gcs-web.com/. A copy of the investor presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information set forth in this item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d)
Exhibits.
The following presentation is furnished as an exhibit to this Current Report on Form 8-K and shall not be deemed to be “filed”:
| Exhibit No. | Exhibit Description |
|---|---|
| 99.1 | Investor Presentation dated December 11, 2024, issued by Strata Skin Sciences, Inc. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STRATA SKIN SCIENCES, INC. | ||
|---|---|---|
| Date: December 11, 2024 | By: | /s/ John Gillings |
| John Gillings | ||
| Vice President Finance (Principal Financial Officer<br><br> <br>and Principal Accounting Officer) |
Exhibit 99.1
Investor Presentation December 2024 Driving Value in Dermatology Matching Patients with Clinics for a Win-Win-Win Outcome NASDAQ: SSKN
Safe Harbor Statement 2 This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements regarding product development, product extensions, product integration or product marketing; any statements regarding continued compliance with government regulations, changing legislation or regulatory environments; any statements of expectation or belief and any statements of assumptions underlying any of the foregoing. In addition, there are risks and uncertainties related to successfully integrating the products and employees of the Company, as well as the ability to ensure continued regulatory compliance, performance and/or market growth. These risks, uncertainties and other factors, and the general risks associated with the businesses of the Company described in the reports and other documents filed with the SEC, could cause actual results to differ materially from those referred to, implied or expressed in the forward-looking statements. The Company cautions readers not to rely on these forward-looking statements. All forward-looking statements are based on information currently available to the Company and are qualified in their entirety by this cautionary statement. The Company anticipates that subsequent events and developments will cause its views to change. The information contained in this presentation speaks as of the date hereof and the Company has or undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
About Us 3 STRATA Skin Sciences is a medical technology company offering advanced medical devices for the in-office treatment of life-altering dermatological conditions. $38B Market Opportunity Across Psoriasis, Vitiligo, Eczema, and Acne markets Experienced Management with 20+ Year History in Dermatology Market Leading Global Provider of Dermatology In-Office Medical Procedures Stock Symbol NASDAQ: SSKN Stock Price (as of 11/26/24) $2.96 Shares Outstanding (as of 8/12/24) 4.2M Market Cap $12M Cash & Equivalents* $8.4M Debt* $15.2 Enterprise Value $19M Options* Warrants* 501,726 @ $8.36 WAEP 80,000 @ $8.80 WAEP Inside Ownership (%): ~39% Capitalization Table * As of 9/30/24
Addressing $38B Dermatology Market Psoriasis - $20.1B1, Vitiligo - $1.2B2, Eczema - $11.8B3, Acne - $5.5B4 4 30M Patients in the U.S. Psoriasis – 8M / Vitiligo - 5M / Eczema - 18M Fortune Business Insights Market Report 2019; 2016-2018 historical, 2019 base year, 2020-2027 projected Fortune Business Insights Market Report 2018; 2015-2017 historical, 2018 base year, 2019-2026 projected Market Data Forecast Analysis Report 2020; 2020 base year, 2021-2026 projected Strata Skin Sciences 50M+ Acne Patients in the U.S.
Affiliated Academic Institutions STRATA has placed over 50 XTRAC® machines in residency programs across academic institutions 5 Affiliated Academic Institutions STRATA devices are available at over 50 academic institutes that offer dermatology residency programs 5
Management Team Sales and Operational Dermatology Experience Chief Executive Officer Dr. Dolev Rafaeli V.P. Finance John Gillings Chief Operating Officer Shmuel Gov 6
STRATA Investment Highlights 7 Unique and Proven Business Model Best-in-class Excimer Laser technologies Recurring revenue driven by DTC and growing installed base Installed base of 873 XTRAC® domestic devices for Psoriasis, Vitiligo, and Eczema treatments Installed base of 135 TheraClear®X domestic devices for Acne treatments Installed base of ~1700 XTRAC® and VTRAC® devices internationally Providing “business in a box” for dermatology practices without an upfront capital spend by practices Over 300 peer-reviewed, published clinical studies A Win-Win-Win Business Model For patients – safest, most effective, minimal side effects For clinics – stable increased revenue base For Payers – the cheapest treatment available Opportunity for Renewed Growth in U.S. in Recurring Revenue per Device Re-emphasis on DTC marketing in U.S. with near-term opportunity of increasing recurring revenue/device by 40% More rigorous sales and marketing strategy and process in place Both initiatives could collectively grow revenue by double digit percent and help return the company to positive cash flow
3Q24 Financial Highlights 8 Revenue Total revenue $8.8M (-1% YOY) vs. $8.9M 3Q23 Global net recurring revenue $5.4M (+2% YOY) vs. $5.3M 3Q23 Gross domestic XTRAC® recurring billings $4.8M (-2% YOY) vs. $4.9M 3Q23 Revenue per domestic XTRAC® system $5,332 (+2% YOY) on 873 systems vs. $5,233 on 929 systems in 3Q23 Gross Margin 60.3% (+430 bps YOY) vs. 56.0% in 3Q23 Operating Expenses $5.2M (-7% YOY) (excluding one-time accrual expense) vs. $5.6M 3Q23 Operating Income Non-GAAP operating profit (excluding accrual item) $128,000 First time generating positive operating profit since early 2018
Core Domestic Business Model
A True Partnership – A Complete Business Solution 10 No upfront capital expense; instead, it’s a fee-per-use business model Complete business solution includes a suite of value-added support services to maximize practice’s success Clinical Support Reimbursement Support Call Center Support Field Service Support Consumables and Parts Device Upgrades Co-pay Support DTC Marketing PartnershipProgram
~900 Partner Dermatology Clinics with 3,000+ Dermatology Providers Across the U.S. 11 Overview 873 Partner XTRAC® clinics + >150 sold XTRAC® devices 135 TheraClear®X clinics 3 Regions / 23 Sales Territories / 1 National Accounts Manager 15 Field Service Techs In-house call center and insurance benefits team 4 Clinical specialists
Practice Development Program In-Office Patient Education Materials for psoriasis, vitiligo & atopic dermatitis: Patient Brochures Counter Cards In Office Branding “Patient-Directed” marketing initiative: Patient Education Mailings Outreach Programs Eblasts 12 12
Marketing Support Drives Additional Patient Awareness 13 Patient Eblasts Direct Mailers In-office Branding Social Media Trade Shows Clinical Webinars
DTC Advertising Generates Direct and Indirect Appointments in Partner Clinics 14 See XTRAC® ad on Facebook, Google and Instagram Click on the ad to go to an XTRAC® page Leave their contact information In-house call center team confirms appointment and insurance benefits Show in the office Convert to XTRAC® Stay on XTRAC® Patient Journey
Leads Appointments RDX Charts (New Patient Charts) 1 2 1 3 DTC Model Driver 15 Core Business Refocused to DRIVE Recurring Revenue Model $21.1M Net U.S. Recurring Revenue Significant opportunity to increase ARR back to 2019 levels using proven DTC strategies that should yield appreciable incremental revenue and at higher incremental margins, allowing the Company to become cash flow positive again $23.6M $16.8M $21.2M $21.6M $20.2M Change in US Recurring Revenue +12% -29% +26% +2% -6% Recurring Revenue model in practice. Pandemic reduces in-person appointments, company pivots to device sales over recurring model. Device sales model stays in tact as pandemic eases. 15
International Sales Operations India Israel S. Korea Japan China Bahrain, Iraq, Jordan, Kuwait, Qatar, Oman, Saudi Arabia, UAE Mexico In-house Head of International Sales 39 international partner XTRAC® clinics (S. Korea, Japan) at 9/30/24 Capital equipment sales preferred model Usage per device higher than in U.S. market TheraClear®X equipment sales opportunity Latin America & European markets untapped Total International Install Base > 1,700 devices Markets added in 2023 STRATA’s international markets 16 ($000s)
XTRAC®: Overview Safe, effective treatment 150+ peer-reviewed clinical studies Psoriasis treatment is the number 1 domestic use for XTRAC® lasers – 80% of treatments Opportunities exist for expanding use for other approved indications like vitiligo and eczema Clinical support team focused on: In-office training Best practices 17
Indicated for Chronic Dermatological Diseases Visible skin disorders can limit healthy psychosocial development and have profoundly negative consequences on quality of life3-5 VITILIGO ~7.5 million adults in the US1,a PSORIASIS ATOPIC DERMATITIS ~2–3 million adults in the US2 ~16.5 million adults in the US3 1. Armstrong AW et al. JAMA Dermatol. 2021;157(8):940-946.aIncludes people 20 years of age and older. 2. Gandhi K et al. JAMA Dermatol. 2022;158(1):43-50. 3. Fuxench ZCC et al. J Invest Dermatol. 2019;139(3):583-590.4. Elbuluk N, Ezzedine K. Dermatol Clin. 2017;35:117-128. 5. Armstrong AW, Read C. JAMA. 2020;323(19):1945-1960. 18
Induces Apoptosis of T cells and Keratinocytes in Psoriatic Plaques 19 Baseline After 2 tx After 4 tx XTRAC® Psoriasis Clinical Protocol - 6.2 treatments to PASI* 75 Induces apoptosis in T cells and keratinocytes1 T cell Keratinocytes Psoriasis: Autoimmune disease that causes the skin to regenerate faster than normal; characterized by red, itchy scaly patches *PASI – A 75% reduction in the Psoriasis Area and Severity Index (PASI) score (PASI 75) is the current benchmark of primary endpoints for most clinical trials of psoriasis Tx- treatments 1. Abrouk M et al. Psoriasis Targets Ther. 2016;6:165-173. 2. Esmat S et al. Dermatol Clin. 2017;35:171-192. 3. Oh CT et al. Lasers Surg Med. 2016;48(6):629-637, XTRAC® Targeted 308nm UVB
Induces Melanocyte Proliferation and T cell Apoptosis in Vitiligo Patches 20 Baseline After 18 tx After 21 tx XTRAC® Vitiligo Clinical Protocol - >75% repigmentation in less than 20 treatments1 Vitiligo: An autoimmune condition due to a loss of melanocytes, characterized by white patches of skin losing its pigment Long lasting results No pigment loss during 2-year follow-up2 80% facial repigmentation retention at 3-year follow-up3 XTRAC® Targeted 308nm UVB Stimulates melanocyte proliferation and induces T cell apoptosis2 Melanocyte T cell Shi Q et al. Photodermatol Photoimmunol Photomed. 2013;29(1):27-33. 2. Esposito M et al. Clin Exp Dermatol. 2004;29:133-137. 3. Hong SB et al. J Korean Med Sci. 2005;20:273-278 Hadi S et al. Photomed Laser Surg. 2006; 24(3):354-357 Sethi S, Silverberg NB. J Drugs Dermatol.2022;21(7):773-775.
Source: National Psoriasis Foundation XTRAC® is a Preferred Treatment for 90% of Psoriasis Patients (<10% BSA) 21
Has Clinical and Economic Competitive Advantage 22 XTRAC® NB-UVB Topical Steroids Non-Biologic Systemics Biologics Approximate Costs ($) 1K-3K 3K-9K 1K-7K 1K 32K-68K Clinical Outcomes 92% 71% 75% 48% 50-70% Speed of Onset 5 10 3 14 12 Days of Actual Care 18 80 294 52 12-65 Remission 2.5 Months Continued with maintenance Continued with maintenance Continued with maintenance Continued with maintenance Adverse Events Mild Temp Mild Temp Mild-Mod Temp –Lasting Mild-Severe Temp – Lasting Mild-Severe Temp – Lasting Marchetti A, Bhutani T, Lockshin B, Siegel DM, Behringer F. Therapies for Psoriasis: Clinical and Economic Comparisons. J Drugs Dermatol. 2020 Nov 1;19(11):1101-1108. doi: 10.36849/JDD.2020.5510. PMID: 33196750
XTRAC® Adds (Delegated)* Reimbursed Recurring Revenue for Dermatology Partners 23 CPT Code Description 2024 National Average Medicare Payment Rate 96920 Excimer Laser Treatment for Psoriasis (<250 sq cm) $152.92 96921 Excimer Laser Treatment for Psoriasis (250 - 500 sq cm) $167.65 96922 Excimer Laser Treatment for Psoriasis (>500 sq cm) $228.23 Number of Treatment/ Week 20 30 # of Weeks / Year 48 48 Total # of Treatments / Year 960 1440 Average Revenue Per Treatment $190 $190 Physician Gross Revenue (Annual) $182,067 $273,100 * Subject to state legislation ** Patients who are eligible to receive CPT code 10040 services are those with acne lesions such as milia, comedones, cysts, or pustules that require surgical intervention. This may include patients with severe or persistent acne that has not responded to other treatments, or those with large or painful cysts that need to be drained or removed. Determination of the appropriate usage of the CPT code is made by the treating physician.
TheraClear®X: Overview Safe, effective treatment Peer-reviewed clinical studies Opportunities exist for expanding use for expanding the installed base to clinics using reimbursed acne surgery procedures Clinical support team focused on: In-office training Best practices 24
Acne is the Most Common Skin Condition in Dermatology Up to 50 Million Americans affected annually2 ~85% of all adolescents experience some degree of acne from the ages of 12 to 24 years3 >50% of US women experience acne in their 20s4 Acne occurring in adults is increasing5 #1 skin disease in the US1 Bickers DR et al. J Am Acad Dermatol. 2006;55:490-500. Tan JKL, Bhate K. Br J Dermatol. 2015;172 (Suppl 10:3-12. White GM. J Am Acad Dermatol. 1998;39:S34-S37. Collier CN et al. J Am Acad Dermatol. 2008;58:56-59. Holzmann R, Shakery K. Skin Pharmacol Physiol. 2014;27 (Suppl 1):3-8. 25
Photopneumatic Technology Combines VACUUM with PULSED BROADBAND LIGHT 26 Clears bacteria and follicular contents from pilosebaceous unit, C acnes are removed both mechanically and thermally from the active acne lesion. Reduces sebum production cleans pores by extracting sebaceous and follicular material light activates porphyrins to directly reduce C acnes and sebum production skin normalizes upon completion Place Extract Treat Complete contact with treatment area Baseline After 4 tx Photos courtesy of Suneel Chilukuri, MD.
Addresses Limitations of Existing Acne Therapies 27 Visible improvement of acne lesions as early as after second treatment Visible improvement of skin texture, pore size, and perilesional erythema after the first few treatments Time to improvement Initiation 4 to 6 treatments, scheduled 1-2 weeks apart Maintenance1 to 2 months apart as needed Treatment regimen Procedure ~15 minutes per treatment No pre-treatment with topical analgesics Comfortable with no down time Can be delegated (depending on state laws) Systemic and topical acne treatments Are often associated with poor adherence due to forgetfulness, inconvenience, and adverse effects1,2 Typically require 3 to 6 weeks to achieve visible improvement3 Can be associated with skin dryness, irritation, burning, and bleaching effects2 TheraClear®X Comfortable in-office treatment with no down-time Visible improvement of acne lesions as early as after second treatment Visible improvement of skin texture, pore size, and perilesional erythema after the first few treatments Snyder S et al. Am J Clin Dermatol. 2014;15(2):87-94. 2. Tuchayi SM et al. Patient Pref Adherence. 2016;10:2091-2096 3. Fox L et al. Molecules. 2016;21:1063. doi:10.3390/molecules21081063. 4. Data on file. STRATA Skin Sciences.
TheraClear®X Adds (Delegated)* Reimbursed Recurring Revenue for Dermatology Partners 28 CPT Code Description 2024 National Average Medicare Payment Rate 10040 Acne Surgery, which Involves the opening or removal of multiple milia, comedones, cysts and pustules. $114.61 Number of Treatment/ Week 20 30 # of Weeks / Year 48 48 Total # of Treatments / Year 960 1,440 Average Revenue Per Treatment $114.61 $114.61 Physician Gross Revenue (Annual) $110,025.60 $165,038.40 * Subject to state legislation ** Patients who are eligible to receive CPT code 10040 services are those with acne lesions such as milia, comedones, cysts, or pustules that require surgical intervention. This may include patients with severe or persistent acne that has not responded to other treatments, or those with large or painful cysts that need to be drained or removed. Determination of the appropriate usage of the CPT code is made by the treating physician.
SUMMARY
Financial Metrics Unaudited quarterly results 30 2019 2020 2021 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 U.S. Gross Recurring Revenue $24,590 $16,901 $22,071 $22,271 $4,735 $5,057 $4,883 $4,947 $19,622 $4,578 $4,735 $4,799 U.S. Installed Base (XTRAC® Devices) 820 832 890 909 916 930 929 923 923 907 882 873 Average Gross Recurring Revenue/device/Qtr $7,497 $5,078 $6,200 $6,125 $5,169 $5,438 $5,256 $5,360 $5,315 $5,047 $5,369 $5,497 Revenues, net $31,586 $23,090 $29,977 $36,161 $7,567 $8,250 $8,852 $8,689 $33,358 $6,754 $8,435 $8,797 Cost of revenues 11,316 8,956 10,127 14,393 3,179 3,932 3,898 3,888 14,897 3,674 3,498 3,490 Gross profit 20,270 14,134 19,850 21,768 4,388 4,318 4,954 4,801 18,461 3,080 4,937 5,307 Operating expenses: Engineering and product development 1,002 1,274 1,434 1,029 315 374 248 380 1,317 241 199 243 Selling and marketing 12,003 9,038 13,106 15,301 3,742 3,416 3,038 2,760 12,956 3,018 3,014 3,048 General and administrative 10,275 7,898 9,712 10,087 2,917 2,490 2,283 2,818 10,508 2,710 2,210 1,888 Impairment of goodwill - - - - - - - 2,284 2,284 5,969 - - Total Expenses $23,280 $18,210 $24,252 $26,417 $6,974 $6,280 $5,569 $8,242 $27,065 $11,938 $5,423 $5,179 Loss from operations ($3,010) ($4,076) ($4,402) ($4,649) ($2,586) ($1,962) ($615) ($3,441) ($8,604) ($2,889) ($486) $128 Non-GAAP adjusted EBITDA $3,036 $1,492 $1,467 $2,557 ($759) ($95) $1,291 $520 $957 ($1,279) $1,012 $1,493 Net cash provided (used) by operating activities $2,229 $2,096 $1,508 ($924) ($1,203) $175 $(997) $1,506 ($519) ($804) $591 ($515) (All numbers below in $'000s except for U.S. Installed Base)
STRATA Investment Summary Unique and Proven Business Model Best-in-class Excimer Laser technologies Recurring revenue driven by DTC and growing installed base Installed base of 873 XTRAC® domestic devices for Psoriasis, Vitiligo, and Eczema treatments Installed base of 135 TheraClear®X domestic devices for Acne treatments Installed base of ~1700 XTRAC® and VTRAC® devices internationally Providing “business in a box” for dermatology practices without an upfront capital spend by practices Over 300 peer-reviewed, published clinical studies A Win-Win-Win Business Model For patients – safest, most effective, minimal side effects For clinics – stable increased revenue base For Payers – the cheapest treatment available Opportunity for Renewed Growth in U.S. in Recurring Revenue per Device Re-emphasis on DTC marketing in U.S. with near-term opportunity of increasing recurring revenue/device by 40% More rigorous sales and marketing strategy and process in place Both initiatives could collectively grow revenue by double digit percent and help return the company to positive cash flow 31
THANK YOU! Investor Contact: CORE IR 516-222-2560 IR@strataskin.com www.strataskinsciences.com
APPENDIX
Acquisitions to Drive Top-line Growth January 2022 August 2021 $3.7M Acquisition Minimal acquisition cost compared to exclusivity in external laser market $1M Acquisition Adds attractive business segment to address $5.5B acne market 34
Domestic XTRAC® Installed Base Growth Drivers 873 2286 370 As of 9/30/2024 Signed strategic expansion into group clinic rollups Within the 48 groups: 61 TheraClear®X devices Penetration grew from 86 in 2018 to 386 in 2023 Group partnership accounts represent 37% of XTRAC® domestic recurring revenue XTRAC®Partners GroupClinics 35 Representative PE Backed Groups: Over 250 comeback opportunities of existing excimer laser owners Increased penetration into facility locations (e.g. Kaiser, VA, and Mt. Sinai)
Example – NYC Metro Area XTRAC® Placements and DTC Leads (1Q24) 36 Metro NYC XTRAC® installed base Metro NYC 1Q24 DTC Patient Leads
Psoriasis Case Study: Patient I.B., Lewisburg, PA 37 Treatment Room After Before