On May 22, 2020, STRATA Skin Sciences, Inc. (the “Company”) executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the United States Small Business Administration (the “SBA”) under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is up to $500,000, with proceeds to be used for working capital purposes. As of the date of this Current Report on Form 8-K, the Company has not requested any disbursements under the EIDL Loan, and the EIDL Loan requires all requests for disbursements be made by September 26, 2020 (six months after the date of the EIDL Loan), unless the SBA, in its sole discretion, extends the disbursement period. If the Company does not request disbursements by such date, the EIDL Loan commitment will terminate and the Company will lose the ability to draw the funds. Interest accrues at the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning March 26, 2021 (twelve months from the date of the promissory note) in the amount of $2,437. The balance of principal and interest is payable thirty years from the date of the promissory note.

The Company has executed the EIDL Loan documents, which include the SBA Secured Disaster Loan Note, dated March 26, 2020 (the “EIDL Loan Note”), the Loan Authorization and Agreement, dated March 26, 2020 (the “EIDL Loan LA&A”), between the SBA and the Company, and the Security Agreement, dated March 26, 2020 (the “EIDL Loan Security Agreement”), between the SBA and the Company, and returned those executed documents to the SBA within the two month deadline from March 26, 2020 in order to avoid forfeiting the EIDL Loan. Notwithstanding the provisions stated in the loan documents requiring a personal guarantee, the Company did not provide a personal guarantee.

The Company may or may not draw any of the available funds under the EIDL Loan if it cannot secure certain changes or clarifications to the loan terms and conditions.

The EIDL Loan is secured by a security interest on all of the Company’s assets. The terms of the security interest are set forth in the EIDL Loan Security Agreement.

The foregoing description of the EIDL Loan is qualified in its entirety by reference to the terms of the EIDL Loan LA&A, which is attached hereto as Exhibit 10.1, the EIDL Loan Note, which is attached hereto as Exhibit 10.2, and the EIDL Loan Security Agreement, which is attached hereto as Exhibit 10.3, and each of which is incorporated by reference.

The information about the EIDL Loan disclosed in Item 1.01 above is incorporated by reference into this Item 2.03.

On May 22, 2020, Strata Skin Sciences, Inc. (the “Company”) accepted the resignation of David N. Gill from his position as a Board member and Chairman of the Board\’s Audit Committee. Mr. Gill resigned for personal reasons in order to focus attention on other matters. This resignation is not a result of any disagreement or dispute related to Strata’s operations, accounting policies, or practices. On the same date Ms. LuAnn Via, a member of the Company\’s Board since 2012 and a member of the Audit Committee since February 2017, agreed to serve as Chairperson of the Audit Committee. In addition to her long-standing service as a member of the Board, Ms. Via had previously served as Chairperson of the Board.

Additionally, Samuel Navarro, a member of the Board since 2014, became a member of the Audit Committee. Mr. Navarro has previous experience having served on the Audit Committee through the end of the third quarter of the 2016 fiscal year.

While the Company has executed the SBA’s standard EIDL Loan documents described in Item 1.01 above in order to avoid forfeiting the EIDL Loan commitment, the Company is seeking modifications regarding, among other things, the security interest of the SBA to permit third-party financing senior, in terms of security, to the SBA. The Company cannot guarantee that it will be successful in modifying the EIDL Loan documents to eliminate unacceptable provisions, or, if it is unsuccessful, the Company will still request disbursements for some or all of the amounts available under the EIDL Loan.

The information set forth under this Item 7.01 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “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 of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

STRATA Skin Sciences, Inc. Exhibit
EX-10.1 2 ex_10-1.htm U.S. SMALL BUSINESS ADMINISTRATION LOAN AUTHORIZATION & AGREEMENT. EXHIBIT 10.1 Application # 2000067140/EIDL 4316357010   U.S. Small Business Administration   Secured Economic Injury Disaster Loan   LOAN AUTHORIZATION AND AGREEMENT     Date: March 26,…
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About STRATA SKIN SCIENCES, INC. (NASDAQ:SSKN)

STRATA Skin Sciences, Inc., formerly MELA Sciences, Inc., is a medical technology company. The Company is engaged in developing and commercializing products for the diagnosis and treatment of dermatological disorders. The Company has three segments: Dermatology Recurring Procedures, Dermatology Procedures Equipment and Dermatology Imaging. The XTRAC and VTRAC products are the devices used for the treatment of psoriasis, vitiligo and other skin disorders. The XTRAC system delivers targeted ultraviolet light to affected areas of skin, leading to psoriasis clearing and vitiligo repigmentation, following a series of treatments. The Company’s technology includes XTRAC Excimer Laser, VTRAC Lamp and MelaFind. MelaFind is a non-invasive, point-of-care instrument to aid dermatologists in their decision to biopsy suspicious pigmented lesions, such as melanoma. The Company has approximately two distribution channels for phototherapy treatment equipment.