News
03/14/2017   STRATA Skin Sciences, Inc. Announces a Strategic Alliance With Ellipse USA, LLC

STRATA Skin Sciences, Inc. Announces a Strategic Alliance With Ellipse USA, LLC

  • Leverages STRATA’s Current Sales, Service and Support Organizations and Strong Relationships with the Dermatology Community
  • Ellipse Offers a Broad Range of Dermatological Lasers with over 6,000 Placements Worldwide

HORSHAM, Pa., March 14, 2017 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN) (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatologic disorders, today announced an agreement to license the exclusive US distribution rights for the Ellipse family of products from Ellipse USA.

This uniquely designed class of laser with patented Dual Mode Filtration is manufactured in Denmark by Ellipse Global A/S under the brand name Nordlys.  Nordlys utilizes the latest advancements in cosmetic and medical technology and offers a superior patient, provider and practice experience. There is no requirement for medications or needles, and little to no downtime.

The Ellipse systems have 24 indications cleared to date by the FDA and have the ability to use a multitude of light based technologies all in one compact platform –SWT (Selective Waveband Technology: the latest evolution and advancements of Intense Pulsed Light), Nd:YAG and the FRAX 1550 non-ablative fractionated technology. Ellipse users include leading dermatologists, plastic surgeons and cosmetic physicians with over 6,000 placements worldwide.

Under the terms of the agreement, STRATA will be the exclusive distributor of Ellipse lasers for three years, with an automatic extension out to a five-year term as long as minimum sales targets are achieved.  STRATA will pay an annual license fee as well as a commission for each system sold.  As part of the transaction, the majority of sales and marketing professionals from Ellipse USA will be joining STRATA’s team.

Frank McCaney, President and Chief Executive Officer of STRATA, commented, “We are excited to enter into this agreement with Ellipse USA, LLC, with STRATA becoming the exclusive U.S. distributor of the differentiated best-in-class Ellipse line of lasers.  The agreement is consistent with our core strategy to become The Dermatological and Aesthetic Practice Partner of Choice, by leveraging our existing infrastructure, including our substantial group of 23 sales representatives, a strong field service group, reimbursement capabilities and call center."

“We will continue to look for complementary dermatologic and aesthetic products via thoughtful business development in order to build STRATA’s revenue base and add more products to better serve our existing call points,” added Mr. McCaney.

Jon Urbana, Founder of Ellipse USA, LLC. stated, "With global success and a loyal physician following, our Ellipse family is excited to continue the journey of providing the world’s most proven and progressive physicians with best-in-class technology. STRATA is the ideal partner as we continue to build our distribution network within the aesthetic marketplace here in the U.S.  We look forward to increasing market penetration of our proprietary lasers in the U.S. by taking advantage of STRATA’s infrastructure and strong relationships in the dermatology community.”

About STRATA Skin Sciences, Inc. (www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions.

About Ellipse and Ellipse USA
Ellipse is a privately held company, with headquarters in Copenhagen, Denmark, that develops, manufactures and markets high-quality laser and SWT based systems. Since 1997, Ellipse has been on the forefront of non-invasive rejuvenation technology; driven by a single obsession: to provide the most efficacious and versatile skin solutions. Offering unsurpassed clinical and technical support as well as clinically proven, safe and effective solutions, Ellipse currently markets its products to more than 50 countries worldwide. Ellipse USA is the USA Distributor for Ellipse products. For more information, refer to www.ellipse.com.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the Company’s ability to execute on on-going or new R&D or treatment protocol programs, the Company’s ability expand its product offerings, the public’s reaction the Company’s new advertisements and marketing campaign,  the Company’s ability to build a leading franchise in medical dermatology, and the Company’s ability to leverage its sales and field service forces, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due too financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

Investor Contacts:
Christina L. Allgeier, Chief Financial Officer
STRATA Skin Sciences, Inc.
callgeier@strataskin.com
215-619-3267

Bob Yedid, Managing Director
LifeSci Advisors, LLC
bob@LifeSciAdvisors.com
646-597-6989

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences Reports Fourth Quarter and Full Year 2016 Financial Results

Company is cash flow positive for the fourth quarter

Conference call and webcast, today at 4:30 pm Eastern Time

HORSHAM, Pa., March 09, 2017 (GLOBE NEWSWIRE) -- (NASDAQ:SSKN) STRATA Skin Sciences, Inc. (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the quarter and year ended December 31, 2016.

Fourth Quarter and Recent Corporate Highlights

  • Fourth quarter revenues were $8.6 million
  • Recurring XTRAC revenues were $6.7 million, down 10.0% year-over-year and up 8.5% sequentially
  • Installed base of XTRAC systems in the U.S. expanded to 775 systems placed, up 7.9% from 718 at the end of the fourth quarter 2015
  • Company generated positive operating cash flow for the fourth quarter

“We are in the process of implementing a strategy that we believe will enhance our offering to the dermatology community and accelerate growth in our business,” stated Frank McCaney, President and Chief Executive Officer of STRATA. “The initiatives we rolled out in recent months, together with work conducted under my predecessor, had a positive impact on our Q4 results. We continue to believe that medical office practices are undergoing significant changes and we are adjusting our business with the goal of better serving the needs of our customers and the marketplace. Our response to those changes underlies our longer term thinking about how best to grow our enterprise.”

“We have prioritized the clinical development work on our Optimal Therapeutic Dose for XTRAC and are expanding outreach for building awareness about the use of XTRAC for vitiligo, atopic dermatitis (which includes eczema, particularly pediatric eczema) and scalp psoriasis. We believe that there is the potential for significant revenue growth through these campaigns. We are also active in business development with the objective of bringing other products for our call points into our available portfolio. We believe that by providing a set of unique and advantaged products we can help our customers to become more successful, thereby establishing STRATA as the Preferred Partner to the dermatology community.”

Financial Results for the Fourth Quarter 2016
Revenues for the fourth quarter of 2016 were $8.6 million compared with revenues for the fourth quarter of 2015 of $9.5 million, a decrease of 8.9%.

Net loss for the fourth quarter of 2016 was $0.9 million or ($0.09) per diluted share, which included other income of $0.1 million for the change in fair value of warrant liability, $1.3 million in interest expense, $1.5 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with a net loss for the fourth quarter of 2015 of $0.6 million or ($0.21) per diluted share, which included other income of $2.5 million for the change in fair value of warrant liability, $1.5 million in interest expense, $1.7 million in depreciation and amortization expenses and $0.1 million for income tax expense.

Financial Results for the Full Year 2016
Revenues for the full year 2016 were $31.8 million compared with revenues of $18.5 million in 2015. Reported revenues are not directly comparable to the prior year period since the Company acquired certain assets of PhotoMedex as of June 22, 2015. 

Net loss for the year 2016 was $3.3 million or ($0.75) per diluted share, which included other income of $5.4 million for the change in fair value of warrant liability, $4.9 million in interest expense, $6.4 million in depreciation and amortization expenses and $0.3 million for income tax expense. This compares with a net loss in 2015 of $27.9 million or ($3.27) per diluted share, which included a deemed dividend of $3.0 million, other income of $1.8 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $10.2 million in interest expense, $0.5 million in acquisition costs and $4.0 million in depreciation and amortization expenses.

As of December 31, 2016 the Company had cash, cash equivalents and short-term investments of $3.9 million, compared with $3.3 million as of December 31, 2015.

In order to provide information that is helpful to investors relating to the historical and current growth of the XTRAC recurring revenues, the Company is providing the following table, including information obtained from the predecessor company’s disclosures of previous period results.

Q4 2016 Supplemental Proforma Financial Information
As of December 31, 2016, Q4 Earnings Report
(unaudited)
(in thousands)
                           
      2015  
    Qtr. 1     Qtr. 2     Qtr. 3     Qtr. 4     YTD  
XTRAC Recurring Revenue   $ 5,376 *   $ 6,678 **   $ 7,032     $ 7,479     $ 26,565 ***
                               
                               
      2016  
    Qtr. 1     Qtr. 2     Qtr. 3     Qtr. 4     YTD  
XTRAC Recurring Revenue   $ 5,528     $ 6,093     $ 6,205     $ 6,732     $ 24,558  

*As reported by PhotoMedex, Inc.
**$104 reported by the Company; balance reported by PhotoMedex, Inc.
***$14,615 reported by the Company; balance reported by PhotoMedex, Inc.

Non-GAAP Measures
To supplement the Company’s consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted EBITDA.

The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

      Three Months Ended
December 31,
  Year Ended
December 31,
        2016       2015       2016       2015  
      (in thousands)
(Unaudited)
  (in thousands)
(Unaudited)
Net loss as reported   $ (887 )   $   (593 )   $ (3,335 )   $  (24,947 )
Adjustments:                
  Depreciation and amortization expense *     1,522       1,703       6,366       4,051  
  Interest expense, net      623       535       2,227       1,329  
  Non-cash interest expense     706       927       2,673       8,871  
  Income taxes     64       119       255       119  
                   
  EBITDA     2,028       2,691       8,186       (10,577 )
                   
  Stock-based compensation expense     (288 )     270       113       1,753  
  Change in fair value of warrants     (80 )     (2,493 )     (5,396 )     (1,814 )
  Acquisition costs     -       -       -       456  
  Impairment of property and equipment     -       -       -       920  
  Inventory valuation reserves     -       -       -       4,818  
                   
Non-GAAP adjusted EBITDA   $ 1,660     $ 468     $  2,903     $ (4,444 )

* Includes depreciation on lasers placed-in-service of $1,052 and $1,185 for the three months ended December 31, 2016 and 2015, respectively, and $4,410 and $2,364 for the year ended December 31, 2016 and 2015, respectively.

STRATA previously announced the scheduling of a conference call with investors to review the results of the fourth quarter and year ended December 31, 2016. Following is the pertinent information for accessing that call. 

Conference Call Detail:

Date:   Thursday, March 9, 2017
Time:   4:30 pm Eastern Time
Toll Free:   800-327-5138
International:   719-325-2250
Passcode:   1973486
Webcast:   www.strataskinsciences.com

Replays available through March 23, 2017:

Toll Free:   844-512-2921
International:   412-317-6671
Passcode:   1973486
Webcast:   www.strataskinsciences.com

About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com)           
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the Company’s ability to execute on on-going or new R&D or treatment protocol programs, the Company’s ability expand its product offerings,  the public’s reaction the Company’s new advertisements and marketing campaign, and the Company’s ability to build a leading franchise in medical dermatology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due too financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

Investor Contacts:

Christina L. Allgeier, Chief Financial Officer       Bob Yedid, Managing Director
STRATA Skin Sciences, Inc.       LifeSci Advisors, LLC
215-619-3267        646-597-6989
callgeier@strataskin.com       bob@LifeSciAdvisors.com

 

STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
   
  December 31, 2016   December 31, 2015
       
ASSETS      
Current assets:      
Cash and cash equivalents $   3,928   $   3,303
Restricted cash   -     15
Accounts receivable, net   3,390     4,068
Inventories, net   2,817     4,128
Other current assets   617     465
Property and equipment, net   10,180     13,851
Goodwill and other intangible assets   22,215     24,155
Other non-current assets, net   46     94
Total assets $ 43,193   $ 50,079
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Note payable $   339   $    299
Current portion of long-term debt   1,714     -
Accounts payable and accrued current liabilities   3,845     6,607
Current portion of deferred revenues   235     173
Senior secured convertible debentures, net   12,028     9,839
Long-term debt, net   9,752     9,851
Warrant liability   105     7,042
Other long-term liabilities   456     181
Stockholders' equity   14,719     16,087
Total liabilities and stockholders’ equity $ 43,193   $ 50,079
       

 

STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
 
    For the Three Months Ended
December 31,
  For the Year Ended
December 31,
      2016       2015       2016       2015  
                 
Revenues   $ 8,631     $ 9,480     $ 31,757     $ 18,495  
                 
Cost of revenues     3,005       3,493       12,636       13,719  
                 
Gross profit     5,626       5,987       19,121       4,776  
                 
Operating expenses:                
Engineering and product development     388       740       1,929       2,029  
Selling and marketing     3,079       3,553       13,152       9,194  
General and administrative     1,755       3,209       7,637       10,028  
      5,222       7,502       22,718       21,251  
                 
Operating loss before other income (expense), net     404       (1,515 )     (3,597 )     (16,475 )
                 
Other income (expense), net:                
Interest expense, net     (1,329 )     (1,462 )     (4,900 )     (10,200 )
Change in fair value of warrant liability     80       2,493       5,396       1,814  
Other (expense) income, net     22       10       21       33  
      (1,227 )     1,041       517       (8,353 )
                 
Net loss before income taxes     (823 )     (474 )     (3,080 )     (24,828 )
                 
Income tax expense     (64 )     (119 )     (255 )     (119 )
                 
Net loss     (887 )     (593 )     (3,335 )     (24,947 )
                 
Deemed dividend related to warrant modification     -       -       -       (2,962 )
                 
Net loss attributable to common stockholders   $ (887 )   $ (593 )   $ (3,335 )   $ (27,909 )
                 
Net loss per share:                
  Basic   $ (0.08 )   $ (0.06 )   $ (0.31 )   $ (3.27 )
  Diluted   $ (0.09 )   $ (0.06 )   $ (0.75 )   $ (3.27 )
                 
                 
Shares used in computing net loss per share:                
  Basic     10,768,533       10,147,066       10,595,068       8,536,699  
  Diluted     10,768,533       10,147,066       11,578,573       8,536,699  
                 

 

STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 
    For the Year Ended
December 31,
      2016       2015  
Cash Flows From Operating Activities:        
Net loss   $ (3,335 )   $ (24,947 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization     6,366       4,051  
Stock-based compensation     113       1,753  
Amortization of debt discount     2,473       8,479  
Amortization of deferred financing costs     200       391  
Change in fair value of warrant liability     (5,396 )     (1,814 )
Impairment of long-lived assets     -       920  
Inventory write-offs     -       4,818  
Other     484       139  
Changes in operating assets and liabilities:        
Current assets     2,093       (833 )
Current liabilities     (2,676 )     473  
 Net cash provided by (used in) operating activities     322       (6,570 )
         
Cash Flows From Investing Activities:        
Lasers placed-in-service, net     (1,008 )     (1,689 )
Other     140       (50 )
Acquisition costs, net of cash received     -       (42,500 )
 Net cash used in investing activities     (868 )     (44,239 )
         
Cash Flows From Financing Activities:        
Proceeds from convertible debentures     -       32,500  
Proceeds from senior notes     -       10,000  
Repayment of senior notes     -       (10,000 )
Proceeds from term debt     1,500       10,500  
Other financing activities     (333 )     (330 )
 Net cash provided by financing activities     1,167       42,670  
         
Effect of exchange rate changes on cash     4       8  
         
Net decrease in cash and cash equivalents     625       (8,131 )
Cash and cash equivalents, beginning of period     3,303       11,434  
         
Cash and cash equivalents, end of period   $   3,928     $ 3,303  


Supplemental information:            
Cash paid for interest   $ 2,054   $ 1,188  
             
Supplemental information of non-cash investing and financing activities:            
Modification of warrants recorded as a deemed dividend   $ -   $ 2,962  
Conversion of senior secured convertible debentures into common stock   $ 265   $ 4,815  
Reclassification of property and equipment to inventory, net   $ -   $ 107  
Reclassification of warrant liability to (from) stockholders’ equity   $ 1,541   $ (5,399 )
Recognition of debt discount and beneficial conversion feature on long-term debt   $ -   $ 27,300  
Recognition of warrants issued with term note credit facility as debt discount    $ 47   $ 321  
Prepaid insurance financed with notes payable   $ 372   $ 334  
Recognition of warrants issued in connection with financings   $ -   $ 2,958  

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. to Report Fiscal Year End 2016 Financial Results on Thursday, March 9

Conference Call to Follow at 4:30 p.m. EST

HORSHAM, Pa., Feb. 23, 2017 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release fiscal year ended December 31, 2016 financial results on Thursday, March 9, after the market close.  STRATA Skin Sciences President and Chief Executive Officer, Frank J. McCaney, and Chief Financial Officer, Christina Allgeier, will host a conference call at 4:30 pm Eastern Time to review the Company’s progress and answer questions.

Conference Call Details:

Date: Thursday, March 9, 2017
Time: 4:30 pm Eastern Time
Toll Free: 800-327-5138
International: 719-325-2250
Passcode: 1973486
Webcast: www.strataskinsciences.com
   
Replays, available through March 23, 2017
   
Toll Free: 844-512-2921
International: 412-317-6671
Replay PIN: 1973486
   

About STRATA Skin Sciences, Inc.  (www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company focused in the dermatology market.  Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind System used to assist in the identification and management of melanoma skin cancer.

Investor Contacts:
Christina L. Allgeier
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences Reports Third Quarter 2016 Financial Results

Company is cash flow positive for the third quarter

Conference call and webcast, today at 4:30 pm Eastern Time

HORSHAM, Pa., Nov. 10, 2016 (GLOBE NEWSWIRE) -- (NASDAQ:SSKN) STRATA Skin Sciences, Inc. (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the quarter ended September 30, 2016.

Third Quarter and Recent Corporate Highlights

  • Third quarter revenues were $7.7 million
  • Recurring XTRAC revenues were $6.2 million, down 11.8% year-over-year and up 1.8% sequentially
  • Installed base of XTRAC systems in the U.S. expanded to 760 systems placed, up 8.9% from 698 at the end of the third quarter 2015
  • Company generated positive operating cash flow for the third quarter and expects to be cash flow positive in the fourth quarter 2016
  • Podium presentation of new XTRAC data at Fall Clinical Dermatology Conference
  • On October 31, appointed Frank McCaney as President and CEO

“The STRATA business has been in its current form for about a year. We now have a good sense of what has been working well with the XTRAC business, where the challenges lie, and what actions we need to take to address them,” stated Frank McCaney, President and Chief Executive Officer. “I believe that gives us the opportunity to focus on growing the core business through technology enhancements, improved treatment protocols for patients and new marketing initiatives. Importantly, we believe that dermatology office practices are undergoing significant changes, and we plan to take an approach that helps dermatologists and their practices be more efficient, more successful and to better manage the business aspects of their offices.”

“Going forward, one of the priorities of our strategic plan for STRATA will be to expand our product offerings,” continued Mr. McCaney. “The Company already has significant resources in a dedicated dermatology sales organization, a Field Service force, and Field Clinical Specialists as well as a Call Center for Patient Recruitment and a Reimbursement Hotline. I will be working with our senior management to evaluate these resources and to determine if any further improvements need to be made. Together, I believe our current capabilities are important assets in the dermatology space that can and should be leveraged.  Overall, I believe we have the talent, innovation and the infrastructure to enhance our value proposition to our customers and ultimately the value to our shareholders.”  

Reported Financial Results

Revenues for the third quarter of 2016 were $7.7 million compared with revenues for the third quarter of 2015 of $8.3 million, a decrease of 6.7%.

Net loss for the third quarter of 2016 was $1.5 million or ($0.14) per diluted share, which included other income of $0.1 million for the change in fair value of warrant liability, $1.2 million in interest expense, $1.5 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with a net loss for the third quarter of 2015 of $12.2 million or ($1.29) per diluted share, which included a deemed dividend of $3.0 million, other expense of $1.3 million for the change in fair value of warrant liability, $5.6 million in interest expense and $1.7 million in depreciation and amortization expenses.

Revenues for the nine months of 2016 were $23.1 million compared with revenues for the nine months of 2015 of $9.0 million. Reported revenues for the nine months ended September 30, 2016 are not comparable to the prior year period since the Company acquired certain assets of PhotoMedex as of June 22, 2015. 

Net loss for the nine months of 2016 was $2.4 million or ($0.71) per diluted share, which included other income of $5.3 million for the change in fair value of warrant liability, $3.6 million in interest expense, $4.8 million in depreciation and amortization expenses and $0.2 million for income tax expense. This compares with a net loss for the nine months of 2015 of $27.3 million or ($3.42) per diluted share, which included a deemed dividend of $3.0 million, other expense of $0.7 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $8.7 million in interest expense, $0.5 million in acquisition costs and $2.3 million in depreciation and amortization expenses.

As of September 30, 2016 the Company had cash, cash equivalents and short-term investments of $3.0 million, compared with $3.3 million as of December 31, 2015.

In order to provide information that is helpful to investors relating to the historical and current growth of the XTRAC recurring revenues, the Company is providing the following table, including information obtained from the predecessor company’s disclosures of previous period results.

Q3 2016 Supplemental Proforma Financial Information
As of September 30, 2016, Q3 Earnings Report
(unaudited)
(in thousands)
 
    2015  
    Qtr. 1     Qtr. 2     Qtr. 3   Qtr. 4   YTD  
XTRAC Recurring Revenue   $ 5,376   *   $ 6,678   **   $ 7,032     $ 7,479     $ 26,565   ***
                           
    2016  
    Qtr. 1     Qtr. 2     Qtr. 3   Qtr. 4   YTD  
XTRAC Recurring Revenue   $ 5,528       $ 6,093       $ 6,205       -     $ 17,826    
                                           

*As reported by PhotoMedex, Inc.
**$104 reported by the Company; balance reported by PhotoMedex, Inc.
***$14,615 reported by the Company; balance reported by PhotoMedex, Inc.

Non-GAAP Measures
To supplement the Company’s consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted EBITDA.

The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

      Three Months Ended
September 30,
  Nine Months Ended
September 30,
      2016
  2015
  2016
  2015
      (in thousands)
(Unaudited)
  (in thousands)
(Unaudited)
                                 
Net loss as reported   $ (1,509 )   $ (9,234 )   $ (2,448 )   $ (24,354 )
Adjustments:                
  Depreciation and amortization expense *     1,521       1,710       4,844       2,348  
  Interest expense, net     537       506       1,604       794  
  Non-cash interest expense     638       5,071       1,967       7,944  
  Income taxes     64       -       191       -  
                   
EBITDA     1,251       (1,947 )     6,158       (13,268 )
                   
  Stock-based compensation expense     116       1,007       401       1,483  
  Change in fair value of warrants     (132 )     1,329       (5,316 )     679  
  Acquisition costs     -       -       -       456  
  Impairment of property and equipment     -       -       -       920  
  Inventory valuation reserves     -       -       -       4,818  
                   
Non-GAAP adjusted EBITDA   $ 1,235     $ 389     $ 1,243     $ (4,912 )
                                 

* Includes depreciation on lasers placed-in-service of $1,040 and $1,169 for the three months ended September 30, 2016 and 2015, respectively, and $3,329 and $1,169 for the nine months ended September 30, 2016 and 2015, respectively.

STRATA previously announced the scheduling of a conference call with investors to review the results of the second quarter. Following is the pertinent information for accessing that call. 

Conference Call Detail:

Date:   Thursday, November 10, 2016
Time:   4:30 pm Eastern Time
Toll Free:   888-503-8175
International:   719-457-2631
Passcode:   5890827
Webcast:   www.strataskinsciences.com
     

Replays available through November 26, 2016:

Toll Free:   844-512-2921
International:   412-317-6671
Passcode:   5890827
Webcast:   www.strataskinsciences.com
     

About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the Company’s ability to execute on on-going or new R&D or treatment protocol programs, the Company’s ability to expand its product offerings,  the public’s reaction to the Company’s new advertisements and marketing campaign, and the Company’s ability to build a leading franchise in medical dermatology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
     
    September 30, 2016   December 31, 2015
    (unaudited)    
ASSETS        
Current assets:        
Cash and cash equivalents   $ 2,957     $ 3,303  
Restricted cash     -       15  
Accounts receivable, net     2,936       4,068  
Inventories, net     3,229       4,128  
Other current assets     266       465  
Property and equipment, net     10,848       13,851  
Goodwill and other intangible assets     22,668       24,155  
Other non-current assets, net     46       94  
Total assets   $ 42,950     $ 50,079  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Note payable   $ -     $ 299  
Current portion of long-term debt     857       -  
Accounts payable and accrued current liabilities     3,437       6,607  
Current portion of deferred revenues     327       173  
Senior secured convertible debentures, net     11,398       9,839  
Long-term debt, net     10,549       9,851  
Warrant liability     185       7,042  
Other long-term liabilities     320       181  
Stockholders' equity     15,877       16,087  
Total liabilities and stockholders’ equity   $ 42,950     $ 50,079  
         


STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
 
    For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
    2016   2015   2016   2015
                 
Revenues   $ 7,767     $ 8,323     $ 23,126     $ 9,015  
                 
Cost of revenues     3,070       3,042       9,631       10,226  
                 
Gross profit (loss)     4,697       5,281       13,495       (1,211 )
                 
Operating expenses:                
Engineering and product development     382       560       1,541       1,289  
Selling and marketing     2,840       3,913       10,073       5,641  
General and administrative     1,880       3,131       5,882       6,819  
      5,102       7,604       17,496       13,749  
                 
Operating loss before other income (expense), net     (405 )     (2,323 )     (4,001 )     (14,960 )
                 
Other income (expense), net:                
Interest expense, net     (1,175 )     (5,577 )     (3,571 )     (8,738 )
Change in fair value of warrant liability     132       (1,329 )     5,316       (679 )
Other (expense) income, net     3       (5 )     (1 )     23  
      1,040       (6,911 )     1,744       (9,394 )
                 
Net loss before income taxes     (1,445 )     (9,234 )     (2,257 )     (24,354 )
                 
Income tax expense     (64 )     -       (191 )     -  
                 
Net loss     (1,509 )     (9,234 )     (2,448 )     (24,354 )
                 
Deemed dividend related to warrant modification     -       (2,962 )     -       (2,962 )
                 
Net loss attributable to common stockholders   $ (1,509 )   $ (12,196 )   $ (2,448 )   $ (27,316 )
                 
Net loss per share:                
Basic   $ (0.14 )   $ (1.29 )   $ (0.23 )   $ (3.42 )
Diluted   $ (0.14 )   $ (1.29 )   $ (0.71 )   $ (3.42 )
                 
                 
Shares used in computing net loss per share:                
Basic     10,679,761       9,442,022       10,536,824       7,994,012  
Diluted     10,679,761       9,442,022       10,947,713       7,994,012  
                 


STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 
  For the Nine Months Ended
September 30,
    2016   2015
Cash Flows From Operating Activities:        
Net loss   $ (2,448 )   $ (24,354 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization     4,844       2,348  
Stock-based compensation     401       1,483  
Amortization of debt discount     1,821       7,571  
Amortization of deferred financing costs     145       373  
Change in fair value of warrant liability     (5,316 )     679  
Impairment of long-lived assets     -       920  
Inventory write-offs     -       4,818  
Other     395       20  
Changes in operating assets and liabilities:        
Current assets     2,142       (916 )
Current liabilities     (3,068 )     113  
Net cash used in operating activities     (1,084 )     (6,945 )
         
Cash Flows From Investing Activities:        
Lasers placed-in-service, net     (607 )     (1,066 )
Other     140       (117 )
Acquisition costs, net of cash received     -       (42,500 )
Net cash used in investing activities     (467 )     (43,683 )
         
Cash Flows From Financing Activities:        
Proceeds from convertible debentures     -       32,500  
Proceeds from senior notes     -       10,000  
Proceeds from term debt     1,500       -  
Other financing activities     (299 )     (154 )
Net cash provided by financing activities     1,201       42,346  
         
Effect of exchange rate changes on cash     4       17  
         
Net decrease in cash and cash equivalents     (346 )     (8,265 )
Cash and cash equivalents, beginning of period     3,303       11,434  
         
Cash and cash equivalents, end of period   $ 2,957     $ 3,169  
                 
Supplemental information:                
Cash paid for interest   $ 1,517     $ 402  
                 
Supplemental information of non-cash investing and financing activities:                
Conversion of convertible preferred stock into common stock   $ 309     $ 5,283  
Conversion of senior secured convertible debentures into common stock   $ 248     $ 4,593  
Reclassification of property and equipment to inventory, net   $ -     $ 107  
Reclassification of warrants to (from) stockholders’ equity   $ 1,541     $ (5,399 )
Establishment of a warrant liability with a deemed dividend   $ -     $ 2,962  
Recognition of debt discount and beneficial conversion feature on long-term debt   $ -     $ 27,300  
Recognition of warrants issued as debt discount   $ 47     $ -  
                 
Investor Contacts:
Christina L. Allgeier, Chief Financial Officer
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid, Managing Director
LifeSci Advisors, LLC
646-597-6989
bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences Names Frank McCaney as President and CEO

HORSHAM, Pa., Nov. 01, 2016 (GLOBE NEWSWIRE) -- (NASDAQ:SSKN) STRATA Skin Sciences, Inc. (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today announced that its Board of Directors has named Mr. McCaney, 61, as the company’s next President and Chief Executive Officer, effective November 1, 2016.

Mr. McCaney replaces Michael Stewart, who has resigned as President and CEO and member of the Board of Directors, effective immediately. Mr. Stewart has agreed to remain with STRATA as an independent consultant to assist in both commercial and clinical aspects of the company’s continued growth.

Jeffrey O’Donnell Sr., Chairman of the Board of STRATA Skin Sciences, stated, “The Board thanks Mike Stewart for his tireless efforts and dedication to Strata Skin Sciences.  We are confident that Frank McCaney has the skill sets to build the company into a major innovator and partner to dermatologists and their clinical teams.  We look forward to building the value in this changing environment.”   

In expressing his views on his reasons for joining STRATA and his visions for the company’s growth, Mr. McCaney stated, “The core business of Strata is healthy and I believe that there is significant potential for growth both in the core business and in expanding the company's business model to better serve both dermatologists and patients.”

Mr. McCaney was most recently CEO of Corpak MedSystems, a private equity-backed medical device company in the field of enteral feeding. Corpak was sold to Halyard Health (NYSE:HYH) for $174 million in May 2016. Prior to Corpak, he was the founder and CEO of Nitric BioTherapeutics, a venture backed-medical technology company from 2006 until 2012. Prior to Nitric Bio, he was a senior executive at Viasys Healthcare, Inc., a medical technology company focusing on respiratory, neurology, medical disposable and orthopedic products and had a lead role in spinning Viasys out of Thermo Electron Corporation.  While at Viasys, Mr. McCaney had several responsibilities including strategy, business development and investor relations. He currently serves as a director of Diasome Pharmaceuticals, a privately-held company.

As previously announced, STRATA will release its financial results for the third quarter ended September 30, 2016 after the close of the financial markets on Thursday, November 10, 2016.  STRATA’s management will host an investment community conference call the same day at 4:30 p.m. Eastern Time to discuss these results.

About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com)           
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the Company’s ability to execute on plans for acquisitions and entering new markets, the public’s reaction the Company’s new advertisements and marketing campaign, and the Company’s ability to build a leading franchise in medical dermatology, with growth in the Company’s core business and expanding the Company’s business model , are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

Christina L. Allgeier, Chief Financial Officer
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid, Managing Director
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. to Report 3rd Quarter 2016 Financial Results on Thursday, November 10

Conference Call to Follow at 4:30 p.m. EST

HORSHAM, Pa., Oct. 27, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release third quarter financial results on Thursday, November 10, after the market close.  STRATA Skin Sciences President and Chief Executive Officer, Michael Stewart, and Christina Allgeier, Chief Financial Officer, will host a conference call at 4:30 pm Eastern Time to review the Company’s progress and answer questions.

Conference Call Details:
Date: Thursday, November 10, 2016
Time: 4:30 pm Eastern Time
Toll Free:   888-503-8175
International:   719-457-2631
Passcode: 5890827
Webcast:  www.strataskinsciences.com
   
Replays, available through November 26, 2016
Toll Free: 844-512-2921
International:   412-317-6671
Replay PIN:  5890827

About STRATA Skin Sciences, Inc.  (www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company focused in the dermatology market.  Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind System used to assist in the identification and management of melanoma skin cancer.

Investor Contacts:
Christina L. Allgeier
STRATA Skin Sciences, Inc.
215 619 3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences Reports Second Quarter 2016 Financial Results

Conference call and webcast, today at 4:30 pm Eastern Time

HORSHAM, Pa., Aug. 11, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (“STRATA”) (NASDAQ:SSKN) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the quarter ended June 30, 2016.

Second Quarter and Recent Corporate Highlights

  • Second quarter revenues were $7.7 million.
  • Recurring XTRAC revenues were $6.1 million, down 8.8% year-over-year and up 10.2% sequentially.
  • Installed base of XTRAC systems in the U.S. expanded to 748 systems placed, up 12.7% from 664 at the end of the second quarter 2015.

The operating results of the Company for the three months ended June 30, 2016 include activity from the XTRAC and VTRAC businesses for the entire period. As a result of purchase accounting rules, the operating results of the XTRAC and VTRAC businesses for the three months ended June 30, 2015 are included for the period of June 23 through June 30 in consolidated statements of operations.

“As we work to drive further market penetration of XTRAC we are continuing to implement improvements to our marketing and awareness campaigns aimed at expanding patient awareness and better facilitating the patient’s XTRAC experience.  Over the coming quarters, we expect to see greater efficiencies from our newly revamped website coupled with new creatives and more targeted approach in television, radio and social media. In addition, our team has implemented a new process to work with dermatology practices with newly placed XTRAC systems in an effort to ramp revenues more quickly and maintain a consistent and growing level of procedures,” said Michael R. Stewart, President and CEO of the Company. 

Continuing, Mr. Stewart added, “We are seeing a greater consolidation of individual dermatology practices in the marketplace through corporate buyouts. Over time, we believe this is an important growth opportunity for the XTRAC as our sales approach adapts to addressing the needs of these corporate entities, including the potential expansion of the deployment of XTRAC into a greater number of owned practices. Separately, as patients face the reset of their deductible and co-pays at the start of each year, and as insurers are raising these deductible limits for many consumers, we believe this appears to have been reflected in fewer patient visits to dermatologists during the past quarter than in the same quarter a year ago.”

“We are excited about the opportunity for growth of the XTRAC system.  We continue to pursue R&D projects that may deliver a more effective treatment using a higher dose of light, increasing the appeal of the XTRAC system to dermatologists and patients. In addition to accelerating our revenue growth, we are also engaged in several engineering and R&D projects to help lower Strata’s costs of installing and maintaining the XTRAC systems in place,” added Mr. Stewart.

Reported Financial Results
Revenues for the second quarter of 2016 were $7.7 million compared with revenues for the second quarter of 2015 of $0.6 million.

Net income for the second quarter of 2016 was $0.5 million or ($0.23) per diluted share, which included other income of $3.2 million for the change in fair value of warrant liability, $1.2 million in interest expense, $1.6 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with a net loss for the second quarter of 2015 of $7.8 million or ($1.01) per diluted share, which included other income of $2.0 million for the change in fair value of warrant liability, $0.8 million in interest expense and $0.3 million in depreciation and amortization expenses.

Revenues for the six months of 2016 were $15.4 million compared with revenues for the six months of 2015 of $0.7 million.

Net loss for the six months of 2016 was $0.9 million or ($0.55) per diluted share, which included other income of $5.2 million for the change in fair value of warrant liability, $2.4 million in interest expense, $3.3 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with a net loss for the six months of 2015 of $15.1 million or ($2.08) per diluted share, which included other income of $0.7 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $3.2 million in interest expense, $0.5 million in acquisition costs and $0.6 million in depreciation and amortization expenses.

As of June 30, 2016 the Company had cash, cash equivalents and short-term investments of $2.8 million, compared with $3.3 million as of December 31, 2015.

In order to provide information that is helpful to investors relating to the historical and current growth of the XTRAC recurring revenues, the Company is providing the following table, including information obtained from the predecessor company’s disclosures of previous period results.

 
Q2 2016 Supplemental Proforma Financial Information
As of June 30, 2016, Q2 Earnings Report
(unaudited)
(in thousands)
                             
  2015  
  Qtr. 1     Qtr. 2     Qtr. 3   Qtr. 4   YTD  
XTRAC Recurring Revenue $ 5,376   *   $ 6,678   **   $ 7,032     $ 7,479     $ 26,565   ***
                         
  2016  
  Qtr. 1     Qtr. 2     Qtr. 3   Qtr. 4   YTD  
XTRAC Recurring Revenue $ 5,528       $ 6,093               $ 11,621    
                                     

*As reported by PhotoMedex, Inc.
**$104 reported by the Company; balance reported by PhotoMedex, Inc.
***$14,615 reported by the Company; balance reported by PhotoMedex, Inc.

Non-GAAP Measures
To supplement the Company’s consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted EBITDA.

The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

           
      Three Months Ended
June 30,
  Six Months Ended
June 30,
        2016       2015       2016       2015  
      (in thousands)
(Unaudited)
  (in thousands)
(Unaudited)
                                 
Net income (loss) as reported   $ 498     $ (7,847 )   $ (939 )   $ (15,120 )
Adjustments:                
  Depreciation and amortization expense     1,640       322       3,323       641  
  Interest expense, net     535       151       1,067       290  
  Non-cash interest expense     643       687       1,329       2,872  
  Income taxes     61       -       127       -  
                   
  EBITDA     3,377       (6,687 )     4,907       (11,317 )
                   
  Stock-based compensation expense     116       246       286       476  
  Change in fair value of warrants     (3,199 )     (1,985 )     (5,184 )     (651 )
  Acquisition costs     -       456       -       456  
  Impairment of property and equipment     -       920       -       920  
  Inventory valuation reserves     -       4,818       -       4,818  
                   
Non-GAAP adjusted EBITDA   $ 294     $ (2,232 )   $ 9     $ (5,298 )
                                 

STRATA previously announced the scheduling of a conference call with investors to review the results of the second quarter. Following is the pertinent information for accessing that call. 

Conference Call Detail:

Date:   Thursday, August 11, 2016
Time:   4:30 pm Eastern Time
Toll Free:   888.430.8691
International:   719.457.2664
Passcode:   1347868
Webcast:   www.strataskinsciences.com
     

Replays available through August 25, 2016:

Toll Free:   877.870.5176
International:   858.384.5517
Passcode:   1347868
Webcast:   www.strataskinsciences.com
     

About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the public’s reaction to the Company’s new advertisements and marketing campaign, and the Company’s ability to build a leading franchise in medical dermatology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

 
STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
   
  June 30, 2016   December 31, 2015
  (unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $ 2,841     $ 3,303  
Restricted cash   -       15  
Accounts receivable, net   2,708       4,068  
Inventories, net   3,754       4,128  
Other current assets   252       465  
Property and equipment, net   11,635       13,851  
Goodwill and other intangible assets   23,122       24,155  
Other non-current assets, net   94       94  
Total assets $ 44,406     $ 50,079  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Note payable $ 93     $ 299  
Accounts payable and accrued current liabilities   4,097       6,607  
Current portion of deferred revenues   204       173  
Senior secured convertible debentures, net   10,824       9,839  
Long-term debt, net   11,345       9,851  
Warrant liability   317       7,042  
Other long-term liabilities   254       181  
Stockholders' equity   17,272       16,087  
Total liabilities and stockholders’ equity $ 44,406     $ 50,079  
       


STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
         
    For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
      2016       2015       2016       2015  
                 
Revenues   $ 7,739     $ 611     $ 15,359     $ 692  
                 
Cost of revenues     3,139       6,474       6,561       7,185  
                 
Gross profit (loss)     4,600       (5,863 )     8,798       (6,493 )
                 
Operating expenses:                
Engineering and product development     634       282       1,159       521  
Selling and marketing     3,523       910       7,233       1,937  
General and administrative     1,901       1,950       4,002       3,686  
      6,058       3,142       12,394       6,144  
                 
Operating loss before other income (expense), net     (1,458 )     (9,005 )     (3,596 )     (12,637 )
                 
Other income (expense), net:                
Interest expense, net     (1,178 )     (838 )     (2,396 )     (3,162 )
Change in fair value of warrant liability     3,199       1,985       5,184       651  
Other (expense) income, net     (4 )     11       (4 )     28  
      2,017       1,158       2,784       (2,483 )
                 
Net income (loss) before income taxes     559       (7,847 )     (812 )     (15,120 )
                 
Income tax expense     (61 )     -       (127 )     -  
                 
Net income (loss)   $ 498     $ (7,847 )   $ (939 )   $ (15,120 )
                 
                 
Net income (loss) per share:                
Basic   $ 0.05     $ (0.97 )   $ (0.09 )   $ (2.08 )
Diluted   $ (0.23 )   $ (1.01 )   $ (0.55 )   $ (2.08 )
                 
                 
Shares used in computing net income (loss) per share:                
Basic     10,589,485       8,067,991       10,464,571       7,274,358  
Diluted     11,555,236       9,687,623       11,080,904       7,274,358  
                 


STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
   
  For the Six Months Ended
  June 30,
      2016       2015  
Cash Flows From Operating Activities:        
Net loss   $ (939 )   $ (15,120 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization     3,323       641  
Stock-based compensation     286       476  
Amortization of debt discount     1,239       2,662  
Amortization of deferred financing costs     91       219  
Change in fair value of warrant liability     (5,184 )     (651 )
Impairment of long-lived assets     -       920  
Inventory write-offs     -       4,818  
Other     329       -  
Changes in operating assets and liabilities:        
Current assets     1,817       513  
Current liabilities     (2,536 )     (33 )
Net cash used in operating activities     (1,574 )     (5,555 )
         
Cash Flows From Investing Activities:        
Lasers placed-in-service, net     (328 )     (123 )
Other     140       (100 )
Acquisition costs, net of cash received     -       (42,500 )
Net cash used in investing activities     (188 )     (42,723 )
         
Cash Flows From Financing Activities:        
Proceeds from convertible debentures     -       32,500  
Proceeds from senior notes     -       10,000  
Proceeds from term debt     1,500       -  
Other financing activities     (207 )     (105 )
Net cash provided by financing activities      1,293       42,395  
         
Effect of exchange rate changes on cash     7       2  
         
Net decrease in cash and cash equivalents     (462 )     (5,881 )
Cash and cash equivalents, beginning of period     3,303       11,434  
         
Cash and cash equivalents, end of period   $ 2,841     $ 5,553  
 
Supplemental information:        
Cash paid for interest   $ 980     $ 250  
         
Supplemental information of non-cash investing and financing activities:        
Conversion of convertible preferred stock into common stock   $ -     $ 5,283  
Conversion of senior secured convertible debentures into common stock   $ 248     $ 2,308  
Reclassification of property and equipment to inventory, net   $ -     $ 107  
Reclassification of warrants to equity   $ 1,541     $ -  
Recognition of warrants issued as debt discount   $ 47     $ -  
                 


Investor Contacts:
Christina L. Allgeier, Chief Financial Officer
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid, Managing Director
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. to Report 2nd Quarter 2016 Financial Results on Thursday, August 11

Conference Call to Follow at 4:30 p.m. EDT

HORSHAM, Pa., July 28, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release second quarter financial results on Thursday, August 11, after the market close.  STRATA Skin Sciences President and Chief Executive Officer, Michael Stewart, and Christina Allgeier, Chief Financial Officer, will host a conference call at 4:30 pm Eastern Time to review the Company’s progress and answer questions.

 
Conference Call Details:
Date:     Thursday, August 11
Time:     4:30 pm Eastern Time
Toll Free:     888-430-8691
International:     719-457-2664
Passcode:     1347868
Webcast:     www.strataskinsciences.com
       
Replays, available through August 25, 2016
Toll Free:     877-870-5176
International:     858-384-5517
Replay PIN:     1347868
       

About STRATA Skin Sciences, Inc.  (www.strataskinsciences.com)        
STRATA Skin Sciences is a medical technology company focused in the dermatology market.  Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind System used to assist in the identification and management of melanoma skin cancer.

Investor Contacts:
Christina L. Allgeier
STRATA Skin Sciences, Inc.
215 619 3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences to Host Key Opinion Leader Lunch

KOL Lunch in New York City on Thursday, June 16

HORSHAM, Pa., June 13, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN) (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of dermatological disorders, announced today that it will host a Key Opinion Leader meeting on Thursday, June 16th at 12pm ET in New York City.

The meeting will feature keynote presentations by renowned dermatological experts R. Rox Anderson, MD and Noah S. Scheinfeld, JD, MD, who will discuss new approaches to treating serious dermatological disorders, including psoriasis and vitiligo.  Members of the STRATA Skin Sciences executive management team will provide an overview of the Company’s XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions.

Dr. Rox Anderson serves as Director of Massachusetts General Hospital’s Wellman Center for Photomedicine, the world’s largest academic facility dedicated to photomedicine. He is also a professor at Harvard Medical School and an adjunct professor at MIT.  Dr. Anderson was previously President of the American Society for Laser Medicine & Surgery, where he now serves as Director of Government Communications and Education. He currently serves on STRATA Skin Sciences’ Board of Directors.

Dr. Anderson conceived and developed many of the non-scarring laser treatments now widely used in dermatology, such as selective photothermolysis for birthmarks, microvascular and pigmented lesions, tattoo and permanent hair removal. His research has significantly advanced the knowledge of human skin photobiology, drug photosensitization mechanisms, and laser-tissue interactions, and has contributed to the development of tissue optics, photodynamic therapy, and optical diagnostics.

Dr. Anderson graduated from MIT, received his MD degree magna cum laude from the joint MIT-Harvard Medical Program, Health Sciences and Technology, and completed his residency in dermatology and research fellowships at Harvard.

Dr. Noah Scheinfeld maintains a private dermatology practice in New York City. He is also an Assistant Clinical Professor of Dermatology at Columbia University Medical Center and serves as an Assistant Attending Physician at Beth Israel Medical Center and St. Luke's Roosevelt Hospital Center.

Dr. Scheinfeld  is a nationally recognized expert on psoriasis, hidradenitis suppurativa & Degos disease. As of 2010, he has authored or coauthored more than 175 peer-reviewed articles and has given more than 60 national dermatology presentations. He is an editor for Journal Drugs & Dermatology, SKINmed, Cutis, Skin & Aging, Dermatology Online Journal & American Journal of Clinical Dermatology.

Dr. Scheinfeld graduated  magna cum laude from Columbia University. He received his JD from Harvard Law School and his MD from Yale University School of Medicine. He completed his residency in dermatology at Albert Einstein College of Medicine and has been certified by the American Board of Dermatology in Dermatology and Pediatric Dermatology.

The event is intended for institutional investors and sell-side analysts only. If you would like to attend in person, please contact Mac MacDonald at 212-915-2567 or via e-mail at mac@lifesciadvisors.com to reserve a place.

A live webcast of the event, with slides, will be available at http://lifesci.rampard.com/20160616/reg.jsp and in the Investors section of the Company’s website at http://strataskinsciences.com

About STRATA Skin Sciences, Inc.  (www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the public’s reaction to the Company’s new advertisements and marketing campaign, and the Company’s ability to build a leading franchise in medical dermatology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

Investor Contacts:
Christina L. Allgeier, Chief Financial Officer
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid, Managing Director
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences Reports First Quarter 2016 Financial Results

Conference call and webcast, today at 4:30 pm Eastern Time

HORSHAM, Pa., May 12, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN) (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the quarter ended March 31, 2016.

First Quarter and Recent Corporate Highlights

  • First quarter total revenues of $7.6 million, which included recurring XTRAC revenue of $5.5 million, accounting for 72.5% of total revenues
  • Installed base of XTRAC systems in the U.S. expands to 730 systems placed, up 14.1% from 640 at the end of the first quarter 2015

The operating results of the Company for the three months ended March 31, 2016 include activity from the XTRAC and VTRAC businesses for the entire period. As a result of purchase accounting rules, the operating results of the XTRAC and VTRAC businesses for the three months ended March 31, 2015 are not included in consolidated statements of operations, including revenue amounts discussed in this release, for the period ended March 31, 2015.

“We continued to make solid progress with the XTRAC business in the first quarter of 2016,” said Michael R. Stewart, President and CEO of the Company. “As we anticipated, first quarter procedure volume and system placements were seasonally soft as patients respond to deductible and co-pay resets which occur in the first quarter of the year for many healthcare plans. New marketing initiatives planned for the second quarter and the rest of the year include broadcasting a new TV commercial with greater direct-to-patient appeal, enhanced radio spots, a greater social media presence for XTRAC and an improved XTRAC website for patients.” 

“We are excited about the opportunity for growth of the XTRAC system in the near- and long-term as dermatologists and their patients look for highly effective, less costly treatment options,” added Mr. Stewart.

Reported Financial Results
Revenues for the first quarter of 2016 were $7.6 million compared with revenues for the first quarter of 2015 of $0.8 million.

Net loss for the first quarter of 2016 was $1.4 million or ($0.26) per diluted share, which included other income of $2.0 million for the change in fair value of warrant liability, $1.2 million in interest expense, $1.7 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with a net loss for the first quarter of 2015 of $7.3 million or ($1.12) per diluted share, which included other expense of $1.3 million for the change in fair value of warrant liability, $2.3 million in interest expense and $0.3 million in depreciation and amortization expenses.

As of March 31, 2016 the Company had cash, cash equivalents and short-term investments of $3.1 million, compared with $3.3 million of unrestricted cash as of December 31, 2015.

In order to provide information that is helpful to investors relating to the historical and current growth of the XTRAC recurring revenues, the Company is providing the following table, including information obtained from the predecessor company’s disclosures of previous period results.


Q1 2016 Supplemental Proforma Financial Information
As of March 31, 2016, Q1 Earnings Report
(unaudited)
(in thousands)
 
    2015        2016  
  Qtr. 1     Qtr. 2     Qtr. 3   Qtr. 4   YTD     Qtr. 1
XTRAC Recurring
Revenue
$ 5,376   *   $ 6,678   **   $ 7,032     $ 7,479     $ 26,565   ***   $ 5,528  
                             

*As reported by PhotoMedex, Inc.
**$104 reported by the Company; balance reported by PhotoMedex, Inc.
***$14,615 reported by the Company; balance reported by PhotoMedex, Inc.

Non-GAAP Measures
To supplement the Company’s consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted EBITDA.

The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

      Three Months Ended
March 31,
 
            2016         2015    
 
      (in thousands)
(Unaudited)
 
Net loss as reported   $     (1,437 )     $       (7,272 )  
Adjustments:            
  Depreciation and amortization expense         1,684           316    
  Interest expense, net          532         139    
  Non-cash interest expense         686         2,185    
  Income taxes         66         -    
               
EBITDA         1,531         (4,632 )  
               
  Stock-based compensation expense         170         230    
  Change in fair value of warrants         (1,985 )       1,334    
               
Non-GAAP adjusted EBITDA   $     (284 )     $ (3,068 )  
 

STRATA previously announced the scheduling of a conference call with investors to review the results of the Fourth quarter. Following is the pertinent information for accessing that call. 

Conference Call Detail:

Date:   Thursday, May 12
Time:   4:30 pm Eastern Time
Toll Free:   888-576-4387
International:   719-457-2697
Passcode:   3418132
Webcast:   www.strataskinsciences.com
     

Replays available through May 26, 2016:

Toll Free:   877-870-5176
International:   858-384-5517
Passcode:   3418132
Webcast:   www.strataskinsciences.com
     

About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com)           
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the public’s reaction to the Company’s new advertisements and marketing campaign, and the Company’s ability to build a leading franchise in medical dermatology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.




STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
     
    March 31, 2016   December 31, 2015
    (unaudited)    
ASSETS        
Current assets:        
Cash and cash equivalents   $  3,120     $  3,303  
Restricted cash     -       15  
Accounts receivable, net     3,247       4,068  
Inventories, net     4,152       4,128  
Other current assets     377       465  
Property and equipment, net     12,818       13,851  
Goodwill and other intangible assets     23,701       24,155  
Other non-current assets, net     94       94  
Total assets   $ 47,509     $ 50,079  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Long-term debt and other notes payable   $ 11,539     $ 10,150  
Accounts payable and accrued current liabilities     5,142       6,607  
Current portion of deferred revenues     225       173  
Senior secured convertible debentures, net     10,308       9,839  
Warrant liability     5,057       7,042  
Other long-term liabilities     206       181  
Stockholders' equity     15,032       16,087  
Total liabilities and stockholders’ equity   $ 47,509     $ 50,079  



STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
 
    For the Three Months Ended
March 31,
 
      2016       2015    
           
Revenues   $ 7,620     $ 81    
           
Cost of revenues     3,422       711    
           
Gross profit (loss)     4,198       (630 )  
           
Operating expenses:          
Engineering and product development     525       239    
Selling and marketing     3,710       1,027    
General and administrative     2,101       1,736    
      6,336       3,002    
           
Operating loss before other income (expense), net     (2,138 )     (3,632 )  
           
Other income (expense), net:          
Interest expense, net     (1,218 )     (2,324 )  
Change in fair value of warrant liability     1,985       (1,334 )  
Other (expense) income, net     -       18    
      767       (3,640 )  
           
Loss before income taxes     (1,371 )     (7,272 )  
           
Income tax expense     (66 )     -    
           
Net loss   $ (1,437 )   $ (7,272 )  
           
Net loss per share:          
  Basic   $ (0.14 )   $ (1.12 )  
  Diluted   $ (0.26 )   $ (1.12 )  
           
           
Shares used in computing net loss per share:          
  Basic     10,339,657       6,471,906    
  Diluted     13,307,923       6,471,906    





STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 
  For the Three Months Ended
 March 31,
      2016       2015  
Cash Flows From Operating Activities:        
Net loss   $ (1,437 )   $ (7,272 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization     1,684       316  
Stock-based compensation     170       230  
Amortization of debt discount     639       2,015  
Amortization of deferred financing costs     48       180  
Change in fair value of warrant liability     (1,985 )     1,334  
Other     100       1  
Changes in operating assets and liabilities:        
Current assets     846       251  
Current liabilities     (1,461 )     (155 )
Net cash used in operating activities     (1,396 )     (3,201 )
         
Cash Flows From Investing Activities:        
Lasers placed-in-service, net     (197 )     -  
Other     15       (100 )
Net cash used in investing activities     (182 )     (100 )
         
Cash Flows From Financing Activities:        
Proceeds from term debt     1,500       -  
Other financing activities     (105 )     -  
Net cash provided by financing activities     1,395       -  
         
Net decrease in cash and cash equivalents     (183 )     (3,201 )
Cash and cash equivalents, beginning of period     3,303       11,434  
         
Cash and cash equivalents, end of period   $   3,120     $ 8,233  
 
Supplemental information:                
Cash paid for interest   $ 442     $ 139  
                 
Supplemental information of non-cash investing and financing activities:                
Conversion of convertible preferred stock into common stock   $ -     $ 1,508  
Conversion of senior secured convertible debentures into common stock   $ 165     $ 2,308  
Reclassification of property and equipment to inventory, net   $ -     $ 26  
Recognition of warrants issued as debt discount   $ 47     $ -  


 

Investor Contacts:

Christina L. Allgeier, Chief Financial Officer
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid, Managing Director
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. to Report 1st Quarter 2016 Financial Results on Thursday, May 12

Conference Call to Follow at 4:30 p.m. EDT

HORSHAM, Pa., April 29, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release first quarter financial results on Thursday, May 12, after the market close.  STRATA Skin Sciences President and Chief Executive Officer, Michael Stewart, and Christina Allgeier, Chief Financial Officer, will host a conference call at 4:30 pm Eastern Time to review the Company’s progress and answer questions.

Conference Call Details:
Date: Thursday, May 12
Time: 4:30 pm Eastern Time
Toll Free: 888-576-4387
International:         719-457-2697
Passcode: 3418132
Webcast: www.strataskinsciences.com
   
Replays, available through May 26, 2016
Toll Free: 877-870-5176
International: 858-384-5517
Replay PIN: 3418132 
   

About STRATA Skin Sciences, Inc.  (www.strataskinsciences.com)        
STRATA Skin Sciences is a medical technology company focused in the dermatology market.  Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind System used to assist in the identification and management of melanoma skin cancer.

Investor Contacts:
Christina L. Allgeier
STRATA Skin Sciences, Inc.
215 619 3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences Reports Fourth Quarter 2015 Financial Results

Proforma XTRAC Recurring Revenue Growth of 16.1% in CY 2015  

Achieved Positive Non-GAAP Adjusted EBIDTA for Second Consecutive Quarter

 

HORSHAM, Pa., March 10, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN) (“STRATA”) a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the fourth quarter ended December 31, 2015. These results include the June 2015 acquisition of the XTRAC and VTRAC businesses.

Fourth Quarter and Recent Corporate Highlights

  • Fourth quarter recurring XTRAC revenue of $7.5 million, sequential growth of 6.4%.
  • Proforma YOY recurring XTRAC revenue growth of 16.1% as compared to and including periods prior to the June 22, 2015 acquisition.
  • Achieved positive Non-GAAP adjusted EBITDA for second consecutive quarter of operations.
  • Installed base of XTRAC systems in the U.S. expands to 718 systems placed, up from 620 at the end of the fourth quarter 2014.
  • Refinanced $10 million short-term bridge loan with $12 million long-term debt facility with interest only payments for the first 18 months.

The operating results of the Company for the three months ended December 31, 2015 include activity from the XTRAC and VTRAC businesses for the entire period. The operating results of the Company for the year ended December 31, 2015 include activity from the XTRAC and VTRAC businesses from June 23, 2015 through December 31, 2015. As a result of purchase accounting rules, the operating results of the XTRAC and VTRAC businesses for the three months and the year ended December 31, 2014 are not included in consolidated statements of operations, including revenue amounts discussed in this release, for the periods ended December 31, 2014.

Commenting on the fourth quarter, Michael R. Stewart, President and CEO of the Company stated: “The XTRAC business in the fourth quarter continues to make solid progress with increases in both recurring procedure revenues from utilization and our installed base of placed systems. Our total fourth quarter revenues of $9.5 million were up 13.9% sequentially from the third quarter 2015, and we generated positive Non-GAAP adjusted EBITDA of $0.5 million.” 

Mr. Stewart added: “The re-branding of the company to STRATA Skin Sciences, reflecting our commitment to serving the broader clinical dermatology market, has been well received by our customers, the broader dermatology marketplace and our employees.”

Reported Financial Results

Revenues for the fourth quarter of 2015 were $9.5 million compared with revenues for the fourth quarter of 2014 of $0.4 million.

Net loss for the fourth quarter of 2015 was $0.6 million or ($0.06) per share, which included other income of $2.5 million for the change in fair value of warrant liability, $1.5 million in interest expense; $1.7 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with net loss attributable to common shareholders for the fourth quarter of 2014 of $6.4 million or ($1.09) per share, which included a deemed dividend of $1.9 million, other income of $1.0 million for the change in fair value of warrant liability, $1.8 million in interest expense and $0.4 million in depreciation and amortization expenses.

Revenues for the year 2015 were $18.5 million compared with revenues for the year 2014 of $0.9 million.

Net loss attributable to common shareholders for the year 2015 was $27.9 million or ($3.27) per share, which included a deemed dividend of $3.0 million, other income of $1.8 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $10.2 million in interest expense; $0.5 million in acquisition costs, $4.0 million in depreciation and amortization expenses and $0.1 million for income taxes. This compares with net loss attributable to common shareholders for the year 2014 of $16.0 million or ($3.03) per share, which included other income of $8.1 million for the change in fair value of warrant liability, $3.4 million in registration rights liquidated damages, $2.4 million in interest expense and $1.8 million in depreciation and amortization expenses.

As of December 31, 2015 the Company had cash, cash equivalents and short-term investments of $3.3 million, compared with $11.4 million of unrestricted cash as of December 31, 2014.

In order to provide information that is helpful to investors relating to the historical and current growth of the XTRAC recurring revenues, the Company is providing the following table, including information obtained from the predecessor company’s disclosures of previous period results.

   
Q4 2015 Supplemental Proforma Financial Information  
As of December 31, 2015, Q4 Earnings Report  
(unaudited)  
   
(dollar amounts in thousands)                      
    2014       2015    
      Qtr. 1   Qtr. 2   Qtr. 3   Qtr. 4   YTD  
XTRAC Recurring Revenue $ 22,871   $ 5,376   $ 6,678 **    $ 7,032     $ 7,479     $ 26,565 ***   
                         
*As reported by PhotoMedex, Inc.
**$104 reported by the Company; balance reported by PhotoMedex, Inc.
***$14,615 reported by the Company; balance reported by PhotoMedex, Inc.
 

Mr. Stewart stated: “The table above presents the results of the Company’s recently acquired XTRAC recurring revenue business. The recurring business generated sequential growth of 6.4% in the fourth quarter and generated 2015 year-over-year growth of 16.1%."

Non-GAAP Measures

To supplement the Company’s consolidated financial statements, prepared in accordance with GAAP, the Company provides certain Non-GAAP measures of financial performance. These Non-GAAP measures include Non-GAAP adjusted income.

The Company’s reference to these Non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These Non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the Non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes Non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all Non-GAAP measures included in this press release is as follows:

 
(Unaudited)
 
      Three Months Ended
December 31,
  Year Ended
December 31, 
  (in thousands)     2015       2014       2015       2014  
                   
Net loss as reported   ($ 593 )   ($ 4,504 )   ($ 24,947 )   ($ 14,145 )
Adjustments:                
  Depreciation and amortization expense     1,703         419       4,051         1,790  
  Interest expense, net      535       138       1,329       242  
  Non-cash interest expense     927       1,706       8,871       2,130  
  Income taxes     119       -       119       -  
                   
EBITDA     2,691       (2,241 )     (10,577 )     (9,983 )
                   
  Stock-based compensation expense     270       (34 )     1,753       413  
  Acquisition costs     -       -       456       -  
  Change in fair value of warrants     (2,493 )     (952 )     (1,814 )     (8,103 )
  Registration rights liquidated charges     -       -       -       3,420  
  Impairment of property and equipment     -       -       920         -   
  Inventory obsolescence charges     -       1,084       4,818       1,084  
                   
Non-GAAP adjusted EBITDA   $ 468     ($ 2,143 )   ($   4,444 )   ($  13,169 )
                                 

STRATA previously announced the scheduling of a conference call with investors to review the results of the Fourth quarter. Following is the pertinent information for accessing that call. 

   
Conference Call Detail:
Date:  Thursday, March 10
Time: 4:30pm Eastern Time
Toll Free:  888-337-8169
International: 719-325-2177
Passcode: 4193642
Webcast: www.strataskinsciences.com
   
Replays, available through March 24, 2016
Toll Free:  877-870-5176
International: 858-384-5517
Replay PIN:  4193642
   

About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com

STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, and the Company’s ability to build a leading franchise in medical dermatology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

 
STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
   
  December 31, 2015   December 31, 2014
ASSETS      
Current assets:      
Cash and cash equivalents $ 3,303     $ 11,434  
Restricted cash   15       -  
Accounts receivable, net   4,068       220  
Inventories, net   4,128       5,275  
Other current assets   465       274  
Property and equipment, net   13,851       1,961  
Goodwill and other intangible assets   24,155       37  
Other non-current assets, net   1,387       869  
Total assets $ 51,372     $ 20,070  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Long-term debt and other notes payable $ 10,478     $ -  
Accounts payable and accrued current liabilities   6,607       2,144  
Current portion of deferred revenues   173       43  
Senior secured convertible debentures, net   10,804       5,001  
Warrant liability   7,042       499  
Other long-term liabilities   181       107  
Stockholders' equity   16,087       12,276  
Total liabilities and stockholders’ equity $ 51,372     $ 20,070  
               


 
STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
 
    For the Three Months Ended
December 31,
  For the Year Ended
December 31,
      2015       2014       2015       2014  
                 
Revenues   $ 9,480     $ 374     $ 18,495     $ 915  
                 
Cost of revenues     3,493       1,180       13,719       4,935  
                 
Gross profit (loss)     5,987       (806 )     4,776       (4,020 )
                 
Operating expenses:                
Engineering and product development     598       218       2,029       1,641  
Selling and marketing     3,695       774       9,194       3,140  
General and administrative     3,209       1,833       10,028       7,821  
      7,502       2,825       21,251       12,602  
                 
Operating loss before other income (expense), net     (1,515 )     (3,631 )     (16,475 )     (16,622 )
                 
Other income (expense), net:                
Interest expense, net     (1,462 )     (1,844 )     (10,200 )     (2,372 )
Change in fair value of warrant liability     2,493       952       1,814       8,103  
Registrations rights liquidated damages     -       -       -       (3,420 )
Gain on sale of assets     -       -       -       16  
Other (expense) income, net     10       19       33       150  
      1,041       (873 )     (8,353 )     2,477  
                 
Loss before income taxes     ( 474 )     ( 4,504 )     ( 24,828 )     ( 14,145 )
                 
Income tax expense     (119 )     -       (119 )     -  
                 
Net loss     ( 593 )     ( 4,504 )     ( 24,947 )     ( 14,145 )
                 
Deemed dividend     -       (1,887 )     (2,962 )     (1,887 )
                 
Net loss attributable to common stockholders   ($ 593 )   ($ 6,380 )   ($ 27,909 )   ($ 16,032 )
                 
                 
Basic and diluted net loss per share   ($ 0.06 )   ($ 1.09 )   ($ 3.27 )   ($ 3.03 )
                 
                 
Shares used in computing basic and diluted net loss per share     10,147,066       5,852,348       8,536,699       5,295,929  
                 


 
STRATA SKIN SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 
    For the Year Ended December 31,
      2015       2014  
Cash Flows From Operating Activities:        
Net loss   ($ 24,947 )   ($ 14,145 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization     4,051       1,790  
Stock-based compensation     1,753       413  
Impairment of long-lived assets     920       -  
Inventory write-offs     4,818       -  
Amortization of debt discount     8,479       1,943  
Amortization of deferred financing costs     391       191  
Change in fair value of warrant liability     (1,814 )     (8,103 )
Other     139       36  
Changes in operating assets and liabilities:        
Current assets     (848 )     691  
Current liabilities     473       (525 )
Net cash used in operating activities     (6,585 )     (17,709 )
         
Cash Flows From Investing Activities:        
Lasers placed-in-service, net     (1,689 )     -  
Acquisition costs, net of cash received     (42,500 )     -  
Other     (35 )     17  
Net cash (used in) provided by investing activities     (44,224 )     17  
         
Cash Flows From Financing Activities:        
Proceeds from convertible debentures     32,500       15,000  
Repayment of convertible debentures     (103 )     -  
Proceeds from term debt     10,500       -  
Proceeds from credit facilities     -       11,458  
Other financing activities     (227 )     (1,115 )
Net cash provided by financing activities     42,670       25,343  
         
Effect of exchange rate changes on cash     8       -  
Net (decrease)/increase in cash and cash equivalents     (8,131 )     7,651  
Cash and cash equivalents, beginning of period     11,434       3,783  
         
Cash and cash equivalents, end of period   $ 3,303     $ 11,434  
         
Supplemental information:          
Cash paid for interest $   1,188     $ 116  
             
Supplemental information of non-cash investing and financing activities:            
Conversion of convertible preferred stock into common stock $   5,282     $ 513  
Conversion of senior secured convertible debentures into common stock $   4,815     $ 1,589  
Modification of warrants recorded as a deemed dividend $   2,962     $ -  
Beneficial conversion feature recorded as a deemed dividend $   -     $ 1,887  
Exchange of series A convertible preferred stock for series B convertible preferred stock $   -     $ 12,300  
Recognition of debt discount and beneficial conversion feature on long-term debt $   27,300     $ 10,353  
Recognition of warrants issued in connection with financings $   2,958     $ 5,585  
Reclassification of property and equipment to inventory, net $   107     $ -  
Reclassification of warrant liability from stockholders’ equity $   (5,399 )   $ -  
Recognition of warrants issued as debt discount $   321     $ -  
Proceeds of notes payable for prepaid insurance $   334     $ -  
               
Investor Contacts:
Christina L. Allgeier, CFO
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. Announces FDA Approval of PMA Supplemental for MelaFind®

Study including Classifier Score Data shows increased Sensitivity and Specificity

FDA Post-Approval Study Termination provides cost savings

Greater flexibility to explore strategic value of MelaFind System in Clinical Dermatology

HORSHAM, Pa., March 10, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (“STRATA”), (NASDAQ:SSKN), a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, announced today that the U.S. Food and Drug Administration (FDA) approved STRATA’s PMA supplement for the MelaFind System.

MelaFind is a non-invasive, point-of-care instrument to aid in the detection of melanoma. The FDA approved MelaFind’s use of the “classifier score data”, a quantitative result derived by the MelaFind System that can be beneficially used in conjunction with the previously approved binary result (yes/no) from the instrument. With the Classifier Score, Dermatologists will be in possession of more complete information when utilizing MelaFind to aid in their decision to biopsy an ambiguous skin lesion.

To provide evidence to support the supplement, STRATA developed a reader study protocol in conjunction with the FDA and conducted a live study at the Fall Clinical Dermatology Conference that took place on October 1, 2015. This study measured the impact of the MelaFind binary result plus classifier score information on a dermatologist’s decision to biopsy suspicious pigmented skin lesions. A total of 160 Board Certified dermatologists participated. 

The results of the study showed average sensitivity (ability to detect disease) increased from 76% before the utilization of MelaFind to 92% following the use of MelaFind. Average specificity (ability to rule out disease) increased from 52% before to 79% after MelaFind utilization. These statistically significant results satisfied the requirements for approval of the PMA Supplement. The full results of the study are being prepared for submission to a peer-reviewed publication.

In conjunction with the acceptance of these study results by the FDA, the Agency agreed that STRATA could terminate the previously required Post Approval Study for MelaFind (“PAS”) that had been underway since 2012 and was expected to continue for several additional years.

Michael R. Stewart, STRATA’s president and CEO commented: “We appreciate the FDA working with us to achieve approval of MelaFind’s classifier score labelling information that better assists dermatologists in the use of the MelaFind device and reaching agreement to terminate the post approval study. The study we conducted demonstrates the value of the MelaFind device in the hands of a dermatologist. Moreover, the opportunity to terminate the PAS eliminates future costs of millions of dollars to the Company that would have been associated with the continuation of the PAS.”   

“The supplement approval gives us the flexibility to evaluate the potential for broader acceptance of the MelaFind device in the market as we continue to examine ways to create enhanced value for STRATA from this technology,” continued Mr. Stewart. “The Company’s primary focus near term remains on the growth of the XTRAC® system recurring revenues for the treatment of psoriasis and vitiligo. While the MelaFind is not expected to contribute materially to STRATA’s 2016 revenues, the receipt of the PMA supplement approval regarding the classifier score, and the associated meaningful results of the Reader study are positive steps in our strategic assessment of the MelaFind technology."

About STRATA Skin Sciences, Inc. (Formerly MELA Sciences, Inc.)
(www.strataskinsciences.com)

STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, and the Company’s ability to build a leading franchise in medical dermatology, including the ability of the Company to advance and market the MelaFind technology, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

Investor Contacts:

Christina L. Allgeier, CFO   Bob Yedid
STRATA Skin Sciences, Inc.   LifeSci Advisors, LLC
215-619-3267   646-597-6989
callgeier@strataskin.com   Bob@LifeSciAdvisors.com

 

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. to Report 4th Quarter 2015 Results on Thursday, March 10

Conference Call to Follow at 4:30 p.m. EST

HORSHAM, Pa., Feb. 25, 2016 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ:SSKN), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release fourth quarter and Year End 2015 financial results on Thursday, March 10, after the market close.  STRATA Skin Sciences President and Chief Executive Officer, Michael Stewart, and Christina Allgeier, Chief Financial Officer, will host a conference call at 4:30 pm Eastern Time to review the Company’s progress and answer questions.

Conference Call Details:    
Date: Thursday, March 10  
Time: 4:30 pm Eastern Time  
Toll Free: 888-337-8169  
International: 719-325-2177  
Passcode: 4193642  
Webcast: www.strataskinsciences.com   
 
Replays, available through March 24, 2016
   
Toll Free: 877-870-5176  
International: 858-384-5517  
Replay PIN: 4193642  


About STRATA Skin Sciences, Inc. 
(www.strataskinsciences.com)         
STRATA Skin Sciences is a medical technology company focused in the dermatology market.  Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind System used to assist in the identification and management of melanoma skin cancer.

Investor Contacts:
Christina L. Allgeier
STRATA Skin Sciences, Inc.
215 619 3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

Primary Logo

STRATA Skin Sciences, Inc.

STRATA Skin Sciences, Inc. Announces Refinancing of $10.0 Million of Short-Term Debt

HORSHAM, Pa., Jan. 05, 2016 (GLOBE NEWSWIRE) -- (NASDAQ:SSKN) On December 30, 2015, STRATA Skin Sciences, Inc. (“STRATA Skin”) entered into a $12.0 million Credit and Security Agreement (the “Agreement”) and related financing documents with a group led by MidCap Financial Trust (“MidCap”). Under the Agreement, the credit facility may be drawn down in two tranches, the first of which was drawn for $10.5 million on December 30, 2015. The proceeds of this first tranche were used to repay $10.0 million principal amount of short-term senior secured promissory notes, plus associated interest, loan fees and expenses. The second tranche may be drawn after January 1, 2016. The Company’s obligations under the credit facility are secured by a first priority lien on all of STRATA Skin’s assets. Other financing documents included subordination agreements and other amendments with STRATA Skin’s existing debenture holders from its 2014 and 2015 financings. In connection with the repayment of the short-term notes, STRATA Skin also repurchased a debenture from its July 2014 financing for approximately $118,000 from an unrelated party.

The credit facility bears an interest rate of LIBOR plus 8.25%, which was 8.75% as of December 30, 2015. The loan period is 60 months and is payable as interest only for the first 18 months. Thereafter the loans are amortized on a straight-line basis and due in full on the maturity date, which is 60 months from the draw of the initial tranche, December 30, 2020.

In connection with entering into the credit facility, STRATA Skin issued warrants to the lenders to purchase an aggregate of 650,442 shares of the Company’s common stock at an exercise price of $1.13 per share, which equals the volume weighted average price (“VWAP”) for the ten-day period prior to the closing date. The warrants are exercisable for five years from the date of issuance. Upon drawdown of the second tranche for $1.5 million, another warrant or warrants will be issued for the aggregate number of shares equal to 7.0% of 1,500,000 divided by the exercise price, which will equal the VWAP for the ten-day period prior to the closing date of the second tranche. The Warrants have not been registered under the Securities Act of 1933, as amended.

About STRATA Skin Sciences (Formerly MELA Sciences, Inc.)
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC laser and VTRAC excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations at any time in the future, and the Company's ability to build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.


CONTACT:
Investor Contacts:
Christina Allgeier
STRATA Skin Sciences, Inc.
215-619-3267
callgeier@strataskin.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

STRATA Skin Sciences, Inc.

MELA Sciences Announces That Its Corporate Name Change to STRATA Skin Sciences Will Be Effective January 5, 2016

HORSHAM, Pa., Jan. 04, 2016 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), today announced that its corporate name change to STRATA Skin Sciences, Inc. will be effective Tuesday, January 5, 2016 and that it will trade under the symbol “SSKN” on the Nasdaq Stock Market.

As Michael R. Stewart, President and Chief Executive Officer previously stated: “Our June 2015 XTRAC® acquisition has expanded the dermatological opportunities that the Company is pursuing with unique, innovative technologies. Today we have over 700 dermatology accounts that include over 3,000 dermatologists, covered with a 49 person sales and marketing organization of direct sales managers, sales management, clinical specialists, reimbursement specialists and call center support personnel. During the third quarter of 2015, our first full quarter of XTRAC operations, we generated revenues of $8.3 million, including $7.0 million or 84.5% of recurring high-margin revenues, representing year over year growth of 15.9%.”

STRATA’s portfolio of products currently includes its flagship product, the XTRAC laser system for the effective treatment of psoriasis and vitiligo, as well as the VTRAC® excimer lamp system and MelaFind, a multi-spectral digital skin lesion analysis system that assists in the identification of melanoma skin cancer.

STRATA advocates the need for personalized medical care and best practices in medical dermatology. Commercial momentum was gained when coverage policies for XTRAC treatments were secured from virtually all insurers, including Medicare. XTRAC more recently created an expanded market outreach and awareness program aimed at the approximately 10 million psoriasis and vitiligo sufferers in the United States. To support our customers we have developed and are continually enhancing a leading call center operation of patient advocates that bridge the gap between patients looking for solutions and our network of customers.

Continuing, Mr. Stewart added: “We reiterate our initial guidance of continuing revenue growth in the mid-to-high teens and further cash flow improvements going forward.

To better reflect the broader dermatology market being served by the Company and our vision going forward, we have selected STRATA Skin Sciences as our new corporate name and are excited to officially launch this new corporate identity. The new name embodies our commitment to a wide range of therapeutic and diagnostic dermatological conditions with the common goal of increasing access, lowering costs and improving patient quality. 

STRATA Skin Sciences enters 2016 with an infrastructure that positions us as a best-in-class player in medical dermatology and a partner-of-choice for emerging technologies looking for a strong and effective enterprise that can quickly scale and exploit unmet needs in the dermatology market.”

About STRATA Skin Sciences (Formerly MELA Sciences, Inc.)
STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC laser and VTRAC excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations at any time in the future, and the Company's ability to build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT:
Investor Contacts:
Christina Allgeier
MELA Sciences, Inc.
215-619-3267
callgeier@melasciences.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

MELA Sciences, Inc.

MELA Sciences Announces Corporate Name Change to STRATA Skin Sciences to Reflect Broader Dermatology Commitment

HORSHAM, Pa., Dec. 22, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), today announced that it will be changing its corporate name to STRATA Skin Sciences, Inc. effective Tuesday, January 5, 2016 and that it will trade under the symbol “SSKN” on the Nasdaq Stock Market.

Michael R. Stewart, President and Chief Executive Officer stated: “Our June 2015 XTRAC® acquisition has expanded the dermatological opportunities that the Company is pursuing with unique, innovative technologies. Today we have over 700 dermatology accounts that include over 3,000 dermatologists, covered with a 49 person sales and marketing organization of direct sales managers, sales management, clinical specialists, reimbursement specialists and call center support personnel. During the third quarter of 2015, our first full quarter of XTRAC operations, we generated revenues of $8.3 million, including $7.0 million or 84.5% of recurring high-margin revenues, representing year over year growth of 15.9%.”

STRATA’s portfolio of products currently includes its flagship product, the XTRAC laser system for the effective treatment of psoriasis and vitiligo, as well as the VTRAC® excimer lamp system and MelaFind, a multi-spectral digital skin lesion analysis system that assists in the identification of melanoma skin cancer.

STRATA advocates the need for personalized medical care and best practices in medical dermatology. Commercial momentum was gained when coverage policies for XTRAC treatments were secured from virtually all insurers, including Medicare.  XTRAC more recently created an expanded market outreach and awareness program aimed at the approximately 10 million psoriasis and vitiligo sufferers in the United States.  To support our customers we have developed and are continually enhancing a leading call center operation of patient advocates that bridge the gap between patients looking for solutions and our network of customers.

Continuing, Mr. Stewart added: “We reiterate our initial guidance of continuing revenue growth in the mid-to-high teens and further cash flow improvements going forward.

To better reflect the broader dermatology market being served by the Company and our vision going forward, we have selected STRATA Skin Sciences as our new corporate name and are excited to officially launch this new corporate identity. The new name embodies our commitment to a wide range of therapeutic and diagnostic dermatological conditions with the common goal of increasing access, lowering costs and improving patient quality.

STRATA Skin Sciences enters 2016 with an infrastructure that positions us as a best-in-class player in medical dermatology and a partner-of-choice for emerging technologies looking for a strong and effective enterprise that can quickly scale and exploit unmet needs in the dermatology market.”

About STRATA Skin Sciences (Formerly MELA Sciences, Inc.)

STRATA Skin Sciences is a medical technology company focused on the therapeutic and diagnostic dermatology market. Its products include the XTRAC laser and VTRAC excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, and the Company's ability to build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT:
Investor Contacts:
Christina Allgeier
MELA Sciences, Inc.
215-619-3267
callgeier@melasciences.com

Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com

MELA Sciences, Inc.

MELA Sciences Reports Supplemental Financial Information on XTRAC(R) Recurring Revenue

HORSHAM, Pa., Nov. 13, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA) reported today additional information related to its Third Quarter 2015 financial results press release dated November 12, 2015, clarifying the comparative revenue information from its XTRAC recurring revenues.

On June 22, 2015, MELA acquired the XTRAC and VTRAC® businesses from PhotoMedex, Inc., including its high margin recurring XTRAC revenues, which are driven by the number of XTRAC units in the field as well as their utilization, both of which continue to increase as planned. In order to provide information that is helpful to investors relating to the historical and current growth of these revenues, the Company is providing the following table, including information obtained from the predecessor company's disclosures of previous period results.

MELA Sciences, Inc.
Q3 2015 Supplemental Financial Information
As of September 30, 2015, Q3 Earnings Report
(unaudited)
               
                 
                 
(dollar amounts in thousands)                
  Qtr. 1   Qtr. 2   Qtr. 3   YTD  
XTRAC Recurring Revenue:                
2015 $5,376 * $6,678 ** $7,033   $19,087 ***
                 
2014 $4,410 * $5,501 * $6,069 * $15,980 *
                 
Year-over-year 21.9%   21.4%   15.9%   19.4%  
                 
*As reported by PhotoMedex, Inc.                
**$104 reported by the Company; balance reported by PhotoMedex, Inc.                
***$7,137 reported by the Company; balance reported by PhotoMedex, Inc.                

Michael R. Stewart, MELA Sciences President and CEO stated: "The table above presents the results of the Company's recently acquired XTRAC recurring revenue business. Year-over-year growth during the third quarter was 15.9% (sequential growth of 5.3%); and the nine month to date (2015) generated year-over-year growth of 19.4%. As shown in the table below, EBITDA for the third quarter of 2015 was a loss of $1.9 million as compared to a loss of $1.3 million for the third quarter of 2014. After further adjustments for stock-based compensation expense and the change in fair value of warrants, adjusted EBITDA, on a non-GAAP basis, was income of $0.4 million for the third quarter of 2015 as compared to a loss of $3.3 million for the third quarter of 2014."

  Three Months Ended 
  September 30,
(Unaudited, in thousands) 2015 2014
     
Net loss income as reported ($9,234) ($2,288)
Adjustments:    
Depreciation and amortization expense 1,710 489
Interest expense, net  506 104
Non-cash interest expense  5,071 423
     
EBITDA (1,947) (1,272)
     
Stock-based compensation expense 1,007 115
Change in fair value of warrants 1,329 (2,108)
     
Non-GAAP adjusted EBITDA  $389 ($3,265)

MELA provided annual guidance of XTRAC recurring revenue growth in the mid to high teens and the results to date, as reported in the Company's November 12, 2015 financial results press release, have met that guidance. The Company reiterates its guidance of continued XTRAC recurring annual revenue growth in the mid to high teens.           

About MELA Sciences, Inc.  (www.melasciences.com)     

MELA Sciences is a medical technology company focused on the dermatology market. Its products include the XTRAC laser and VTRAC excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, including support for the MelaFind system through the reimbursement process and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period or for any future period. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT: Investor Contacts:

         Christina L. Allgeier
         MELA Sciences, Inc.
         215-619-3267
         callgeier@melasciences.com


         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences Reports Third Quarter 2015 Financial Results

Conference Call at 4:30pm Eastern Time, Today

HORSHAM, Pa., Nov. 12, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the third quarter ended September 30, 2015.

Third Quarter and Recent Corporate Highlights

  • Third quarter revenue for the acquired businesses was $8.2 million in line with expectations.
  • The installed base of XTRAC systems in the U.S. expanded to 698 systems, up from 590 at the end of the third quarter 2014, as reported to us by PhotoMedex.
  • Achieved positive non-GAAP adjusted income in first full quarter of combined operations. See Non-GAAP Measures below.
  • Integration of the acquired businesses into MELA is essentially complete.

MELA Sciences acquired the XTRAC and VTRAC business from PhotoMedex, Inc. on June 22, 2015. Therefore, operating results for the three and nine months ended September 30, 2015 include activity from the XTRAC and VTRAC businesses from July 1, 2015 through September 30, 2015 for the three-month period and from June 23, 2015 through September 30, 2015 for the nine-month period. As a result of purchase accounting rules, the operating results of the XTRAC and VTRAC businesses for the three and nine months ended September 30, 2014 are not included in consolidated statements of operations for the periods ended September 30, 2014.

Commenting on the third quarter, Michael R. Stewart, President and CEO stated: "The XTRAC recurring revenue in the third quarter continued to show positive growth of over 5%. The installed base of placed lasers in the United States also increased by 5% to nearly 700 lasers. The average annualized revenue per system now exceeds $42,000. All of these results met our expectations and demonstrate the integration of the XTRAC business into MELA has successfully occurred."

Continuing, Stewart added: "The transforming of MELA is well underway. In addition to the integration activities that have been accomplished thus far, we are now reviewing new branding initiatives that we expect to implement before the end of 2015 that we believe will better reflect the new company and the market that we serve."

Reported Financial Results

Revenues for the third quarter of 2015 were $8.3 million compared with revenues for the third quarter of 2014 of $0.2 million, which did not include revenues from the XTRAC and VTRAC businesses.

Net loss for the third quarter of 2015 was $12.2 million or ($1.29) per share, which included a non-cash deemed dividend of $3.0 million, other expense of $1.3 million for the change in fair value of warrant liability, $5.6 million in interest expense and $1.7 million in depreciation and amortization expenses. This compares with a net loss for the third quarter of 2014 of $2.3 million or ($0.44) per share, which included other income of $2.1 million for the change in fair value of warrant liability, $0.5 million in interest expense and $0.5 million in depreciation and amortization expenses.

Revenues for the nine months of 2015 were $9.0 million compared with revenues for the nine months of 2014 of $0.5 million, which did not include revenues from the XTRAC and VTRAC businesses.

Net loss for the nine months of 2015 was $27.3 million or ($3.42) per share, which included a non-cash deemed dividend of $3.0 million, other expense of $0.7 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $8.7 million in interest expense; $0.5 million in acquisition costs and $2.3 million in depreciation and amortization expenses. This compares with net loss for the nine months of 2014 of $9.6 million or ($1.89) per share, which included other income of $7.2 million for the change in fair value of warrant liability, $3.4 million in registration rights liquidated damages, $0.5 million in interest expense and $1.4 million in depreciation and amortization expenses.

As of September 30, 2015 the company had cash, cash equivalents and short-term investments of $3.3 million including $0.1 million of restricted cash, compared with $11.4 million of unrestricted cash as of December 31, 2014.

Non-GAAP Measures

To supplement the Company's consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted income.

The Company's reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company's core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

  (Unaudited)      
  Three Months Ended  Nine Months Ended 
  September 30, September 30,
(in thousands) 2015 2014 2015 2014
         
Net loss income as reported ($9,234) ($2,288) ($24,354) ($9,641)
         
Adjustments:        
Depreciation and amortization expense 1,710 489 2,348 1,371
Interest expense, net  506 104 794 105
Non-cash interest expense  5,071 423 7,944 423
         
EBITDA (1,947) (1,272) (13,268) (7,742)
         
Stock-based compensation expense 1,007 115 1,483 447
Acquisition costs -- -- 456 --
Change in fair value of warrants 1,329 (2,108) 679 (7,151)
Registration rights liquidated charges -- -- -- 3,420
Impairment of property and equipment -- -- 920  -- 
Inventory obsolescence charges -- -- 4,818 --
         
Non-GAAP adjusted income ( loss ) $389 ($3,265) ($4,912) ($11,026)

MELA previously announced the scheduling of a conference call with investors to review the results of the Third quarter. The following is the pertinent information for accessing that call. 

Conference Call Detail:  
Date: Thursday, November 12
Time: 4:30 pm Eastern Time
Toll Free: 888-430-8691
International: 719-325-2376
Passcode: 714691
Webcast: www.melasciences.com
   
Replays, available through November 26, 2015  
Toll Free: 877-870-5176
International: 858-384-5517
Replay PIN: 714691

About MELA Sciences, Inc.  (www.melasciences.com)     

MELA Sciences is a medical technology company focused on the dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, including support for the MelaFind system through the reimbursement process and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

MELA SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
     
  September 30, 2015 December 31, 2014
ASSETS (unaudited)  
Current assets:    
Cash and cash equivalents  $3,169 $11,434
Restricted cash 100 --
Accounts receivable, net  4,182 220
Inventories, net  3,915 5,275
Other current assets 596 274
Property and equipment, net  14,461 1,961
Goodwill and other intangible assets 24,608 37
Other non-current assets, net 1,123 869
Total assets $52,154 $20,070
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Senior Note payable and other notes payable $8,887 $ --
Accounts payable and accrued current liabilities 6,113 2,144
Current portion of deferred revenues 267 43
Senior secured convertible debentures, net 11,373 5,001
Warrant liability 9,535 499
Other long-term liabilities 103 107
Stockholders' equity 15,876 12,276
Total liabilities and stockholders' equity $52,154 $20,070
 
MELA SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(unaudited)
  For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
  2015 2014 2015 2014
         
Revenues $8,323 $218 $9,015 $541
         
Cost of revenues 3,042 1,560 10,226 3,755
         
Gross profit (loss) 5,281 (1,342) (1,211) (3,214)
          
Operating expenses:        
Engineering and product development 471 345 946 1,423
Selling and marketing 4,001 429 5,984 2,366
General and administrative 3,132 1,885 6,819 5,988
   7,604 2,659 13,749 9,777
         
Operating loss before other income (expense), net (2,323) (4,001) (14,960) (12,991)
          
Other income (expense), net:        
Interest expense, net (5,577) (527) (8,738) (528)
Change in fair value of warrant liability (1,329) 2,108 (679) 7,151
Registrations rights liquidated damages -- -- -- (3,420)
Gain on sale of assets -- 11 -- 16
Other (expense) income, net (5) 121 23 131
  (6,911) 1,713 (9,394) 3,350
         
Net loss (9,234) (2,288) (24,354) (9,641)
         
Deemed dividend related to warrant modification (2,962) -- (2,962) --
         
Net loss attributable to common stockholders ($12,196) ($2,288) ($27,316) ($9,641)
         
         
 Basic and diluted net loss per share ($1.29) ($0.44) ($3.42) ($1.89)
         
         
Shares used in computing basic and diluted net loss per share  9,442,022 5,216,290 7,994,012 5,108,418
 
MELA SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands, unaudited)
     
     
  For the Nine Months Ended September 30,
  2015 2014
Cash Flows From Operating Activities:    
Net loss  ($24,354) ($9,641)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 2,347 1,371
Stock-based compensation  1,483 447
Impairment of long-lived assets 920 --
Inventory write-offs 4,818 1,076
Amortization of debt discount 7,571 385
Amortization of deferred financing costs 373 38
Change in fair value of warrant liability 679 (7,151)
Other 20 1
Changes in operating assets and liabilities:     
Current assets (1,016) (966)
Current liabilities 114 (212)
Net cash used in operating activities (7,045) (14,668)
     
Cash Flows From Investing Activities:    
Lasers placed-in-service, net (1,066) --
Acquisition costs, net of cash received (42,500) --
Other (17) 17
Net cash (used in) provided by investing activities (43,583) 17
     
Cash Flows From Financing Activities:    
Proceeds from convertible debentures 32,500 15,000
Proceeds from senior notes 10,000 --
Proceeds from credit facilities -- 11,452
Other financing activities (154) (1,123)
Net cash provided by financing activities  42,346 25,335
     
Effect of exchange rate changes on cash 17 --
Net (decrease)/increase in cash and cash equivalents (8,265) 10,684
Cash and cash equivalents, beginning of period 11,434 3,783
     
Cash and cash equivalents, end of period $3,169 $14,467
     
Supplemental information:    
Cash paid for interest $402 $ --
     
Supplemental information of non-cash investing and financing activities    
Conversion of senior secured convertible debentures into common stock $4,593 $ --
Establishment of a warrant liability with a deemed dividend $2,962 $ --
Exchange of series A convertible preferred stock for series B convertible preferred stock $ -- $12,300
Recognition of debt discount and beneficial conversion feature on long-term debt $27,300 $10,353
Reclassification of property and equipment to inventory, net $107 $ --
Reclassification of warrant liability (from) to stockholders' equity ($5,399) $ --
CONTACT: Investor Contacts:
         Christina L. Allgeier
         MELA Sciences, Inc.
         215-619-3267
         callgeier@melasciences.com

         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences Appoints Christina L. Allgeier Chief Financial Officer

HORSHAM, Pa., Nov. 11, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today announced that Christina L. Allgeier has been promoted to the post of Chief Financial Officer of MELA Sciences, Inc., effective November 9, 2015. Ms. Allgeier is a graduate of Penn State University and is a Certified Public Accountant with significant SEC experience. Ms. Allgeier joined MELA as a result of the recent acquisition of the XTRAC and VTRAC business.

Ms. Allgeier has over 15 years of experience in the medical laser field. She replaces Robert Cook who has tendered his resignation to pursue other matters, but has agreed to remain with the Company through mid-January 2016 in the role of Senior Financial Advisor.

MELA Sciences' President and CEO, Michael R. Stewart, commented, "I have worked with Christina in the past and am thrilled to have her join the MELA team in the position of CFO. I have firsthand knowledge of her background and expertise and I have every confidence that she will prove to be an invaluable asset." Mr. Stewart continued, "Christina's most recent position as Chief Accounting Officer of PhotoMedex, Inc., from whom we acquired the XTRAC and VTRAC business, makes her the perfect candidate for the MELA CFO position."

"I would like to thank Bob Cook for the dedication he has put into the Company and wish him well in his future endeavors," said Mr. Stewart.

About MELA Sciences, Inc. (www.melasciences.com)

MELA Sciences is a medical technology company focused on the dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, including support for the MelaFind system through the reimbursement process and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT: Investor Contacts:
         Christina Allgeier
         MELA Sciences, Inc.
         215-619-3267
         callgeier@melasciences.com

         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences to Report Third Quarter Financial Results on Thursday, November 12

Conference Call to Follow at 4:30 p.m. EDT

HORSHAM, Pa., Oct. 29, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release third quarter financial results on Thursday, November 12, after the market close. MELA Sciences President and Chief Executive Officer, Michael Stewart, and Robert Cook, Chief Financial Officer, will host a conference call at 4:30pm Eastern Time to review the Company's progress and answer questions.

Conference Call Details:
Date: Thursday, November 12
Time: 4:30pm Eastern Time
Toll Free: 888-430-8691
International: 719-325-2376
Passcode: 714691
Webcast: www.melasciences.com
   
Replays, available through November 26, 2015
Toll Free: 877-870-5176
International: 858-384-5517
Replay PIN: 714691

About MELA Sciences, Inc.  (www.melasciences.com

MELA Sciences is a medical technology company focused in the dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; and the MelaFind System used to assist in the identification and management of melanoma skin cancer.

CONTACT: Investor Contacts:
         Robert W. Cook
         MELA Sciences, Inc.
         914 373 6936
         rcook@melasciences.com

         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences Announces Election of R. Rox Anderson, M.D., to Board of Directors

HORSHAM, Pa., Oct. 13, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, announced today that R. Rox Anderson, M.D., was elected to the Company's board of directors at its Annual General Meeting of Stockholders held on September 30, 2015 in Philadelphia, PA. With Dr. Anderson's election, the MELA board of directors has increased to seven members, six of whom are independent.

Jeffrey F. O'Donnell, Chairman of the MELA Board, stated, "Having Dr. Anderson on our Board benefits MELA in so many ways, not the least of which is that Dr. Anderson led the team that developed the first XTRAC® system at Massachusetts General Hospital. He is very familiar with the product, its history and potential. The Board will benefit from his knowledge and counsel. On a personal level, I am very pleased to have the opportunity to work with him again."

"We are delighted to have Dr. Anderson as a member of MELA's board of directors," said Michael R. Stewart, MELA's President and CEO. "Dr. Anderson is a key thought leader in the treatment of dermatological disorders, and conceived and developed many of the non-scarring laser treatments now widely used in dermatology. He has an extensive academic background and impeccable reputation. His significant knowledge and accomplishments in photomedicine will be invaluable to the Company as we integrate our recent acquisition of the XTRAC and VTRAC® businesses and seek new areas of growth in dermatology." 

"I am excited to have joined MELA's Board at this stage in the Company's development," said Dr. Anderson. "I am very familiar with the recently acquired XTRAC and VTRAC systems and believe that MELA is now poised to become an important commercial player in dermatology.  I look forward to assisting the Company in achieving that status."

R. Rox Anderson, M.D., is a professor at Harvard Medical School, an adjunct professor at MIT, and director of the Wellman Center for Photomedicine at Massachusetts General Hospital in Boston. The Wellman Center is the world's largest academic facility dedicated to photomedicine. After graduating from MIT, Dr. Anderson received an M.D. degree magna cum laude from a joint MIT-Harvard medical program, Health Sciences and Technology. He conceived and developed non-scarring dermatologic surgery using selectively-absorbed laser pulses, which is now the preferred basis for treatment of birthmarks, pigmented lesions, tattoos, hypertrichosis and other conditions. He has made many contributions to the understanding and development of laser-tissue interactions, tissue optics, photodynamic therapy, and optical diagnostics. 

An active practitioner, teacher and researcher, Dr. Anderson's research includes diagnostic tissue imaging and spectroscopy, photodynamic therapy, mechanisms of laser-tissue interactions, adipose tissue biology, low-level light effects and novel therapies for skin disorders. He has authored or co-authored over 250 scientific books and research papers, and 65 issued patents. Dr. Anderson received awards from the American Society for Laser Medicine & Surgery, and the American Academy of Dermatology.  

About MELA Sciences, Inc. (www.melasciences.com)

MELA Sciences is a medical technology company focused on the dermatology market. Through its acquisition of the XTRAC and VTRAC businesses, MELA Sciences provides products and services for the treatment of psoriasis, vitiligo and other skin conditions. The Company is also in the early commercialization stages of the MelaFind® system, an innovative software-driven technology that provides additional information to dermatologists in the management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, including support for the MelaFind system through the reimbursement process and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT: Investor Contacts:
         Robert W. Cook
         MELA Sciences, Inc.
         914-373-6936
         rcook@melasciences.com

         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences Reports Second Quarter 2015 Financial Results

HORSHAM, Pa., Aug. 13, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, today reported financial results for the second quarter ended June 30, 2015.

Second Quarter and Recent Corporate Highlights

  • XTRAC and VTRAC businesses of PhotoMedex, Inc. purchased on June 22, 2015, for $42.5 million in cash and the assumption of certain business-related liabilities.
  • Installed base of XTRAC systems in the U.S. expands to 664 systems placed, up from 554 at the end of the second quarter 2014, as reported to us by PhotoMedex.
  • Full quarter revenue results for the acquired businesses of $7.7 million in line with expectations, of which $0.6 million was included in the operating results of the Company.
  • Integration of the business into MELA is on schedule and proceeding smoothly.
  • A new version of the MelaFind unit is in development. The new design will afford dermatologists all the benefits and functionalities of the current version but with a smaller footprint, allowing for greater mobility and overall user-friendliness. The new version will also significantly lower production cost. The Company plans to complete development by the first half of 2016. A significant portion of the existing MelaFind inventories was determined to be excess and /or obsolete and therefore a charge was recorded in the second quarter of $4.8 million.

The operating results of the Company for the three and six months ended June 30, 2015 include activity from the XTRAC and VTRAC businesses from June 23, 2015 through June 30, 2015. As a result of purchase accounting rules, the operating results of the XTRAC and VTRAC businesses for the three and six months ended June 30, 2014 are not included in consolidated statements of operations for the periods ended June 30, 2014.

Commenting on the second quarter, Michael R. Stewart, President and CEO of MELA Sciences, Inc. stated: "Clearly, the most significant development for MELA during the second quarter was the completion of the acquisition of the XTRAC and VTRAC businesses. We believe that the addition of these businesses will be transformational for MELA and will provide not only existing quality revenue streams and cash flows for the Company, but will also support the MelaFind system's development. The assets acquired include a significant and capable sales organization augmented by a patient advocacy call center and reimbursement team, and I believe these assets and the significant customer base both domestically and internationally create a platform upon which we can build. We are looking forward to reporting our third quarter results, which will include a full quarter's activity from these businesses."

Continuing, Stewart added: "The integration activities are progressing well and as a result the back office operations of the Company will be enhanced. The organization is excited about our new company and about executing our plans for growth in the coming quarters."

Reported Financial Results

Revenues for the second quarter of 2015 were $0.6 million, an increase of 172% compared with revenues for the second quarter of 2014 of $0.2 million, which did not include revenues from the XTRAC and VTRAC businesses.

Net loss for the second quarter of 2015 was $7.8 million or ($0.97) per share, which included other income of $2.0 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $0.8 million in interest expense; $0.5 million in acquisition costs and $0.3 million in depreciation and amortization expenses. This compares with net income for the second quarter of 2014 of $0.6 million or $0.12 per share, which included other income of $4.9 million for the change in fair value of warrant liability and $0.2 million in depreciation and amortization expenses.

Revenues for the six months of 2015 were $0.7 million, an increase of 114% compared with revenues for the six months of 2014 of $0.3 million, which did not include revenues from the XTRAC and VTRAC businesses.

Net loss for the six months of 2015 was $15.1 million or ($2.08) per share, which included other income of $0.7 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $3.2 million in interest expense; $0.5 million in acquisition costs and $0.6 million in depreciation and amortization expenses. This compares with net loss for the six months of 2014 of $7.4 million or ($1.46) per share, which included other income of $5.0 million for the change in fair value of warrant liability, $3.4 million in registration rights liquidated damages and $0.9 million in depreciation and amortization expenses.

As of June 30, 2015 the Company had cash, cash equivalents and short-term investments of $5.6 million including $0.1 million of restricted cash, compared with $11.4 million of unrestricted cash as of December 31, 2014.

Non-GAAP Measures

To supplement the Company's consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted income.

The Company's reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company's core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

(Unaudited)
  Three Months Ended Six Months Ended
  June 30, June 30,
(000's) except per share amounts 2015 2014 2015 2014
         
Net (loss) income as reported ($7,847) $627 ($15,120) ($7,353)
Adjustments:        
         
Depreciation and amortization expense 322 185 641 881
Interest expense, net 838 1 3,162 1
         
EBITDA (6,687) 813 (11,317) (6,471)
         
Stock-based compensation expense 246 168 476 332
Acquisition costs 456 -- 456 --
Change in fair value of warrants (1,985) (4,906) (651) (5,043)
Registration rights liquidated charges -- (30) -- 3,420
Impairment of property and equipment 920 -- 920 --
Inventory obsolescence charges 4,818 -- 4,818 --
         
Non-GAAP adjusted loss ($2,232) ($3,955) ($5,298) ($7,762)

MELA previously announced the scheduling of a conference call with investors to review the results of the Second quarter. The following is the pertinent information for accessing that call. 

Conference Call Detail:
Date: Thursday, August 13
Time: 4:30pm Eastern Time
Toll Free: 888-337-8169
International: 719-457-2689
Passcode: 3537662
Webcast: http://public.viavid.com/player/index.php?id=115368
   
Replays, available through August 27, 2015
Toll Free: 877-870-5176
International: 858-384-5517
Replay PIN: 3537662

About MELA Sciences, Inc.  (www.melasciences.com)

MELA Sciences is a medical technology company focused on the dermatology market. Through its acquisition of the XTRAC and VTRAC businesses, MELA Sciences markets those products for the treatment of psoriasis, vitiligo and other skin conditions. The Company is also in the early commercialization stages of the MelaFind® system, an innovative software-driven technology that provides additional information to dermatologists in the management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, including support for the MelaFind system through the reimbursement process and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

MELA SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
     
  June 30, 2015 December 31, 2014
ASSETS (unaudited)  
Current assets:    
Cash and cash equivalents $5,553 $11,434
Restricted cash 100 --
Accounts receivable, net 3,663 220
Inventories, net 3,409 5,275
Other current assets 678 274
Property and equipment, net 14,769 1,961
Goodwill and other intangible assets 25,062 37
Other non-current assets, net 1,178 869
Total assets $54,412 $20,070
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Senior Note payable and other notes payable $7,238 $ --
Accounts payable and accrued current liabilities 6,147 2,144
Current portion of deferred revenues 362 43
Warrant liability 2,806 499
Senior secured convertible debentures, net 10,413 5,001
Other long term liabilities 193 106
Stockholders' equity 27,253 12,277
Total liabilities and stockholders' equity $54,412 $20,070
     
     
MELA SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(unaudited)
  For the Three Months Ended For the Six Months Ended
  June 30, June 30,
  2015 2014 2015 2014
         
Revenues $611 $225 $692 $323
         
Cost of revenues 6,474 1,277 7,185 2,196
         
Gross loss (5,863) (1,052) (6,493) (1,873)
         
Operating expenses:        
Engineering and product development 282 371 521 1,078
Selling and marketing 910 1,089 1,937 2,161
General and administrative 1,950 1,746 3,686 3,878
  3,142 3,206 6,144 7,117
         
Operating loss before other income (expense), net (9,005) (4,258) (12,637) (8,990)
         
Other income (expense), net:        
Interest expense, net (838) (1) (3,162) (1)
Change in fair value of warrant liability 1,985 4,906 651 5,043
Registrations rights liquidated damages -- (30) -- (3,420)
Other income, net 11 10 28 15
  1,158 4,885 (2,483) 1,637
         
Net income (loss) ($7,847) $627 ($15,120) ($7,353)
         
Basic and diluted net income (loss) per share ($0.97) $0.12 ($2.08) ($1.46)
         
Shares used in computing basic and diluted net income (loss) per share 8,067,991 5,212,765 7,274,358 5,053,587
         
         
MELA SCIENCES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
     
  For the Six Months Ended June 30,
  2015 2014
Cash Flows From Operating Activities:    
Net loss ($15,120) ($7,354)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 641 881
Stock-based compensation 476 332
Impairment of long-lived assets 920 --
Amortization of debt discount 2,662 --
Amortization of deferred financing costs 219 --
Change in fair value of warrant liability (651) (5,043)
Other -- (4)
Changes in operating assets and liabilities:    
Current assets 4,849 1,176
Current liabilities 349 (1,029)
Net cash used in operating activities (5,655) (11,039)
     
Cash Flows From Investing Activities:    
Lasers placed-in-service, net (123) --
Acquisition costs, net of cash received (42,500) --
Other -- 6
Net cash (used in) provided by investing activities (42,623) 6
     
Cash Flows From Financing Activities:    
Proceeds from convertible debentures 32,500 --
Proceeds from senior notes 10,000 --
Proceeds from credit facilities -- 11,452
Other financing activities (105) --
Net cash provided by financing activities 42,395 11,452
     
Effect of exchange rate changes on cash 2 --
Net (decrease)/increase in cash and cash equivalents (5,881) 419
Cash and cash equivalents, beginning of period 11,434 3,783
     
Cash and cash equivalents, end of period $5,553 $4,202
     
Supplemental information:    
Cash paid for interest $250 $ --
     
Supplemental information of non-cash investing and financing activities    
Conversion of convertible preferred stock into common stock $5,283 $ --
Conversion of senior secured convertible debentures into common stock $2,308 $ --
Reclassification of property and equipment to inventory, net $107 $ --
Reclassification of warrant liability to stockholders' equity $ -- $652
     
CONTACT: Investor Contacts:
         Robert W. Cook
         MELA Sciences, Inc.
         914-373-6936
         rcook@melasciences.com

         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences to Report Second Quarter Financial Results on Thursday, August 13

Conference Call to Follow at 4:30 p.m. EDT

HORSHAM, Pa., Aug. 12, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the diagnosis and treatment of serious dermatological disorders, will release second quarter financial results on Thursday, August 13, after the market close. MELA Sciences President and Chief Executive Officer, Michael Stewart, and Robert W. Cook, Chief Financial Officer, will host a conference call at 4:30pm Eastern Time to review the Company's progress and answer questions.

Conference Call Details:
Date: Thursday, August 13
Time: 4:30pm Eastern Time
Toll Free: 888-337-8169
International: 719-457-2689
Passcode: 3537662
Webcast: http://public.viavid.com/player/index.php?id=115368
   
Replays, available through August 27, 2015
Toll Free: 877-870-5176
International: 858-384-5517
Replay PIN: 3537662

About MELA Sciences, Inc. (www.melasciences.com)

MELA Sciences is a medical technology company focused on the dermatology market. Through its acquisition of the XTRAC and VTRAC businesses, MELA Sciences markets those products for the treatment of psoriasis, vitiligo and other skin conditions. The Company is also in the early commercialization stages of the MelaFind® system, an innovative software-driven technology that provides additional information to dermatologists in the management of melanoma skin cancer.

CONTACT: Investor Contacts:
         Robert W. Cook
         MELA Sciences, Inc.
         914-373-6936
         rcook@melasciences.com

         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences Acquires XTRAC and VTRAC Businesses From PhotoMedex, Inc.

Becomes a Multi-Product Medical Dermatology Business

Conference Call at 8:30am Eastern Time Today

IRVINGTON, N.Y., June 23, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), today announced that it has signed and completed the purchase of the XTRAC and VTRAC Dermatology business from PhotoMedex, Inc. for $42.5 million in cash and the assumption of certain business-related liabilities. The purchase price includes all of the accounts receivable, inventory and fixed and intangible assets of the businesses. To fund the purchase price of the transaction, the Company has issued senior secured notes and convertible debentures equal to the transaction purchase price to certain investors. The XTRAC and VTRAC businesses generated $30.6 million in revenues in 2014.

Michael R. Stewart, President and CEO of MELA Sciences, stated, "This is a transformational event for MELA Sciences. As a result of this acquisition, MELA becomes a multi-product company with a single salesforce focused on meeting the needs of dermatologists for the diagnosis and treatment of serious dermatological conditions. The XTRAC laser in particular provides us with a recurring source of revenue that has been growing significantly over the past few years and is expected to generate sufficient cash flow to fund our ongoing operations beginning this year. This should enable us to continue our current commercialization efforts while growing the XTRAC and VTRAC businesses globally.

Added MELA Sciences Chairman, Jeffrey F. O'Donnell, Sr., "I am thrilled we have completed this acquisition as it transforms MELA Sciences into a sustainable commercial enterprise, providing it with a sales infrastructure, a synergistic product line and a positive-cash flow business platform on which to build a leading franchise in medical dermatology.  Given Mike Stewart's previous experience running the XTRAC and VTRAC businesses at PhotoMedex, we look forward to a smooth transition with him as CEO of the combined businesses."

XTRAC is an ultraviolet light excimer laser system that has become a widely utilized treatment among dermatologists for the treatment of psoriasis, vitiligo and other skin diseases. 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. In 2014, the acquired businesses generated $30.6 million in revenues, representing year-over-year growth of 41% and a gross profit of 60.1%. As of March 31, 2015, there were 640 installed XTRAC systems in the United States, up from 527 at the end of March 2014. There are approximately 7.5 million people in the U.S. and up to 125 million people worldwide suffering from psoriasis, and 1% to 2% of the world's population have vitiligo. In 2014, over 300,000 XTRAC laser treatments were performed on approximately 19,000 patients in the United States.

To finance the transaction, the Company entered into a securities purchase agreement with institutional investors in connection with a private placement of $42.5 million aggregate principal amount of senior secured notes and convertible debentures and warrants to purchase 3.0 million shares of common stock at an exercise price of $0.75 per share. The Company sold $10.0 million principal amount of senior secured 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 Company also issued $32.5 million principal amount of senior secured convertible debentures that, subject to certain ownership limitations and stockholder approval conditions, will be convertible into approximately 43.3 million 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. The Company's obligations under the notes and debentures are secured by a first priority lien on all of the Company's assets. 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 to stockholder approval of such issuances and an amendment to the Company's certificate of incorporation to increase the Company's authorized shares of common stock. Upon receipt of stockholder approval, the Company has also agreed to reprice outstanding warrants held by certain investors to reduce the exercise price to $0.75 per share. 

The notes, convertible debentures and warrants described above have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The securities were offered only to accredited investors. Pursuant to a registration rights agreement with the investors, the Company has agreed to file one or more registration statements with the SEC covering the resale of the shares of common stock issuable upon conversion of or in connection with the convertible debentures and upon exercise of the warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The Company will also be providing slides with an overview of the transaction and discussion points. They will be available at http://melasciences.com/investors/home.

Conference Call Details:
Date: Tuesday, June 23, 2015
Time: 8:30 am Eastern Time
Toll Free: 888-364-3109
International: 719-325-2455
Passcode: 6308822
Webcast: http://public.viavid.com/player/index.php?id=114845
   
Replays, available through July 7, 2015
Toll Free: 877-870-5176
International: 858-384-5517
Replay PIN: 6308822

About MELA Sciences, Inc.  (www.melasciences.com)

MELA Sciences is a medical technology company focused on the dermatology market. Through its acquisition of the XTRAC and VTRAC businesses, MELA Sciences markets those products for the treatment of psoriasis, vitiligo and other skin conditions. The Company is also in the early commercialization stages of the MelaFind® system, an innovative software-driven technology that provides additional information to dermatologists in the management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT: Media
         Diana Garcia Redruello
         MELA Sciences, Inc.
         914-373-6960
         dgarcia@melasciences.com

         Media
         Diana Garcia Redruello
         MELA Sciences, Inc.
         914-373-6960
         dgarcia@melasciences.com
MELA Sciences

MELA Sciences Reports First Quarter 2015 Financial Results

IRVINGTON, N.Y., May 14, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), developer of the MelaFind® System, a non-invasive software-driven image analysis device intended to provide a dermatologist with objective data of clinically irregular pigmented moles when they choose to obtain additional information to help them decide whether or not to biopsy (at the most curable and cost-effective stage), today reported financial results for the quarter ended March 31, 2015.

First Quarter 2015 Financial Results Compared with First Quarter 2014 Results:

  • Revenue totaled approximately $0.1 million, unchanged compared with a year ago. The Company has taken steps to obtain medical reimbursement and on March 9, 2015, the CPT® Editorial Panel assigned additional Category III codes that apply to the MelaFind System, which should become effective January 1, 2016. These codes provide the basis for pursuing third party and CMS insurance coverage for MelaFind.  Efforts to obtain reimbursement from private insurers are underway and until reimbursement is in place, sales of MelaFind systems will be limited to select institutions and are expected to be minimal.
  • Cost of revenue was $0.7 million, compared with $0.9 million in the first quarter of 2014. The decrease was primarily the result of lower depreciation and other expenses, partially offset by the cost of sold MelaFind systems.
  • Selling, general and administrative expenses totaled $2.8 million, compared with $3.2 million for the first quarter of 2014. The decrease is the result of the continuing cost reduction initiatives being implemented by the Company.
  • Interest expense was $2.3 million, compared with $1,000 a year ago. Interest expense was related to the 4% Convertible Debentures and substantially consisted of $2.2 million of non-cash charges related to amortization of debt discount and deferred financing fees.  Approximately $1.7 million of interest expense was recognized as a result of the conversion of $2.3 million of Debentures into common stock during the quarter.  The change in fair value of the Company's warrant liability, which is marked to market quarterly, resulted in an expense of $1.3 million during the first quarter of 2015, compared with a benefit of $0.1 million for the first quarter of 2014.  

Michael R. Stewart, President and CEO of MELA Sciences, stated, "Our efforts aimed at establishing reimbursement for the MelaFind system will continue to accelerate over the coming months in anticipation of the issuance of the level III CPT codes in early 2016. And, we will continue working with major skin cancer institutions in an effort to establish MelaFind as an integral tool in the clinical management of melanoma."

At March 31, 2015, the Company had working capital totaling $10.0 million and cash and equivalents totaling $8.2 million. Cash and equivalents totaled $11.4 million at December 31, 2014.

About MELA Sciences, Inc.  (www.melasciences.com)

MELA Sciences is a medical technology company dedicated to designing and developing innovative software-driven technology for the early detection of skin cancer. MELA Sciences conducted the largest, positive prospective study ever done on the melanoma disease, and is the first and only medical technology company to receive both FDA Pre-Market Approval for the United States, and CE Marking certification for the European Union for their flagship product MelaFind.

About MelaFind (www.melafind.com)

The MelaFind System utilizes innovative software-driven technology and state-of-the-art 3-D imaging to non-invasively extract data 2.5 mm below the skin surface from patient's clinically irregular pigmented moles and objectively analyzes them with proprietary algorithms.  MelaFind provides important additional perspective to physicians to help them better understand the structural disorganization of a patient's pigmented irregular moles (before cutting the skin) during the evaluation and diagnosis process for melanoma.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the effective date of the CPT codes for physicians' use of the MelaFind system, the Company's ability to gain Medicare Part B reimbursement from CMS and reimbursement from private insurance companies, study results, acceptance of MelaFind by practitioners and key opinion leaders and institutions, the Company's ability to expand MelaFind's use domestically and internationally and increase its visibility, the Company's ability to develop, launch and improve its products, and the Company's effectiveness in mitigating or preventing significant deficiencies or material weaknesses in its internal control over financial reporting in the future, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

 
MELA SCIENCES, INC.
BALANCE SHEETS
 
  March 31,
2015
December 31,
2014
  (unaudited) *
ASSETS 
Current Assets:    
Cash and cash equivalents   $ 8,233,044  $ 11,433,579
Restricted cash  100,000  -- 
Accounts receivable (net of allowance of $95,477 and $94,838 as of March 31, 2015 and December 31, 2014, respectively)  5,845  220,534
Inventory (net of reserves of $1,408,453 as of March 31, 2015 and December 31, 2014)   5,187,926  5,274,803
Prepaid expenses and other current assets  350,165  274,031
Total Current Assets  13,876,980  17,202,947
Property and equipment, net   1,620,365  1,961,376
Patents and trademarks, net  35,450  36,719
Deferred financing costs  640,981  820,775
Other assets  48,000  48,000
Total Assets  $ 16,221,776  $ 20,069,817
     
LIABILITIES AND STOCKHOLDERS' EQUITY 
     
Current Liabilities:    
Accounts payable (includes related parties of $67,500 and $73,792 as of March 31, 2015 and December 31, 2014, respectively)  $ 1,320,274  $ 1,239,919
Accrued expenses   651,186  841,918
Deferred revenue  25,391  42,843
Warrant liability   1,833,638  499,089
Other current liabilities  54,434  61,829
Total Current Liabilities  3,884,923  2,685,598
     
Long Term Liabilities:    
Deferred revenue  16,420  26,500
Deferred rent  70,075  80,084
Senior secured convertible debentures (net of discount of $6,395,105 and $8,410,187 at March 31, 2015 and December 31, 2014, respectively)  4,707,410  5,000,826
Total Long Term Liabilities  4,793,905  5,107,410
Total Liabilities  8,678,828  7,793,008
     
COMMITMENTS AND CONTINGENCIES    
     
Stockholders' Equity:    
Preferred stock -- $0.10 par value; authorized 10,000,000 shares: issued and outstanding: 10,279 at March 31, 2015 and 11,787 at December 31, 2014  1,028  1,179
Common stock -- $0.001 par value; authorized 50,000,000 shares:    
Issued and outstanding 7,525,146 shares at March 31, 2015 and 6,037,232 at December 31, 2014  7,525  6,037
Additional paid-in capital  197,100,186  194,562,963
Accumulated deficit  (189,565,791)  (182,293,370)
Total Stockholders' Equity   7,542,948  12,276,809
Total Liabilities and Stockholders' Equity   $ 16,221,776  $ 20,069,817
* Derived from the audited balance sheet as of December 31, 2014    
 
MELA SCIENCES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
     
  Three months ended March 31,
  2015 2014
Net revenues  $ 81,200  $ 97,638
Cost of revenue  710,880  918,523
Gross profit  (629,680)  (820,885)
     
Operating expenses:    
Research and development  238,874  707,824
Selling, general and administrative  2,762,991  3,203,533
Total operating expenses  3,001,865  3,911,357
Operating loss  (3,631,545)  (4,732,242)
     
Other income (expenses):    
Interest income  1,126  618
Interest expense  (2,324,963)  (1,199)
Change in fair value of warrant liability  (1,334,549)  137,142
Registration rights liquidating damages  --   (3,389,940)
Other income, net  17,510  5,025
   (3,640,876)  (3,248,354)
     
Net loss  $ (7,272,421)  $ (7,980,596)
     
Basic and diluted net loss per common share  $ (1.12)  $ (1.63)
     
Basic and diluted weighted average number of common shares outstanding  6,471,906  4,892,641
 
MELA SCIENCES, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
     
  Three Months Ended March 31,
  2015 2014
Cash flows from operating activities:    
Net loss  $ (7,272,421)  $ (7,980,596)
Adjustments to reconcile net loss:    
Depreciation and amortization  316,243  696,800
Bad debt expense  639  700
Share-based compensation  230,062  164,168
Amortization of debt discount  2,015,082  -- 
Amortization of deferred financing costs  179,794  -- 
Change in fair value of warrant liability  1,334,549  (137,142)
Changes in operating assets and liabilities:    
Restricted cash  (100,000)  -- 
Accounts receivable  214,050  22,330
Inventory  112,914  (16,815)
Prepaid expenses and other current assets  (76,134)  414,558
Accounts payable and accrued expenses  (110,377)  (192,101)
Other current liabilities  (7,395)  (6,119)
Deferred rent  (10,009)  (10,009)
Deferred revenue  (27,532)  (76,661)
Net cash used in operating activities  (3,200,535)  (7,120,887)
Cash flows from investing activities:    
Purchases of property and equipment  --   -- 
 Net cash used in investing activities  --   -- 
Cash flows from financing activities:    
Net proceeds from private placements/public offerings  --   11,460,715
 Net cash provided by financing activities  --   11,460,715
Net (decrease)/increase in cash and cash equivalents  (3,200,535)  4,339,828
Cash and cash equivalents at beginning of period  11,433,579  3,782,881
Cash and cash equivalents at end of period  $ 8,233,044  $ 8,122,709
     
Supplemental Disclosure of Cash Flow Information:    
Cash paid for interest  $ 139,000  $ -- 
Supplemental Disclosure of Non-cash Investing and Financing Activities:    
Conversion of convertible preferred stock into common stock  $ 1,508,000  $ -- 
Conversion of senior secured convertible debentures into common stock  $ 2,308,498  $ -- 
Reclassification of MelaFind components from property and equipment to inventory, net  $ 26,037  $ -- 
CONTACT: Media
         Diana Garcia Redruello
         MELA Sciences, Inc.
         914-373-6960
         dgarcia@melasciences.com

         Investors
         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com
MELA Sciences

MELA Sciences Reports 2014 Financial Results and Provides a Business Update

IRVINGTON, N.Y., March 30, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (Nasdaq:MELA), developer of the MelaFind® system, a non-invasive software-driven image analysis device intended to provide a dermatologist with objective data of clinically irregular pigmented moles when they choose to obtain additional info to help them decide whether or not to biopsy (at the most curable and cost-effective stage), today reported financial results and provided a business update.

Fourth Quarter 2014 and Subsequent Weeks Operational Highlights:

  • Named Michael R. Stewart as the Company's President and Chief Executive Officer. Mr. Stewart has been a member of the MELA Sciences Board of Directors since August 2014 and was most recently a senior executive at NASDAQ-traded PhotoMedex, Inc. Mr. Stewart was previously CEO of publicly traded Surgical Laser Technologies, Inc. prior to its sale to PhotoMedex.
     
  • Announced that the CPT Editorial Panel accepted the addition of Category III codes 039XX1T and 039XX2T to report multi-spectral digital skin lesion analysis of atypical cutaneous lesions, which applies to the MelaFind System. The Company expects that these codes will become effective on January 1, 2016 and will provide the basis to begin pursuing insurance coverage and reimbursement for MelaFind. 
     
  • Reported that highly favorable results were obtained in a clinical and healthcare management study using MelaFind to help identify lesions most at risk for atypia and malignancy in patients at a high risk for melanoma, potentially allowing some patients to avoid an unnecessary surgical procedure. The results were included in the 2013 Outcomes for Cleveland Clinic's Dermatology & Plastic Surgery Institute.
     
  • Conducted a fourth U.S. "reader" study in October at the Fall Clinical Dermatology Conference in Las Vegas, Nevada.  These studies measure the impact of MelaFind on physician biopsy management.  

Michael R. Stewart, President and CEO of MELA Sciences, stated, "We are pleased to have learned that, barring any further action by the American Medical Association, Category III CPT Codes for the use of MelaFind will become effective on January 1, 2016. Obtaining insurance reimbursement for physicians' use of the MelaFind system in the U.S. is a critical step toward MelaFind becoming broadly adopted by the dermatology community, and this is the first tangible success of our decision to pursue that strategy. More broadly, we are seeking to expand MelaFind's use both domestically and internationally, particularly by placing MelaFind in key institutions with a particular focus on dermatologists who treat high risk patients; increasing our visibility through abstracts, posters and clinical presentations at dermatology conferences; as well as continuously improving the MelaFind device. I believe we are making progress on all of these fronts." 

2014 Financial Results (All comparisons are to results for the year ended December 31, 2013):

  • Revenue increased to $0.9 million, from $0.5 million, and was the result of MelaFind system revenue under the Company's capital sale model, partially offset by a decline in deferred placement revenue. The Company's first commercial sale occurred in the second quarter of 2014. 
     
  • Cost of revenue was $4.9 million, up 14% from $4.3 million in 2013. This increase was the result of several factors, including a reserve for obsolete inventory, deferred repairs of certain of our MelaFind system units, and direct costs of MelaFind systems sold under our capital sale model, partially offset by lower depreciation and other expenses. Research and development (R&D) expenses declined 58% to approximately $1.6 million in 2014, compared with $3.8 million for 2013. The decrease was the result of the cost reduction plan initiated in August 2013. Ongoing R&D efforts are focused on product enhancements.
     
  • Selling, general and administrative (SG&A) expenses declined 29% to approximately $11.0 million, compared with $15.5 million for 2013. The decrease is the result of salary and headcount reductions, lower stock compensation expense, lower consulting and temporary help expenses, and other cost reduction initiatives.
     
  • Interest expense was $2.4 million, compared with $0.6 million in 2013. In 2014, interest expense was related to the issuance of 4% Convertible Debentures and to the subsequent conversion of approximately $1.6 million in the debentures during the year, and included $1.9 million in amortization of debt discount, $0.3 million in interest payments, and $0.2 million in amortization of deferred financing costs. The conversion of the debentures resulted in approximately $1.2 million of accelerated interest expense. In 2013, interest expense was incurred as a result of a $6 million senior debt financing in March 2013, which was prepaid in September 2013.
     
  • The change in fair value of the Company's warrant liability, which is marked to market, resulted in a benefit of $8.1 million for 2014, compared with a charge of $0.3 million for 2013 and was primarily related to a lower stock price for the period.

The Company had cash and cash equivalents totaling $11.4 million at December 31, 2014, compared with $3.8 million at December 31, 2013.

As reported in the Company's Form 10-K for the year ended December 31, 2014, management concluded that the Company's internal controls specifically related to proper review and monitoring were not operating effectively at December 31, 2014. Since December 31, 2014, all accounts have been reconciled appropriately. Management has updated the Company's quarterly closing procedures and implemented a timeline by which to actively monitor the Company's progress with respect to the quarterly close, specifically to permit adequate review. Upon completion of the closing process following the end of the first quarter of 2015, management will determine whether the material weakness cited at December 31, 2014 has been remediated.

About MELA Sciences, Inc.  (www.melasciences.com)

MELA Sciences is a medical technology company dedicated to designing and developing innovative software-driven technology for physician clinical use for the early detection of skin cancer. MELA Sciences conducted the largest, positive prospective study ever done on the melanoma disease, and is the first and only medical technology company to receive both FDA Pre-Market Approval (PMA) for the U.S. and CE Marking certification for the European Union for their flagship product MelaFind.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the effective date of the CPT codes for physicians' use of the MelaFind system, the Company's ability to gain Medicare Part B reimbursement from CMS and reimbursement from private insurance companies, study results, acceptance of MelaFind by practitioners and key opinion leaders and institutions, the Company's ability to expand MelaFind's use domestically and internationally and increase its visibility, the Company's ability to develop, launch and improve its products, and the Company's effectiveness in mitigating or preventing significant deficiencies or material weaknesses in its internal control over financial reporting in the future, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

MELA SCIENCES, INC.
BALANCE SHEETS
(in thousands, except for share data)
  December 31, December 31,
  2014 2013
ASSETS
Current Assets:    
Cash and cash equivalents  $11,434  $3,783
Accounts receivable (net of allowance of $95 and $46 as of December 31, 2014 and 2013, respectively)  220  57
Inventory (net of reserve $1,409 and $325 as of December 31, 2014 and 2013, respectively)  5,275  5,631
Prepaid expenses and other current assets  274  880
Total Current Assets  17,203  10,351
Property and equipment, net  1,961  3,691
Patents and trademarks, net  37  42
Deferred financing costs  821  -- 
Other assets  48  48
Total Assets  $20,070  $14,132
     
LIABILITIES AND STOCKHOLDERS' EQUITY
     
Current Liabilities:    
Accounts payable (includes related parties of $74 and $33 as of December 31, 2014 and 2013, respectively)  $1,240  $1,479
Accrued expenses (includes related parties of $0 and $48 as of December 31, 2014 and 2013, respectively)  842  844
Deferred revenue  43  244
Warrant liability  499  3,017
Other current liabilities  62  68
Total Current Liabilities  2,686  5,652
     
Long-Term Liabilities:    
Deferred revenue  27  64
Deferred rent  80  120
Senior secured convertible debentures (net of discount of $8,410 at December 31, 2014)  5,001  -- 
Total Long-Term Liabilities  5,108  184
Total Liabilities  7,794  5,836
     
COMMITMENTS AND CONTINGENCIES    
Stockholders' Equity:    
Series B convertible preferred stock -- $0.10 par value; authorized 10,000,000 shares: issued and outstanding: 11,787 and 0 at December 31, 2014 and 2013, respectively  1  -- 
Common stock -- $0.001 par value; authorized 50,000,000 shares:    
Issued and outstanding 6,037,232 and 4,750,160 shares at December 31, 2014 and 2013, respectively.  6  5
Additional paid-in capital  194,562  176,439
Accumulated deficit  (182,293)  (168,148)
Total Stockholders' Equity  12,276  8,296
Total Liabilities and Stockholders' Equity  $20,070  $14,132
 
MELA SCIENCES, INC.
STATEMENTS OF OPERATIONS
(in thousands, except for share and per share data)
     
  December 31, December 31,
  2014 2013
Net revenues  $915  $536
Cost of revenue  4,935  4,341
Gross profit  (4,020)  (3,805)
     
Operating expenses:    
Research and development  1,641  3,782
Selling, general and administrative  10,961  15,536
Impairment of long-lived assets  --   1,011
Total operating expenses  12,602  20,329
     
Operating loss  (16,622)  (24,134)
     
Other income (expenses):    
Interest income  8  8
Interest expense  (2,380)  (564)
Change in fair value of warrant liability  8,103  (296)
Write-off of unamortized loan costs  --   (983)
Gain on sale of fixed assets  16  -- 
Registration rights liquidated damages  (3,420)  -- 
Other income, net  150  21
   2,477  (1,814)
     
Net loss  $(14,145)  $(25,948)
Deemed dividend related to beneficial conversion feature on convertible preferred stock  (1,887)  -- 
Net loss attributable to common stockholders  $(16,032)  $(25,948)
     
Basic and diluted net loss per common share  $(3.03)  $(6.05)
     
Basic and diluted weighted average number of common shares outstanding  5,295,929  4,289,450
 
MELA SCIENCES, INC.
STATEMENTS OF CASH FLOWS
(in thousands)
  December 31, December 31,
  2014 2013
Cash flows from operating activities:    
Net loss  $(14,145)  $(25,948)
Adjustments to reconcile net loss:    
Write-off of unamortized loan costs  --   983
Depreciation and amortization  1,790  2,439
Impairment of long-lived assets  --   1,011
Bad debt expense  52  46
Write-off of unamortized financing costs  --   41
Share-based compensation expense  413  1,301
Amortization of deferred financing costs  191  250
Amortization of debt discount  1,943  -- 
Change in fair value of warrant liability  (8,103)  296
Inventory reserve  1,084  325
Gain on sale of fixed assets  (16)  -- 
Changes in operating assets and liabilities:    
Accounts receivable  (215)  77
Inventory  (784)  121
Prepaid expenses and other current assets  606  86
Other assets  --   36
Accounts payable and accrued expenses  (241)  (484)
Other current liabilities  (6)  27
Deferred rent  (40)  (24)
Deferred revenue  (238)  4
Net cash used in operating activities  (17,709)  (19,413)
Cash flows from investing activities:    
Purchases of property and equipment  --   (5,188)
Proceeds from the sale of fixed assets  17  -- 
Net cash provided by (used in) investing activities  17  (5,188)
Cash flows from financing activities:    
Net proceeds from private placements/public offerings  11,458  21,174
Proceeds from long-term debt  15,000  6,000
Expenses related to long-term debt  (1,012)  (245)
Expenses related to issuance of Series B convertible preferred stock  (103)  
Repayment of long-term debt  --   (6,425)
Proceeds from exercise of stock options  --   18
Net cash provided by financing activities  25,343  20,522
Net increase (decrease) in cash and cash equivalents  7,651  (4,079)
Cash and cash equivalents at beginning of period  3,783  7,862
Cash and cash equivalents at end of period  $11,434  $3,783
Supplemental Disclosure of Cash Flow Information:    
Cash paid for intere