STRATA Skin Sciences Announces Successful Amendment to Credit Agreement with MidCap Financial
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Insights
Amendments to credit agreements are pivotal events for companies, as they directly affect liquidity and operational capabilities. STRATA Skin Sciences' recent amendment with MidCap Financial Trust can be seen as a strategic move to optimize its financial structure in alignment with current and projected business needs. By removing the minimum revenue requirements for 2023, the company has effectively reduced the pressure of meeting specific financial thresholds, which could have been a potential liquidity constraint.
From a financial perspective, such amendments often signal to the market that a company is proactively managing its debt obligations to avoid potential breaches of covenants. This could be interpreted positively by investors as it demonstrates management's commitment to maintaining financial stability. However, the introduction of new financial covenants will require close monitoring, as they will set the future financial conduct the company must adhere to. The details of these covenants would be crucial in assessing the company's future financial risk profile.
The dermatological sector is highly competitive, with continuous innovation being a key driver for growth. STRATA's focus on delivering innovative dermatological solutions positions it well within the industry. The amendment to its credit agreement could provide the necessary financial flexibility to support research and development, as well as marketing efforts for new and existing products. This is essential for maintaining a competitive edge.
Furthermore, the confidence expressed by the company's Vice Chairman and CEO in executing strategic initiatives suggests that STRATA may have a robust pipeline or strategic partnerships in the works. For stakeholders, the long-term value will hinge on the company's ability to leverage this amended financial flexibility to capture market share and drive revenue growth in a market where technological advancements and patient outcomes are critical success factors.
The filing of the amendment on Form 8-K is a regulatory requirement by the SEC that ensures transparency for investors and the market. This public disclosure allows shareholders and potential investors to evaluate the implications of the amended credit terms on the company's financial health. It is important for stakeholders to review such filings to understand the legal and financial nuances of the amendment, such as any new covenants or obligations that STRATA is now subject to.
Given that the amendment has been termed as 'successful' by the company, it indicates a favorable negotiation outcome with MidCap Financial Trust. However, stakeholders should consider the terms of the amendment in the context of the company's overall debt structure and the potential impact on its operational freedom. Legal counsel would typically advise on the implications of these changes and the potential risks or benefits associated with the new covenants.
–Amends certain financial covenants to enhance liquidity and financial flexibility–
–Ensures alignment with the Company’s current and future business operations–
HORSHAM, Pa., Feb. 26, 2024 (GLOBE NEWSWIRE) -- STRATA Skin Sciences, Inc. (NASDAQ: SSKN) (“STRATA” or “the Company”), a medical technology company dedicated to developing, commercializing and marketing innovative products for the treatment of dermatologic conditions, today announced the successful amendment of its credit and security agreement with MidCap Financial Trust (“MidCap”) effective February 20, 2024.
This amendment, recognized as Amendment No. 4 (“Amendment”), removes the minimum revenue requirements for 2023 and introduces future financial covenants. The Amendment ensures alignment with the Company’s current and future business projections by supporting operational and capital needs.
Dolev Rafaeli, STRATA’s Vice Chairman and Chief Executive Officer, remarked, “This amendment signifies the strength of our partnership with MidCap Financial Trust and our lenders. Their support enables us to continue advancing our mission to deliver innovative dermatological solutions to our customers. We are confident that these amended terms will provide us with the flexibility to execute our strategic initiatives and drive long-term value for our stakeholders.”
The Company has filed a copy of the amendment on Form 8k on February 21, 2024.
About STRATA Skin Sciences, Inc.
STRATA Skin Sciences is a medical technology company dedicated to developing, commercializing, and marketing innovative products for the in-office treatment of various dermatologic conditions such as psoriasis, vitiligo, and acne. Its products include the XTRAC® excimer laser, VTRAC® lamp systems, and the TheraClear®X Acne Therapy System.
STRATA is proud to offer these exciting technologies in the U.S. through its unique Partnership Program. STRATA’s popular partnership approach includes a fee per treatment cost structure versus an equipment purchase, installation and use of the device, on-site training for practice personnel, service and maintenance of the equipment, dedicated account and customer service associates, and co-op advertising support to help raise awareness and promote the program within the practice.
About MidCap Financial
MidCap Financial is a middle-market focused, specialty finance firm that provides senior debt solutions to companies across all industries. As of December 31, 2023, MidCap Financial provides administrative or other services for over
For more information about MidCap Financial, please visit http://www.midcapfinancial.com.
For more information about Apollo, please visit http://www.apollo.com.
*Including commitments managed by MidCap Financial Services Capital Management LLC, a registered investment adviser, as reported under Item 5.F on Part 1 of its Form ADV
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, the Company’s ability to launch and sell an acne treatment device and to integrate that device into its product offerings, the Company’s ability to develop, launch and sell products recently acquired or to be developed in the future, the Company’s ability to develop social media marketing campaigns, direct to dermatologist marketing campaigns, and the Company’s ability to build a leading franchise in dermatology and aesthetics, 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, adverse market conditions labor supply shortages, or supply chain interruptions resulting from the coronavirus, fiscal, and political factors, responses, or conditions affecting the Company, the medical device industry and our customers and patients 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 these forward-looking statements may prove to be incorrect or unreliable. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release. The Company urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.
Investor Contact:
Rich Cockrell
CG Capital
Phone: +1 (404) 736-3838
sskn@cg.capital
FAQ
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