STRATA Skin Sciences closes pact to eliminate $40.7M in convertible debentures
STRATA Skin Sciences announced the closing of a transaction in which holders of its 2.25% Senior Series A Secured Convertible Debentures and 4% Senior Secured Convertible Debentures, both due July 30, 2021, have agreed to exchange all of such debentures, with an aggregate principal amount of approximately $40.7 million, into 40,617 shares of newly created Series C Convertible Preferred Stock, convertible into 15.1 million shares of common stock. In addition to eliminating the senior secured debt, the exchange has also eliminated the Company's obligation to pay approximately $4M of interest payments over the next four years. Frank McCaney, President and Chief Executive Officer of Strata, commented, "We are pleased to announce this share exchange agreement which we believe has major benefits to STRATA. The exchange removes our obligation to repay the convertible debt in 2021 and, as there is no dividend due or interest rate on newly issued non-voting convertible preferred stock, it also eliminates our obligation to pay approximately $4M of cash interest payments over the next four years. The interest savings will also provide flexibility to carry out our strategic plan of external and organic growth. An important part of STRATA's growth strategy is to leverage our salesforce of 28 sales reps and our current base of over 750 recurring revenue dermatology and plastic surgery customers, and our existing infrastructure."