v3.26.1
Organization and Nature of Business
12 Months Ended
Dec. 31, 2025
Organization and Nature of Business [Abstract]  
Organization and Nature of Business
1. Organization and Nature of Business

Background

STRATA Skin Sciences, Inc. (the “Company”) is a medical technology company dedicated to developing, commercializing and marketing innovative products for the treatment of dermatologic conditions. Its products include the XTRAC® excimer lasers and VTRAC® lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions. In January 2022, the Company acquired the TheraClear® Acne Therapy System to broaden its opportunities with expansion potential in the acne care market. The Company markets the device under the brand name TheraClear® X.

The Company’s shares of common stock were delisted from The Nasdaq Capital Market at the opening of business on February 19, 2026 and are now quoted over the counter (“OTC”). See Note 16 for additional information.

Impact of Tariffs

In 2025, the U.S. introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, with certain exemptions. To the extent that trade tariffs and other restrictions imposed by the U.S. or other countries increase the price of, or limit the amount of, the Company’s products or components or materials used in its products imported into the U.S., or create adverse tax consequences, the revenues, costs, or gross profit of the Company’s products and services, primarily in the Dermatology Procedures Equipment segment, may be adversely affected and the demand from its customers may be diminished. Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending and may impact the Company’s results of operations.

Impact of Middle East Conflict

In early 2026, geopolitical tensions in the Middle East escalated significantly, including military conflict involving the U.S., Israel and Iran. While the situation remains fluid and continues to evolve, these developments have contributed to increased regional instability, including disruptions to airspace and heightened volatility in global energy markets. Although the Company has not experienced a material impact on its operations as of the date of issuance of these consolidated financial statements, continued or expanded conflict in the region could adversely affect global economic conditions, supply chains, transportation logistics, and customer demand, which in turn could impact the Company’s business and results of operations.

Liquidity and Going Concern

The Company has historically experienced recurring losses and has been dependent on raising capital from the sale of securities in order to continue to operate. In October 2021, the Company entered into an equity distribution agreement with an investment bank under which, as of December 31, 2025, the Company could sell up to an additional $5.1 million of its common stock in registered “at-the-market” offerings, subject to certain limitations. As of the date that the consolidated financial statements were issued, the Company may not sell any of its shares of common stock under the equity distribution agreement because it deregistered the unsold shares following the delisting of its common stock.

Management has evaluated the Company’s ability to meet its financial obligations as they become due within the next 12 months following the issuance of these consolidated financial statements. The delisting of the Company’s shares constitutes an event of default under the Senior Term Facility (see Note 10), which has continued through the date of issuance of these consolidated financial statements. The lender reserves any and all rights and remedies available to it under the Senior Term Facility, including, without limitation, its right to choose to accelerate the debt and seek immediate repayment in full. As a result, all of the Company’s long-term debt has been classified as current in the consolidated balance sheet, resulting in negative working capital. This, combined with its history of operating losses, raises substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the date that the consolidated financial statements were issued. Specifically, the Company’s ability to meet its obligations and continue operations is dependent upon regaining compliance with its debt covenants, modifying its existing debt facility, or successfully securing additional sources of liquidity and financing, as well as addressing other challenges, including market conditions that may negatively impact its ability to access capital. These conditions include, but are not limited to, potential future pandemics, changes in U.S. trade policies, supply chain disruptions, customer behavior, and rising interest rates, and could interfere with the Company’s ability to access financing and on favorable terms.

Management is actively evaluating various strategies to address the Company’s liquidity concerns, including exploring financing alternatives and pursuing other strategic initiatives. However, there can be no assurance that these efforts will be successful or sufficient to mitigate the substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. These financial statements do not include any adjustments that might result from the Company’s inability to continue as a going concern.