Fairmount Partners Advises STRATA in $17 Million Equity Financing led by Accelmed Growth Partners

HORSHAM, PA – May 29, 2018 – STRATA Skin Sciences (NASDAQ:SSKN) a medical technology company in Dermatology and Plastic Surgery dedicated to developing, commercializing, and marketing innovative products for the treatment of dermatologic conditions, has entered into definitive agreements for the sale of 15,740,740 shares of common stock to a group of investors led by Accelmed Growth Partners, an investment firm focused on value creation for medical device companies and technologies, for proceeds of $17 million. Accelmed is investing $13 million. Other investors include Dr. Dolev Rafaeli, Gohan Investments, Broadfin Capital and Sabby Management, the latter two of which are dedicated healthcare investors which both currently own common and preferred stock in the Company.

STRATA also announced the appointment of Dr. Rafaeli as Interim CEO. The Company’s current CEO Frank J. McCaney will assume the role of Interim CFO.

In connection with the equity financing, STRATA has signed a non-binding Term Sheet to amend its existing $10.6 million credit facility established with MidCap Financial Trust (“MidCap”) in 2015. Of the $17 million to be received from the new investors, $3 million will be used to pay down the current loan with MidCap. The terms of the credit facility will be amended to lower the interest rate, impose less restrictive covenants and lower prepayment and exit fees for the Company.

The remaining proceeds from the equity financing will be used to enhance the Company’s growth by focusing on the Company’s core recurring revenue business and adding innovative medical devices which can leverage STRATA’s salesforce, customer relationships and current infrastructure in sales, marketing and reimbursement.

“We are very pleased to have Accelmed as an investor in STRATA,” said LuAnn Via, Chairperson of the Board of Directors. “Their experience in medical devices and providing growth equity to drive significant value creation serve to further position STRATA for its next phase of growth.”

“We are delighted also to have Dolev Rafaeli join as the Company’s new CEO,” continued Ms. Via. “He has considerable experience in leadership roles in medical device companies and has a successful track record of turning around organizations and creating value for shareholders. We are confident he will make a significant contribution to the future of STRATA.” Upon Closing, Dr. Rafaeli will become the permanent CEO. In addition, at Closing, Dr. Uri Geiger, co-founder and CEO of Accelmed Growth Partners will become Chairman of the Board.

“I am very excited to have the opportunity to lead STRATA,” said Dr. Dolev Rafaeli, incoming Interim CEO. “The Company has a portfolio of proven, best-in-class skin science technologies, including the market leading XTRAC laser for the treatment of psoriasis, vitiligo and other skin deseases. I look forward to helping STRATA achieve its goal to become the valued business partner of choice for dermatology practices.”

Dr. Dolev Rafaeli has over 25 years of experience in the healthcare, medical device, consumer and industrial services fields. He served as a Member of the Board of Directors of the company that founded the XTRAC, PhotoMedex (Nasdaq:PHMD), since 2011 and was its CEO from 2006 to 2015. Under his management at PhotoMedex, he oversaw sales growth from $19 million to over $300 million, driven by increases in brand portfolio, distribution channels and M&A transactions. He was President and CEO of Radiancy, a subsidiary of PhotoMedex, from 2006 to 2017.

Mr. Hal Mintz, Managing Member of Sabby Management and a current investor in the Company as well as an investor in this round of financing, said, “The investment by Accelmed and the appointment of Drs. Geiger and Rafaeli mark a significant change to the makeup of STRATA. The additional $17 million in capital will allow the company to renegotiate its credit facility and reinvest in advertising its flagship XTRAC laser system, options that until now were unavailable to existing management. Accelmed is a seasoned medical device investor and turnaround specialist that recently made a similar investment in Cogentix just 18 months ago and which was recently sold with significant appreciation for its shareholders.”

H.C. Wainwright & Co. acted as placement agent for Strata in the equity transaction.

Fairmount Partners, an independent investment banking firm, acted as financial adviser to STRATA.

About STRATA Skin Sciences

STRATA Skin Sciences, Inc., a medical technology company, engages in developing and commercializing products for the treatment of dermatological disorders. Its products include XTRAC and VTRAC devices used for the treatment of psoriasis, vitiligo, and other skin disorders; and MelaFind system, an instrument for aiding dermatologists in the evaluation of clinically atypical pigmented skin lesions, when a dermatologist chooses to obtain additional information before making a final decision to biopsy in order to rule out melanoma. The company was formerly known as MELA Sciences, Inc. and changed its name to STRATA Skin Sciences, Inc. in December 2015. STRATA Skin Sciences, Inc. was founded in 1989 and is based in Horsham, Pennsylvania.

About Accelmed Growth Partners

Accelmed is an investment firm focused on value creation for medical device companies and technologies. Accelmed was founded in 2009 by Mori Arkin and Uri Geiger and invests in small and mid-cap private and public companies.  With its proven track record and large team of accomplished investment professionals, Accelmed’s vision is to create leading med-tech players by merging commercial platforms with small innovative growth companies, predominantly from Israel.

About Fairmount Partners

Based in Philadelphia, Fairmount Partners is the leading investment bank worldwide for pharmaceutical, device and related services businesses. Fairmount provides merger and acquisitions advisory services, and assists companies to raise funding for acquisitions, growth and liquidity. Fairmount’s Pharmaceutical Services Group has assisted clients to complete over 123 transactions in 18 countries in North and South America, Europe, Asia and Australia.

Further information is available at www.fairmountpartners.com