On May 22, 2020, STRATA Skin Sciences, Inc. (the “Company”) executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the United States Small Business Administration (the “SBA”) under its
Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is up to $500,000, with proceeds to be used for working capital purposes. As of
the date of this Current Report on Form 8-K, the Company has not requested any disbursements under the EIDL Loan, and the EIDL Loan requires all requests for disbursements be made by September 26, 2020 (six months after the date of the EIDL Loan),
unless the SBA, in its sole discretion, extends the disbursement period. If the Company does not request disbursements by such date, the EIDL Loan commitment will terminate and the Company will lose the ability to draw the funds. Interest accrues at
the rate of 3.75% per annum and will accrue only on funds actually advanced from the date of each advance. Installment payments, including principal and interest, are due monthly beginning March 26, 2021 (twelve months from the date of the promissory
note) in the amount of $2,437. The balance of principal and interest is payable thirty years from the date of the promissory note.
The Company has executed the EIDL Loan documents, which include the SBA Secured Disaster Loan Note, dated March 26, 2020 (the “EIDL Loan Note”), the Loan Authorization and Agreement, dated March 26, 2020 (the “EIDL
Loan LA&A”), between the SBA and the Company, and the Security Agreement, dated March 26, 2020 (the “EIDL Loan Security Agreement”), between the SBA and the Company, and returned those executed documents to the SBA within the two month deadline
from March 26, 2020 in order to avoid forfeiting the EIDL Loan. Notwithstanding the provisions stated in the loan documents requiring a personal guarantee, the Company did not provide a personal guarantee.
The Company may or may not draw any of the available funds under the EIDL Loan if it cannot secure certain changes or clarifications to the loan terms and conditions.
The EIDL Loan is secured by a security interest on all of the Company’s assets. The terms of the security interest are set forth in the EIDL Loan Security Agreement.
The foregoing description of the EIDL Loan is qualified in its entirety by reference to the terms of the EIDL Loan LA&A, which is attached hereto as Exhibit 10.1, the EIDL Loan Note, which is attached hereto as
Exhibit 10.2, and the EIDL Loan Security Agreement, which is attached hereto as Exhibit 10.3, and each of which is incorporated by reference.