13D Filing: Sabby Capital and Strata Skin Sciences Inc. (SSKN)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE
13D

Under the Securities Exchange Act of
1934
(Amendment No.   )*

STRATA
SKIN SCIENCES, INC.

(Name of Issuer)

Common
Stock

(Title of Class of Securities)

86272A107

(CUSIP Number)

(Name, Address and Telephone Number of Person
Authorized to
Receive Notices and Communications)

January
2, 2018

(Date of Event Which Requires Filing of
this Statement)

If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box. [X]

Note: Schedules filed in paper format shall include a
signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are
to be sent.

* The remainder of this cover page shall be filled out for a
reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page
shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”)
or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).

Item 1. Security and Issuer

The name of the issuer is Strata Skin Sciences, Inc., a Delaware
corporation (the “Issuer”). The address of the Issuer’s principal office is 100
Lakeside Drive, Suite 100, Horsham, Pennsylvania 19044, United States of America. This Schedule 13D relates to the Issuer’s
Common Stock, par value $0.001 (the “Shares”).

Item 2. Identity and Background

Sabby Healthcare
Master Fund, Ltd.

c/o Ogier
Fiduciary Services (Cayman) Limited

89 Nexus Way,
Camana Bay

Grand Cayman
KY1-9007

Cayman Islands

Sabby Volatility
Warrant Master Fund, Ltd.

c/o Ogier
Fiduciary Services (Cayman) Limited

89 Nexus Way,
Camana Bay

Grand Cayman
KY1-9007

Cayman Islands

Sabby Management,
LLC

10 Mountainview
Road, Suite 205

Upper Saddle
River, New Jersey 07458

Hal Mintz

c/o Sabby
Management, LLC

10 Mountainview
Road, Suite 205

Upper Saddle
River, New Jersey 07458

Item 3.
Source and Amount of Funds or Other Consideration

The
funds for the purchase of Shares came from the investment capital of Sabby Healthcare and Sabby Volatility, which are managed by
Sabby Management.

No
borrowed funds were used to purchase the Shares, other than any borrowed funds used for investment purposes in the ordinary course
of Sabby Healthcare’s and Sabby Volatility’s business.

Item 4. Purpose of Transaction

The Reporting Persons have acquired their Shares of the Issuer
for investment. The Reporting Persons evaluate their respective investments in the Shares on a continual basis.

On January 2, 2018, the Reporting Persons sent to the Board
of Directors of the Issuer a letter (the “Letter”) expressing dissatisfaction with recent actions taken by the Issuer’s
Board of Directors. A copy of the Letter is filed as Exhibit 2 to this Schedule 13D and is incorporated
herein in its entirety by reference. Except as set forth in the letter to the Issuer’s Board
of Directors filed as an exhibit attached hereto, the Reporting Persons have no present plan or proposal that would relate to or
result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D.

The Reporting Persons from time to time intend
to review their investment in the Issuer on the basis of various factors, including the Issuer’s business, financial condition,
results of operations and prospects, general economic and industry conditions, the securities markets in general and those for
the Issuer’s Shares in particular, as well as other developments and other investment opportunities. Based upon such review,
the Reporting Persons will take such actions in the future as the Reporting Persons may deem appropriate in light of the circumstances
existing from time to time. If the Reporting Persons believe that further investment in the Issuer is attractive, whether because
of the market price of the Issuer’s Shares or otherwise, they may acquire shares of common stock or other securities of the
Issuer either in the open market or in privately negotiated transactions. Similarly, depending on market and other factors, the
Reporting Persons may determine to dispose of some or all of the Shares currently owned by the Reporting Persons or otherwise acquired
by the Reporting Persons either in the open market or in privately negotiated transactions.

The Reporting Persons reserve the right to be
in contact with members of the Issuer’s management, the members of the Issuer’s Board of Directors, other significant shareholders
and others regarding alternatives that the Issuer could employ to increase shareholder value.

The Reporting Persons further reserve the right
to act in concert with any other shareholders of the Issuer, or other persons, for a common purpose should it determine to do so,
and/or to recommend courses of action to the Issuer’s management, the Issuer’s Board of Directors, the Issuer’s shareholders and
others.

Item 5. Interest in Securities
of the Issuer

*As calculated in accordance with Rule
13d-3 of the Securities Exchange Act of 1934, as amended, Sabby Management and Hal Mintz each beneficially own 407,201 Shares of
the Issuer, representing approximately 9.99% of the issued and outstanding Shares, based on 4,076,089 shares
issued and outstanding on November 10, 2017. Sabby Management and Hal Mintz do not directly own any Shares, but each indirectly
owns 407,201 shares of Common Stock. Sabby Management indirectly owns 407,201 shares of Common Stock because it serves as the investment
manager of Sabby Healthcare and Sabby Volatility, which directly hold 335,105 Shares and 72,096 Shares, respectively. Mr. Mintz
indirectly owns 407,201 shares of Common Stock in his capacity as manager of Sabby Management. Excluded
from each Reporting Person’s beneficial ownership are an aggregate of 7,947,182 shares of Common Stock underlying certain
securities including: (i) 859,306 shares of Common Stock underlying warrants owned by Sabby Healthcare, (ii) 4,971,375 shares of
Common Stock issuable upon conversion of Series C Convertible Preferred Stock owned by Sabby Healthcare, (iii) 179,327 shares of
Common Stock underlying warrants owned by Sabby Volatility, and (iv) 1,937,174 shares of Common Stock issuable upon conversion
of Series C Convertible Preferred Stock owned by Sabby Volatility (excluded warrants and Series C Convertible Preferred Stock,
collectively, the “Excluded Securities”). The Excluded Securities are not beneficially owned by the Reporting Persons
due to the beneficial ownership limitation in the form of a conversion cap that precludes the Reporting Persons from converting
or exercising, as applicable, such Excluded Securities, to the extent that the Reporting Persons would, after such conversion or
exercise, collectively beneficially own (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934,
as amended) in excess of 9.99% of the shares of Common Stock outstanding. The Reporting Persons may choose to convert or exercise,
as applicable, the Excluded Securities, while continuing to comply with such beneficial ownership limitation.

Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer

The Reporting Persons have entered
into a Joint Filing Agreement, dated as of the date hereof, a copy of which is filed with this Schedule 13D as Exhibit 1 (which
is incorporated herein by reference), pursuant to which the Reporting Persons have agreed to file this statement jointly in accordance
with the provisions of Rule 13d-1(k) under the Act.

Item 7. Material to Be Filed as Exhibits

Exhibit 1 — Joint
Filing Agreement, dated January 2, 2018, among Sabby Healthcare Master Fund, Ltd., Sabby Volatility Warrant Master Fund, Ltd.,
Sabby Management, LLC and Hal Mintz

Exhibit 2 — Letter
to the Board of Directors of the Issuer, dated January 2, 2018

SIGNATURES

After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true, complete and correct.

*This Reporting Person disclaims beneficial
ownership over the securities reported herein except to the extent of its pecuniary interest therein.

EXHIBIT 1

———-

JOINT FILING AGREEMENT

The undersigned hereby agree that this
Statement on Schedule 13D with respect to the beneficial ownership of shares of Common Stock of STRATA Skin Sciences, Inc. is filed
jointly, on behalf of each of them.

Dated: January 2, 2018

EXHIBIT 2

January 2, 2018

SABBY MANAGEMENT, LLC

10 Mountainview Road, Suite 205

Upper Saddle River, New Jersey 07458

Members of the Board of Directors

STRATA Skin Sciences,
Inc. 

100 Lakeside Drive, Suite
100

Horsham, Pennsylvania
19044

Re: Recent Actions
by the Board of Directors

Dear Members of the Board
of Directors:

We, Sabby Management, LLC (“Sabby”),
are writing this letter to express our dissatisfaction with certain actions taken by the board of directors of Strata Skin Sciences,
Inc. (“Strata” or the “Company”) in the past few weeks, including declining the proposed investment of
$15 million in equity (the “Proposed Investment”) in Strata by, who we believe to be, a prominent med-tech investor
(the “Proposed Investor”), and instead chose to “evaluate strategic alternatives,” as stated by the Company
in its press release issued on December 18, 2017 (the “Press Release”). We acquired our shares of the Company for investment
purposes, which we continually evaluate. Through our evaluation of our investment, we believe that Strata became a leading provider
of laser therapy for dermatological conditions two and a half years ago when it purchased certain XTRAC laser assets and VTRAC
excimer lamp systems. In the ensuing thirty months, the value of Strata’s equity for shareholders has declined approximately
80%; based on public disclosures, revenue for 2017 is expected to be roughly 20% below 2015 levels; and the CFO recently resigned,
which we believe are a result of mismanagement by the board of directors and a sign of dysfunction in the case of the CFO resignation.
Change in the leadership at the board level may be necessary.

With regard to the Proposed Investment,
we became aware of its terms through the Proposed Investor, who came to us asking if we would vote in favor of the Proposed Investment,
as shareholder approval was necessary for the Proposed Investment and we hold a large minority stake in the Company. We were informed
that the terms of the Proposed Investment recently presented to and rejected by the Strata board were as follows: $15 million in
the form of preferred stock convertible at $1.40 per share (a 10% premium over the then 30 day volume weighted average price of
Strata stock) with no economic preferences or warrants. We strongly believe that this was the best financing alternative Strata
will be able to find anywhere. The Proposed Investment was predicated on major changes to the composition of the board and a change
in CEO leadership. The replacement CEO that the Proposed Investor intended to appoint was personally investing $2 million of the
$15 million raise. However, and to our great dismay, instead of presenting the Proposed Investment to Strata’s shareholders
for consideration, we learned, through the Press Release, that the board decided to explore alternative strategies and to potentially
engage a financial advisor to evaluate all options for the company. Ultimately, it should be up to the shareholders to decide whether
or not the investment is beneficial for the Company and if the current board should remain in place. You failed to provide them
with the opportunity to vote.

We supported the Proposed Investment
even though it would have resulted in substantial dilution of our holdings at a stock price that is 50% below the level at
which we invested in Strata, as we believe the Proposed Investment could reverse what we believe is a negative market
perception and expectations for the Company. We believe the infusion of $15 million in added working capital could enable the
company to invest as necessary in advertising via both traditional means and social media, and other expenditures that have
been cut to virtually zero due to capital constraints. The additional capital could also be used to move
Strata’s Optimal Dosing Technology (“OTD”) program forward – which we believe harbors vast potential
over the coming years, if nurtured through the regulatory process and adopted by patients, payers, and dermatologists.

It is also perplexing that the board voted
LuAnn Via to be chairman of the board (“COB”) in the days following its move to explore strategic alternatives, as,
based on the Company’s disclosure on Form 10-K for the fiscal year ended December 31, 2016, Ms. Via has no experience in
the healthcare industry or (more specifically) in the medical device space and was specifically brought on to the board for her
experience in retail sales and manufacturing and her extensive experience as a CEO and senior
executive of several publicly-listed companies, which we deem is unrelated to the Company’s business. Without specific
experience in the medical device space, we do not believe that Ms. Via is qualified to serve as the COB.

The Proposed Investor behind the rejected
Proposed Investment is a device specialist with vast experience investing in public companies and helping them grow their businesses.
They have access to executives who have been leaders at multiple healthcare entities that Strata can greatly use as fresh voices
at the board level, and we support both their investment in Strata and their vision for changes in management.

The board specifically noted in the Press
Release that:

“The
Board has not set a timetable for this process nor has it made any decisions related to any specific strategic alternatives at
this time.  There can be no assurance that the exploration of strategic alternatives will result in a transaction.  STRATA
does not intend to provide any updates unless or until it determines that further disclosure is appropriate or necessary.”

In
our opinion, the Company has rejected its best path forward without proposing another clear alternative. While we are open minded
regarding viable alternatives for a justifiable path forward, we would like the board to provide an update by January 22,
2018 on its exploration of its strategic alternatives. At such time, whether or not we receive an update from the Company, we may
reevaluate our investment and may consider taking action, including calling on all shareholders to vote for alternative leadership
at the board level at the next shareholder’s meeting. Please kindly respond to this letter by January 22, 2018 with the board’s
update.

Sincerely,

Sabby Management, LLC

  /s/ Hal D. Mintz                       

By: Hal D. Mintz, Manager