apyx-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

September 30, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number:

0-12183



APYX MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)


Delaware						11-2644611
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

5115 Ulmerton Road, Clearwater, FL 33760

(Address of principal executive offices, zip code)

(727) 384-2323

(Registrant’s telephone number)

Securities Registered Pursuant to Section 12 (b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	APYX	Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No ☒

As of November 9, 2021, 34,343,750 shares of the registrant’s $0.001 par value common stock were outstanding.

Table of Contents

APYX MEDICAL CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended September 30, 2021

Page

Part I.

Financial Information

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020

Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2021 and 2020

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

Part II.

Other Information

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Item 6.

PART I. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	September 30, 2021 (Unaudited)		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	30,898	$	41,915
Trade accounts receivable, net of allowance of $360 and $300	11,444		8,399
Income tax receivables	7,654		7,654
Other receivables	873		1,275
Inventories, net of provision for obsolescence of $303 and $388	6,040		4,051
Prepaid expenses and other current assets	2,967		2,795
Total current assets	59,876		66,089
Property and equipment, net of accumulated depreciation and amortization of $5,145 and $4,813	6,412		6,541
Operating lease right-of-use assets	152		237
Finance lease right-of-use assets	274		437

Other assets	1,055		807
Total assets	$	67,769	$	74,111



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	3,044	$	1,511
Accrued expenses and other current liabilities	8,324		7,278
Current portion of operating lease liabilities	125		126
Current portion of finance lease liabilities	218		238

Total current liabilities	11,711		9,153
Long-term operating lease liabilities	30		129
Long-term finance lease liabilities	22		183
Contract liabilities	1,200		621
Other liabilities	146		166
Total liabilities	13,109		10,252
EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,339,533 issued and outstanding as of September 30, 2021, and 34,289,222 issued and outstanding as of December 31, 2020	34		34
Additional paid-in capital	64,862		61,066
(Accumulated deficit) retained earnings	(10,548)		2,621
Total stockholders' equity	54,348		63,721
Non-controlling interest	312		138
Total equity	54,660		63,859
Total liabilities and equity	$	67,769	$	74,111

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Sales	$	11,831	$	6,954	$	31,693	$	16,247
Cost of sales	3,775		2,229		10,243		6,444
Gross profit	8,056		4,725		21,450		9,803
Other costs and expenses:
Research and development	1,175		1,047		3,374		3,002
Professional services	2,032		1,835		5,442		5,882
Salaries and related costs	4,206		3,508		12,794		10,258
Selling, general and administrative	4,611		2,706		12,596		8,691
Total other costs and expenses	12,024		9,096		34,206		27,833
Loss from operations	(3,968)		(4,371)		(12,756)		(18,030)
Interest income	2		10		9		233
Interest expense	(3)		(25)		(9)		(39)
Other (loss) income, net	(192)		(63)		(188)		349
Total other (loss) income, net	(193)		(78)		(188)		543
Loss before income taxes	(4,161)		(4,449)		(12,944)		(17,487)
Income tax expense (benefit)	73		(715)		246		(7,112)
Net loss	(4,234)		(3,734)		(13,190)		(10,375)
Net loss attributable to non-controlling interest	(12)		(6)		(21)		(6)
Net loss attributable to stockholders	$	(4,222)	$	(3,728)	$	(13,169)	$	(10,369)

Loss per share:

Basic and diluted	$	(0.12)	$	(0.11)	$	(0.38)	$	(0.30)

The accompanying notes are an integral part of the condensed consolidated financial statements.

Table of Contents

APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(In thousands)


Three Months Ended September 30, 2021 and 2020
	Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Non-controlling Interest		Total Equity
	Shares	Par Value
Balance at June 30, 2020	34,202	$	34	$	58,926	$	7,876	$	—	$	66,836
Contributions from non-controlling interest	—	—		—		—		148		148
Shares issued on stock options exercises for cash	10	—		25		—		—		25
Stock based compensation	—	—		1,063		—		—		1,063
Shares issued on net settlement of stock options	11	—		—		—		—		—

Net loss	—	—		—		(3,728)		(6)		(3,734)
Balance at September 30, 2020	34,223	$	34	$	60,014	$	4,148	$	142	$	64,338

Balance at June 30, 2021	34,323	$	34	$	63,650	$	(6,326)	$	324	$	57,682

Shares issued on stock options exercises for cash	3	—		28		—		—		28
Stock based compensation	—	—		1,184		—		—		1,184
Shares issued on net settlement of stock options	14	—		—		—		—		—

Net loss	—	—		—		(4,222)		(12)		(4,234)
Balance at September 30, 2021	34,340	$	34	$	64,862	$	(10,548)	$	312	$	54,660

Nine Months Ended September 30, 2021 and 2020
	Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Non-controlling Interest		Total
	Shares	Par Value
Balance at December 31, 2019	34,170	$	34	$	56,708	$	14,517	$	—	$	71,259
Contributions from non-controlling interest	—	—		—		—		148		148
Shares issued on stock options exercises for cash	20	—		97		—		—		97
Stock based compensation	—	—		3,209		—		—

SEC Form 10-Q filed by Apyx Medical Corporation