apyx-20220930

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, 2022

☐

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, 2022, 34,597,822 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, 2022

Page

Part I.

Financial Information

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021

Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2022 and 2021

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

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, 2022 (Unaudited)		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	14,833	$	30,870
Trade accounts receivable, net of allowance of $634 and $430	9,094		13,038
Income tax receivables	7,545		7,642
Other receivables	19		483
Inventories, net of provision for obsolescence of $379 and $263	12,042		6,778
Prepaid expenses and other current assets	2,774		1,926
Total current assets	46,307		60,737
Property and equipment, net of accumulated depreciation and amortization of $5,335 and $5,316	6,810		6,575
Operating lease right-of-use assets	774		121
Finance lease right-of-use assets	124		178

Other assets	1,253		1,110
Total assets	$	55,268	$	68,721



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2,070	$	2,631
Accrued expenses and other current liabilities	8,842		10,287
Current portion of operating lease liabilities	240		122
Current portion of finance lease liabilities	42		165

Total current liabilities	11,194		13,205
Long-term operating lease liabilities	454		—
Long-term finance lease liabilities	78		18
Long-term contract liabilities	1,192		1,323
Other liabilities	133		166
Total liabilities	13,051		14,712
EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,588,398 issued and outstanding as of September 30, 2022, and 34,409,912 issued and outstanding as of December 31, 2021	35		34
Additional paid-in capital	71,641		66,221
Accumulated deficit	(29,686)		(12,551)
Total stockholders’ equity	41,990		53,704
Non-controlling interest	227		305
Total equity	42,217		54,009
Total liabilities and equity	$	55,268	$	68,721

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,
	2022		2021		2022		2021
Sales	$	9,114	$	11,831	$	31,899	$	31,693
Cost of sales	3,357		3,775		11,009		10,243
Gross profit	5,757		8,056		20,890		21,450
Other costs and expenses:
Research and development	1,061		1,175		3,289		3,374
Professional services	1,936		2,032		6,611		5,442
Salaries and related costs	3,871		4,206		13,944		12,794
Selling, general and administrative	4,671		4,611		14,675		12,596
Total other costs and expenses	11,539		12,024		38,519		34,206
Loss from operations	(5,782)		(3,968)		(17,629)		(12,756)
Interest income	73		2		93		9
Interest expense	(1)		(3)		(12)		(9)
Other (loss) income, net	(35)		(192)		551		(188)
Total other income (loss), net	37		(193)		632		(188)
Loss before income taxes	(5,745)		(4,161)		(16,997)		(12,944)
Income tax expense	50		73		216		246
Net loss	(5,795)		(4,234)		(17,213)		(13,190)
Net loss attributable to non-controlling interest	(31)		(12)		(78)		(21)
Net loss attributable to stockholders	$	(5,764)	$	(4,222)	$	(17,135)	$	(13,169)

Loss per share:

Basic and diluted	$	(0.17)	$	(0.12)	$	(0.50)	$	(0.38)

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, 2022 and 2021
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Non-controlling Interest		Total Equity
	Shares	Par Value
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

SEC Form 10-Q filed by Apyx Medical Corporation