apyx-20240331

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

March 31, 2024

☐

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:

001-31885



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 Global Select Market

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 May 8, 2024, 34,643,926 shares of the registrant’s $0.001 par value common stock were outstanding.


	March 31, 2024 (Unaudited)		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	37,282	$	43,652
Trade accounts receivable, net of allowance of $605 and $608	12,487		14,023


Inventories, net of provision for obsolescence of $880 and $875	9,795		9,923
Prepaid expenses and other current assets	2,362		2,764
Total current assets	61,926		70,362
Property and equipment, net of accumulated depreciation and amortization of $3,642 and $3,522	1,779		1,915
Operating lease right-of-use assets	5,049		5,162
Finance lease right-of-use assets	64		69

Other assets	1,893		1,732
Total assets	$	70,711	$	79,240



LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2,103	$	2,712
Accrued expenses and other current liabilities	8,077		9,661
Current portion of operating lease liabilities	356		347
Current portion of finance lease liabilities	20		20
Total current liabilities	10,556		12,740
Long-term debt, net of debt discounts and issuance costs	33,406		33,185
Long-term operating lease liabilities	4,795		4,896
Long-term finance lease liabilities	48		53

Long-term contract liabilities	1,252		1,246
Other liabilities	194		198
Total liabilities	50,251		52,318

EQUITY
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 issued and outstanding as of March 31, 2024 and December 31, 2023	—		—
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,643,926 issued and outstanding as of March 31, 2024 and 34,643,888 issued and outstanding as of December 31, 2023	35		35
Additional paid-in capital	82,242		81,114
Accumulated deficit	(62,024)		(54,448)
Total stockholders' equity	20,253		26,701
Non-controlling interest	207		221
Total equity	20,460		26,922
Total liabilities and equity	$	70,711	$	79,240


	Three Months Ended March 31,
	2024		2023
Sales	$	10,244	$	12,142
Cost of sales	4,295		4,569
Gross profit	5,949		7,573
Other costs and expenses:
Research and development	1,397		1,271
Professional services	1,574		1,740
Salaries and related costs	4,696		4,918
Selling, general and administrative	4,897		5,255
Total other costs and expenses	12,564		13,184

Loss from operations	(6,615)		(5,611)
Interest income	495		51
Interest expense	(1,396)		(234)
Other loss, net	(21)		(5)

Total other loss, net	(922)		(188)
Loss before income taxes	(7,537)		(5,799)
Income tax expense (benefit)	53		(2,267)
Net loss	(7,590)		(3,532)
Net loss attributable to non-controlling interest	(14)		(49)
Net loss attributable to stockholders	$	(7,576)	$	(3,483)

Loss per share:

Basic and diluted	$	(0.22)	$	(0.10)


Three Months Ended March 31, 2024 and 2023
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Non-controlling Interest		Total Equity
	Shares	Par Value
Balance at December 31, 2022	34,598	$	35	$	73,282	$	(35,735)	$	211	$	37,793


Stock based compensation	—	—		1,367		—		—		1,367

Proceeds from debt allocated to warrants	—	—		586		—		—		586
Net loss	—	—		—		(3,483)		(49)		(3,532)
Balance at March 31, 2023	34,598	$	35	$	75,235	$	(39,218)	$	162	$	36,214

Balance at December 31, 2023	34,644	$	35	$	81,114	$	(54,448)	$	221	$	26,922


Stock based compensation	—	—		1,128		—		—		1,128



Net loss	—	—		—		(7,576)		(14)		(7,590)
Balance at March 31, 2024	34,644	$	35	$	82,242	$	(62,024)	$	207	$	20,460


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities
Net loss	$	(7,590)	$	(3,532)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	157		203
Provision for inventory obsolescence	7		—

Loss on disposal of property and equipment	20		—
Stock based compensation	1,128		1,367
Allowance for credit losses	—		(142)
Non-cash lease expense	31		—
Non-cash interest expense	221		67
Changes in operating assets and liabilities:
Trade receivables	1,478		837
Prepaid expenses and other assets	241		858
Income tax receivables	—		(207)
Inventories	138		879
Accounts payable	(599)		(776)
Accrued expenses and other liabilities	(1,573)		(1,435)
Net cash used in operating activities	(6,341)		(1,881)
Cash flows from investing activities
Purchases of property and equipment	(35)		(110)

Net cash used in investing activities	(35)		(110)
Cash flows from financing activities

Proceeds from long-term debt	—		9,289
Payment of debt issuance costs	—		(1,754)
Proceeds from debt allocated to warrants	—		586
Repayment of finance lease liabilities	(5)		(9)
Net cash (used in) provided by financing activities	(5)		8,112
Effect of exchange rates on cash	11		(58)
Net change in cash and cash equivalents	(6,370)		6,063
Cash and cash equivalents, beginning of period	43,652		10,192
Cash and cash equivalents, end of period	$	37,282	$	16,255





Cash paid for:
Interest	$	1,175	$	1
Income taxes	6		125


(In thousands)	March 31, 2024		December 31, 2023
Raw materials	$	3,941	$	4,112
Work in process	2,338		2,257
Finished goods	4,396		4,429
Gross inventories	10,675		10,798
Less: provision for obsolescence	(880)		(875)
Inventories, net	$	9,795	$	9,923


(In thousands)
2024	$	—
2025	—
2026	—
2027	2,216
2028	35,284

Total repayments	$	37,500


	Three Months Ended March 31,
(in thousands, except per share data)	2024		2023
Numerator:
Net loss attributable to stockholders	$	(7,576)	$	(3,483)

Denominator:
Weighted average shares outstanding - basic and diluted	34,644		34,598

Loss per share:
Basic and diluted	$	(0.22)	$	(0.10)

Anti-dilutive instruments excluded from diluted loss per common share:

Options	8,513		7,783
Warrants	1,500		250


	Number of options	Weighted average exercise price




Outstanding at December 31, 2023	7,342,883	$	6.31
Granted	1,468,929	2.36
Exercised	(569)	2.50
Canceled and forfeited	(298,079)	7.63
Outstanding at March 31, 2024	8,513,164	$	5.58


	2024 Grants
Strike price	$1.27	-	$2.42
Risk-free rate	4.0%	-	4.2%
Expected dividend yield	—
Expected volatility	92.1%	-	94.3%
Expected term (in years)	6


	Three Months Ended March 31, 2024
(In thousands)	Advanced Energy		OEM		Corporate & Other		Total
Sales	$	7,453	$	2,791	$	—	$	10,244











(Loss) income from operations	(2,940)		732		(4,407)		(6,615)

Interest income	—		—		495		495
Interest expense	—		—		(1,396)		(1,396)
Other loss, net	—		—		(21)		(21)



Income tax expense	—		—		53		53



3.1						Articles of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s report on Form 10-K/A filed on March 31, 2011)
3.2						By laws of the Registrant (Incorporated by reference to Exhibit 3.2 to the Registrant’s report on Form 10-K/A filed on March 31, 2011)


3.3						Certificate of Amendment of the Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.5 to the Registrant’s Quarterly Report on Form 10-Q filed on November 3, 2017)
3.4						Certificate of Elimination (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 3, 2018)
3.5						Certificate of Amendment of the Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 28, 2018)























31.1*						Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2*						Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1*						Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2*						Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002


	Apyx Medical Corporation

Date: May 9, 2024	By:	/s/ Charles D. Goodwin II
		Charles D. Goodwin II
		President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: May 9, 2024	By:	/s/ Matthew Hill
		Matthew Hill
		Chief Financial Officer,
		Treasurer and Secretary
		(Principal Financial Officer)


	Three Months Ended March 31, 2023
(In thousands)	Advanced Energy		OEM		Corporate & Other		Total
Sales	$	9,690	$	2,452	$	—	$	12,142











(Loss) income from operations	(1,476)		851		(4,986)		(5,611)

Interest income	—		—		51		51

Interest expense	—		—		(234)		(234)
Other loss, net	—		—		(5)		(5)



Income tax benefit	—		—		(2,267)		(2,267)