What changed in this filing

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Item 9A. Controls and Procedures

2021-03-31 compared with 2020-03-31 · 312 added, 209 removed, 386 unchanged (57% of the section changed)

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Our management has established and maintains disclosure controls and procedures that are designed to ensure that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2019, the Company's disclosure controls and procedures were not effective because of the material weakness in our internal control over financial reporting as discussed below.

Notwithstanding such material weaknesses, which is described below in Management’s Report on Internal Control over Financial Reporting, our management has concluded that the consolidated financial statements included in this Form 10-K present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2020, the Company's disclosure controls and procedures were effective.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f) under the Exchange Act).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management carried out an evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31, 2020, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).

Based on that evaluation, management concluded that, as of December 31, 2019, the Company's internal control over financial reporting was not effective as a result of the material weaknesses described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that material misstatements of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Our management has determined that the following previously reported material weaknesses that existed as of December 31, 2018 have not been remediated and continue to constitute material weaknesses as of December 31, 2019:

APYX MEDICAL CORPORATION

An ineffective control environment requiring additional qualified accounting personnel with an appropriate level of knowledge and experience with generally accepted accounting principles.

Ineffective control activities due to the lack of documentation and timeliness in executing certain business process controls, specifically related to procure to pay and inventory processes and footnote reporting disclosures related to income tax accounts, primarily related to our United States operations.

Additionally, our management has determined the following material weakness also exists as of December 31, 2019:

Ineffective control environment and control activities over financial reporting in our Bulgarian subsidiary related to the purchasing of goods and services, including the processing and payment of vendor invoices.

Remediation Efforts to Address Material Weaknesses

Management is committed to maintaining a strong internal control environment.

In response to the identified material weaknesses, management, with the oversight of the Audit Committee of the Board of Directors, has taken actions toward the remediation of the respective material weaknesses in internal control over financial reporting as outlined below.

We are in the process of remediating the material weakness associated with the lack of sufficient qualified accounting personnel with an appropriate level of knowledge and experience with generally accepted accounting principles by hiring a new Chief Financial Officer in January 2019 and, in September 2019, a new Corporate Controller with experience in internal controls and financial reporting.

Both have been actively engaged in remediation efforts to address the material weaknesses to date and will continue throughout fiscal year 2020.

We will continue to recruit qualified professionals with appropriate levels of knowledge and experience to assist in resolving accounting issues related to non-routine and complex transactions.

We have also enhanced our policies, procedures, and controls for all key business processes.

In addition, management will continue to train personnel to ensure consistent application of accounting principles and adherence to the Company’s policies, procedures, and controls.

We are in the process of remediating the material weakness associated with the ineffective control activities due to the lack of documentation and timeliness in executing business process controls by enhancing our processes and review controls associated with the processes noted above.

We have reviewed current financial controls to assess if additional management review controls are necessary and will continue to work with all finance personnel to ensure the appropriate documentation criteria for the existing controls, including evidence of review, timeliness and variance thresholds.

We will continue to work with the third-party specialists we engaged to review, document, and enhance the design of our controls, with the goal of designing and implementing controls that address the completeness and accuracy of data used in the performance of certain controls as well as the precision of management's review, but also enhance our ability to manage our business.

We have enhanced, or are in the process of enhancing, certain controls over purchasing and disbursements in our Bulgarian subsidiary, including approving and validating vendor invoices received by verifying the related purchase authorization and the receipt of the goods or services.

Management believes the steps outlined above, along with the implementation of a new financial reporting system, will remediate the material weaknesses described above.

The Audit Committee of the Board of Directors and management will continue to monitor the implementation of these remediation measures and the effectiveness of our internal controls over financial reporting on an ongoing basis.

As of December 31, 2019, our remediation of these deficiencies is incomplete.

The effectiveness of our internal control over financial reporting as of December 31, 2019 has been audited by BDO USA LLP, an independent registered public accounting firm, as stated in their reports included in this Annual Report on Form 10-K.

This report, which appears in Part II, Item 8 of this Annual Report on Form 10-K, contains an adverse opinion on the effectiveness of our internal control over financial reporting.

Remediation of Prior Material Weaknesses

We have remediated the material weakness previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 associated with ineffective monitoring controls to ascertain whether the components of internal control were present and

Based on that evaluation, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2020.

Remediation of Previously Reported Material Weaknesses in Internal Control over Financial Reporting

We have remediated the material weaknesses previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 and improved our internal control over financial reporting specifically in the areas of the overall control environment and documentation of control activities through the completion of remediation steps described below.

Control Environment

We have remediated the material weakness associated with the lack of sufficient qualified accounting personnel with an appropriate level of knowledge and experience with generally accepted accounting principle by (i) hiring a new Chief Financial Officer and a new Corporate Controller in 2019 with experience in internal controls and financial reporting that have been actively engaged in remediation efforts to address the material weaknesses (ii) enhancing our policies, procedures, and controls for all key business processes and (iii) training personnel to ensure consistent application of accounting principles and adherence to the Company’s policies, procedures, and controls.

Control Activities

We have remediated the material weakness associated with the ineffective control activities due to the lack of documentation and timeliness in executing certain business process controls specifically related to procure to pay and inventory processes and footnote reporting disclosures related to income tax accounts, primarily related to our United States operations by (i) enhancing our processes and review controls associated with the processes noted above (ii) ensuring the appropriate criteria for controls, including evidence of review, timeliness and variance thresholds are documented, (iii) engaging third-party specialists for

APYX MEDICAL CORPORATION

functioning by (i) the hiring of additional resources with an appropriate level of knowledge and expertise, (ii) supplementing the monitoring staff with qualified co-sourcing resources to ensure an adequate level of technical competency, (iii) evaluating deficiencies objectively in accordance with the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) and (iv) better reporting of results to management, the Audit Committee and the Board of Directors.

income tax calculations and disclosures .and (iv) increasing management oversight of performance of such procedures and controls.

We have remediated the material weakness associated with the ineffective control over financial reporting in our Bulgarian subsidiary related to the purchasing of goods and services, including the processing and payment of vendor invoices by (i) enhancing controls over purchasing and disbursements in our Bulgarian subsidiary (ii) approving and validating vendor invoices received by verifying the related purchase authorization and the receipt of the goods or services and (iii) ensuring that documentation of approval was retained and performed timely.

Changes in Internal Control Over Financial Reporting

Except as set forth above, there were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2019 that materially affected, or that are reasonably likely to materially affect our internal control over financial reporting.

Except as noted above, there were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2020, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

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however, in recommending directors, the Board and the Committee consider the specific background and experience of the Board members and other personal attributes in an effort to provide a diverse mix of capabilities, contributions and viewpoints which the Board believes enables it to function effectively as the Board of Directors of a company with our size and nature of business..

Moreover, our corporate governance guidelines commit the Company to maintaining a Board with a strong and diverse membership.

Directors serve for one-year terms and are elected at the annual stockholders’ meeting.

Set forth below is information regarding the executive officers, directors and key employees of Apyx Medical Corporation as of March 29, 2021.

Director Since

Chief Executive Officer and Director

December 2017

Chief Financial Officer, Treasurer and Secretary

Executive Vice President

Moshe Citronowicz

Senior Vice President

Andrew Makrides

Chairman of the Board

December 1982

Michael Geraghty

Vice-Chairman of the Board

Craig Swandal

Minnie Baylor-Henry

Name Age Position Director Since

Goodwin 55 Chief Executive Officer and Director December 2017

Tara Semb 51 Chief Financial Officer, Treasurer and Secretary N/A

Todd Hornsby 45 Executive Vice President N/A

Moshe Citronowicz 68 Senior Vice President N/A

Andrew Makrides 79 Chairman of the Board December 1982

Waldman 74 Director March 2011

Michael Geraghty 73 Director March 2011

John Andres 63 Vice-Chairman of the Board July 2014

Craig Swandal 60 Director March 2018

Minnie Baylor-Henry 73 Director August 2019

APYX MEDICAL CORPORATION

Andrew Makrides , Esq.

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Makrides is qualified to serve as Chairman because of his over 30 years of experience in the medical device industry as well as with his previous tenure with the Company.

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Goodwin , age 55, Chief Executive Officer and a Director of Apyx Medical since December 2017, is an accomplished senior executive with over 25 years of experience in the healthcare industry.

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Prior to joining EisnerAmper LLP, Mr.

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Waldman was the Partner-in-Charge of Commercial Audit Practice Development for Holtz Rubenstein Reminick, LLP from July 2006 to August 2011.

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In October 2016, Mr.

Waldman was appointed and subsequently in December 2016 elected to the Board of Directors of CVD Equipment Corporation, and serves as the Chair of the audit committee and as Lead Independent Director Mr.

In January 2021, Mr.

Waldman was appointed to serve as non-Executive Chairman of the Board of CVD Equipment Corporation.

Waldman served through October 2018 as a member of the Board of Directors of Northstar/ RXR Metro Income Fund, a non-traded Real Estate Investment Trust and has served as a member of its audit committee since 2014.

APYX MEDICAL CORPORATION

Waldman is also the Chair of the Supervisory Committee of Bethpage Federal Credit Union.

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Swandal joined Gyrus, a manufacturer of surgical devices, where he was responsible for the company’s manufacturing operations as Director of Operations and later Vice President of Operations.

During his tenure, he improved manufacturing efficiencies by leading his manufacturing group through the implementation of lean and Six Sigma techniques.

Following Gyrus’s acquisition of ACMI in 2005, Mr.

Swandal was promoted to Senior Vice President and was responsible for the global operations of the combined company, which included 12 facilities across 8 countries.

Swandal was promoted to Senior Vice President and was responsible for the global operations of the combined company.

He developed and executed Gyrus ACMI’s strategy to consolidate its manufacturing, distribution, customer service and service and repair operations and was a member of the leadership team that successfully sold the company to Olympus Corporation for $2.2 billion in 2008.

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He also is a partner of Hawk Healthcare, LLC, which provides strategic transaction management to private individuals and companies.

Andres also holds a position with Electrocore.

Since 2011, Mr.

Andres has served as the Legal Compliance Officer of Electrocore, Inc., a medical device company.

Andres joined the Longeviti Neuro Solutions, LLC Board of Directors which is developing cranial implant products for cranial reconstruction.

Andres helped found K2M, Inc.

(KTWO) and from 2004 until 2010 served as a member of the Board of Directors of K2M, Inc.

(KTWO) and from 2004 until 2010 served as

APYX MEDICAL CORPORATION

a member of the Board of Directors of K2M, Inc.

Prior to 2004, Mr.

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The Company believes Mr.

Andres is qualified to serve as Vice Chairman and Nominating Committee Chair because of his extensive experience in patent and business strategy development and execution.

APYX MEDICAL CORPORATION

Andres is qualified to serve as a director because of his extensive experience in patent and business strategy development and execution in the medical device industry.

Minnie Baylor-Henry , age 73, Director and Regulator Compliance Committee Chair since August 2019.

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Independent Board Members

During 2019 , the Board had five independent members, John Andres, Michael Geraghty, Craig Swandal, Lawrence J.

Waldman, and Minnie Baylor-Henry who meet the existing independence requirements of the NASDAQ Stock Market LLC.

The Board currently has six independent members, Andrew Makrides, John Andres, Michael Geraghty, Lawrence J.

Waldman, Craig Swandal and Minnie Baylor-Henry who meet the existing independence requirements of The NASDAQ Stock Market LLC and the Securities and Exchange Commission.

Board Leadership

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The Lead Independent Director is also responsible for meeting, from time to time, with the Company’s Compensation Committee to discuss the Chief Executive Officer’s performance.

Our Corporate Governance Policies also contain several features which the Company believes will ensure that the Board maintains effective and independent oversight of management, including the following:

The Company’s Corporate Governance Policies also contain several features which the Company believes will ensure that the Board maintains effective and independent oversight of management, including the following:

• Executive sessions without management and non-independent directors present are a standing Board agenda item.

Executive sessions of the independent directors are held at any time requested by an independent director and, in any event, are held in connection with at least 100% of regularly scheduled Board meetings.

Executive sessions of the independent directors are held at any time requested by an independent director and, in any event, are held in connection with all regularly scheduled Board meetings.

• The Board regularly meets in executive session with the CEO without other members of management present.

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The committee chairs have authority to hold executive sessions without management and non-independent directors present.

While our Board has no formal policy with respect to separation of the positions of Chairman and CEO or with respect to whether the Chairman should be a member of management or an independent director, our Board leadership structure currently separates the positions of the Chairman and CEO.

We believe that these are matters that should be discussed and determined by the Board from time to time.

The Chief Executive Officer of the Company, Charlie Goodwin, is tasked with the responsibility of implementing our corporate strategy, we believe he is best suited for leading discussions, at the Board level, regarding performance relative to our corporate strategy and this discussion accounts for a significant portion of the time devoted at our Board meetings.

The Board has no formal policy with respect to separation of the positions of Chairman and CEO or with respect to whether the Chairman should be a member of management or an independent director, and believes that these are matters that should be

APYX MEDICAL CORPORATION

discussed and determined by the Board from time to time.

The Chief Executive Officer of the Company, Charles D.

Goodwin, is tasked with the responsibility of implementing our corporate strategy.

We believe Mr.

Goodwin is best suited for leading discussions, at the Board level, regarding performance relative to our corporate strategy and this discussion accounts for a significant portion of the time devoted at our Board meetings.

Board Evaluations

The Board has adopted a policy to evaluate its performance and effectiveness as well as that of the three standing committees on an annual basis.

The Board has adopted a policy to evaluate its performance and effectiveness as well as that of the four standing committees on an annual basis.

The purpose of the evaluation is to track progress in certain areas targeted for improvement from year to year and to identify ways to enhance the Board’s effectiveness.

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The Audit Committee assists the Board in its general oversight of our financial reporting, internal controls, and audit functions, and is directly responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm.

The Audit Committee reviews and discusses with management and our independent accountants the annual audited and quarterly financial statements (including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), reviews the integrity of the financial reporting processes, both internal and external, reviews the qualifications, performance and independence of our independent accountants and prepares the Audit Committee Report included in this Annual Report on Form 10-K in accordance with rules and regulations of the Securities and Exchange Commission.

The Audit Committee reviews and discusses with management and our independent accountants the annual audited and quarterly financial statements (including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and matters required to be discussed by the applicable requirements of the PCAOB), reviews the integrity of the financial reporting processes, both internal and external, reviews the qualifications, performance and independence of our independent accountants, and prepares the Audit Committee Report included in its Annual Report in accordance with rules and regulations of the Securities and Exchange Commission.

The Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties.

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The Audit Committee also acts as a qualified legal compliance committee.

The meetings of the Committee are designed to facilitate and encourage communication among the Committee, the Company and the Company’s independent auditor.

The Committee discussed with the Company’s Independent Auditor the overall scope and plans for their respective audits.

The Committee meets with the independent auditor, with and without management present, to discuss the results of their examinations;

their evaluations of the Company’s internal controls;

and the overall quality of the Company’s financial reporting.

During 2020, our Audit Committee consisted of four independent members of the Board of Directors, Lawrence J.

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The Audit Committee meets as often as it determines necessary but not less frequently than once every fiscal quarter.

During 2019, the Audit Committee met four times.

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Governance and Nominating Committee

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The Governance and Nominating Committee meets as often as it determines necessary, but not less than once a year.

During 2019 , the Governance and Nominating Committee met once.

Compensation Committee

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The Compensation Committee meets as often as it determines necessary, but not less than once a year.

During 2019 , the Compensation Committee met three times.

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Regulatory Compliance Committee

The Regulatory Compliance Committee, formed in the third quarter of 2019, is responsible for matters relating to the Company’s overall non-financial regulatory and compliance strategies and systems.

Specifically, the Committee will provide oversight of management’s efforts to comply with the requirements for a medical device company operating in a regulatory environment, with respect to healthcare compliance, product quality and safety, and other areas as directed by the Board.

During 2019, our Regulatory Compliance Committee consisted of three independent members of the Board of Directors, Minnie Baylor-Henry who serves as Chairman, John Andres and Craig Swandal.

Specifically, the Committee provides oversight of management’s efforts to comply with the requirements for a medical device company operating in a highly regulated environment with respect to healthcare compliance, product quality and safety, and other areas as directed by the Board.

During 2020, our Regulatory Compliance Committee consisted of three independent members of the Board of Directors, Minnie Baylor-Henry who serves as Chairperson, John Andres and Craig Swandal.

The Regulatory Compliance Committee meets as often as it determines necessary, but not less than once a year.

During 2019, Regulatory and Compliance Committee met once.

Code of Ethics

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In 2018 and again in 2019, Pearl Meyer & Partners updated the competitive frame of reference for the study to consist of the following group of pre-selected companies that were of comparable size and operated in our industry category.

APYX MEDICAL CORPORATION

Corindus Vascular Robotics, Inc.

IRIDEX Corporation

Restoration Robotics, Inc.

IRIDEX Corporation Restoration Robotics, Inc.

Misonix, Inc.

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Utah Medical Products Inc.

Nuvectra Corporation

Viveve Medical, Inc.

IRadimed Corporation

OrthoPediatrics Corp.

Nuvectra Corporation Viveve Medical, Inc.

IRadimed Corporation OrthoPediatrics Corp.

In addition to the peer group, Pearl Meyer referenced industry-specific, size-adjusted market survey data where appropriate.

The results of the survey confirmed that, consistent with our desired philosophy, our compensation arrangements were competitive with the marketplace, with some variation by individual.

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Compensation Program

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For 2020, the Company established a combination of financial, operational and personal objectives as the broad criteria that would determine annual performance bonus amounts for the year.

(In millions)

Overall Weight

Operating Income/(Loss)

After careful review and consideration of the measures that comprise the 2019 bonus, the Compensation Committee approved the following performance bonuses:

As a result of COVID-19, the Compensation Committee, in consultation with Pearl Meyer, revised the financial portion of these objectives to non-financial objectives that correlate with the long-term growth of the Company.

Based on the achievement of the non-financial objectives, the Compensation Committee approved payout of the 2020 bonuses at 50% of the levels paid in 2019.

After careful review and consideration of the revised measures that comprise the 2020 bonus, the Compensation Committee approved the following performance bonuses for the named executive officers:

Goodwin $ 168,750

Moshe Citronowicz 44,850

Todd Hornsby 86,750

Tara Semb 73,800

Total $ 374,150

Stock Options

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The following table sets forth the compensation paid to each of our Executive Officers for the three years ended December 31, 2020 and 2019 for services to our Company in all capacities:

Name and Principal Position

Name and Principal Position Year Salary Bonus

($) Stock Awards

($) Option Awards

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($) All Other Compensation

($) (2) Total

Goodwin 2020 $ 450,000 $ 168,750 $ — 1,195,074 $ — $ — $ 19,056 $ 1,832,880

CEO and Director 2019 $ 450,000 $ 344,250 $ — 1,135,160 $ — $ — $ 15,848 $ 1,945,258

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Senior Vice President 2019 $ 270,000 $ 82,620 $ — 346,320 $ — $ — $ 22,415 $ 721,355

Todd Hornsby 2020 $ 347,000 $ 86,750 $ — 491,800 $ — $ — $ 28,722 $ 954,272

Executive Vice President(*) 2019 $ 330,000 $ 168,300 $ — 365,560 $ — $ — $ 28,400 $ 892,260

Tara Semb(**) 2020 $ 328,000 $ 73,800 $ — 472,128 $ — $ — $ 9,257 $ 883,185

Chief Financial Officer,

Treasurer and Secretary

CFO, Treasurer and Secretary 2019 $ 271,000 $ 110,265 $ — 312,000 $ — $ — $ 5,922 $ 699,187

*Assumed role as Executive Vice President on January 2, 2019.

**Assumed role as CFO, Treasurer and Secretary on January 2nd, 2019.

**Assumed role as CFO, Treasurer and Secretary on January 2, 2019.

(1) These columns represent the grant date fair value of the awards as calculated in accordance with FASB ASC 718 (Stock Compensation).

Pursuant to SEC rule changes effective February 28, 2010, we are required to reflect the total grant date fair values of the option grants in the year of grant, rather than the portion of this amount that was recognized for financial

APYX MEDICAL CORPORATION

statement reporting purposes in a given fiscal year which was required under the prior SEC rules, resulting in a change to the amounts reported in prior Annual Reports.

(2) The amounts for 2020 include compensation under the following plans and programs:

Life insurance premiums

APYX MEDICAL CORPORATION

Citronowicz T.

Long-term disability premiums 186 186 186 186

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Employer 401(k) contribution 8,550 8,285 8,611 9,071

Total $ 19,056 $ 22,402 $ 28,722 $ 9,257

Amounts in the table above are pro-rated where applicable.

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At December 31, 2020, we were obligated under four employment agreements.

Contract Expiration Date

Moshe Citronowicz

December 31, 2020

Name Contract Expiration Date

Goodwin N/A (1)

Tara Semb N/A (1)

Todd Hornsby N/A (1)

Moshe Citronowicz December 31, 2021

(1) Employment contracts provide for the Executives to remain employed by the Company until such time as their employment is terminated pursuant to the terms of their Employment Agreement.

Employment contracts, other than for Messr.

Citronowicz, commence on effective date and continue until terminated.

The employment agreements provide, among other things, that the executive may be terminated as follows:

Upon the death of the executive, in which case the executive’s estate shall be paid the basic annual compensation due the employee pro-rated through the date of death.

By the resignation of the executive at any time upon at least thirty (30) days prior written notice to Apyx in which case Apyx shall be obligated to pay the employee the basic annual compensation due him pro-rated to the effective date of termination.

By Apyx, “for cause” if during the term of the employment agreement the employee violates the non-competition provisions of his employment agreement, or is found guilty in a court of law of any crime of moral turpitude in which case the contract would be terminated and provisions for future compensation forfeited.

By Apyx, without cause, with the majority approval of the Board of Directors, for Mr.

Goodwin and Mr.

Citronowicz at any time upon at least thirty (30) days prior written notice to the executive.

In this case Apyx shall be obligated to pay the executive compensation in effect at such time, including all bonuses, accrued or prorated and expenses up to the date of termination.

Thereafter for Messr.

Citronowicz, Apyx shall pay the executive three times the salary in effect at the time of termination payable in one lump sum.

Goodwin Employment Agreement

On September 17, 2020, the Company entered into an Amended and Restated Employment Agreement, effective as of September 17, 2020, with Charles D.

Goodwin II, the Company’s President and Chief Executive Officer (the “Goodwin Agreement”).

The Goodwin Agreement amends and restates Mr.

Goodwin’s original employment agreement, dated as of December 15, 2017, in its entirety.

The term of Mr.

Goodwin’s employment under the Goodwin Agreement commenced as of the effective date thereof and shall continue until terminated in accordance with the terms of the Goodwin Agreement.

Under the Goodwin Agreement, Mr.

Goodwin will receive an initial annual base salary of $450,000, which shall be reviewed from time to time and may be increased, but not decreased, by the Compensation Committee of the Board of Directors (the “Committee”) in its sole and exclusive discretion.

Goodwin shall be entitled to participate in (i) any bonus or incentive plan available to the Company’s executives generally, on such terms as the Committee may determine in its discretion, and (ii) the equity-based incentive plans of the Company, pursuant to which he may receive awards thereunder, as determined by the Company’s Board of Directors in its sole discretion from time to time and subject to the terms and conditions of such plans and any applicable award agreement.

In the event Mr.

Goodwin’s employment is terminated as a result of death or disability, Mr.

Goodwin or his estate shall be entitled to receive (i) any unpaid base salary earned and accrued prior to the date of termination, (ii) reimbursement for expenses incurred prior to the date of termination, (iii) a pro rata bonus for the year of termination, and, (iv) if Mr.

Goodwin is eligible for and elects continuation benefits under COBRA, the Company will pay the employer portion of the COBRA coverage premium for the shorter of (x) the 12-month period following the date of termination, or (y) the time at which Mr.

Goodwin becomes eligible for medical and dental benefits through another employer.

In addition, Mr.

Goodwin’s outstanding option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Mr.

Goodwin’s options (i) that were exercisable as of the effective date of the Goodwin Agreement and (ii) that would have become exercisable on the next anniversary of the effective date following the date of termination shall become and remain exercisable for a period of 12 months following the date of termination.

In the event Mr.

Goodwin’s employment is terminated by the Company for cause or by Mr.

Goodwin without good reason, Mr.

Goodwin shall be entitled to receive any unpaid base salary earned and accrued prior to the date of termination, and reimbursement for expenses incurred prior to the date of termination.

In addition, in the event Mr.

Goodwin’s employment is terminated by Mr.

Goodwin without good reason, Mr.

Goodwin’s stock option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Mr.

Goodwin’s options which were exercisable as of the date of termination shall remain exercisable for a period of 3 months following the date of termination.

APYX MEDICAL CORPORATION

If Apyx fails to meet its obligations to the executive on a timely basis, or if there is a change in the control of Apyx, the executive may elect to terminate his employment agreement.

In the event Mr.

Goodwin’s employment is terminated by Mr.

Goodwin for good reason, by the Company without cause, or in connection with a change of control (as defined in the Goodwin Agreement), Mr.

Goodwin shall be entitled to receive (i) any unpaid base salary and other benefits earned and accrued prior to the date of termination, (ii) reimbursement for expenses incurred prior to the date of termination, (iii) a pro rata bonus for the year of termination, (iv) continued payment of his base salary for the twelve (12) month period following the date of termination, and (v) if Mr.

Goodwin becomes eligible for medical and dental benefits through another employer.

In addition, Mr.

Goodwin’s outstanding option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Mr.

Goodwin’s options that (i) were exercisable as of the date of termination and (ii) would have become exercisable on the next anniversary of the effective date following the date of termination, shall become and remain exercisable for a period of 12 months following the date of termination.

The Goodwin Agreement contains customary non-competition, non-solicitation, and confidentiality provisions in favor of the Company.

Tara Semb Employment Agreement

On September 16, 2020, the Company entered into an Amended and Restated Employment Agreement, effective as of September 16, 2020, with Tara Harris Semb, the Company’s Chief Financial Officer, Secretary and Treasurer (the “Semb Agreement”).

The Semb Agreement amends and restates Ms.

Semb’s original employment agreement, dated as of January 2, 2019, in its entirety.

The term of Ms.

Semb’s employment under the Semb Agreement commenced as of the effective date thereof and shall continue until terminated in accordance with the terms of the Semb Agreement.

Under the Semb Agreement, Ms.

Semb will receive an initial annual base salary of $328,000, which shall be reviewed from time to time and may be increased, but not decreased, by the Committee in its sole and exclusive discretion.

Semb shall be entitled to participate in any bonus or incentive plan available to the Company’s executives generally, on such terms as the Committee may determine in its discretion.

In the event Ms.

Semb’s employment is terminated as a result of death or disability, Ms.

Semb or her estate shall be entitled to receive (i) any unpaid base salary earned and accrued prior to the date of termination, (ii) reimbursement for expenses incurred prior to the date of termination, (iii) a pro rata bonus for the year of termination, and, (iv) if Ms.

Semb is eligible for and elects continuation benefits under COBRA, the Company will pay the employer portion of the COBRA coverage premium for the shorter of (x) the 12-month period following the date of termination, or (y) the time at which Ms.

Semb becomes eligible for medical and dental benefits through another employer.

In addition, Ms.

Semb’s outstanding option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Ms.

Semb’s options (i) that were exercisable as of the effective date of the Semb Agreement and (ii) that would have become exercisable on the next anniversary of the effective date following the date of termination shall become and remain exercisable for a period of 12 months following the date of termination.

In the event Ms.

Semb’s employment is terminated for by the Company for cause or by Ms.

Semb without good reason, Ms.

Semb shall be entitled to receive any unpaid base salary earned and accrued prior to the date of termination, and reimbursement for expenses incurred prior to the date of termination.

In addition, in the event Ms.

Semb’s employment is terminated by Ms.

Semb without good reason, Ms.

Semb’s stock option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Ms.

Semb’s options which were exercisable as of the date of termination shall remain exercisable for a period of 3 months following the date of termination.

In the event Ms.

Semb’s employment is terminated by Ms.

Semb for good reason, by the Company without cause, or in connection with a change of control (as defined in the Semb Agreement), Ms.

Semb shall be entitled to receive (i) any unpaid base salary and other benefits earned and accrued prior to the date of termination, (ii) reimbursement for expenses incurred prior to the date of termination, (iii) a pro rata bonus for the year of termination, (iv) continued payment of her base salary for the twelve (12) month period following the date of termination, and (v) if Ms.

Semb becomes eligible for medical and dental benefits through another employer.

In addition, Ms.

Semb’s outstanding option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Ms.

Semb’s options that (i) were exercisable as of the date of termination and (ii) would have become exercisable on the next anniversary of the effective date following the date of termination, shall become and remain exercisable for a period of 12 months following the date of termination.

APYX MEDICAL CORPORATION

The Semb Agreement contains customary non-competition, non-solicitation, and confidentiality provisions in favor of the Company.

Todd Hornsby Employment Agreement

On September 17, 2020, the Company entered into an Amended and Restated Employment Agreement, effective as of September 17, 2020, with Todd Hornsby, the Company’s Executive Vice President (the “Hornsby Agreement”).

The Hornsby Agreement amends and restates Mr.

Hornsby’s original employment agreement, dated as of January 1, 2018, in its entirety.

The term of Mr.

Hornsby’s employment under the Hornsby Agreement commenced as of the effective date thereof and shall continue until terminated in accordance with the terms of the Hornsby Agreement.

Under the Hornsby Agreement, Mr.

Hornsby will receive an initial annual base salary of $347,000, which shall be reviewed from time to time and may be increased, but not decreased, by the Committee in its sole and exclusive discretion.

Hornsby shall be entitled to participate in (i) any bonus or incentive plan available to the Company’s executives generally, on such terms as the Committee may determine in its discretion, and (ii) the equity-based incentive plans of the Company, pursuant to which he may receive awards thereunder, as determined by the Company’s Board of Directors in its sole discretion from time to time and subject to the terms and conditions of such plans and any applicable award agreement.

In the event Mr.

Hornsby’s employment is terminated as a result of death or disability, Mr.

Hornsby or his estate shall be entitled to receive (i) any unpaid base salary earned and accrued prior to the date of termination, (ii) reimbursement for expenses incurred prior to the date of termination, (iii) a pro rata bonus for the year of termination, and, (iv) if Mr.

Hornsby is eligible for and elects continuation benefits under COBRA, the Company will pay the employer portion of the COBRA coverage premium for the shorter of (x) the 12-month period following the date of termination, or (y) the time at which Mr.

Hornsby becomes eligible for medical and dental benefits through another employer.

In addition, Mr.

Hornsby’s outstanding option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Mr.

Hornsby’s options (i) that were exercisable as of the effective date of the Hornsby Agreement and (ii) that would have become exercisable on the next anniversary of the effective date following the date of termination shall become and remain exercisable for a period of 12 months following the date of termination.

In the event Mr.

Hornsby’s employment is terminated by the Company for cause or by Mr.

Hornsby without good reason, Mr.

Hornsby shall be entitled to receive any unpaid base salary earned and accrued prior to the date of termination, and reimbursement for expenses incurred prior to the date of termination.

In addition, in the event Mr.

Hornsby’s employment is terminated by Mr.

Hornsby without good reason, Mr.

Hornsby’s stock option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Mr.

Hornsby’s options which were exercisable as of the date of termination shall remain exercisable for a period of 3 months following the date of termination.

In the event Mr.

Hornsby’s employment is terminated by Mr.

Hornsby for good reason, by the Company without cause, or in connection with a change of control (as defined in the Hornsby Agreement), Mr.

Hornsby shall be entitled to receive (i) any unpaid base salary and other benefits earned and accrued prior to the date of termination, (ii) reimbursement for expenses incurred prior to the date of termination, (iii) a pro rata bonus for the year of termination, (iv) continued payment of his base salary for the twelve (12) month period following the date of termination, and (v) if Mr.

Hornsby becomes eligible for medical and dental benefits through another employer.

In addition, Mr.

Hornsby’s outstanding option grants shall continue to be treated in accordance with the terms of the applicable plan and award agreement, provided that the portion of Mr.

Hornsby’s options that (i) were exercisable as of the date of termination and (ii) would have become exercisable on the next anniversary of the effective date following the date of termination, shall become and remain exercisable for a period of 12 months following the date of termination.

The Hornsby Agreement contains customary non-competition, non-solicitation, and confidentiality provisions in favor of the Company.

Moshe Citronowicz Employment Agreement

Citronowicz employment agreement contains an automatic extension for a period of one year after the initial term unless we provide Mr.

Citronowicz with appropriate 60 days written notice pursuant to the his contract.

Citronowicz’s employment agreement provides, among other things, that the Mr.

Citronowicz may be terminated as follows:

APYX MEDICAL CORPORATION

Upon the death of the Mr.

Citronowicz, in which case Mr.

Citronowicz’sestate shall be paid the basic annual compensation due to Mr.

Citronowicz pro-rated through the date of death.

By the resignation of Mr.

Citronowicz at any time upon at least thirty (30) days prior written notice to Apyx in which case Apyx shall be obligated to pay Mr.

Citronowicz the basic annual compensation due him pro-rated to the effective date of termination.

By Apyx, “for cause” if during the term of the employment agreement Mr.

Citronowicz violates the non-competition provisions of his employment agreement, or is found guilty in a court of law of any crime of moral turpitude in which case the contract would be terminated and provisions for future compensation forfeited.

By Apyx, without cause, with the majority approval of the Board of Directors, for Mr.

Citronowicz at any time upon at least thirty (30) days prior written notice to Mr.

In this case Apyx shall be obligated to pay Mr.

Citronowicz compensation in effect at such time, including all bonuses, accrued or prorated and expenses up to the date of termination.

Thereafter, Apyx shall pay Mr.

Citronowicz three times the salary in effect at the time of termination payable in one lump sum.

If Apyx fails to meet its obligations to Mr.

Citronowicz on a timely basis, or if there is a change in the control of Apyx, the executive may elect to terminate Mr.

Citronowicz’s employment agreement.

Upon any such termination or breach of any of its obligations under the employment agreement, Apyx shall pay Mr.

Citronowicz a lump sum severance equal to three times the annual salary and bonus in effect the month preceding such termination or breach as well as any other sums which may be due under the terms of the employment agreement up to the date of termination.

Goodwin shall be paid two times their annual salary and bonus in effect the month preceding such termination or breach as well as any other sums which may be due under the terms of their respective employment agreement up to the date of termination.

Semb shall be paid her annual salary and bonus in twelve monthly installments in effect the month following such termination.

There are no other employment contracts that have non-cancelable terms in excess of one year.

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The following table presents information with respect to each unexercised stock option held by our Executive Officers as of December 31, 2020:

# of Securities

(# Exercisable)

# of Securities Underlying Unexercised Options

(# Unexercisable)

Weighted Average Option

Name # of Securities

(# Exercisable) # of Securities Underlying Unexercised Options

(# Unexercisable) Weighted Average Option

Exercise Price

Option Expiration

($/Sh) Option Expiration

Range After Grant Date

Goodwin 1,078,667 400,333 $ 4.63 12/15/2027 - 1/15/2030

Moshe Citronowicz 143,500 137,500 $ 5.44 7/12/2022 - 1/15/2030

Todd Hornsby 179,417 176,583 $ 5.50 8/27/2024 - 1/15/2030

Tara Semb 21,667 139,333 $ 8.07 1/9/2029 - 1/15/2030

*** These columns represent the grant date fair value of the awards as calculated in accordance with FASB ASC 718 (Stock Compensation).

In 2019, our Board of Directors consisted of Charles D.

Goodwin, Andrew Makrides, John Andres, Lawrence J.

Waldman, Michael Geraghty, Craig Swandal, and Minnie Baylor-Henry.

Baylor-Henry became a member of the Board in August 2019.

In 2003, the Board of Directors adopted, and our stockholders approved Apyx's 2003 Executive and Employee Stock Option Plan covering a total of 1,200,000 shares of common stock issuable upon exercise of options to be granted under the Plan.

2 unchanged sentences

In 2011, the Board of Directors granted 25,000 options to purchase a like number of shares of common stock.

In July of 2012, our stockholders approved the 2012 Share Incentive Plan covering a total of 750,000 shares of common stock issuable upon exercise of options to be granted under the plan.

At December 31, 2019 approximately 160,000 are available to be issued in this plan.

In July of 2015, our stockholders approved the 2015 Executive and Employee Stock Option Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan.

In July 2012, our stockholders approved the 2012 Share Incentive Plan covering a total of 750,000 shares of common stock issuable upon exercise of options to be granted under the plan.

At December 31, 2020 approximately 60,000 are available to be issued in this plan.

In August of 2017, our stockholders approved the 2017 Executive and Employee Stock Option Plan covering a total of 3,000,000 shares of common stock issuable upon exercise of options to be granted under the plan.

In July 2015, our stockholders approved the 2015 Executive and Employee Stock Option Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan.

At December 31, 2020 approximately 230,000 are available to be issued in this plan.

APYX MEDICAL CORPORATION

In August of 2019, our stockholders approved the 2019 Share Incentive Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan.

In August 2017, our stockholders approved the 2017 Executive and Employee Stock Option Plan covering a total of 3,000,000 shares of common stock issuable upon exercise of options to be granted under the plan.

At December 31, 2020 approximately 70,000 are available to be issued in this plan.

In August 2019, our stockholders approved the 2019 Share Incentive Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan.

At December 31, 2020, all 2,000,000 are available to be issued in this plan.

8 unchanged sentences

Based on our Compensation Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, our Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in our Proxy Statement and in this Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for filing with the SEC.

During the majority of 2019, our Compensation Committee consisted of three independent members of the Board of Directors, Michael Geraghty, who served as Chairman, John Andres and Lawrence J.

During 2020, our Compensation Committee consisted of three independent members of the Board of Directors, Michael Geraghty, who served as Chairman, John Andres and Lawrence J.

APYX MEDICAL CORPORATION

5 unchanged sentences

Number of Shares

Name and Address

Nature of Ownership

Percentage of Ownership (i)

William Weeks Vanderfelt

Name and Address Title Owned (i) Nature of Ownership Percentage of Ownership (i)

RTW Investments Common 3,391,279 Beneficial 9.9 %

250 West 55th St.

New York, NY 10019

William Weeks Vanderfelt Common 3,158,414 Beneficial 9.2 %

Coralis 44, Azzuri Village 44

Roches Noires, 31201 Mauritius

Archon Capital Management, LLC

Archon Capital Management, LLC Common 2,502,077 Beneficial 7.3 %

1100 19th Avenue E

Seattle, WA 98122

Andrew Makrides

BlackRock, Inc.

Common 2,328,764 Beneficial 6.8 %

4400 Computer Drive

Westborough, MA 01581

Andrew Makrides Common 692,712 (ii) Beneficial 2.0 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Goodwin II Common 1,266,583 (iii) Beneficial 3.6 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Moshe Citronowicz

Moshe Citronowicz Common 635,504 (iv) Beneficial 1.8 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Lawrence Waldman

APYX MEDICAL CORPORATION

Lawrence Waldman Common 177,817 (v)

Beneficial 0.5 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Todd Hornsby Common 239,000 (vi)

Beneficial 0.7 %

5115 Ulmerton Rd.

Clearwater, FL 33760

APYX MEDICAL CORPORATION

Geraghty Common 128,740 (vii)

Beneficial 0.4 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Craig Swandal

Craig Swandal Common 66,740 (viii)

Beneficial 0.2 %

5115 Ulmerton Rd.

Clearwater, FL 33760

John Andres Common 101,240 (ix)

Beneficial 0.3 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Tara Semb Common 75,333 (x)

Beneficial 0.2 %

5115 Ulmerton Rd.

Clearwater, FL 33760

Minnie Baylor-Henry

Minnie Baylor-Henry Common 30,740 (xi)

Beneficial 0.1 %

5115 Ulmerton Rd.

1 unchanged sentence

Officers and Directors as a group (10 people) 3,414,409

(i) Based on 34,174,314 outstanding shares of Common Stock and 2,951,762 exercisable outstanding options to acquire a like number of shares of Common Stock as of March 27, 2020, of which officers and directors owned a total of 971,000 vested options and 1,033,476 shares at March 27, 2020 (and exercisable within 60 days thereafter).

We have calculated the percentage on the basis of the amount of outstanding securities plus, for each person or group, any securities that person or group has current or future right to acquire pursuant to options, warrants, conversion privileges or other rights based on the 13G and 13D SEC filings.

(ii) Includes 607,972 shares and 54,000 vested options out of a total of 71,000 ten year options owned by Mr.

Makrides to purchase shares of Common Stock of the Company at an exercise price between $2.54 and $7.28.

Options vest equally over a one year period.

(iii) Includes 0 shares and 1,078,667 vested options out of a total of 1,479,000 ten year options owned by Mr.

Goodwin to purchase shares of Common Stock of the Company at an exercise price between $2.99 and $8.18.

Options vest equally over a two or three year period.

(iv)Includes 426,504 shares and 143,500 vested options out of a total of 281,000 ten year options owned by Mr.

Citronowicz to purchase shares of Common Stock of the Company at an exercise price ranging from $1.80 to $8.18.

Options vest equally over a three or four year period.

(v) Includes 0 shares and 149,000 vested options out of a total of 166,000 ten year options owned by Mr.

Waldman to purchase shares of Common Stock of the Company at an exercise price ranging from $1.88 to $7.28.

Options vest in one year.

(vi) Includes 0 shares and 151,583 vested options out of a total of 356,000 ten year options owned by Mr.

Hornsby to purchase shares of Common Stock of the Company at an exercise price ranging from $1.77 to $8.18.

Options vest equally over a three to four year period.

(vii) Includes 0 shares and 98,000 vested options out of a total of 115,000 ten year options owned by Mr.

Geraghty to purchase shares of Common Stock of the Company at an exercise price ranging from $1.88 to $7.28 Options vest over a one year period.

(viii) Includes 45,916 shares and 0 vested options out of a total of 7,084 ten year options owned by Mr.

Swandal to purchase shares of Common Stock of the Company at an exercise price of $7.28.

Options vest equally over a one year period.

(ix) Includes 0 shares and 70,500 vested options out of a total of 87,500 ten year options owned by Mr.

Andres to purchase shares of Common Stock of the Company at an exercise price ranging from $1.88 to $7.28.

Options vest equally over a one year period.

(x) Includes 0 shares and 21,667 vested options out of a total of 161,000 ten year options owned by Ms.

Semb to purchase shares of Common Stock of the Company at an exercise price ranging from $7.91 to $8.18.

Options vest equally over a three year period.

(xi) Includes 1,766,917 vested options out of a total of 2,733,500 ten year outstanding options and 1,033,476 shares owned by all Executive Officers and directors as a group.

The last date the options can be exercised is January 14, 2030.

Section 16(a) Beneficial Ownership Reporting Compliance

(i) Based on 34,317,863 outstanding shares of Common Stock as of March 29, 2021, of which officers and directors owned a total of 2,285,606 shares at March 29, 2021.

We have calculated the percentage on the basis of the number of outstanding securities plus, for each person or group, any securities that person or group has current or future right to acquire pursuant to options, warrants, conversion privileges or other rights based on the 13G and 13D SEC filings at March 29, 2021 (and exercisable within 60 days thereafter).

(ii) Includes 607,972 shares and 84,740 vested options (and exercisable within 60 days thereafter).

(iii) Includes 28,250 shares and 1,238,333 vested options (and exercisable within 60 days thereafter).

(iv) Includes 426,504 shares and 209,000 vested options (and exercisable within 60 days thereafter).

(v) Includes 5,577 shares and 172,240 vested options (and exercisable within 60 days thereafter).

(vi) Includes 0 shares and 239,000 vested options (and exercisable within 60 days thereafter).

(vii) Includes 7,500 shares and 121,240 vested options (and exercisable within 60 days thereafter).

(viii) Includes 53,000 shares and 13,740 vested options (and exercisable within 60 days thereafter).

(ix) Includes 0 shares and 101,240 vested options (and exercisable within 60 days thereafter).

(x) Includes 0 shares and 75,333 vested options (and exercisable within 60 days thereafter).

(xi) Includes 0 shares and 30,740 vested options (and exercisable within 60 days thereafter).

APYX MEDICAL CORPORATION

Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors and persons who own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission.

Section 16(a) Beneficial Ownership Reporting Compliance

Officers, directors and greater than ten-percent shareholders (the “Reporting Persons”) are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on its review of the copies of such reports received or written representations from certain Reporting Persons that no other reports were required, the Company believes that during its fiscal year ended December 31, 2019 all filing requirements applicable to the Reporting Persons were timely met, with the exception of the 4 named Executives, who did not timely file their Form 4s showing 1 transaction, and Craig A.

Swandal who did not timely file his Form 4s for 3 separate transactions.

To the Company’s knowledge, based solely on its review of the copies of such reports received or written representations from certain Reporting Persons that no other reports were required, the Company believes that during its fiscal year ended December 31, 2020 all filing requirements applicable to the Reporting Persons were timely met, with the exception of Craig A.

Swandal who did not timely file his Form 4s for 2 separate transactions and Lawrence J.

Waldman who did not timely file his Form 4 for 1 transaction.

APYX MEDICAL CORPORATION

5 unchanged sentences

Antoaneta Dimitrova Shileva-Toromanova, Mr.

Shilev’s sister, is the manager of production and human resources.

Shilev’s sister, is t he manager of human resources.

Svetoslav Shilev, Mr.

Shilev’s son, is an engineer in the quality assurance department.

Shilev’s son, is a quality manager in the quality assurance department.

In addition, as part of the purchase of the Bulgaria manufacturing facility, Mr.

Shilev was issued a note payable for $0.1 million to be paid 5 years after the original purchase date, which is in October 2020.

The note was paid in full on October 20, 2020.

Independent Board Members

The Board currently has five independent members, John Andres, Michael Geraghty, Lawrence J.

The Board currently has six independent members, Andrew Makrides, John Andres, Michael Geraghty, Lawrence J.

Waldman, Craig Swandal, and Minnie Baylor-Henry, who meet the existing independence requirements of The NASDAQ Stock Market LLC and the Securities and Exchange Commission.

Principal Accountant Fees and Services

The following table sets forth the aggregate fees billed to us and expected to be billed to us by BDO USA, LLP and Frazier & Deeter, LLC, our principal accountants for 2019 and 2018, respectively:

The following table sets forth the aggregate fees billed to us and expected to be billed to us by RSM US, LLP, our principal accountant for 2020 and 2019:

Year Ended December 31,

4 unchanged sentences

Total fees billed $ 325 $ 238

In 2019, we reported BDO USA, LLP as our principal accountant.

The 2019 year was subsequently reaudited by RSM US, LLP, and we have included them as our principal accountant in the table above.

Fees paid to BDO USA, LLP in conjunction with their 2019 audit work was $0.8 million.

(1) Audit fees consist of billed and unbilled fees for professional services rendered for the audit of Apyx's annual financial statements and reviews of its interim consolidated financial statements included in quarterly reports and other services related to statutory and regulatory filings or engagements.

5 unchanged sentences

Exhibits and Financial Statement Schedules

LISTING OF FINANCIAL STATEMENTS

(a)(1) LISTING OF FINANCIAL STATEMENTS Page

The following consolidated financial statements of the Company are included in Item 8 of this Report:

Consolidated Balance Sheets at December 31, 20 20 and 201 9

Consolidated Statements of Operations for the years ended December 31, 2019, 2018, 2017

Consolidated Statement of Changes in Stockholders’ Equity for the years ended December 31, 2019, 2018, 2017

Consolidated Statements of Operations for the years ended December 31, 20 20 and 201 9

Consolidated Statement of Changes in Equity for the years ended December 31, 20 20 a nd 201 9

Consolidated Statements of Cash Flows for the years ended December 31, 20 20 and 201 9

Notes to Consolidated Financial Statements

FINANCIAL STATEMENT SCHEDULES

(a)(2) FINANCIAL STATEMENT SCHEDULES

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Report.

7 unchanged sentences

4.1 Indenture (Incorporated by reference to the Registrant's Registration Statement on Form S-3 filed on May 4, 2018)

Description of the Registrant’s Securities

4.2 Description of the Registrant’s Securities (Incorporated by the reference to the Registrant's Annual Report on Form 10-K filed on March 31, 2020)

10.1** Charles D.

Goodwin II Employment Agreement, dated December 15, 2017 (Incorporated by the reference to the Registrant's Annual Report on Form 10-K filed on March 13, 2018)

2 unchanged sentences

10.3** Tara Semb Employment Agreement, dated January 2, 2019 (Incorporated by the reference to the Registrant's Annual Report on Form 10-K filed on March 14, 2019)

Code of Ethics

Letter from Frazier & Deeter, LLC (Incorporated by the reference to the Registrant's Current Report on Form 8-K filed on June 4, 2019)

List of Subsidiaries

Consent of BDO USA, LLP

Consent of Frazier & Deeter, LLC

Tara Semb Amended and Restated Employment Agreement, dated September 16, 2020 (Incorporated by reference to the Registrant's Current Report on Form 8-K filed on September 18, 2020)

Goodwin II Amended and Restated Employment Agreement, dated September 17, 2020 (Incorporated by reference to the Registrant's Current Report on Form 8-K filed on September 18, 2020)

Todd Hornsby Amended and Restated Employment Agreement, dated September 17, 2020 (Incorporated by reference to the Registrant's Current Report on Form 8-K filed on September 18, 2020)

14.1 Code of Ethics (Incorporated by the reference to the Registrant's Annual Report on Form 10-K filed on March 31, 2020)

16.1 Letter from B DO USA, LLP (Incorporated by the reference to the Registrant's Current Report on Form 8-K filed on August 20, 2020)

21.1 List of Subsidiaries (Incorporated by the reference to the Registrant's Annual Report on Form 10-K filed on March 31, 2020)

23.1* Consent of RSM US, LLP

31.1* Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002

2 unchanged sentences

32.2* Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Label Presentation Document

101.INS*** XBRL Instance Document

101.SCH*** XBRL Taxonomy Extension Schema Document

101.CAL*** XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*** XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*** XBRL Taxonomy Extension Label Linkbase Document

101.PRE*** XBRL Taxonomy Extension Label Presentation Document

* Filed herewith.

12 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ ANDREW MAKRIDES

Chairman of the Board

March 31, 2020

Name Title Date

/s/ ANDREW MAKRIDES Chairman of the Board March 31, 2021

Andrew Makrides

/s/ CHARLES D.

Chief Executive Officer and Director

March 31, 2020

/s/ TARA SEMB

Chief Financial Officer, Treasurer and Secretary

March 31, 2020

/s/ JOHN ANDRES

Vice Chairman of the Board

March 31, 2020

GOODWIN II Chief Executive Officer and Director March 31, 2021

/s/ TARA SEMB Chief Financial Officer, Treasurer and Secretary March 31, 2021

/s/ JOHN ANDRES Vice Chairman of the Board March 31, 2021

/s/ LAWRENCE J.

March 31, 2020

/s/ MICHAEL GERAGHTY

March 31, 2020

WALDMAN Director March 31, 2021

/s/ MICHAEL GERAGHTY Director March 31, 2021

Michael Geraghty

/s/ CRAIG SWANDAL

March 31, 2020

/s/ CRAIG SWANDAL Director March 31, 2021

Craig Swandal

/s/ MINNIE BAYLOR-HENRY

March 31, 2020

/s/ MINNIE BAYLOR-HENRY Director March 31, 2021

Minnie Baylor-Henry

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures