What changed in this filing

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Item 1. Business

2025-03-13 compared with 2024-03-21 · 95 added, 133 removed, 187 unchanged (55% of the section changed)

Apyx Medical Corporation (“Company”, “Apyx Medical”, “we”, “us”, or “our”) was incorporated in 1982, under the laws of the State of Delaware and has its principal executive office at 5115 Ulmerton Road, Clearwater, FL 33760.

We are an advanced energy technology company with a passion for elevating people’s lives through innovative products, including our Helium Plasma Technology products marketed and sold as Renuvion® in the cosmetic surgery market and J-Plasma® in the hospital surgical market.

Our primary focus is on the cosmetic surgery market where Renuvion offers plastic surgeons, facial plastic surgeons and cosmetic physicians a unique ability to provide controlled heat to the tissue to achieve their desired results.

We also leverage our deep expertise and decades of experience in unique waveforms through original equipment manufacturing (“OEM”) agreements with other medical device manufacturers.

We are an advanced energy technology company with a passion for elevating people’s lives through innovative products, including our Helium Plasma Platform Technology products marketed and sold as Renuvion ® in the cosmetic surgery market and J-Plasma ® in the hospital surgical market.

Renuvion and J-Plasma offer surgeons a unique ability to provide controlled heat to tissue to achieve their desired results.

We also leverage our deep expertise and decades of experience in unique waveforms through Original Equipment Manufacturer (“OEM”) agreements with other medical device manufacturers.

Recent Business Developments

On March 14, 2022, the U.S.

Food and Drug Administration (“FDA”) posted a Safety Communication that warned consumers and health care providers against the use of our Advanced Energy products outside of their FDA-cleared indications for general use in cutting, coagulation, and ablation of soft tissue during open and laparoscopic surgical procedures.

Following the Safety Communication, we experienced reduced demand for the adoption of our Helium Plasma Technology.

On May 26, 2022, we announced that we received 510(k) clearance from the FDA for the use of the Renuvion Dermal handpiece for specific dermal resurfacing procedures.

On July 18, 2022, we announced that we received 510(k) clearance from the FDA for the use of the Renuvion APR handpiece for certain skin contraction procedures.

On June 2, 2022 and July 21, 2022, the FDA updated the Medical Device Safety Communication to recognize the new 510(k) clearances for the Renuvion Dermal handpiece, and the expanded indications for the Renuvion APR handpiece.

The 510(k) clearance for the Renuvion Dermal handpiece allows surgeons to perform dermal resurfacing procedures for the treatment of moderate to severe wrinkles and rhytides, limited to patients with Fitzpatrick Skin Types I, II or III.

The 510(k) clearance for the Renuvion APR handpiece now addresses improving the appearance of lax (loose) skin in the neck and submental region.

On February 27, 2023, we announced that we received 510(k) clearance from the FDA for the use of the Renuvion APR handpiece for the delivery of radiofrequency energy and/or helium plasma where coagulation/contraction of soft tissue is needed.

Soft tissue includes subcutaneous tissue.

On April 28, 2023, we announced that we received 510(k) clearance from the FDA for the use of the Renuvion APR handpiece for coagulation of subcutaneous soft tissues following liposuction for aesthetic body contouring.

On May 10, 2023, the FDA updated the Safety Communication to inform consumers and healthcare providers about the clearance for the Renuvion APR handpiece for coagulation of subcutaneous soft tissues following liposuction.

On June 14, 2023, we announced that we received 510(k) clearance from the FDA for the Renuvion Micro handpiece, a new addition to the Renuvion production family.

The Renuvion Micro handpiece was cleared with an indication for the delivery of radiofrequency energy and/or helium plasma where coagulation/contraction of soft tissue is needed.

Soft tissue includes subcutaneous tissue.

While we expected that receiving these clearances would materially mitigate the financial effects of the Safety Communication in future periods, we continue to experience reduced demand for the adoption and utilization of our technology and we believe that this may have an adverse effect in future periods.

APYX MEDICAL CORPORATION

On January 6, 2025, we announced that we had submitted a 510(k) premarket notification to the FDA for the AYON Body Contouring System ("AYON").

AYON was developed with a focus on versatility and innovation.

AYON has been designed to be the only device a surgeon needs for comprehensive body contouring solutions.

This all-in-one system integrates advanced modalities to perform multiple functions seamlessly, removing unwanted fat, enhancing tissue contraction and addressing the full range of patient needs from contouring to aesthetic enhancement.

The initial submission for AYON includes the following:

Dual aspiration to facilitate simultaneous users

Ultrasound-assisted liposuction

Electrocoagulation to support procedures requiring removal of excess tissue

Volume enhancement capabilities

Renuvion treatment to address loose and lax skin

During 2025, we plan to expand the indications with an additional 510(k) submission for AYON to include power assisted liposuction.

We have incurred recurring net losses and cash outflows from operations and we anticipate that losses will continue in the near term.

For the year ended December 31, 2023, we incurred a loss from operations of $17.3 million and used $5.2 million of cash in operations, which is inclusive of the receipt of our tax refund of approximately $8.1 million.

For the year ended December 31, 2024, we incurred a loss from operations of $18.8 million and used $18.0 million of cash in operations.

As of December 31, 2024, we had cash and cash equivalents of $31.7 million.

We plan to continue to fund our operations and capital funding needs through existing cash, sales of our products and, if necessary, additional equity and/or debt financing.

However, we cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our existing stockholders.

The sale of additional equity w ould result in dilution to our stockholders.

However, we cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms acceptable to us.

The sale of additional equity would result in dilution to our stockholders.

Incurring additional debt financing would result in further debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations.

If we are unable to raise additional capital in sufficient amounts or on acceptable terms, we may be required to delay, limit, reduce, or terminate our sales, marketing and product development.

Any of these actions could harm our business, results of operations and prospects.

Any of these actions could harm our business, results of operations, cash flows, and prospects.

In November 2024, we undertook a cost saving restructuring which included an organizational reduction in force to better focus, optimize and streamline operations.

As a result of the organizational changes, we reduced our U.S.

workforce by nearly 25%.

We estimate the annualized future cost savings from the reduction in force to be approximately $4.3 million, which we expect to contribute to our goal of decreasing losses and achieving cash-flow breakeven.

We incurred pre-tax charges of approximately $0.6 million in the fourth quarter of 2024 representing, for the most part, one-time cash expenditures for severance and other employee termination benefits.

In addition to the reduction in force, we eliminated bonuses in 2024, reduced the size of the board of directors from eight to five members and reduced aggregate board cash compensation from $0.5 million annually to $0.1 million, while increasing board stock-based compensation.

In addition to the organizational changes, we have identified other direct cost savings we anticipate achieving in 2025.

The identified cost savings include reductions in professional fees, lower research and development costs as we complete the development of AYON, lower credit card fees and stock-based compensation.

We foresee, in totality, these cost savings will reduce our annual operating expenses below $40 million in 2025.

APYX MEDICAL CORPORATION

On November 22, 2022, we filed a shelf registration statement providing us the ability to register and sell our securities in the aggregate amount up to $100 million.

The shelf registration included an embedded at-the-market (“ATM”) facility for up to $40 million.

The shelf registration statement included an embedded ATM facility for up to $40 million.

To date we have not utilized this facility.

On February 17, 2023, we entered into a Credit, Security and Guaranty Agreement (the “MidCap Credit Agreement”) with MidCap Funding IV Trust (as agent), and MidCap Financial Trust (as term loan servicer), and the lenders party thereto from time to time.

The MidCap Credit Agreement provided for an up to $35 million facility, consisting of senior secured term loans and a secured revolving facility.

The MidCap Credit Agreement provided for senior secured term loans of up to $25 million, comprised of (i) an initial tranche of $10 million, (ii) a second tranche of $5 million, and (iii) a third tranche of $10 million.

The secured revolving facility provided for loans in an aggregate principal amount of up to $10 million, subject to a borrowing base equal to certain percentages of the Company’s eligible accounts receivable and inventory, as determined in accordance with the terms of the MidCap Credit Agreement.

The MidCap Credit Agreement was extinguished when, on November 8, 2023, we entered into a Credit and Guaranty Agreement (the “Perceptive Credit Agreement”), by and among Apyx Medical (as borrower), Apyx China Holding Corp.

and Apyx Bulgaria EOOD, our wholly-owned subsidiaries (as subsidiary guarantors), and Perceptive Credit Holdings IV, LP (as initial lender and administrative agent)(“Perceptive”), and the lenders from time to time party thereto.

The Perceptive Credit Agreement provides for a facility of up to $45 million, consisting of senior secured term loans.

The Perceptive Credit Agreement provides for (i) an initial loan of $37.5 million and (ii) a delayed draw loan of $7.5 million.

For a more in depth description of the terms of the MidCap Credit Agreement and the Perceptive Credit Agreement, see Note 11 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

On February 27, 2023, our Board of Directors approved a plan to sell and leaseback our real property located in Clearwater, FL.

On March 14, 2023, we entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with VK Acquisitions VI, LLC (the “Purchaser”), for the sale of our facility located at 5115 Ulmerton Road, Clearwater, Florida, as more fully described in the Purchase Agreement (collectively, the “Property”) for a purchase price of $7,650,000.

On May 8, 2023, the Company closed on the Purchase Agreement and concurrently executed a 10-year agreement to leaseback the underlying Property from the Purchaser.

For a more in depth description of the terms of the Purchase Agreement see Notes 6 and 7 of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.

During January 2023, we were notified that the Internal Revenue Service (“IRS”) examination process of our 2018, 2019 and 2020 tax returns was complete and that our tax refunds were approved for approximately $0.2 million more than the amount recorded in our Consolidated Balance Sheet at December 31, 2022.

On August 10, 2023, the Company received $8.1 million from the IRS, which included approximately $0.4 million of interest on the $7.7 million of income tax refunds.

We also continue to reassess our operating expenditures and cost structure to be commensurate with our expected levels of revenue and we have the ability to reduce or delay expenditures to enhance and preserve liquidity.

We continue to focus our efforts to increase the adoption of our Advanced Energy technology and utilization of our handpieces by surgeons in the U.S.

and fulfilling demand from distributors in our international markets.

Management estimates that our

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products have been sold in more than 60 countries.

As of December 31, 2023, we had a direct sales force of 31 field-based selling professionals and utilized 3 independent sales agencies.

We also had 4 sales managers.

This selling organization, along with our international network of distributors, is focused on the use of Renuvion in the cosmetic surgical markets, supported by our global medical affairs team.

This global team of clinical support specialists focuses on supporting our users to ensure optimal outcomes for their patients.

In addition, we have invested in training programs and marketing-related activities to support accelerated adoption of Renuvion into surgeons' practices.

On November 7, 2024, we entered into an amendment to the Perceptive Credit Agreement.

The amendment reduced the financial covenant trailing twelve-month revenue targets relating to its Advanced Energy segment (tested quarterly), with amended year-end targets of $34.4 million, $37.0 million, $52.4 million and $60.3 million for 2024, 2025, 2026 and 2027, respectively.

The amendment also introduced a maximum operating expense financial covenant, with full year targets of $40.0 million and $45.0 million for 2025 and 2026, respectively.

The Perceptive Credit Agreement, as amended, continues to contain customary affirmative and negative covenants, including covenants limiting our ability, and our subsidiaries to, among other things, to incur debt, grant liens, make distributions, enter certain restrictive agreements, pay or modify subordinated debt, dispose of assets, make investments and acquisitions, enter into certain transactions with affiliates, and undergo certain fundamental changes, in each case, subject to limitations and exceptions set forth in the Perceptive Credit Agreement.

Additionally, we must maintain a balance of $3.0 million in cash and cash equivalents during the term of the Perceptive Credit Agreement.

As of December 31, 2024, we were in compliance with the financial covenants contained within the Perceptive Credit Agreement, as amended.

Our continued compliance with covenants is subject to meeting or exceeding forecasted Advanced Energy revenues, as amended, and reducing operating expenses.

For a more in-depth description of the terms of the Perceptive Credit Agreement, as amended, see Note 11 in Item 8 of this Annual Report on Form 10-K.

On November 7, 2024, we closed a $7.0 million registered direct offering with a healthcare-focused fund and issued 3,000,000 shares of common stock and 2,934,690 of pre-funded warrants to purchase common stock with an exercise price of $.001 per share.

For a more in-depth description of the terms of the registered direct offering, see Note 13 in Item 8 of this Annual Report on Form 10-K.

Our direct sales force, along with our international network of distributors, is focused on becoming the sole provider of surgical equipment in the cosmetic surgical markets.

This sales force is supported by a global team of clinical support specialists, which focuses on supporting our users to ensure optimal outcomes for their patients.

In addition, we have invested in training programs and marketing-related activities to support accelerated adoption of our technology into surgeons' practices.

We strongly encourage investors to visit our website:

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Joint Venture

In 2019, the Company executed a joint venture agreement with its Chinese supplier whereby the Company has a 51% ownership interest, to establish a presence in the Chinese market for the manufacturing and sale of our Advanced Energy products.

In 2019, we executed a joint venture agreement with its Chinese supplier whereby we have a 51% ownership interest, to establish a presence in the Chinese market for the manufacturing and sale of our Advanced Energy products.

As of the date of this report, the joint venture has not commenced its principal operations.

The cosmetic surgery market is a special segment of the medical field which is involved in the restoration, reconstruction, or alteration of the human body so as to enhance the body’s appearance.

The cosmetic surgery market is a special segment of the medical field, which is involved in the restoration, reconstruction, or alteration of the human body to enhance the body’s appearance.

The market for cosmetic surgery includes surgical, minimally invasive, and nonsurgical cosmetic procedures.

This market is expected to have steady growth year-over-year and this growth is driven by social and cultural factors such as the influence of social media, societal influence for appearance and beauty, and increasing disposable income.

According to the recent International Society of Aesthetic Plastic Surgery (“ISAPS”) 2022 Global Survey report, liposuction procedures grew 21.1% year-over-year, and continues to be the number one aesthetic surgical procedure globally.

Currently, the majority of procedures utilizing our Renuvion technology occur in conjunction with liposuction procedures.

Glucagon-like peptide -1 peptide receptor agonists (GLP-1’s), such as Mounjaro ® , Wegov ® and Ozempic ® , are prescribed for the treatment of diabetes in combination with exercise to improve glycemic control.

Glucagon- like peptide -1 peptide receptor agonists (“GLP-1’s”), such as Mounjaro®, Wegovy® and Ozempic®, are prescribed for the treatment of diabetes and or weight loss in combination with exercise to improve glycemic control.

GLP-1’s have also been found to mimic the GLP-1 satiety hormone in our bodies.

When one eats, GLP-1 is released in the small intestines regulating blood sugar and sending signals to the brain centers that control appetite.

Studies have shown patients taking GLP-1’s have loss of body weight, Currently, two GLP-1’s are cleared by the FDA for weight loss, but we anticipate a number of additional drug candidates will be cleared as well as, oral versions of these injectable medications.

We believe the increased use of GLP-1’s may have an initial negative impact on the number of liposuction procedures, but in the long term, as these drugs have a ripple effects that will drive people towards plastic surgery, they will provide a tailwind for sales of our Renuvion products.

The rapid weight loss from these drugs may cause what is known as “Ozempic Butt” characterized by sagging skin on the butt.

Rapid weight loss can contribute to loose skin, particularly in the curvier areas of the body.

Studies have shown patients taking GLP-1’s have experienced a loss of body weight.

Currently, two GLP-1’s are cleared by the FDA for weight loss, but we anticipate a number of additional drug candidates will be cleared as well as, oral versions of these injectable medications.

APYX MEDICAL CORPORATION

We believe the increased use of GLP-1’s has had an initial negative impact on the revenue for plastic and cosmetic surgeons and created uncertainty in the aesthetic space.

However, we believe, as these drugs will have a ripple effect that will eventually drive people towards plastic surgery and may provide a tailwind for sales of our Renuvion products.

Rapid weight loss caused by these drugs can contribute to loose skin, particularly in the curvier areas of the body.

To address this, the cosmetic surgery market is focusing on body contouring.

Body contouring is a customizable treatment for patients to target specific fat deposits, engage in fat transfer, and treatments to address skin laxity.

Body contouring is a customizable treatment for patients to target specific fat deposits, engage in the transfer of fat, and treatments to address loose or lax skin.

Renuvion is the only FDA approved device for the treatment of this issue post liposuction.

Additionally, Renuvion may be used to treat skin laxity without the use of liposuction, potentially increasing the total available market for our products.

We believe that we have sustainable, competitive advantages in the cosmetic surgery market for several reasons:

According to the recent International Society of Aesthetic Plastic Surgery (“ISAPS”) 2023 Global Survey report, while liposuction procedures contracted 2.9% year-over-year, it continues to be the number one aesthetic surgical procedure globally and all surgical procedures increased 5.5% year-over-year.

Currently, the majority of procedures utilizing our Renuvion technology occur in conjunction with liposuction procedures.

We believe, as the leader in surgical aesthetics, that we have sustainable, competitive advantages in the cosmetic surgery market for several reasons:

our long history of developing unique energy devices to meet the needs of physicians, our unique Helium Plasma Technology, our outstanding product quality supported by strong engineering and research and development capabilities, and the clinical support that our expanding global medical affairs team provides to our customers.

We feel that our products and our strategy as a

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customer-centric aesthetic medical device manufacturer have, and will continue to improve, the lives of doctors and their patients.

We feel that our products and our strategy as a customer-centric aesthetic medical device manufacturer have, and will continue to improve, the lives of doctors and their patients.

Intellectual Property

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We have 9 U.S.

registered trademarks, 7 international registered trademarks, and 32 pending international trademark applications.

registered trademarks, 29 international registered trademarks, 1 pending U.S.

trademark application, and 9 pending international trademark applications.

As we continue to expand our intellectual property portfolio, we believe it is critical for us to continue to invest in filing patent applications to protect our technology, inventions and improvements.

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However, it is possible that a prolonged disruption to the global supply chain could cause a backlog of sales orders in the future.

We continue to work to find other sources of supply, where feasible, and have expedited the shipments of certain raw material items to adequately maintain our production and safety stock levels, resulting in higher shipping costs.

We have also experienced some impact on the purchase prices of our raw materials due to inflation, global inventory shortages and increased demand across the manufacturing sector.

We maintain collaborative arrangements with three foreign suppliers, including our contract component manufacturer located in Ningbo, China, under which we request the development of certain products which we purchase pursuant to purchase orders.

We continue to work to find other sources of supply, where feasible.

We have also experienced some impact on the purchase prices of our raw materials due to inflation.

Based on our preliminary analysis, we currently do not expect that recent and recently proposed tariff legislation will have a material impact on us.

We maintain collaborative arrangements with two foreign suppliers, including our contract component manufacturer located in Ningbo, China, under which we request the development of certain products, which we purchase pursuant to purchase orders.

Our purchase order commitments are never more than one year in duration and are supported by our sales forecasts.

In accordance with Defense Federal Acquisition Regulation Supplement 225.7022-5(b), to our knowledge, none of the products that we source are through entities manufacturing in the Xinjiang province.

To our knowledge, none of the products that we source are through entities manufacturing in the Xinjiang province.

In response to the global supply chain instability and inflationary cost increases, we continue to take action to minimize, as much as possible, any potential adverse impacts by working closely with our suppliers to closely monitor the availability of raw material components (i.e.

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We expect global supply chain instability will continue to have an impact on our business, but to date that has not been material to our financial performance.

The consequences of global supply chain instability, inflationary cost increases, and their adverse impact to the global economy, continue to evolve.

The consequences of global supply chain instability, tariffs, inflationary cost increases, and their adverse impact to the global economy, continue to evolve.

Accordingly, the significance of the future impact to our business and financial statements remains subject to significant uncertainty.

The value of unshipped factory orders is not material.

Sustainability

We have created an environmental, social and governance (“ESG”) structure by introducing a cross-functional ESG team which has been working with senior management, our board, and other stakeholders to develop an ESG framework that is aligned with our corporate mission, vision and values.

Our ESG initiatives are sponsored by our CEO and CFO, and include a steering committee comprised of all members of the executive management team as well as some mid-level managers in certain areas

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such as R&D, Regulatory and Quality.

In July 2022, we published our first ESG report aligned with the Sustainability Accounting Standards Board (“SASB”) Medical Equipment industry standards.

Human Capital Management

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We continuously focus our efforts on cultivating and enhancing our working culture that embraces equal opportunity.

Currently, over half of our global workforce is represented by women.

In addition, in the U.S., approximately 33% of our employees are from minority ethnic/racial groups.

Recruitment, Training and Development

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Our mission and vision are to be the world’s leading innovator in unique energy solutions that continually reshape what’s possible in cosmetic and medical procedures through innovative solutions.

Our shared values of transforming physicians’ and their patients’ lives, acting with integrity, and driving innovation, form the core of our company's culture.

We articulate the qualities associated with these behaviors through our three Core Values:

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• Trailblazers :

We are passionate about the work we do.

We energetically pursue our goals, aim higher, and reach further.

When we encounter setbacks, we see opportunities for innovation and improvement.

When we clear a business hurdle, we celebrate, and then raise the bar.

• Challengers :

We speak up and are not afraid to question, to reimagine, to think differently.

We innovate to break the status quo, and create new possibilities, for our customers and for our company.

• Team Players :

We respect everyone’s contribution and are absolutely committed to elevating our fellow team members, and our customers and their patients.

Part of our culture is to give back and support the communities and people around us.

In 2023, we engaged in both employee volunteer and financial support in the areas of education and the environment.

Such initiatives included the following by way of example:

• Throughout the year, we have provided supplies, including books, stationery, and classroom materials, to a local elementary school in need.

Additionally, we have contributed financially to a local Ronald McDonald House, supporting families with sick children during challenging times.

• During the holiday season, we participated in local food drives to aid members of our local community.

Furthermore, we participated in the Toys for Tots program, collecting toys and gifts for children from lower-income households.

• As part of our commitment to health and wellness, we organized a blood drive that serves as a critical lifeline for individuals in need of transfusions.

Additionally, we actively support breast cancer awareness initiatives and fundraising events to support research, treatment, and other support services.

• We have made financial contributions to organizations dedicated to researching a cure for Amyotrophic Lateral Sclerosis (ALS) in an effort to improve health outcomes for those individuals diagnosed with this difficult disease.

These initiatives reflect a small part of our commitment to engage with our communities, support charitable causes, and foster a culture of social responsibility throughout our organization.

Outside of our communities, we also support Dr.

Giovanni Betti, an accomplished plastic surgeon and loyal Renuvion customer in Mexico, who has established a foundation to support victims of implantation of biopolymers.

Biopolymers are synthetic substances used by unscrupulous practitioners as fillers to augment anatomical locations in body contouring procedures.

These substances are foreign to the human body and cause severe tissue reactions, illness, and sometimes death.

Since most of the patients impacted by these procedures have limited economic means, they often can not afford the procedures they need to remove the biopolymers.

We support Dr.

Betti and his Reconstruyendo Suenos foundation by providing free Renuvion handpieces for these procedures.

Employee Health and Safety

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Identified concerns and potential hazards are addressed immediately, which is evidenced by our low safety incident rate quarter over quarter.

In 2023, we had no lost time accidents.

During 2024 and 2023, we had no lost time accidents.

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Our Two Business Segments

Our reportable segments are disclosed as principally organized and managed as two operating segments:

Our reportable segments are principally organized, managed and disclosed as two operating segments:

Advanced Energy and OEM.

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Asset information is not reviewed by the chief operating decision maker by segment and is not available by segment and, accordingly, we have not presented a measure of assets by reportable segment.

For the year ended December 31, 2023, our A dvanced Energy segment contributed 82.9% of our consolidated total revenue and o ur OEM segment contributed 17.1% of our consolidated total revenue.

For the year ended December 31, 2024, our Advanced Energy segment contributed 80.3% of our consolidated total revenue and our OEM segment contributed 19.7% of our consolidated total revenue.

Advanced Energy Segment

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It also continues to be the subject of numerous presentations at traditional and cosmetic surgery conferences around the world.

This technology initially received FDA clearance in 2012 and a CE mark in December 2014, which enables us to sell the product in the European Union.

This technology initially received FDA clearance in 2012 and a CE mark in December 2014, which enables us to sell our technology in the European Union.

In 2014, we created and trained a direct sales force dedicated to sell this technology.

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This strategy primarily involved deployment of a dedicated sales force, developing product line extensions and expanding the specialties in which we believe this technology can become the “standard of care” for certain procedures.

During 2023, we continued our full-scale, global, commercialization efforts for Renuvion in the cosmetic and plastic surgery markets.

As of December 31, 2023, we had a direct sales force of 31 field-based selling professionals and utilized 3 independent sales agencies.

We also had 4 sales managers.

This selling organization, along with our international network of distributors, is focused on the use of Renuvion in the cosmetic surgery market, supported by our global medical affairs team.

This global team of clinical support specialists focuses on supporting our users to ensure optimal outcomes for their patients.

In addition, we have invested in training programs and marketing-related activities to support accelerated adoption of Renuvion into physicians’ practices.

From 2015 through 2023, we launched numerous new extensions to our Helium Plasma product lines in an effort to target new surgical procedures, users, and markets.

During 2024, we continued our full-scale, global, commercialization efforts for Renuvion in the cosmetic surgery market.

Our direct sales force, along with our international network of distributors, is focused on becoming the sole provider of surgical equipment in the cosmetic surgery market.

This sales force is supported by a global team of clinical support specialists, which focuses on supporting our users to ensure optimal outcomes for their patients.

In addition, we have invested in training programs and marketing-related activities to support accelerated adoption of our technology into surgeons' practices.

We launched numerous new extensions to our Helium Plasma product lines in an effort to target new surgical procedures, users, and markets.

Most notably, throughout 2021, we continued our launch of our Renuvion Apyx Plasma RF handpieces (“APR”) around the world.

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In late January 2023, we launched our recently FDA approved Apyx One Console in the U.S.

This is a multi-functional generator incorporating an advanced 3-in-1 energy system that enables plastic and cosmetic surgeons to utilize Renuvion technology, together with full

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monopolar and bipolar energy.

This is a multi-functional generator incorporating an advanced 3-in-1 energy system that enables plastic and cosmetic surgeons to utilize Renuvion technology, together with full monopolar and bipolar energy.

Key features of the Apyx One Console include adaptive and intuitive touch screens, procedural presets by body part, cloud connectivity, data sharing and logging, remote upgrade capabilities and system diagnostics, and an advanced gas system that measures and monitors gas volume and usage.

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The Renuvion Micro Handpiece is designed for use with the Apyx One Console.

APYX MEDICAL CORPORATION

On January 6, 2025, we announced that we had submitted a 510(k) premarket notification to the FDA for AYON.

AYON was developed with a focus on versatility and innovation.

AYON has been designed to be the only device a surgeon needs for comprehensive body contouring solutions.

The initial submission for AYON includes the following:

Dual aspiration to facilitate simultaneous users

Ultrasound-assisted liposuction

Electrocoagulation to support procedures requiring removal of excess tissue

Volume enhancement capabilities

Renuvion treatment to address loose and lax skin

During 2025, we plan to expand the indications with an additional 510(k) submission for AYON to include power assisted liposuction.

In order to assist us in leveraging our Helium Plasma Technology’s precision and effectiveness in multiple surgical specialties, we continue to utilize our Medical Advisory Board, which currently consists of 5 members representing the plastic surgery, facial plastic surgery, and cosmetic procedure specialties.

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We continue to make substantial investments in the development and marketing of our Renuvion technology for the long-term benefit of the Company and its stakeholders.

This has and may continue to adversely affect our short-term operating performance and cash flows, particularly over the next 12 to 18 months.

While we believe that these investments have the potential to generate additional revenues and profits in the future, there can be no assurance that our Helium Plasma Technology will continue to be successful or that such future revenues and profitability will be realized.

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in the fourth quarter of 2022, full commercial launch of the generator in the U.S.

and select international markets started in 2023.

and select international markets started in 2023 and continued in 2024.

We continued the sales of our Renuvion System 3 generator, to markets outside the U.S.

and began introducing the Apyx Once Console in markets where we have received regulatory approval.

Our high frequency electrosurgical generators can be used for delivery of RF energy and/or helium plasma to cut, coagulate and ablate soft tissue during open and minimally invasive surgical procedures.

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These new product releases continue to expand the procedure base for our Helium Plasma Technology by providing surgeons with the tools they need to access additional anatomic locations and perform specific procedures.

APYX MEDICAL CORPORATION

Single-Use Handpiece Portfolio

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The helium-based plasma generated from these devices has been shown to provide increased precision and control and cause less thermal damage to tissue than CO2 laser, argon plasma and RF energy products currently available on the market.

The technology has a general indication and can

APYX MEDICAL CORPORATION

be used for cutting, coagulating and ablating soft tissue.

The technology has a general indication and can be used for cutting, coagulating and ablating soft tissue.

The advantages of helium plasma continue to be studied throughout the medical and scientific communities.

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During 2021, we began to launch these new handpieces in our international markets, designed specifically for minimally invasive use, with improved ergonomics and safety features.

Discuss Micro here.

Currently, we are the only company with helium-based plasma products and four specific indications from the FDA.

While the FDA Safety Communication did impact our sales, and we face competition from RF-based, argon plasma, and CO2 laser products within our target market, we still believe our competitive position did not change in 2024.

We believe our focus on the surgical aesthetic market provides us a competitive advantage over noninvasive products due to surgical treatments providing patients with more transformative and durable results.

FDA and Other Government Regulations

32 unchanged sentences

Payers have become a more potent force in the marketplace and increased attention is being paid to medical device pricing, appropriate drug and medical device utilization and the quality and costs of healthcare generally.

However, most of the Company’s products are not reimbursable by payers (including the US.

However, most of our products are not reimbursable by payers (including the US.

Government) which alleviates some of the burden of reporting.

10 unchanged sentences

Global Supply Chain Impact

The Company relies on global supply chains, and production and distribution processes, which are complex, are subject to increasing regulatory requirements, and may be faced with unexpected changes that may affect sourcing, supply and pricing of materials used in the Company’s products.

We rely on global supply chains, and production and distribution processes, which are complex, are subject to increasing regulatory requirements, and may be faced with unexpected changes that may affect sourcing, supply and pricing of materials, including tariffs, used in our products.

These processes also are subject to complex and lengthy regulatory approvals.

We leverage our expertise in the design, development and manufacturing of electrosurgical equipment and medical devices by producing generators, medical devices and related accessories for large, well-known medical device manufacturers through original equipment manufacturing (“OEM”) agreements, as well as start-up companies with the need for our energy-based designs.

We leverage our expertise in the design, development and manufacturing of electrosurgical equipment and medical devices by producing generators, medical devices and related accessories for large, well-known medical device manufacturers through OEM agreements, as well as start-up companies with the need for our energy-based designs.

In connection with the Asset Purchase Agreement with Symmetry Surgical in 2018, we entered into a Manufacturing and Supply Agreement for a ten-year term, pursuant to which we manufacture certain products and sell to them at agreed upon prices.

2 unchanged sentences

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 1. Business