What changed in this filing

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Item 1A. Risk Factors

2025-03-13 compared with 2024-03-21 · 40 added, 50 removed, 279 unchanged (24% of the section changed)

9 unchanged sentences

Macroeconomic trends including inflation and higher interest rates may adversely affect our financial condition, results of operations and cash flows.

Inflation in the United States has recently accelerated and is currently expected to continue at an elevated level in the near-term.

We are in an inflationary period in the United States and is expected to continue at an elevated level in the near-term.

Higher inflation and interest rates could have an adverse impact on our operating expenses and our credit facilities.

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Such restrictions or reductions in the availability of consumer credit, or the loss of our relationship with our current financing partners, could have an adverse effect on our business, financial conditions, and operating results.

APYX MEDICAL CORPORATION

We have had a history of operating losses that have impacted our overall cash flows and may impact our ability to continue as a going concern.

We anticipate that we may need to adjust our operating expenditures to be commensurate with our expected levels of revenue and/or raise additional capital to finance operations.

APYX MEDICAL CORPORATION

Due to our recurring net losses and the continued impact of the FDA Safety Communication on demand for the adoption and utilization of our technology, we may need to raise additional capital to fund our future operations.

Due to our recurring net losses and the continued level of demand for the adoption and utilization of our technology, we may need to raise additional capital to fund our future operations.

Our cash needs will depend on numerous factors, including our revenues, successful completion of our FDA product clearance activities, our continued ability to commercialize our advanced energy products, and our ability to reduce and control costs.

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Even if we are successful in developing new, or enhancing our existing products, there are various circumstances that could prevent their successful commercialization.

Our ability to successfully commercialize our products will depend on a number of factors, any of which could delay or prevent commercialization, including:

Our ability to successfully commercialize our products, including AYON, which we expect to launch during 2025, will depend on a number of factors, any of which could delay or prevent commercialization, including:

our inability to obtain the necessary regulatory clearances or approvals for expanded indications, new products, or product modifications;

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Regardless of the merit of any related legal proceeding, we have incurred in the past, and may be required to incur in the future, substantial costs to prosecute, enforce or defend our intellectual property rights.

Even in the absence of infringement by our products on third parties’ intellectual property rights, or litigation related to trade secrets, we have elected in the past, and may in the future, elect to enter into settlements to avoid the costs and risks of protracted litigation and the diversion of resources and management’s

APYX MEDICAL CORPORATION

If the terms of settlements entered into with certain of our competitors are not observed or enforced, we may suffer further costs and risks.

Any of these circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows.

APYX MEDICAL CORPORATION

In addition to patent, copyright, and trademark protection, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.

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Although we carry property and casualty insurance and business interruption insurance, future possible disruptions of operations or damage to property, plant and equipment due to hurricanes or other weather risks could result in impaired production and affect our ability to meet our commitments to our customers and impair important business relationships, the loss of which could adversely affect our operations and profitability.

We do, however, maintain a backup power source at our Clearwater facility, are working to establish deeper redundancies between both facilities, and have a disaster recovery plan in place to help mitigate this risk.

APYX MEDICAL CORPORATION

however, maintain a backup power source at our Clearwater facility, are working to establish deeper redundancies between both facilities, and have a disaster recovery plan in place to help mitigate this risk.

If there is not sufficient consumer demand for the procedures performed with our products, surgeon demand for our products could be inhibited, resulting in unfavorable operating results and reduced growth potential.

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The decision to utilize our products may therefore be influenced by a number of factors, including:

• consumer disposable income and access to consumer credit, which as a result of an unstable economy, may be

significantly impacted;

consumer disposable income and access to consumer credit, which as a result of an unstable economy, may be significantly impacted;

the cost, safety and effectiveness of alternative treatments;

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these claims may be brought by individuals seeking relief on their own behalf or purporting to represent a class.

Quality is extremely important to us and our customers due to the impact on patients, and the serious and potentially costly consequences of product failure.

Quality is extremely important to us and our customers due to the potential impact on patients, and the serious and potentially costly consequences of product failure.

Our business exposes us to potential product liability risks that are inherent in the design, manufacture, and marketing of medical devices.

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We expect that as this global regulatory environment continues to evolve, it could impact the cost, the time needed to approve, and ultimately, our ability to maintain existing approvals or obtain future approvals for our products.

Regulations of the the FDA and other regulatory agencies in and outside the U.S.

Regulations of the FDA and other regulatory agencies in and outside the U.S.

impose significant compliance and monitoring obligations on our business.

We are subject to costly and complex laws and governmental regulations and any adverse regulatory action may materially adversely affect our financial condition and business operations.

As a part of the regulatory process for obtaining marketing clearance or approval for new products and new indications for existing products, we conduct and participate in numerous clinical trials with a variety of study designs, patient populations,

APYX MEDICAL CORPORATION

and trial endpoints.

We are subject to costly and complex laws and governmental regulations and any adverse regulatory action may materially adversely affect our financial condition and business operations.

Unfavorable or inconsistent clinical data from existing or future clinical trials, or the market’s or the FDA’s perception of these clinical data, may adversely impact our ability to obtain product approvals, our position in, and share of, the markets in which we participate.

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limit the proposed intended uses of our products.

On March 14, 2022, the FDA posted a 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.

We worked with the FDA towards securing 510(k) clearance for specific additional indications for our Advanced Energy productions.

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 use in subcutaneous dermatological and aesthetic 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 Renuvion APR handpiece for coagulation of subcutaneous soft tissues following liposuction for aesthetic body contouring.

This submission was supported by a clinical study and real world evidence.

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 use under the skin in certain procedures intended to improve the appearance of the skin including for coagulation of subcutaneous soft tissues following liposuction for aesthetic body contouring.

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.

Before and after a product is commercially released, we have ongoing responsibilities under the FDA, Health Canada, Australia, Brazil, EU, and other applicable government agency regulations.

1 unchanged sentence

The results of these audits can include major inspectional observations, warning letters, or other forms of enforcement.

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are adulterated or misbranded, order a recall, repair, replacement, correction, or refund of such products, refuse to grant pending pre-market clearances or approvals, refuse to issue export certificates for foreign governments, or require us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health.

If the FDA were to conclude that we are not in compliance with applicable laws or regulations, or that any of our medical products are ineffective or pose an unreasonable health risk, they could ban such medical products, determine that our products are adulterated or misbranded, order a recall, repair, replacement, correction, or refund of such products.

The FDA may also refuse to grant pending pre-market clearances or approvals, refuse to issue export certificates for foreign governments, or require us to notify health professionals and others that the devices present unreasonable risks of substantial harm to the public health.

The FDA and other foreign and domestic regulators may also assess civil or criminal penalties against us, our officers or employees and impose operating restrictions on a company-wide basis.

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Governmental regulations worldwide have, and may continue to become, increasingly stringent and customary.

In the EU, a single regulatory approval process exists, and conformity with the legal requirements is represented by the CE Mark.

To obtain a CE Mark, defined products must meet minimum standards of performance, safety, and quality (i.e., the essential requirements), and then, according to their classification, comply with one or more of a selection of conformity assessment routes.

In the EU, all medical devices must carry the CE marking before being sold in the EU.

The CE mark represents compliance with the minimum standards of performance, safety, and quality (i.e., the essential requirements).

Based on the device classification, a conformity assessment route is selected.

An accredited notified body provides an assessment and issues the certificate.

The competent authorities of the EU countries separately regulate the clinical research for medical devices and the market surveillance of products once they are placed on the market.

A new Regulation (EU) 2017/745 on medical devices, or “EU MDR”, came into effect in May 2017, which imposes significant additional premarket and post-market requirements.

The EU MDR represents the first major change to the EU medical device regulatory environment, has significantly raised the compliance bar for the medical device industry, and will cause significant changes to the regulatory obligations of manufacturers, importers and distributors involved in the medical device distribution chain.

A new Regulation (EU) 2017/745 on medical devices, or European Union Medical Device Regulation (“EU MDR”), was published in May 2017, which imposes significant additional premarket and post-market requirements.

The Essential Requirements have been revised and are now referred to as the General Safety and Performance Requirements.

APYX MEDICAL CORPORATION

The EU MDR represents the first major change to the EU medical device regulatory environment since the 1990s when the Medical Device Directive (“MDD”) was put into effect.

The EU MDR supersedes the MDD and has significantly raised the compliance bar for the medical device industry and will cause significant changes to the regulatory obligations of manufacturers, importers and distributors involved in the medical device distribution chain.

Classification has changed for some product categories, and strict new requirements have been imposed on clinical data, risk management, post market surveillance, and supplier management.

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After that time, medical devices marketed in the EU will require certification according to these new requirements, except for devices with valid CE certificates, issued pursuant to the Medical Device Directives before May 2020, which can be placed in the market until May 2024.

Additionally, due to the initial delay in the date of application and the reduction in accredited notified bodies, an extension was provided to the validity of MDD certificates.

Devices which have a MDD certificate and have met the extension requirements set forth in the EU MDR may be placed on the market until December 31, 2028.

High risk devices and implants have a shorter certificate extension period (December 31, 2027).

Outside of the EU, regulations vary significantly from country to country and are becoming increasingly stringent and country specific.

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Ethylene Oxide

APYX MEDICAL CORPORATION

Compliance with existing and future environmental regulations may have an impact on the manufacturing and sterilization of our medical devices.

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Our devices are not currently impacted by these closures, however, it is unknown if the current EtO facilities utilized by Apyx Medical could be impacted in the future.

APYX MEDICAL CORPORATION

The FDA is closely monitoring the supply chain effects of closures and potential closures of certain facilities that use EtO to sterilize medical devices prior to their use, and is concerned about the future availability of sterile medical devices and the potential for medical device shortages that might impact patient care.

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Violations of the FCPA, OFAC restrictions, the Bribery Act or other export control, anti-corruption, anti-money laundering and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our reputation, financial condition, and results of operations.

APYX MEDICAL CORPORATION

We are subject to governmental export controls and economic sanctions that could impair our ability to compete in international markets due to licensing requirements and subject us to potential liability if we are not in compliance with applicable laws.

Any non-compliance could have a material adverse effect on our business, financial condition, and results of operations.

Any non-compliance could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are subject to export control laws and regulations, including the Export Administration Regulations (EAR), administered by the U.S.

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Additionally, it is possible that some of our products have or will be sold to distributors or other parties, without our knowledge or consent, in violation of applicable law and there can be no assurances that we will be in compliance with such rules and regulations in the future.

Any such violation could result in significant criminal or civil fines, penalties, or other consequences, including reputational harm, which could have a material adverse effect on our business, financial condition, and results of operations.

APYX MEDICAL CORPORATION

Risks Relating to Our Stock

The market price of our stock has been and may continue to be highly volatile.

Our common stock is listed on The NASDAQ Stock Market LLC under the ticker symbol “APYX”.

Our common stock is listed on the Nasdaq Global Select Market under the ticker symbol “APYX”.

The market price of our stock has been, and may continue to be, highly volatile and announcements by us or by third parties may have a significant impact on our stock price.

These announcements may include:

• our listing status on the The NASDAQ Stock Market LLC;

our listing status on the Nasdaq Global Select Market;

our operating results falling below the expectations of public market analysts and investors;

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We have no present intention to pay dividends on our common stock and, even if we change that policy, we may be unable to pay dividends.

We currently do not anticipate paying any dividends on our common stock in the foreseeable future, and we are subject to restrictions on our ability to pay dividends pursuant to our credit agreement executed in November 2023.

We currently intend to retain future earnings, if any, to finance operations and invest in our business.

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If we change that policy and commence paying dividends, we will not be obligated to continue paying those dividends, and our stockholders will not be guaranteed, or have contractual or other rights, to receive dividends.

If we commence paying dividends in the future, our board of directors may decide, at its discretion, at any time, to decrease the number of dividends, otherwise

APYX MEDICAL CORPORATION

modify or repeal the dividend policy or discontinue entirely the payment of dividends.

If we commence paying dividends in the future, our board of directors may decide, at its discretion, at any time, to decrease the number of dividends, otherwise modify or repeal the dividend policy or discontinue entirely the payment of dividends.

Under Delaware law, our board of directors may not authorize the payment of a dividend unless it is paid out of our statutory surplus.

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In connection with the execution of the MidCap Credit Agreement and the Perceptive Credit Agreement, we issued warrants to purchase 1,500,000 shares of our commons stock, representing approximately 4.0% of our outstanding common stock.

Additionally, in the registered direct offering that we completed in November 2024, we issued 2,934,690 pre-funded warrants which will have a dilutive effect on our common stock outstanding when exercised.

As of the date of this annual report on Form 10-K, the dilution is 7.8%.

The issuance of additional equity through our shelf registration or through the exercise of some or all of our stock options and warrants will dilute the ownership interests of existing stockholders.

Any sales in the public market of the common stock issuable upon such conversion or exercise could adversely affect prevailing market prices of our common stock.

APYX MEDICAL CORPORATION

General Risks

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Additionally, our business involves the use, storage and transmission of information about our employees, our customers and clients of our customers.

While we take measures to protect the security of, and unauthorized access to, our systems, as well as the privacy of personal and proprietary information, it is possible that our security controls over our systems, as well as other security practices we follow or those systems of our customers into which we operate and rely upon, may not prevent the improper access to or disclosure of personally identifiable

APYX MEDICAL CORPORATION

or proprietary information.

We take measures to protect the security of, and unauthorized access to, our systems, as well as the privacy of personal and proprietary information.

However, despite these preventative measures, it is possible that our security controls over our systems, as well as other security practices we follow or those systems of our customers into which we operate and rely upon, may not prevent the improper access to or disclosure of personally identifiable or proprietary information.

Such disclosure could harm our reputation and subject us to liability under our contracts and laws that protect personal data, resulting in increased costs or loss of revenue.

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Our failure to adhere to, or successfully implement processes in response to, changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace, which could have a material adverse effect on our business, financial condition and results of operations.

APYX MEDICAL CORPORATION

Adverse global and regional economic conditions could materially adversely affect the Company ’ s business, results of operations and financial condition.

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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 1A. Risk Factors