Apyx Medical (APYX) 10-Q 12 May 22 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2022	May 10, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	0-12183
Entity Registrant Name	APYX MEDICAL CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	11-2644611
Entity Address, Address Line One	5115 Ulmerton Road,
Entity Address, City or Town	Clearwater
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33760
City Area Code	727
Local Phone Number	384-2323
Title of 12(b) Security	Common Stock
Trading Symbol	APYX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		34,453,098
Entity Central Index Key	0000719135
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 26,234	$ 30,870
Trade accounts receivable, net of allowance of $560 and $430	12,363	13,038
Income tax receivables	7,642	7,642
Other receivables	112	483
Inventories, net of provision for obsolescence of $348 and $263	7,019	6,778
Prepaid expenses and other current assets	1,441	1,926
Total current assets	54,811	60,737
Property and equipment, net of accumulated depreciation and amortization of $5,378 and $5,316	6,655	6,575
Operating lease right-of-use assets	90	121
Finance lease right-of-use assets	127	178
Other assets	1,314	1,110
Total assets	62,997	68,721
Current liabilities:
Accounts payable	2,562	2,631
Accrued expenses and other current liabilities	8,837	10,287
Current portion of operating lease liabilities	89	122
Current portion of finance lease liabilities	116	165
Total current liabilities	11,604	13,205
Long-term finance lease liabilities	13	18
Long-term contract liabilities	1,386	1,323
Other liabilities	151	166
Total liabilities	13,154	14,712
EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,453,098 issued and outstanding as of March 31, 2022, and 34,409,912 issued and outstanding as of December 31, 2021	34	34
Additional paid-in capital	68,023	66,221
Accumulated deficit	(18,496)	(12,551)
Total stockholders' equity	49,561	53,704
Non-controlling interest	282	305
Total equity	49,843	54,009
Total liabilities and equity	$ 62,997	$ 68,721

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 560	$ 430
Inventories, provision for obsolescence	348	263
Accumulated depreciation and amortization	$ 5,378	$ 5,316
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	34,453,098	34,409,912
Common stock, shares outstanding (in shares)	34,453,098	34,409,912

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Sales	$ 12,493	$ 8,638
Cost of sales	4,274	2,778
Gross profit	8,219	5,860
Other costs and expenses:
Research and development	1,158	1,115
Professional services	2,286	1,521
Salaries and related costs	5,181	4,245
Selling, general and administrative	5,465	3,724
Total other costs and expenses	14,090	10,605
Loss from operations	(5,871)	(4,745)
Interest income	2	3
Interest expense	(8)	(4)
Other loss, net	(21)	(93)
Total other loss, net	(27)	(94)
Loss before income taxes	(5,898)	(4,839)
Income tax expense	70	66
Net loss	(5,968)	(4,905)
Net loss attributable to non-controlling interest	(23)	(4)
Net loss attributable to stockholders	$ (5,945)	$ (4,901)
Loss per share:
Basic (in dollars per share)	$ (0.17)	$ (0.14)
Diluted (in dollars per share)	$ (0.17)	$ (0.14)

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Non-controlling Interest
Beginning balance (in shares) at Dec. 31, 2020		34,289
Beginning balance at Dec. 31, 2020	$ 63,859	$ 34	$ 61,066	$ 2,621	$ 138
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued on stock options exercises for cash (in shares)		8
Shares issued on stock options exercises for cash	21		21
Stock based compensation	1,194		1,194
Shares issued on net settlement of stock options (in shares)		21
Net loss	(4,905)			(4,901)	(4)
Ending balance (in shares) at Mar. 31, 2021		34,318
Ending balance at Mar. 31, 2021	60,169	$ 34	62,281	(2,280)	134
Beginning balance (in shares) at Dec. 31, 2021		34,410
Beginning balance at Dec. 31, 2021	54,009	$ 34	66,221	(12,551)	305
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued on stock options exercises for cash (in shares)		24
Shares issued on stock options exercises for cash	152		152
Stock based compensation	1,650		1,650
Shares issued on net settlement of stock options (in shares)		19
Net loss	(5,968)			(5,945)	(23)
Ending balance (in shares) at Mar. 31, 2022		34,453
Ending balance at Mar. 31, 2022	$ 49,843	$ 34	$ 68,023	$ (18,496)	$ 282

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities
Net loss	$ (5,968)	$ (4,905)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	225	227
Provision for inventory obsolescence	85	0
Loss on disposal of property and equipment	26	0
Stock based compensation	1,650	1,194
Provision for allowance for doubtful accounts	140	6
Changes in operating assets and liabilities:
Trade receivables	475	680
Prepaid expenses and other assets	649	312
Inventories	(371)	(372)
Accounts payable	(51)	782
Accrued and other liabilities	(1,378)	24
Net cash used in operating activities	(4,518)	(2,052)
Cash flows from investing activities
Purchases of property and equipment	(279)	(192)
Net cash used in investing activities	(279)	(192)
Cash flows from financing activities
Proceeds from stock option exercises	152	21
Repayment of finance lease liabilities	(54)	(82)
Net cash provided by (used in) financing activities	98	(61)
Effect of exchange rates on cash	63	(71)
Net change in cash and cash equivalents	(4,636)	(2,376)
Cash and cash equivalents, beginning of period	30,870	41,915
Cash and cash equivalents, end of period	26,234	39,539
Cash paid for:
Interest	8	4
Income taxes	$ 0	$ 0

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATION Apyx Medical Corporation (“Company", "Apyx", "it" and similar terms) 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. The Company is an advanced energy technology company with a passion for elevating people’s lives through innovative products, including its Helium Plasma Technology products marketed and sold as Renuvion® and J-Plasma® in surgical markets. Apyx is solely focused on bringing transformative solutions to physicians and their patients. Renuvion® and J-Plasma® offer surgeons a unique ability to provide controlled heat to tissue to achieve their desired results. The Company also leverages its deep expertise and decades of experience in unique waveforms through OEM agreements with other medical device manufacturers. On March 14, 2022, the U.S. Food and Drug Administration ("FDA") posted a Safety Communication that warns consumers and health care providers against the use of the Company’s 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, the Company began to experience some slowed demand for the adoption of its Helium Plasma Technology primarily in the U.S. The Company continues to evaluate the full effects the Safety Communication will have on the results of its operations, cash flows and financial position, and expects there will be some continued impact to the results of its operations and cash flows into the second fiscal quarter and possibly beyond. The Company continues to work with the FDA towards securing 510(k) clearance for additional indications. On April 4, 2022, a 510(k) premarket notification was filed for the use of Renuvion® to improve the appearance of lax (loose) skin in the neck and submental region. The accompanying unaudited condensed consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, please refer to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management these unaudited condensed consolidated financial statements reflect all adjustments that are necessary for a fair presentation of results of consolidated operations, cash flows and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. Reclassifications We have reclassified certain amounts presented in the prior period to conform to the current period presentation. These reclassifications had no impact on previously reported net loss, retained earnings or net cash used in operating activities for the periods presented.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2022
Accounting Standards Update and Change in Accounting Principle [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, contract assets, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update, as originally issued, was effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates , which deferred the effective dates of these standards for Smaller Reporting Companies until fiscal years beginning after December 15, 2022. The Company currently expects to continue to qualify as a Smaller Reporting Company, based upon the current SEC definition, and as a result, will be utilizing the deferred elective date. While we are in the process of determining the effects of the adoption of the standard on the condensed consolidated financial statements, we do not expect the impact to be material. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

DISPOSAL OF BUSINESS

DISPOSAL OF BUSINESS	3 Months Ended
	Mar. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]
DISPOSAL OF BUSINESS	DISPOSAL OF BUSINESSOn August 30, 2018, the Company closed on a definitive asset purchase agreement (the "Asset Purchase Agreement") with Specialty Surgical Instrumentation Inc., a Tennessee Corporation and wholly owned subsidiary of Symmetry Surgical Inc. (“Symmetry”), pursuant to which the Company divested and sold the Company's electrosurgical "Core" business segment and related intellectual property, including the Bovie® brand and trademarks, to Symmetry for gross proceeds of $97 million in cash.In connection with the Asset Purchase Agreement, the Company entered into an Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement with Symmetry for a four-year term, whereby it will manufacture certain Core products and sell them to Symmetry at agreed upon prices. Any activity resulting from this agreement is netted and reported in the Condensed Consolidated Statements of Operations as other income (loss). Core activity for the three months ended March 31, 2022, amounted to $0.5 million with cost of sales equivalents of $0.4 million and other related expenses of $0.1 million for approximately $0.0 million of net other loss. Core activity for the three months ended March 31, 2021, amounted to $1.5 million with cost of sales equivalents of $1.2 million and related other expenses of $0.3 million for net other loss of $0.1 million.

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2022
Inventory Disclosure [Abstract]
INVENTORIES	INVENTORIES Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are primarily allocated to inventory manufactured in-house based upon direct labor hours. Inventories consisted of the following: (In thousands) March 31, December 31, Raw materials $ 3,487 $ 3,603 Work in process 1,818 1,441 Finished goods 2,062 1,997 Gross inventories 7,367 7,041 Less: provision for obsolescence (348) (263) Inventories, net $ 7,019 $ 6,778

ACCRUED EXPENSES AND OTHER CURR

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	3 Months Ended
	Mar. 31, 2022
Payables and Accruals [Abstract]
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: (in thousands) March 31, December 31, Accrued payroll $ 855 $ 546 Accrued bonuses 571 2,117 Accrued commissions 954 1,656 Accrued product warranties 593 593 Accrued product liability claim insurance deductibles 597 610 Short-term contract liabilities 759 533 Joint and several payroll liability 986 1,027 Uncertain tax positions 1,916 1,863 Sales tax payable 163 428 Other accrued expenses and current liabilities 1,443 914 Total accrued expenses and other current liabilities $ 8,837 $ 10,287

CHINA JOINT VENTURE

CHINA JOINT VENTURE	3 Months Ended
	Mar. 31, 2022
Noncontrolling Interest [Abstract]
CHINA JOINT VENTURE	CHINA JOINT VENTURE In 2019, the Company executed a joint venture agreement with its Chinese supplier ("China JV") whereby the Company has a 51% interest. The China JV has been consolidated in these condensed consolidated financial statements. The agreement required the Company to make capital contributions into the newly formed entity of approximately $357,000, which had been fully funded as of December 31, 2021. As of the date of these condensed consolidated financial statements, the China JV has not commenced principal operations. Changes in the Company's investment in the China JV were as follows: Three Months Ended March 31, (In thousands) 2022 2021 Beginning interest in China JV $ 317 $ 144 Net loss attributable to Apyx (23) (4) Ending interest in China JV $ 294 $ 140

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	3 Months Ended
	Mar. 31, 2022
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER SHARE	EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“basic EPS”) is computed by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings (loss) per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding. As the Company is in a net loss position for all periods presented, all potential shares outstanding are anti-dilutive. The following table provides the computation of basic and diluted loss per share. Three Months Ended (in thousands, except per share data) 2022 2021 Numerator: Net loss attributable to stockholders $ (5,945) $ (4,901) Denominator: Weighted average shares outstanding - basic and diluted 34,429 34,302 Loss per share: Basic and diluted $ (0.17) $ (0.14) Anti-dilutive instruments excluded from diluted loss per common share: Options 6,796 5,559

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2022
Share-based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION Under the Company's stock option plans, the Board of Directors may grant restricted stock and options to purchase common shares to the Company's employees, officers, directors and consultants. The Company accounts for stock options in accordance with FASB ASC Topic 718, Compensation - Stock Compensation , with stock-based compensation expense recognized over the vesting period based on the fair value on the grant date utilizing the Black Scholes model, which includes a number of estimates that affect the grant date fair value and the amount of expense to recognize. The Company recognized approximately $1,650,000 in stock-based compensation expense for the three months ended March 31, 2022, as compared with $1,194,000 for the three months ended March 31, 2021. Stock option activity is summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2021 5,397,691 $ 5.95 Granted 1,478,419 10.96 Exercised (65,840) 5.96 Canceled and forfeited (14,526) 10.23 Outstanding at March 31, 2022 6,795,744 $ 7.03 The Company allows stock option holders to exercise stock-based awards by surrendering stock-based awards with an intrinsic value equal to the cumulative exercise price of the stock-based awards being exercised, referred to as net settlements. These surrenders are included in stock options exercised in the options rollforward above. For the three months ended March 31, 2022 and 2021, respectively, we received 22,654 and 15,441 options as payment in the exercise of 19,013 and 21,141 options. Common shares required to be issued upon the exercise of stock options would be issued from authorized and unissued shares. The Company calculated the grant date fair value of options granted in 2022 ("2022 Grants") utilizing a Black Scholes model. 2022 Grants Strike price $10.96 Risk-free rate 1.6% Expected dividend yield — Expected volatility 69.6% Expected term (in years) 6

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Income tax expense was approximately $70,000 and $66,000 with effective tax rates of (1.2)% and (1.4)% for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022 and 2021, the effective rates differ from the statutory rate primarily due to the full valuation allowance recorded on the NOL generated during the period, combined with interest and penalties on uncertain tax positions.The Company has gross unrecognized tax benefits of approximately $1,313,000 at March 31, 2022. It recognized accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the condensed consolidated financial statements. As of March 31, 2022, the Company had approximately $603,000 in accrued interest and penalties related to unrecognized tax benefits. Included in the income tax expense (benefit) for the three months ended March 31, 2022 and 2021, respectively, are approximately $53,000 and $48,000 of interest and penalties on the Company's uncertain tax positions. If the Company were to prevail on all uncertain tax positions, the resulting impact will be material as the Company will recognize approximately $1,916,000 of income tax benefits in the consolidated statement of operations. It is expected that all of the uncertain tax positions should be resolved by October 2022.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Litigation The medical device industry is characterized by frequent claims and litigation, and the Company may become subject to various claims, lawsuits and proceedings in the ordinary course of our business. Such claims may include claims by current or former employees, distributors and competitors, claims concerning the marketing and promotion of our products and product liability claims. The Company is involved in a number of legal actions relating to the use of our Helium Plasma technology. The outcomes of these legal actions are not within the Company’s control and may not be known for prolonged periods of time. It believes that such claims are adequately covered by insurance; however, in the case of one of the Company’s carriers, the Company is in a dispute regarding the total level of coverage available. Notwithstanding the foregoing, in the opinion of management, the Company has meritorious defenses, and such claims are not expected, individually or in the aggregate, to result in a material, adverse effect on its financial condition, results of operations and cash flows. However, in the event that damages exceed the aggregate coverage limits of the Company’s policies or if its insurance carriers disclaim coverage, management believes it is possible that costs associated with these claims could have a material adverse impact on the consolidated financial condition, results of operations and cash flows. The Company accrues a liability in its consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded, actual results may differ from these estimates. During December 2021, the Company provided notice of contract termination to an international distributor of the Company. In March 2022, the Company received a letter from the former distributor citing improper contract termination and alleging damages. While the matter is still in the early stages, management has determined that a loss is probable and that a range of estimated losses is approximately $250,000 to $1,000,000. The Company has recorded an estimated loss of $250,000 in professional services in the accompanying Condensed Consolidated Statement of Operations for the three months ended March 31, 2022. It is at least possible that a change in the actual amount of loss will occur in the near term, though management expects the actual amount of loss will be within the estimated range of losses. Purchase Commitments At March 31, 2022, the Company had purchase commitments totaling approximately $7.5 million, substantially all of which is expected to be purchased within the next twelve months.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2022
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS Several relatives of Nikolay Shilev, Apyx Bulgaria’s Managing Director, are considered related parties. Teodora Shileva, Mr. Shilev’s spouse, is an employee of the Company working in the accounting department. Antoaneta Dimitrova Shileva-Toromanova, Mr. Shilev’s sister, is the manager of human resources. Svetoslav Shilev, Mr. Shilev’s son, is a quality manager in the quality assurance department. The partner in the Company's China JV is also a supplier to the Company. For the three months ended March 31, 2022 and 2021, the Company made purchases from this supplier of approximately $124,000 and $116,000, respectively. At March 31, 2022 and December 31, 2021, respectively, the Company owed this supplier approximately $10,000 and $1,000.

GEOGRAPHIC AND SEGMENT INFORMAT

GEOGRAPHIC AND SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2022
Segment Reporting [Abstract]
GEOGRAPHIC AND SEGMENT INFORMATION	GEOGRAPHIC AND SEGMENT INFORMATION Operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics, the Company also considers the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to its chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Asset information is not reviewed by the chief operating decision maker by segment and is not available by segment, accordingly, the Company has not presented a measure of assets by segment. The Company's reportable segments are disclosed as principally organized and managed as two operating segments: Advanced Energy and OEM. "Corporate & Other" includes certain unallocated corporate and administrative costs which were not specifically attributed to any reportable segment. The OEM segment is primarily development and manufacturing contract and product driven, all related expenses are recorded as cost of sales, therefore no segment specific operating expenses are incurred. Summarized financial information with respect to reportable segments is as follows: Three Months Ended March 31, 2022 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 10,814 $ 1,679 $ — $ 12,493 Income (loss) from operations (1,339) 317 (4,849) (5,871) Interest income — — 2 2 Interest expense — — (8) (8) Other loss, net — — (21) (21) Income tax expense — — 70 70 Three Months Ended March 31, 2021 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 7,660 $ 978 $ — $ 8,638 Loss from operations (602) (3) (4,140) (4,745) Interest income — — 3 3 Interest expense — — (4) (4) Other loss, net — — (93) (93) Income tax expense — — 66 66 International sales represented approximately 39.6% of total revenues for the three months ended March 31, 2022, as compared with approximately 35.6% of total revenues for the three months ended March 31, 2021. Revenue by geographic region, based on the customer's “ship to” location on the invoice, are as follows: Three Months Ended (In thousands) 2022 2021 Sales by Domestic and International Domestic $ 7,548 $ 5,566 International 4,945 3,072 Total $ 12,493 $ 8,638

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reclassifications	Reclassifications We have reclassified certain amounts presented in the prior period to conform to the current period presentation. These reclassifications had no impact on previously reported net loss, retained earnings or net cash used in operating activities for the periods presented.
Recent Accounting Pronouncements	In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, contract assets, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update, as originally issued, was effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates , which deferred the effective dates of these standards for Smaller Reporting Companies until fiscal years beginning after December 15, 2022. The Company currently expects to continue to qualify as a Smaller Reporting Company, based upon the current SEC definition, and as a result, will be utilizing the deferred elective date. While we are in the process of determining the effects of the adoption of the standard on the condensed consolidated financial statements, we do not expect the impact to be material. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.
Inventories	Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are primarily allocated to inventory manufactured in-house based upon direct labor hours.
Share based compensation	Under the Company's stock option plans, the Board of Directors may grant restricted stock and options to purchase common shares to the Company's employees, officers, directors and consultants. The Company accounts for stock options in accordance with FASB ASC Topic 718, Compensation - Stock Compensation , with stock-based compensation expense recognized over the vesting period based on the fair value on the grant date utilizing the Black Scholes model, which includes a number of estimates that affect the grant date fair value and the amount of expense to recognize.

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2022
Inventory Disclosure [Abstract]
Schedule of inventory	Inventories consisted of the following: (In thousands) March 31, December 31, Raw materials $ 3,487 $ 3,603 Work in process 1,818 1,441 Finished goods 2,062 1,997 Gross inventories 7,367 7,041 Less: provision for obsolescence (348) (263) Inventories, net $ 7,019 $ 6,778

ACCRUED EXPENSES AND OTHER CU_2

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)	3 Months Ended
	Mar. 31, 2022
Payables and Accruals [Abstract]
Schedule of Accounts Payable and Accrued Liabilities	Accrued expenses and other current liabilities consisted of the following: (in thousands) March 31, December 31, Accrued payroll $ 855 $ 546 Accrued bonuses 571 2,117 Accrued commissions 954 1,656 Accrued product warranties 593 593 Accrued product liability claim insurance deductibles 597 610 Short-term contract liabilities 759 533 Joint and several payroll liability 986 1,027 Uncertain tax positions 1,916 1,863 Sales tax payable 163 428 Other accrued expenses and current liabilities 1,443 914 Total accrued expenses and other current liabilities $ 8,837 $ 10,287

CHINA JOINT VENTURE (Tables)

CHINA JOINT VENTURE (Tables)	3 Months Ended
	Mar. 31, 2022
Noncontrolling Interest [Abstract]
Schedule of China Joint Venture	Changes in the Company's investment in the China JV were as follows: Three Months Ended March 31, (In thousands) 2022 2021 Beginning interest in China JV $ 317 $ 144 Net loss attributable to Apyx (23) (4) Ending interest in China JV $ 294 $ 140

EARNINGS (LOSS) PER SHARE (Tabl

EARNINGS (LOSS) PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2022
Earnings Per Share [Abstract]
Basic and diluted earnings (loss) per share	The following table provides the computation of basic and diluted loss per share. Three Months Ended (in thousands, except per share data) 2022 2021 Numerator: Net loss attributable to stockholders $ (5,945) $ (4,901) Denominator: Weighted average shares outstanding - basic and diluted 34,429 34,302 Loss per share: Basic and diluted $ (0.17) $ (0.14) Anti-dilutive instruments excluded from diluted loss per common share: Options 6,796 5,559

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2022
Share-based Payment Arrangement [Abstract]
Summary of stock options and stock awards	Stock option activity is summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2021 5,397,691 $ 5.95 Granted 1,478,419 10.96 Exercised (65,840) 5.96 Canceled and forfeited (14,526) 10.23 Outstanding at March 31, 2022 6,795,744 $ 7.03
Schedule of option fair value assumptions	The Company calculated the grant date fair value of options granted in 2022 ("2022 Grants") utilizing a Black Scholes model. 2022 Grants Strike price $10.96 Risk-free rate 1.6% Expected dividend yield — Expected volatility 69.6% Expected term (in years) 6

GEOGRAPHIC AND SEGMENT INFORM_2

GEOGRAPHIC AND SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2022
Segment Reporting [Abstract]
Schedule of reporting information by segment	Summarized financial information with respect to reportable segments is as follows: Three Months Ended March 31, 2022 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 10,814 $ 1,679 $ — $ 12,493 Income (loss) from operations (1,339) 317 (4,849) (5,871) Interest income — — 2 2 Interest expense — — (8) (8) Other loss, net — — (21) (21) Income tax expense — — 70 70 Three Months Ended March 31, 2021 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 7,660 $ 978 $ — $ 8,638 Loss from operations (602) (3) (4,140) (4,745) Interest income — — 3 3 Interest expense — — (4) (4) Other loss, net — — (93) (93) Income tax expense — — 66 66
Schedule of revenue by geographic area	Revenue by geographic region, based on the customer's “ship to” location on the invoice, are as follows: Three Months Ended (In thousands) 2022 2021 Sales by Domestic and International Domestic $ 7,548 $ 5,566 International 4,945 3,072 Total $ 12,493 $ 8,638

DISPOSAL OF BUSINESS (Details)

DISPOSAL OF BUSINESS (Details) - USD ($) $ in Millions	Aug. 30, 2018	Mar. 31, 2022	Mar. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from the disposition of Core business	$ 97
Symmetry Surgical Inc. | Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Asset purchase agreement, term	4 years
Sales		$ 0.5	$ 1.5
Cost of sales		0.4	1.2
Operating expenses		0.1	0.3
Net other loss		$ 0	$ 0.1

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 3,487	$ 3,603
Work in process	1,818	1,441
Finished goods	2,062	1,997
Gross inventories	7,367	7,041
Less: provision for obsolescence	(348)	(263)
Inventories, net	$ 7,019	$ 6,778

ACCRUED EXPENSES AND OTHER CU_3

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued payroll	$ 855	$ 546
Accrued bonuses	571	2,117
Accrued commissions	954	1,656
Accrued product warranties	593	593
Accrued product liability claim insurance deductibles	597	610
Short-term contract liabilities	759	533
Joint and several payroll liability	986	1,027
Uncertain tax positions	1,916	1,863
Sales tax payable	163	428
Other accrued expenses and current liabilities	1,443	914
Total accrued expenses and other current liabilities	$ 8,837	$ 10,287

ACCRUED EXPENSES AND OTHER CU_4

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Narrative (Details) $ in Thousands	1 Months Ended
	Apr. 30, 2022USD ($)
Subsequent Event
Subsequent Event [Line Items]
Joint and several payroll liability, reversal	$ 650

CHINA JOINT VENTURE - Narrative

CHINA JOINT VENTURE - Narrative (Details) $ in Thousands	Dec. 31, 2019USD ($)
Noncontrolling Interest [Line Items]
Required capital contribution	$ 357
Chinese Supplier
Noncontrolling Interest [Line Items]
Ownership interest	51.00%

CHINA JOINT VENTURE - Rollforwa

CHINA JOINT VENTURE - Rollforward of Joint Venture (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Beginning interest in China JV	$ 305
Net loss attributable to Apyx	(23)	$ (4)
Ending interest in China JV	282
Corporate Joint Venture
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Beginning interest in China JV	317	144
Net loss attributable to Apyx	(23)	(4)
Ending interest in China JV	$ 294	$ 140

EARNINGS (LOSS) PER SHARE (Deta

EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share Reconciliation [Abstract]
Net loss attributable to stockholders, basic	$ (5,945)	$ (4,901)
Net loss attributable to stockholders, diluted	$ (5,945)	$ (4,901)
Denominator:
Weighted average shares outstanding - basic (in shares)	34,429	34,302
Weighted average shares outstanding - diluted (in shares)	34,429	34,302
Loss per share:
Basic (in dollars per share)	$ (0.17)	$ (0.14)
Diluted (in dollars per share)	$ (0.17)	$ (0.14)
Options
Anti-dilutive instruments excluded from diluted loss per common share:
Anti-dilutive instruments (in shares)	6,796	5,559

STOCK-BASED COMPENSATION - Narr

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Stock based compensation	$ 1,650	$ 1,194
Stock swaps equity instruments received (in shares)	22,654	15,441
Stock swaps (in shares)	19,013	21,141

STOCK-BASED COMPENSATION - Summ

STOCK-BASED COMPENSATION - Summary of Stock Options (Details)	3 Months Ended
	Mar. 31, 2022$ / sharesshares
Number of options
Outstanding, beginning of period (in shares) | shares	5,397,691
Granted (in shares) | shares	1,478,419
Exercised (in shares) | shares	(65,840)
Canceled and forfeited (in shares) | shares	(14,526)
Outstanding, end of period (in shares) | shares	6,795,744
Weighted average exercise price
Outstanding, beginning of period (in dollars per share) | $ / shares	$ 5.95
Granted (in dollars per share) | $ / shares	10.96
Exercised (in dollars per share) | $ / shares	5.96
Canceled and forfeited (in dollars per shares) | $ / shares	10.23
Outstanding, end of period (in dollars per share) | $ / shares	$ 7.03

STOCK-BASED COMPENSATION - Fair

STOCK-BASED COMPENSATION - Fair Value Assumptions (Details)	3 Months Ended
	Mar. 31, 2022$ / shares
Share-based Payment Arrangement [Abstract]
Strike price (in dollars per share)	$ 10.96
Risk-free rate	1.60%
Expected dividend yield	0.00%
Expected volatility	69.60%
Expected term (in years)	6 years

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 70	$ 66
Effective income tax rate	(1.20%)	(1.40%)
Unrecognized tax benefits	$ 1,313
Accrued interest and penalties	603
Interest and penalties included in income tax expense	53	$ 48
Uncertain tax positions that would impact effective tax rate	$ 1,916

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Loss Contingencies [Line Items]
Costs accrued	$ 250
Purchase obligation	$ 7,500
Minimum
Loss Contingencies [Line Items]
Estimate of possible loss		$ 250
Maximum
Loss Contingencies [Line Items]
Estimate of possible loss		$ 1,000

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - Co-venturer - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Related Party Transaction [Line Items]
Purchases from related party	$ 124	$ 116
Due to related parties	$ 10		$ 1

GEOGRAPHIC AND SEGMENT INFORM_3

GEOGRAPHIC AND SEGMENT INFORMATION - Narrative (Details) - segment	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting [Abstract]
Number of reportable segments	2
Number of operating segments	2
International sales, percent of total revenue	39.60%	35.60%

GEOGRAPHIC AND SEGMENT INFORM_4

GEOGRAPHIC AND SEGMENT INFORMATION - Reportable Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Sales	$ 12,493	$ 8,638
Loss from operations	(5,871)	(4,745)
Interest income	2	3
Interest expense	(8)	(4)
Other income (loss), net	(21)	(93)
Income tax (benefit) expense	70	66
Operating Segments | Advanced Energy
Segment Reporting Information [Line Items]
Sales	10,814	7,660
Loss from operations	(1,339)	(602)
Interest income	0	0
Interest expense	0	0
Other income (loss), net	0	0
Income tax (benefit) expense	0	0
Operating Segments | OEM
Segment Reporting Information [Line Items]
Sales	1,679	978
Loss from operations	317	(3)
Interest income	0	0
Interest expense	0	0
Other income (loss), net	0	0
Income tax (benefit) expense	0	0
Corporate & Other
Segment Reporting Information [Line Items]
Sales	0	0
Loss from operations	(4,849)	(4,140)
Interest income	2	3
Interest expense	(8)	(4)
Other income (loss), net	(21)	(93)
Income tax (benefit) expense	$ 70	$ 66

GEOGRAPHIC AND SEGMENT INFORM_5

GEOGRAPHIC AND SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Sales	$ 12,493	$ 8,638
Domestic
Segment Reporting Information [Line Items]
Sales	7,548	5,566
International
Segment Reporting Information [Line Items]
Sales	$ 4,945	$ 3,072