Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 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 | 34,573,034 | |
Entity Central Index Key | 0000719135 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 20,063 | $ 30,870 |
Trade accounts receivable, net of allowance of $629 and $430 | 10,340 | 13,038 |
Income tax receivables | 7,642 | 7,642 |
Other receivables | 33 | 483 |
Inventories, net of provision for obsolescence of $360 and $263 | 9,677 | 6,778 |
Prepaid expenses and other current assets | 2,770 | 1,926 |
Total current assets | 50,525 | 60,737 |
Property and equipment, net of accumulated depreciation and amortization of $5,245 and $5,316 | 6,842 | 6,575 |
Operating lease right-of-use assets | 659 | 121 |
Finance lease right-of-use assets | 176 | 178 |
Other assets | 1,269 | 1,110 |
Total assets | 59,471 | 68,721 |
Current liabilities: | ||
Accounts payable | 2,587 | 2,631 |
Accrued expenses and other current liabilities | 8,570 | 10,287 |
Current portion of operating lease liabilities | 110 | 122 |
Current portion of finance lease liabilities | 85 | 165 |
Total current liabilities | 11,352 | 13,205 |
Long-term operating lease liabilities | 514 | 0 |
Long-term finance lease liabilities | 93 | 18 |
Long-term contract liabilities | 1,207 | 1,323 |
Other liabilities | 142 | 166 |
Total liabilities | 13,308 | 14,712 |
EQUITY | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,493,085 issued and outstanding as of June 30, 2022, and 34,409,912 issued and outstanding as of December 31, 2021 | 34 | 34 |
Additional paid-in capital | 69,793 | 66,221 |
Accumulated deficit | (23,922) | (12,551) |
Total stockholders’ equity | 45,905 | 53,704 |
Non-controlling interest | 258 | 305 |
Total equity | 46,163 | 54,009 |
Total liabilities and equity | $ 59,471 | $ 68,721 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 629 | $ 430 |
Inventories, provision for obsolescence | 360 | 263 |
Accumulated depreciation and amortization | $ 5,245 | $ 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) | 34,493,085 | 34,409,912 |
Common stock, shares outstanding (in shares) | 34,493,085 | 34,409,912 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 10,292 | $ 11,224 | $ 22,785 | $ 19,862 |
Cost of sales | 3,378 | 3,690 | 7,652 | 6,468 |
Gross profit | 6,914 | 7,534 | 15,133 | 13,394 |
Other costs and expenses: | ||||
Research and development | 1,070 | 1,084 | 2,228 | 2,199 |
Professional services | 2,389 | 1,889 | 4,675 | 3,410 |
Salaries and related costs | 4,892 | 4,343 | 10,073 | 8,588 |
Selling, general and administrative | 4,539 | 4,261 | 10,004 | 7,985 |
Total other costs and expenses | 12,890 | 11,577 | 26,980 | 22,182 |
Loss from operations | (5,976) | (4,043) | (11,847) | (8,788) |
Interest income | 18 | 4 | 20 | 7 |
Interest expense | (3) | (2) | (11) | (6) |
Other income, net | 607 | 97 | 586 | 4 |
Total other income, net | 622 | 99 | 595 | 5 |
Loss before income taxes | (5,354) | (3,944) | (11,252) | (8,783) |
Income tax expense | 96 | 107 | 166 | 173 |
Net loss | (5,450) | (4,051) | (11,418) | (8,956) |
Net loss attributable to non-controlling interest | (24) | (5) | (47) | (9) |
Net loss attributable to stockholders | $ (5,426) | $ (4,046) | $ (11,371) | $ (8,947) |
Loss per share: | ||||
Basic (in dollars per share) | $ (0.16) | $ (0.12) | $ (0.33) | $ (0.26) |
Diluted (in dollars per share) | $ (0.16) | $ (0.12) | $ (0.33) | $ (0.26) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | 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] | |||||
Contributions from non-controlling interest | 195 | 195 | |||
Shares issued on stock options exercises for cash (in shares) | 8 | ||||
Shares issued on stock options exercises for cash | 21 | 21 | |||
Stock based compensation | 2,563 | 2,563 | |||
Shares issued on net settlement of stock options (in shares) | 26 | ||||
Net loss | (8,956) | (8,947) | (9) | ||
Ending balance (in shares) at Jun. 30, 2021 | 34,323 | ||||
Ending balance at Jun. 30, 2021 | 57,682 | $ 34 | 63,650 | (6,326) | 324 |
Beginning balance (in shares) at Mar. 31, 2021 | 34,318 | ||||
Beginning balance at Mar. 31, 2021 | 60,169 | $ 34 | 62,281 | (2,280) | 134 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Contributions from non-controlling interest | 195 | 195 | |||
Stock based compensation | 1,369 | 1,369 | |||
Shares issued on net settlement of stock options (in shares) | 5 | ||||
Net loss | (4,051) | (4,046) | (5) | ||
Ending balance (in shares) at Jun. 30, 2021 | 34,323 | ||||
Ending balance at Jun. 30, 2021 | 57,682 | $ 34 | 63,650 | (6,326) | 324 |
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) | 44 | ||||
Shares issued on stock options exercises for cash | 208 | 208 | |||
Stock based compensation | 3,364 | 3,364 | |||
Shares issued on net settlement of stock options (in shares) | 39 | ||||
Net loss | (11,418) | (11,371) | (47) | ||
Ending balance (in shares) at Jun. 30, 2022 | 34,493 | ||||
Ending balance at Jun. 30, 2022 | 46,163 | $ 34 | 69,793 | (23,922) | 258 |
Beginning balance (in shares) at Mar. 31, 2022 | 34,453 | ||||
Beginning balance at Mar. 31, 2022 | 49,843 | $ 34 | 68,023 | (18,496) | 282 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued on stock options exercises for cash (in shares) | 20 | ||||
Shares issued on stock options exercises for cash | 56 | 56 | |||
Stock based compensation | 1,714 | 1,714 | |||
Shares issued on net settlement of stock options (in shares) | 20 | ||||
Net loss | (5,450) | (5,426) | (24) | ||
Ending balance (in shares) at Jun. 30, 2022 | 34,493 | ||||
Ending balance at Jun. 30, 2022 | $ 46,163 | $ 34 | $ 69,793 | $ (23,922) | $ 258 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (11,418) | $ (8,956) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 472 | 440 |
Provision for inventory obsolescence | 139 | 13 |
Loss on disposal of property and equipment | 47 | 0 |
Stock based compensation | 3,364 | 2,563 |
Provision for allowance for doubtful accounts | 284 | 46 |
Changes in operating assets and liabilities: | ||
Trade receivables | 2,236 | (656) |
Prepaid expenses and other assets | (549) | (1,160) |
Inventories | (3,187) | (1,198) |
Accounts payable | 33 | 1,296 |
Accrued and other liabilities | (1,811) | 554 |
Net cash used in operating activities | (10,390) | (7,058) |
Cash flows from investing activities | ||
Purchases of property and equipment | (680) | (221) |
Net cash used in investing activities | (680) | (221) |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 208 | 21 |
Repayment of finance lease liabilities | (108) | (120) |
Contributions from non-controlling interests | 0 | 195 |
Net cash provided by financing activities | 100 | 96 |
Effect of exchange rates on cash | 163 | (62) |
Net change in cash and cash equivalents | (10,807) | (7,245) |
Cash and cash equivalents, beginning of period | 30,870 | 41,915 |
Cash and cash equivalents, end of period | 20,063 | 34,670 |
Cash paid for: | ||
Interest | 11 | 4 |
Income taxes | 8 | 13 |
Non cash activities: | ||
Right-of-use assets capitalized and operating lease liabilities recognized upon lease modification | 600 | 0 |
Right-of-use assets capitalized and finance lease liabilities recognized upon execution of lease | $ 103 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 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® in the cosmetic surgery 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. 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 experienced slowed demand for the adoption of its Helium Plasma Technology. On May 26, 2022, the Company announced that it had received 510(k) clearance from the FDA for the use of the Renuvion® Dermal Handpiece for specific dermal resurfacing procedures. On July 18, 2022, the Company announced that it had received 510(k) clearance from the FDA for the use of the Renuvion® APR Handpiece for certain skin contraction procedures. Management believes that receiving these clearances should materially mitigate the financial effects of the Safety Communication in future periods. On June 2, 2022, and July 21, 2022, 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 handpieces. 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 handpieces now addresses improving 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 our Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management these condensed consolidated financial statements reflect all adjustments that are necessary for a fair presentation of results of consolidated operations 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 | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSAL OF BUSINESS | DISPOSAL OF BUSINESS On 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 pro ducts 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 June 30, 2022, amounted to $0.0 million with cost of sales equivalents of $0.0 million and other related expenses of $0.1 million for approximately no net other income (loss). Core activity for the three months ended June 30, 2021, amounted to $2.2 million with cost of sales equivalents of $1.8 million and related other expenses of $0.3 million for net other income of $0.1 million. Core activity for the six months ended June 30, 2022 , amounted to $0.6 million with cost of sales equivalents of $0.5 million and other related expenses of $0.1 million for net other loss of $0.1 million. Core activity for the six months ended June 30, 2021 , amounted to $3.6 million with cost of sales equivalents of $3.0 million and net other related operating expenses of $0.6 million for approximately no net other income. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 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) June 30, December 31, Raw materials $ 4,547 $ 3,603 Work in process 2,192 1,441 Finished goods 3,298 1,997 Gross inventories 10,037 7,041 Less: provision for obsolescence (360) (263) Inventories, net $ 9,677 $ 6,778 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES Operating Leases The Company leases its facility in Sofia, Bulgaria and vehicles in Clearwater, Florida under non-cancelable operating lease agreements. During the three months ended June 30, 2022, the Company entered into a five year extension of its Sofia, Bulgaria facility. These operating leases have terms expiring through December 2027. Finance Leases The Company has entered into non-cancelable finance leases for certain computer equipment and a vehicle in Clearwater, Florida. During the three months ended June 30, 2022, the Company entered into a 63 month lease for computer equipment. These finance leases have terms expiring through July 2027. Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: June 30, 2022 December 31, 2021 Operating Finance Operating Finance Weighted average remaining lease term (in years) 5.5 3.2 1.0 0.8 Weighted average discount rate 1.83% 3.04% 3.98% 4.00% Maturities of lease liabilities as of June 30, 2022 are as follows: (In thousands) Operating Finance 2022 $ 61 $ 70 2023 119 40 2024 119 21 2025 119 21 2026 119 21 Thereafter 119 12 Total lease payments 656 185 Less imputed interest (32) (7) Present value of lease liabilities 624 178 Less current portion of lease liabilities (110) (85) Long-term portion of lease liabilities $ 514 $ 93 |
LEASES | LEASES Operating Leases The Company leases its facility in Sofia, Bulgaria and vehicles in Clearwater, Florida under non-cancelable operating lease agreements. During the three months ended June 30, 2022, the Company entered into a five year extension of its Sofia, Bulgaria facility. These operating leases have terms expiring through December 2027. Finance Leases The Company has entered into non-cancelable finance leases for certain computer equipment and a vehicle in Clearwater, Florida. During the three months ended June 30, 2022, the Company entered into a 63 month lease for computer equipment. These finance leases have terms expiring through July 2027. Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: June 30, 2022 December 31, 2021 Operating Finance Operating Finance Weighted average remaining lease term (in years) 5.5 3.2 1.0 0.8 Weighted average discount rate 1.83% 3.04% 3.98% 4.00% Maturities of lease liabilities as of June 30, 2022 are as follows: (In thousands) Operating Finance 2022 $ 61 $ 70 2023 119 40 2024 119 21 2025 119 21 2026 119 21 Thereafter 119 12 Total lease payments 656 185 Less imputed interest (32) (7) Present value of lease liabilities 624 178 Less current portion of lease liabilities (110) (85) Long-term portion of lease liabilities $ 514 $ 93 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 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) June 30, December 31, Accrued payroll $ 621 $ 546 Accrued bonuses 802 2,117 Accrued commissions 1,074 1,656 Accrued product warranties 611 593 Accrued product liability claim insurance deductibles 597 610 Accrued professional fees and legal related contingent liabilities 1,091 421 Joint and several payroll liability 405 1,027 Short-term contract liabilities 821 533 Uncertain tax positions 1,970 1,863 Sales tax payable 143 428 Other accrued expenses and current liabilities 435 493 Total accrued expenses and other current liabilities $ 8,570 $ 10,287 During April 2022, the Company was relieved of approximately $650,000 of its joint and several payroll liability due to the lapse of the statute of limitations on the liability. This adjustment is included in other income, net for the three and six months ended June 30, 2022. |
CHINA JOINT VENTURE
CHINA JOINT VENTURE | 6 Months Ended |
Jun. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
CHINA JOINT VENTURE | CHINA JOINT VENTURE In 2019, the Company executed a joint venture agreement with its Chinese supplier (the “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 June 30, Six Months Ended (In thousands) 2022 2021 2022 2021 Beginning interest in China JV $ 294 $ 140 $ 317 $ 144 Contributions $ — $ 203 $ — $ 203 Net loss attributable to Apyx $ (25) $ (5) $ (48) $ (9) Ending interest in China JV $ 269 $ 338 $ 269 $ 338 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 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 Six Months Ended (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss attributable to stockholders $ (5,426) $ (4,046) $ (11,371) $ (8,947) Denominator: Weighted average shares outstanding - basic and diluted 34,464 34,321 34,447 34,312 Loss per share: Basic and diluted $ (0.16) $ (0.12) $ (0.33) $ (0.26) Anti-dilutive instruments excluded from diluted loss per common share: Options 6,679 5,561 6,679 5,561 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 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 $1,714,000 and $3,364,000, respectively, in stock-based compensation expense during the three and six months ended June 30, 2022, as compared with $1,369,000 and $2,563,000, respectively, for the three and six months ended June 30, 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 (119,840) 4.46 Canceled and forfeited (76,997) 9.81 Outstanding at June 30, 2022 6,679,273 $ 7.04 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 June 30, 2022 and 2021, respectively, we received 14,013 and 6,614 options as payment in the exercise of 19,987 and 4,886 options. For the six months ended June 30, 2022 and 2021, respectively, we received 36,667 and 22,055 options as payment in the exercise of 39,000 and 26,027 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 | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense was approximately $96,000 and $107,000 with effective tax rates of (1.8)% and (2.7)% for the three months ended June 30, 2022 and 2021, respectively. Income tax expense was approximately $166,000 and $173,000 with effective tax rates of (1.5)% and (2.0)% for the six months ended June 30, 2022 and 2021, respectively. For the three and six months ended June 30, 2022 and 2021, the effective rates differ from the statutory rate primarily due to the full valuation allowance recorded on the net operating loss (“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 June 30, 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 June 30, 2022, the Company had approximately $657,000 in accrued interest and penalties related to unrecognized tax benefits. Included in the income tax expense for the three months ended June 30, 2022 and 2021, respectively, are approximately $53,000 and $51,000 of interest and penalties on the Company's uncertain tax positions. Included in the income tax expense for the six months ended June 30, 2022 and 2021, respectively, are approximately $105,000 and $99,000 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 $1,970,000 of income tax benefits in the consolidated statement of operations. During June 2022, the Company was notified by the Internal Revenue Service (“IRS”) that it is examining the Company’s 2018, 2019 and 2020 federal income tax returns. The examination is expected to be completed no later than May 2023. It is expected that all of the uncertain tax positions should be resolved with the completion of the IRS examination. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 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. 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 six months ended June 30, 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. In addition, as previously disclosed with the U.S. Securities and Exchange Commission on the Company’s Current Report on Form 8-K filed June 7, 2022, on June 6, 2022, a complaint (the “Complaint”) was filed in the United States District Court for the Middle District of Florida by plaintiff William E. Hattaway, individually and on behalf of all others similarly situated against the Company, Charles D. Goodwin (“Goodwin”), the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, and Tara Semb (“Semb”), the Company’s Chief Financial Officer, Treasurer and Secretary, alleging violations by the Company, Goodwin and Semb of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, primarily related to certain public statements and disclosures concerning the off-label usage of certain of the Company’s Advanced Energy products and the impact such usage would have on the Company’s business, operations and prospects. The Complaint seeks an unspecified amount of damages. Although the ultimate outcome of this matter cannot be determined with certainty, the Company believes that the allegations stated in the Complaint are without merit. The Company, Goodwin and Semb intend to defend themselves vigorously in the suit. In the opinion of management, such claims are adequately covered by insurance, however, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with this claim could have a material adverse impact on our consolidated results of operations, financial position or cash flows. 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 $475,000 to $2,500,000. The Company has recorded an estimated loss of $475,000 in professional services in the accompanying Condensed Consolidated Statement of Operations for the three and six months ended June 30, 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. 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. Purchase Commitments At June 30, 2022, the Company had purchase commitments totaling approximately $5.6 million, substantially all of which is expected to be purchased within the next eighteen months. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 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 joint venture is also a supplier to the Company. For the three months ended June 30, 2022 and 2021, the Company made purchases from this supplier of approximately $143,000 and $529,000, respectively. For the six months ended June 30, 2022 and 2021, the Company made purchases from this supplier of approximately $370,000 and $646,000, respectively. At June 30, 2022 and December 31, 2021, respectively, the Company owed this supplier approximately $99,000 and $1,000. |
GEOGRAPHIC AND SEGMENT INFORMAT
GEOGRAPHIC AND SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 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 June 30, 2022 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 8,364 $ 1,928 $ — $ 10,292 Income (loss) from operations (1,252) 469 (5,193) (5,976) Interest income — — 18 18 Interest expense — — (3) (3) Other income, net — — 607 607 Income tax expense — — 96 96 Three Months Ended June 30, 2021 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 9,978 $ 1,246 $ — $ 11,224 Income (loss) from operations 326 263 (4,632) (4,043) Interest income — — 4 4 Interest expense — — (2) (2) Other income, net — — 97 97 Income tax expense — — 107 107 Six Months Ended June 30, 2022 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 19,178 $ 3,607 $ — $ 22,785 Income (loss) from operations (2,591) 786 (10,042) (11,847) Interest income — — 20 20 Interest expense — — (11) (11) Other income, net — — 586 586 Income tax expense — — 166 166 Six Months Ended June 30, 2021 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 17,638 $ 2,224 $ — $ 19,862 Income (loss) from operations (276) 260 (8,772) (8,788) Interest income — — 7 7 Interest expense — — (6) (6) Other income, net — — 4 4 Income tax expense — — 173 173 International sales represented approximately 22.8% and 32.0% of total revenues for the three and six months ended June 30, 2022, respectively, as compared with approximately 34.2% and 34.8% of total revenues for the three and six months ended June 30, 2021, respectively. Revenue by geographic region, based on the customer's “ship to” location on the invoice, are as follows: Three Months Ended Six Months Ended (In thousands) 2022 2021 2022 2021 Sales by Domestic and International Domestic $ 7,947 $ 7,383 $ 15,495 $ 12,949 International 2,345 3,841 7,290 6,913 Total $ 10,292 $ 11,224 $ 22,785 $ 19,862 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 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) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consisted of the following: (In thousands) June 30, December 31, Raw materials $ 4,547 $ 3,603 Work in process 2,192 1,441 Finished goods 3,298 1,997 Gross inventories 10,037 7,041 Less: provision for obsolescence (360) (263) Inventories, net $ 9,677 $ 6,778 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Lease Costs | Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: June 30, 2022 December 31, 2021 Operating Finance Operating Finance Weighted average remaining lease term (in years) 5.5 3.2 1.0 0.8 Weighted average discount rate 1.83% 3.04% 3.98% 4.00% |
Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of June 30, 2022 are as follows: (In thousands) Operating Finance 2022 $ 61 $ 70 2023 119 40 2024 119 21 2025 119 21 2026 119 21 Thereafter 119 12 Total lease payments 656 185 Less imputed interest (32) (7) Present value of lease liabilities 624 178 Less current portion of lease liabilities (110) (85) Long-term portion of lease liabilities $ 514 $ 93 |
Maturities of Finance Lease Liabilities | Maturities of lease liabilities as of June 30, 2022 are as follows: (In thousands) Operating Finance 2022 $ 61 $ 70 2023 119 40 2024 119 21 2025 119 21 2026 119 21 Thereafter 119 12 Total lease payments 656 185 Less imputed interest (32) (7) Present value of lease liabilities 624 178 Less current portion of lease liabilities (110) (85) Long-term portion of lease liabilities $ 514 $ 93 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accrued expenses and other current liabilities consisted of the following: (in thousands) June 30, December 31, Accrued payroll $ 621 $ 546 Accrued bonuses 802 2,117 Accrued commissions 1,074 1,656 Accrued product warranties 611 593 Accrued product liability claim insurance deductibles 597 610 Accrued professional fees and legal related contingent liabilities 1,091 421 Joint and several payroll liability 405 1,027 Short-term contract liabilities 821 533 Uncertain tax positions 1,970 1,863 Sales tax payable 143 428 Other accrued expenses and current liabilities 435 493 Total accrued expenses and other current liabilities $ 8,570 $ 10,287 |
CHINA JOINT VENTURE (Tables)
CHINA JOINT VENTURE (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, Six Months Ended (In thousands) 2022 2021 2022 2021 Beginning interest in China JV $ 294 $ 140 $ 317 $ 144 Contributions $ — $ 203 $ — $ 203 Net loss attributable to Apyx $ (25) $ (5) $ (48) $ (9) Ending interest in China JV $ 269 $ 338 $ 269 $ 338 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 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 Six Months Ended (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss attributable to stockholders $ (5,426) $ (4,046) $ (11,371) $ (8,947) Denominator: Weighted average shares outstanding - basic and diluted 34,464 34,321 34,447 34,312 Loss per share: Basic and diluted $ (0.16) $ (0.12) $ (0.33) $ (0.26) Anti-dilutive instruments excluded from diluted loss per common share: Options 6,679 5,561 6,679 5,561 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 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 (119,840) 4.46 Canceled and forfeited (76,997) 9.81 Outstanding at June 30, 2022 6,679,273 $ 7.04 |
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) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of reporting information by segment | Summarized financial information with respect to reportable segments is as follows: Three Months Ended June 30, 2022 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 8,364 $ 1,928 $ — $ 10,292 Income (loss) from operations (1,252) 469 (5,193) (5,976) Interest income — — 18 18 Interest expense — — (3) (3) Other income, net — — 607 607 Income tax expense — — 96 96 Three Months Ended June 30, 2021 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 9,978 $ 1,246 $ — $ 11,224 Income (loss) from operations 326 263 (4,632) (4,043) Interest income — — 4 4 Interest expense — — (2) (2) Other income, net — — 97 97 Income tax expense — — 107 107 Six Months Ended June 30, 2022 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 19,178 $ 3,607 $ — $ 22,785 Income (loss) from operations (2,591) 786 (10,042) (11,847) Interest income — — 20 20 Interest expense — — (11) (11) Other income, net — — 586 586 Income tax expense — — 166 166 Six Months Ended June 30, 2021 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 17,638 $ 2,224 $ — $ 19,862 Income (loss) from operations (276) 260 (8,772) (8,788) Interest income — — 7 7 Interest expense — — (6) (6) Other income, net — — 4 4 Income tax expense — — 173 173 |
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 Six Months Ended (In thousands) 2022 2021 2022 2021 Sales by Domestic and International Domestic $ 7,947 $ 7,383 $ 15,495 $ 12,949 International 2,345 3,841 7,290 6,913 Total $ 10,292 $ 11,224 $ 22,785 $ 19,862 |
DISPOSAL OF BUSINESS (Details)
DISPOSAL OF BUSINESS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 30, 2018 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from the disposition of Core business | $ 97,000,000 | ||||
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 | $ 2,200,000 | $ 600,000 | $ 3,600,000 | |
Cost of sales | 0 | 1,800,000 | 500,000 | 3,000,000 | |
Operating expenses | 100,000 | 300,000 | 100,000 | $ 600,000 | |
Net other income (loss) | $ 0 | $ 100,000 | $ (100,000) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,547 | $ 3,603 |
Work in process | 2,192 | 1,441 |
Finished goods | 3,298 | 1,997 |
Gross inventories | 10,037 | 7,041 |
Less: provision for obsolescence | (360) | (263) |
Inventories, net | $ 9,677 | $ 6,778 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Jun. 30, 2022 |
Leases [Abstract] | |
Operating lease, extension | 5 years |
Finance lease, term of contract | 63 months |
LEASES - Lease Terms and Discou
LEASES - Lease Terms and Discount Rates (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
Operating | ||
Weighted average remaining lease term | 5 years 6 months | 1 year |
Weighted average discount rate | 1.83% | 3.98% |
Finance | ||
Weighted average remaining lease term | 3 years 2 months 12 days | 9 months 18 days |
Weighted average discount rate | 3.04% | 4% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Operating | ||
2022 | $ 61 | |
2023 | 119 | |
2024 | 119 | |
2025 | 119 | |
2026 | 119 | |
Thereafter | 119 | |
Total lease payments | 656 | |
Less imputed interest | (32) | |
Present value of lease liabilities | 624 | |
Less current portion of lease liabilities | (110) | $ (122) |
Long-term portion of lease liabilities | 514 | 0 |
Finance Lease, Liability, Payment, Due [Abstract] | ||
2022 | 70 | |
2023 | 40 | |
2024 | 21 | |
2025 | 21 | |
2026 | 21 | |
Thereafter | 12 | |
Total lease payments | 185 | |
Less imputed interest | (7) | |
Present value of lease liabilities | 178 | |
Less current portion of lease liabilities | (85) | (165) |
Finance Lease, Liability, Noncurrent | $ 93 | $ 18 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | |||
Accrued payroll | $ 621 | $ 546 | |
Accrued bonuses | 802 | 2,117 | |
Accrued commissions | 1,074 | 1,656 | |
Accrued product warranties | 611 | 593 | |
Accrued product liability claim insurance deductibles | 597 | 610 | |
Accrued professional fees and legal related contingent liabilities | 1,091 | 421 | |
Joint and several payroll liability | 405 | $ (650) | 1,027 |
Short-term contract liabilities | 821 | 533 | |
Uncertain tax positions | 1,970 | 1,863 | |
Sales tax payable | 143 | 428 | |
Other accrued expenses and current liabilities | 435 | 493 | |
Total accrued expenses and other current liabilities | $ 8,570 | $ 10,287 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | |||
Joint and several payroll liability | $ (405) | $ 650 | $ (1,027) |
CHINA JOINT VENTURE - Narrative
CHINA JOINT VENTURE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2019 | |
Noncontrolling Interest [Line Items] | ||||||
Contributions from non-controlling interest | $ 195 | $ 195 | ||||
Corporate Joint Venture | ||||||
Noncontrolling Interest [Line Items] | ||||||
Required capital contribution | $ 357 | |||||
Contributions from non-controlling interest | $ 0 | $ 203 | $ 0 | $ 203 | ||
Corporate Joint Venture | Chinese Supplier | ||||||
Noncontrolling Interest [Line Items] | ||||||
Ownership interest | 51% |
CHINA JOINT VENTURE - Rollforwa
CHINA JOINT VENTURE - Rollforward of Joint Venture (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning interest in China JV | $ 305 | |||
Contributions | $ 195 | $ 195 | ||
Net loss attributable to Apyx | $ (24) | (5) | (47) | (9) |
Ending interest in China JV | 258 | 258 | ||
Corporate Joint Venture | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning interest in China JV | 294 | 140 | 317 | 144 |
Contributions | 0 | 203 | 0 | 203 |
Net loss attributable to Apyx | (25) | (5) | (48) | (9) |
Ending interest in China JV | $ 269 | $ 338 | $ 269 | $ 338 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Net loss attributable to stockholders, basic | $ (5,426) | $ (4,046) | $ (11,371) | $ (8,947) |
Net loss attributable to stockholders, diluted | $ (5,426) | $ (4,046) | $ (11,371) | $ (8,947) |
Denominator: | ||||
Weighted average shares outstanding - basic (in shares) | 34,464 | 34,321 | 34,447 | 34,312 |
Weighted average shares outstanding - diluted (in shares) | 34,464 | 34,321 | 34,447 | 34,312 |
Loss per share: | ||||
Basic (in dollars per share) | $ (0.16) | $ (0.12) | $ (0.33) | $ (0.26) |
Diluted (in dollars per share) | $ (0.16) | $ (0.12) | $ (0.33) | $ (0.26) |
Options | ||||
Anti-dilutive instruments excluded from diluted loss per common share: | ||||
Anti-dilutive instruments (in shares) | 6,679 | 5,561 | 6,679 | 5,561 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Stock based compensation | $ 1,714 | $ 1,369 | $ 3,364 | $ 2,563 |
Stock swaps equity instruments received (in shares) | 14,013 | 6,614 | 36,667 | 22,055 |
Stock swaps (in shares) | 19,987 | 4,886 | 39,000 | 26,027 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock Options (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Number of options | |
Outstanding, beginning of period (in shares) | shares | 5,397,691 |
Granted (in shares) | shares | 1,478,419 |
Exercised (in shares) | shares | (119,840) |
Canceled and forfeited (in shares) | shares | (76,997) |
Outstanding, end of period (in shares) | shares | 6,679,273 |
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 | 4.46 |
Canceled and forfeited (in dollars per shares) | $ / shares | 9.81 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 7.04 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value Assumptions (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Strike price (in dollars per share) | $ 10.96 |
Risk-free rate | 1.60% |
Expected dividend yield | 0% |
Expected volatility | 69.60% |
Expected term (in years) | 6 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 96 | $ 107 | $ 166 | $ 173 |
Effective income tax rate | (1.80%) | (2.70%) | (1.50%) | (2.00%) |
Unrecognized tax benefits | $ 1,313 | $ 1,313 | ||
Accrued interest and penalties | 657 | 657 | ||
Interest and penalties included in income tax expense | 53 | $ 51 | 105 | $ 99 |
Uncertain tax positions that would impact effective tax rate | $ 1,970 | $ 1,970 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Loss Contingencies [Line Items] | ||
Purchase obligation | $ 5,600 | |
Contract with International Distributor | ||
Loss Contingencies [Line Items] | ||
Costs accrued | 250 | |
Suit Against Goodwin and Simb | ||
Loss Contingencies [Line Items] | ||
Costs accrued | 475 | |
Minimum | Contract with International Distributor | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | $ 250 | |
Minimum | Suit Against Goodwin and Simb | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | 475 | |
Maximum | Contract with International Distributor | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | $ 1,000 | |
Maximum | Suit Against Goodwin and Simb | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | $ 2,500 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Co-venturer - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Purchases from related party | $ 143 | $ 529 | $ 370 | $ 646 | |
Due to related parties | $ 99 | $ 99 | $ 1 |
GEOGRAPHIC AND SEGMENT INFORM_3
GEOGRAPHIC AND SEGMENT INFORMATION - Narrative (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | 2 | |||
Number of operating segments | 2 | |||
International sales, percent of total revenue | 22.80% | 34.20% | 32% | 34.80% |
GEOGRAPHIC AND SEGMENT INFORM_4
GEOGRAPHIC AND SEGMENT INFORMATION - Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 10,292 | $ 11,224 | $ 22,785 | $ 19,862 |
Income (loss) from operations | (5,976) | (4,043) | (11,847) | (8,788) |
Interest income | 18 | 4 | 20 | 7 |
Interest expense | (3) | (2) | (11) | (6) |
Other income (loss), net | 607 | 97 | 586 | 4 |
Income tax (benefit) expense | 96 | 107 | 166 | 173 |
Operating Segments | Advanced Energy | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 8,364 | 9,978 | 19,178 | 17,638 |
Income (loss) from operations | (1,252) | 326 | (2,591) | (276) |
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other income (loss), net | 0 | 0 | 0 | 0 |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Operating Segments | OEM | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,928 | 1,246 | 3,607 | 2,224 |
Income (loss) from operations | 469 | 263 | 786 | 260 |
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other income (loss), net | 0 | 0 | 0 | 0 |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
Corporate & Other | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Income (loss) from operations | (5,193) | (4,632) | (10,042) | (8,772) |
Interest income | 18 | 4 | 20 | 7 |
Interest expense | (3) | (2) | (11) | (6) |
Other income (loss), net | 607 | 97 | 586 | 4 |
Income tax (benefit) expense | $ 96 | $ 107 | $ 166 | $ 173 |
GEOGRAPHIC AND SEGMENT INFORM_5
GEOGRAPHIC AND SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 10,292 | $ 11,224 | $ 22,785 | $ 19,862 |
Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7,947 | 7,383 | 15,495 | 12,949 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,345 | $ 3,841 | $ 7,290 | $ 6,913 |