Apyx Medical(APYX) - 2025 Q2 - Quarterly Report

PART I. Financial Information Presents unaudited consolidated financial statements and management's discussion of financial condition and operations ITEM 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements of Apyx Medical Corporation for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes explaining the basis of presentation, recent accounting pronouncements, and specific financial line items Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total current assets | $49,915 | $56,440 | | Total assets | $58,188 | $64,842 | | Total current liabilities | $10,566 | $10,721 | | Total liabilities | $50,732 | $50,507 | | Total stockholders' equity | $7,253 | $14,210 | | Total equity | $7,456 | $14,335 | - Total assets decreased by approximately $6.65 million from December 31, 2024, to June 30, 2025, primarily driven by a reduction in current assets, including cash and cash equivalents and trade accounts receivable[8] - Total equity significantly decreased from $14.335 million at December 31, 2024, to $7.456 million at June 30, 2025, largely due to an accumulated deficit[8] Condensed Consolidated Statements of Operations This section details the company's financial performance over specific periods, including sales, gross profit, and net loss Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales | $11,373 | $12,149 | $20,803 | $22,393 | | Gross profit | $7,083 | $7,493 | $12,748 | $13,442 | | Loss from operations | $(2,574) | $(5,547) | $(5,625) | $(12,162) | | Net loss attributable to stockholders | $(3,778) | $(6,556) | $(7,928) | $(14,132) | | Basic and diluted loss per share | $(0.09) | $(0.19) | $(0.19) | $(0.41) | - Sales decreased by 6.4% for the three months ended June 30, 2025, and by 7.1% for the six months ended June 30, 2025, compared to the prior year periods[11] - Net loss attributable to stockholders significantly improved, decreasing from $(6,556) thousand to $(3,778) thousand for the three months ended June 30, 2025, and from $(14,132) thousand to $(7,928) thousand for the six months ended June 30, 2025, primarily due to reduced operating expenses[11] Condensed Consolidated Statements of Changes in Equity This section outlines the changes in the company's equity components, including common stock, additional paid-in capital, and accumulated deficit Condensed Consolidated Statements of Changes in Equity (in thousands) | Metric (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :-------------------- | :---------------------- | :----------------------- | | Common Stock Par Value | $38 | $38 | | Additional Paid-In Capital | $92,083 | $93,054 | | Accumulated Deficit | $(77,911) | $(85,839) | | Non-controlling Interest | $125 | $203 | | Total Equity | $14,335 | $7,456 | - Total equity decreased by $6,879 thousand from December 31, 2024, to June 30, 2025, primarily due to net losses, partially offset by stock-based compensation and contributions from non-controlling interest[13] Condensed Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities, reflecting the company's liquidity Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(1,935) | $(10,670) | | Net cash used in investing activities | $(320) | $(324) | | Net cash provided by (used in) financing activities | $50 | $(10) | | Net change in cash and cash equivalents | $(2,440) | $(10,974) | | Cash and cash equivalents, end of period | $29,301 | $32,678 | - Net cash used in operating activities significantly decreased from $(10.67) million in H1 2024 to $(1.935) million in H1 2025, driven by improved accounts receivable and reduced operating losses[16][95] - Cash and cash equivalents decreased by $2.44 million in H1 2025, ending the period at $29.301 million[16][94] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the financial statements, covering accounting policies and specific line items NOTE 1. BASIS OF PRESENTATION Apyx Medical Corporation, incorporated in 1982, is an advanced energy technology company specializing in Helium Plasma Platform Technology products (Renuvion® and J-Plasma®) for cosmetic and hospital surgical markets, and OEM agreements. The company received 510(k) clearance for its AYON Body Contouring System™ in May 2025, with a commercial launch planned for H2 2025. Despite recurring net losses and cash outflows, the company plans to fund operations through existing cash, product sales, and potential additional financing. A cost-saving restructuring in November 2024, including a 25% workforce reduction, is expected to yield $4.3 million in annualized savings and reduce annual operating expenses below $40 million in fiscal 2025 - Apyx Medical Corporation received 510(k) clearance from the FDA for its AYON Body Contouring System™ on May 13, 2025, with commercial launch anticipated in the second half of 2025[21][68] - The company implemented a cost-saving restructuring in November 2024, reducing its US workforce by nearly 25%, with estimated annualized future cost savings of approximately $4.3 million[24][71] - Total annual operating expenses are projected to be reduced below $40 million in fiscal 2025 due to identified cost savings, including reductions in professional fees, R&D, credit card fees, and stock-based compensation[24][71] NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS The company adopted ASU 2023-09, Income Taxes (Topic 740), on January 1, 2025, expecting incremental disclosures in its 2025 Annual Report. It is currently evaluating the impact of ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), effective for fiscal years beginning after December 15, 2026 - The Company adopted ASU 2023-09, Income Taxes (Topic 740), on January 1, 2025, which will lead to incremental disclosures in its 2025 Annual Report on Form 10-K[25] - The Company is evaluating the impact of ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), effective for fiscal years beginning after December 15, 2026[26](index=