Apyx Medical Corp

Quarterly Report • Aug 7, 2025

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _ to ___
Commission File Number: 001-31885

APYX MEDICAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	11-2644611
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5115 Ulmerton Road , Clearwater , FL 33760

(Address of principal executive offices, zip code)

( 727 ) 384-2323

(Registrant’s telephone number)

Securities Registered Pursuant to Section 12 (b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	APYX	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes : ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes : ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No ☒

As of August 5, 2025, 37,819,478 shares of the registrant’s $0.001 par value common stock were outstanding.

Table of Contents

APYX MEDICAL CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended June 30, 2025

Part I.	Financial Information	Page — 2
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024	2
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024	3
	Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	23
Part II.	Other Information	24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
	Signatures	26

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PART I. Financial Information

ITEM 1. Condensed Consolidated Financial Statements

APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	June 30, 2025 — (Unaudited)	December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$ 29,301	$	31,741
Trade accounts receivable, net of allowance of $ 1,050 and $ 1,000	11,248		15,480
Inventories, net of provision for obsolescence of $ 1,132 and $ 1,032	8,192		7,564
Prepaid expenses and other current assets	1,174		1,655
Total current assets	49,915		56,440
Property and equipment, net of accumulated depreciation and amortization of $ 4,120 and $ 3,989	2,048		1,987
Operating lease right-of-use assets	4,464		4,703
Finance lease right-of-use assets	38		48
Other assets	1,723		1,664
Total assets	$ 58,188	$	64,842
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$ 2,893	$	2,615
Accrued expenses and other current liabilities	7,275		7,751
Current portion of operating lease liabilities	378		335
Current portion of finance lease liabilities	20		20
Total current liabilities	10,566		10,721
Long-term debt, net of debt discounts and issuance costs	34,365		33,893
Long-term operating lease liabilities	4,292		4,483
Long-term finance lease liabilities	23		33
Long-term contract liabilities	1,194		1,118
Other liabilities	292		259
Total liabilities	50,732		50,507
EQUITY
Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; 0 issued and outstanding as of June 30, 2025 and December 31, 2024	—		—
Common stock, $ 0.001 par value; 75,000,000 shares authorized; 37,793,886 issued and outstanding as of June 30, 2025, and December 31, 2024	38		38
Additional paid-in capital	93,054		92,083
Accumulated deficit	( 85,839	)	( 77,911	)
Total stockholders’ equity	7,253		14,210
Non-controlling interest	203		125
Total equity	7,456		14,335
Total liabilities and equity	$ 58,188	$	64,842

The accompanying notes are an integral part of the condensed consolidated financial statements.

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APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Sales	$ 11,373		$ 12,149		$ 20,803		$ 22,393
Cost of sales	4,290		4,656		8,055		8,951
Gross profit	7,083		7,493		12,748		13,442
Other costs and expenses:
Research and development	824		1,424		1,628		2,821
Professional services	1,621		2,096		3,070		3,670
Salaries and related costs	3,072		4,682		6,153		9,378
Selling, general and administrative	4,140		4,838		7,522		9,735
Total other costs and expenses	9,657		13,040		18,373		25,604
Loss from operations	( 2,574	)	( 5,547	)	( 5,625	)	( 12,162	)
Interest income	278		439		582		934
Interest expense	( 1,393	)	( 1,427	)	( 2,769	)	( 2,823	)
Other expense, net	—		( 1	)	—		( 22	)
Total other expense, net	( 1,115	)	( 989	)	( 2,187	)	( 1,911	)
Loss before income taxes	( 3,689	)	( 6,536	)	( 7,812	)	( 14,073	)
Income tax expense	49		50		98		103
Net loss	( 3,738	)	( 6,586	)	( 7,910	)	( 14,176	)
Net income (loss) attributable to non-controlling interest	40		( 30	)	18		( 44	)
Net loss attributable to stockholders	$ ( 3,778	)	$ ( 6,556	)	$ ( 7,928	)	$ ( 14,132	)
Loss per share:
Basic and diluted	$ ( 0.09	)	$ ( 0.19	)	$ ( 0.19	)	$ ( 0.41	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

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APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(In thousands)

Common Stock			Additional — Paid-In	Accumulated		Non- — controlling	Total
Shares		Par Value	Capital	Deficit		Interest	Equity
Balance at December 31, 2023	34,644	$ 35	$ 81,114	$ ( 54,448	)	$ 221	$	26,922
Stock-based compensation	—	—	1,128	—		—		1,128
Net loss	—	—	—	( 7,576	)	( 14	)	( 7,590	)
Balance at March 31, 2024	34,644	$ 35	$ 82,242	$ ( 62,024	)	$ 207	$	20,460
Stock-based compensation	—	—	1,050	—		—		1,050
Net loss	—	—	—	( 6,556	)	( 30	)	( 6,586	)
Balance at June 30, 2024	34,644	$ 35	$ 83,292	$ ( 68,580	)	$ 177	$	14,924

			Additional			Non-
Common Stock			Paid-In	Accumulated		controlling
Shares		Par Value	Capital	Deficit		Interest	Total
Balance at December 31, 2024	37,794	$ 38	$ 92,083	$ ( 77,911	)	$ 125	$	14,335
Contributions from non-controlling interest	—	—	—	—		30		30
Stock-based compensation	—	—	451	—		—		451
Net loss	—	—	—	( 4,150	)	( 22	)	( 4,172	)
Balance at March 31, 2025	37,794	$ 38	$ 92,534	$ ( 82,061	)	$ 133	$	10,644
Contributions from non-controlling interest	—	—	—	—		30		30
Stock-based compensation	—	—	520	—		—		520
Net (loss) income	—	—	—	( 3,778	)	40		( 3,738	)
Balance at June 30, 2025	37,794	$ 38	$ 93,054	$ ( 85,839	)	$ 203	$	7,456

The accompanying notes are an integral part of the condensed consolidated financial statements.

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APYX MEDICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended June 30, — 2025		2024
Cash flows from operating activities
Net loss	$ ( 7,910	)	$ ( 14,176	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	270		313
Provision for inventory obsolescence	172		60
Loss on disposal of property and equipment	—		20
Stock-based compensation	971		2,178
Allowance for credit losses	156		45
Non-cash lease expense	48		62
Non-cash interest expense	472		443
Changes in operating assets and liabilities:
Trade receivables	4,413		1,187
Prepaid expenses and other assets	434		666
Inventories	( 720	)	547
Accounts payable	182		( 345	)
Accrued expenses and other liabilities	( 423	)	( 1,670	)
Net cash used in operating activities	( 1,935	)	( 10,670	)
Cash flows from investing activities
Purchases of property and equipment	( 320	)	( 324	)
Net cash used in investing activities	( 320	)	( 324	)
Cash flows from financing activities
Repayment of finance lease liabilities	( 10	)	( 10	)
Contributions from non-controlling interest	60		—
Net cash provided by (used in) financing activities	50		( 10	)
Effect of exchange rates on cash	( 235	)	30
Net change in cash and cash equivalents	( 2,440	)	( 10,974	)
Cash and cash equivalents, beginning of period	31,741		43,652
Cash and cash equivalents, end of period	$ 29,301		$ 32,678
Cash paid for:
Interest	$ 2,300		$ 2,371
Income taxes	$ 76		$ 180

The accompanying notes are an integral part of the condensed consolidated financial statements.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. 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 Platform Technology products marketed and sold as Renuvion ® in the cosmetic surgery market and J-Plasma ® in the hospital surgical market. Renuvion and J-Plasma offer surgeons a unique ability to provide controlled heat to tissue to achieve their desired results. The Company also leverages its deep expertise and decades of experience in unique waveforms through OEM agreements with other medical device manufacturers.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Securities and Exchange Commission (“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, 2024 . 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.

Recent Business Developments

On May 13, 2025, the Company announced it had received 510 (k) clearance from the U.S. Food and Drug Administration (the “FDA”) for the AYON Body Contouring System™ (“AYON”). The Company is actively preparing for a commercial launch of AYON leveraging its relationships with key surgeons in critical geographies. The official commercial launch of AYON will commence in the second half of 2025.

This initial 510 (k) clearance for AYON covers a wide variety of aesthetic treatments, including Renuvion to address loose and lax skin, ultrasound-assisted liposuction, electrocoagulation to support procedures requiring removal of excess tissue, along with several others. The Company intends to expand the cleared indications for AYON, to include power liposuction, with an additional 510 (k) submission planned for later this year.

Liquidity

The Company has incurred recurring net losses and cash outflows from operations and anticipates that losses will continue, at least, in the near term. The Company plans to continue to fund operations and capital funding needs through existing cash, sales of its products and, if necessary, additional equity and/or debt financing. However, the Company cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on acceptable terms. The sale of additional equity would result in dilution to its stockholders. Incurring additional debt financing would result in further debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict operations. If the Company is unable to raise additional capital in sufficient amounts or on acceptable terms, it may be required to delay, limit, reduce, or terminate sales, marketing and product development. Any of these actions could harm the Company's business, prospects and results of operations.

In November 2024, the Company undertook a cost saving restructuring which included an organizational reduction in force to better focus, optimize and streamline operations. As a result of the organizational change, the Company reduced its US workforce by nearly 25 %. The estimated annualized future cost savings from the reduction in force is approximately $4.3 million, which is expected to contribute to the goal of decreasing loss and achieving cash-flow breakeven. In addition to the reduction in force, the Company eliminated bonuses in 2024, reduced the board of directors from eight to five members and reduced board cash compensation from $0.5 million annually to approximately $ 0.1 million. In addition to the organizational changes, the Company has identified other direct cost savings it anticipates achieving in 2025. The identified cost savings include reductions in professional fees, lower research and development costs as we complete the development of AYON, credit card fees and stock-based compensation. The Company foresees, in totality, these cost savings will reduce its annual operating expenses below $40 million in fiscal 2025.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ) to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023 - 09 on January 1, 2025. The Company expects incremental disclosures in its Annual Report on Form 10 -K for the 2025 year. This includes additional items in the income tax rate reconciliation, qualitative information for significant reconciling items, disclosing additional information about taxes paid and disclosing loss before income taxes by domestic and foreign.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ) , to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, interim periods within fiscal years beginning after December 15, 2027 . The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements.

No other new accounting pronouncement issued or effective during the fiscal year are expected to have a material impact on the Company’s condensed consolidated financial statements or disclosures.

NOTE 3. INVENTORIES

Inventories consisted of the following:

(In thousands)	June 30, — 2025	2024
Raw materials	$ 4,261	$	3,973
Work in process	2,487		1,918
Finished goods	2,576		2,705
Gross inventories	9,324		8,596
Less: provision for obsolescence	( 1,132	)	( 1,032	)
Inventories, net	$ 8,192	$	7,564

NOTE 4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:

	June 30,	December 31,
(in thousands)	2025	2024
Accrued payroll	$ 900	$ 995
Accrued commissions	589	981
Accrued product warranties	423	428
Accrued product liability claim insurance deductibles	2,711	3,168
Accrued professional fees	350	390
Short-term contract liabilities	1,481	693
Other accrued expenses and current liabilities	821	1,096
Total accrued expenses and other current liabilities	$ 7,275	$ 7,751

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

NOTE 5. DEBT

The Company’s outstanding debt with Perceptive Credit Holdings IV, LP (“Perceptive”) (as initial lender and administrative agent) (“Perceptive Credit Agreement”) at June 30, 2025 and December 31, 2024 bears interest at a floating rate based on one -month SOFR , subject to a floor of 5.0 %, plus 7.0 % ( 12.0 % at June 30, 2025 ). Included in interest expense for the three and six months ended June 30, 2025 are $ 65,000 and $ 130,000 , respectively, of amortization of debt issuance costs and $ 173,000 and $ 342,000 , respectively, of amortization of debt discounts. Included in interest expense for the three and six months ended June 30, 2024 are $ 64,000 and $ 129,000 , respectively, of amortization of debt issuance costs and $ 158,000 and $ 314,000 , respectively, of amortization of debt discounts.

On November 7, 2024, the Company entered into an amendment to the Perceptive Credit Agreement. The amendment reduced the financial covenant trailing twelve -month revenue targets relating to its Advanced Energy segment (tested quarterly), with amended year-end targets of $ 37.0 million, $ 52.4 million and $ 60.3 million for 2025, 2026 and 2027, respectively. The amendment also introduced a maximum operating expense financial covenant, with full year targets of $ 40.0 million and $ 45.0 million for 2025 and 2026, respectively. The Perceptive Credit Agreement, as amended, contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries, among other things, to incur debt, grant liens, make distributions, enter certain restrictive agreements, pay or modify subordinated debt, dispose of assets, make investments and acquisitions, enter into certain transactions with affiliates, and undergo certain fundamental changes, in each case, subject to limitations and exceptions set forth in the Perceptive Credit Agreement. Additionally, the Company must maintain a balance of $ 3.0 million in cash and cash equivalents during the term of the Perceptive Credit Agreement. As of June 30, 2025, the Company was in compliance with the financial covenants contained within the Perceptive Credit Agreement, as amended. The Company’s continued compliance with covenants is subject to meeting or exceeding forecasted Advanced Energy revenues, as amended, and reducing operating expenses.

In connection with the amendment to the Perceptive Credit Agreement, the Company issued Perceptive 150,000 shares of its common stock.

In connection with the Company’s initial loan under the Perceptive Credit Agreement, the Company issued Perceptive warrants to purchase up to 1,250,000 shares of its common stock, with an exercise price of $ 2.43 per share.

The Company’s term loan under the Perceptive Credit Agreement, net consists of the following:

(In thousands)	June 30, — 2025	2024
Term loan	$ 37,500	$	37,500
Unamortized debt issuance costs	( 849	)	( 979	)
Unamortized debt discount	( 2,286	)	( 2,628	)
Term loan, net	$ 34,365	$	33,893

As of June 30, 2025 , principal repayments on the debt are as follows:

(In thousands)
2025	$ —
2026	—
2027	2,216
2028	35,284
Total repayments	$ 37,500

NOTE 6. 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 % ownership interest. The agreement required the Company to make capital contributions of approximately $ 357,000 into the newly formed entity, which were made in prior years. In June 2023, the Company executed an amendment to the joint venture agreement to increase the amount of its registered capital. The amendment requires the Company to make additional capital contributions to the China JV of $ 408,000 , of which $ 214,000 has been made as of June 30, 2025 . During May 2025, the China JV executed a distribution agreement with a Chinese distributor and commenced operations during the second quarter of 2025.

During 2024, the Company determined that the contributions made to the China JV to date are not sufficient for the China JV to fund expected losses without additional subordinated financial support. Accordingly, the Company has determined that the China JV is a VIE. The Company has determined that because it has the sole right to direct the activities of the China JV that most significantly impact its economic performance, and as the majority owner, has the obligation to absorb losses of the VIE and the right to receive benefits from the VIE that are significant to the China JV, that the Company is the primary beneficiary of the VIE. Accordingly, the China JV has been consolidated in these consolidated financial statements.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

The China JV is organized as a limited liability company under the laws of the Peoples Republic of China, accordingly the Company's exposure to losses in the China JV is limited to the Company's registered capital in the Company, which is equal to the sum of the required capital contributions above. As the China JV is not currently sufficiently capitalized, the assets of the China JV are not available to settle obligations of the Company.

The following table summarizes the assets and liabilities of the China JV, a consolidated variable interest entity, included in the Company’s consolidated balance sheets at June 30, 2025 and December 31, 2024 , respectively:

2025	2024
(In thousands)
Cash and cash equivalents	325	13
Prepaid expenses and other current assets	99	54
Property and equipment, net	238	247
Accounts payable	144	8
Accrued expenses and other current liabilities	84	33

Changes in the Company’s ownership investment in the China JV were as follows:

	Three Months Ended
	June 30,		June 30,
(In thousands)	2025	2024	2025		2024
Beginning interest in China JV	$ 138	$ 215	$	130	$ 229
Contributions	30	—		61	—
Net income (loss) attributable to Apyx	42	( 31	)	19	( 45	)
Ending interest in China JV	$ 210	$ 184	$	210	$ 184

NOTE 7. 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
	June 30,				June 30,
(in thousands, except per share data)	2025		2024		2025		2024
Numerator:
Net loss attributable to stockholders	$ ( 3,778	)	$ ( 6,556	)	$ ( 7,928	)	$ ( 14,132	)
Denominator:
Weighted average shares outstanding - basic and diluted	40,729		34,644		40,729		34,644
Loss per share:
Basic and diluted	$ ( 0.09	)	$ ( 0.19	)	$ ( 0.19	)	$ ( 0.41	)
Anti-dilutive instruments excluded from diluted loss per common share:
Options	8,581		8,430		8,581		8,430
Warrants	1,500		1,500		1,500		1,500

During November 2024, the Company sold pre-funded warrants to purchase 2,934,690 shares of its Common Stock. The pre-funded warrants are included in weighted average shares outstanding in the calculation of basic and diluted loss per share.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

NOTE 8. 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 $ 520,000 and $ 971,000 , respectively, in stock-based compensation expense during the three and six months ended June 30, 2025 , as compared with $ 1,050,000 and $ 2,178,000 , respectively, for the three and six months ended June 30, 2024 .

Stock option activity is summarized as follows:

Number of options			Weighted average — exercise price
Outstanding at December 31, 2024	7,638,458		$ 5.50
Granted	1,758,000		$ 1.35
Exercised	—		$ -
Canceled and forfeited	( 815,360	)	$ 5.87
Outstanding at June 30, 2025	8,581,098		$ 4.62

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. There were no such exercises for the three and six months ended June 30, 2025 . For the six months ended June 30, 2024 , the Company received 531 options as payment in the exercise of 38 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 2025 (“ 2025 Grants”) utilizing a Black-Scholes model.

	2025 Grants
Strike price	$ 0.90 - $ 1.53
Risk-free rate	4.1% - 4.5%
Expected dividend yield	—
Expected volatility	94.5 % - 96.3 %
Expected term (in years)	6
Grant date fair value	$ 0.70 - $ 1.21

NOTE 9. INCOME TAXES

Income tax expense was approximately $ 49,000 and $ 50,000 with effective tax rates of ( 1.3 )% and ( 0.8 )% for the three months ended June 30, 2025 and 2024 , respectively. Income tax expense was approximately $ 98,000 and $ 103,000 with effective tax rates of ( 1.3 )% and ( 0.7 )% for the six months ended June 30, 2025 and 2024 , respectively. For the three and six months ended June 30, 2025 and 2024, the effective rate differs from the statutory rate primarily due to the full valuation allowance recorded on the net operating loss (“NOL”) and net deferred tax assets generated during the period.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

NOTE 10. 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 the Company’s products and product liability claims.

The Company is involved in a number of legal actions relating to the use of its Helium Plasma Platform Technology, which actions are being defended by the Company’s insurance carrier-appointed counsel. The outcomes of these legal actions are not within the Company’s control and may not be known for prolonged periods of time. Management has not yet received from carrier-appointed defense counsel the estimates of the net potential range of losses in all of these cases, as would be required to confirm whether all of the claims in total are adequately covered by the varying levels of aggregate insurance coverage available for each relevant insurance policy period; further, 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 condensed 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 2022, the Company was notified of certain procedures alleged to have been performed by the same physician and which are currently the subject of two related products liability cases within the courts. During 2023, the Company was notified by its insurance carriers that all or most of the ten individual plaintiff’s allegations could be subject to separate deductibles notwithstanding the commonality of each underlying occurrence. During March 2024, two of the plaintiffs claims were dismissed by the courts. Additionally, during 2024, the Company determined that one of the procedures was performed by a different physician. The Company has determined that a loss, comprised of estimated costs to defend the Company against the lawsuits, is probable and that the range of estimated losses is approximately $ 1,650,000 to $ 1,950,000 . The Company recorded an estimated loss of $ 1,450,000 related to the matters during 2022 and $ 200,000 related to the matters during 2024. It is at least reasonably 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.

During March 2024, the Company was named as a defendant in a number of product liability lawsuits filed under the direction of a single plaintiff’s tort firm alleging off-label use of Renuvion products and the Company’s mismarketing of the same. The suits are venued predominantly in Florida and nearly all involve procedures conducted prior to 2023, which was before the Company received FDA 510k clearance for the use of Renuvion in the types of procedures at issue. The Company denies liability and intends to vigorously defend these suits and believes that it has applicable substantive and procedural defenses. The Company has determined that a loss, comprised of estimated costs to defend the Company against the lawsuits, is probable and currently estimates the range of losses in connection with these matters to be between $ 1,300,000 and $ 1,500,000 . The Company recorded an estimated loss of $ 1,300,000 related to these matters during 2024 . The Company has also determined that there is a reasonable possibility that there will be an additional loss related to the matters, but the Company is unable to provide an estimate of the range of such additional loss at this time.

Purchase Commitments

At June 30, 2025 , the Company had purchase commitments totaling approximately $ 3.6 million, substantially all of which is expected to be purchased within the next twelve months.

NOTE 11. RELATED PARTY TRANSACTIONS

Two 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. 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 June 30, 2025 and 2024 , the Company made purchases from this supplier of approximately $ 341,000 and $ 42,000 , respectively. For the six months ended June 30, 2025 and 2024 , the Company made purchases from this supplier of approximately $ 370,000 and $ 93,000 , respectively. At June 30, 2025 and December 31, 2024 , respectively, the Company had net payables to this supplier of approximately $ 489,000 and $ 243,000 , respectively.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

NOTE 12. 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 ("CODM") for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Charles D. Goodwin, CEO, is the Company's CODM. The CODM uses gross profit to assess segment performance and allocate resources, including employees and capital resources. The Company has included additional financial measures regularly reported to the CODM on a segment basis in the tables below along with a reconciliation between these measures and net income (loss). All other operating expenses are not regularly reported to the CODM on a segment basis. Asset information is not reviewed by the CODM 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 Advanced Energy segment is comprised primarily of sales of its Helium Plasma Technology products marketed and sold as Renuvion in the cosmetic surgery market. Renuvion and J-Plasma offer surgeons a unique ability to provide controlled heat to tissue to achieve their desired results. These sales consist of electrosurgical generators, single-use handpieces, accessories and related products sold in the cosmetic surgical market. The OEM segment is comprised primarily of sales related to the development and contract manufacturing of surgical devices, accessories and handpieces.

Summarized financial information with respect to reportable segments is as follows:

(In thousands)	Three Months Ended June 30, 2025 — Advanced Energy	OEM	Corporate & Other	Total
Sales	$ 9,670	$ 1,703	$ —	$	11,373
Cost of sales	2,772	1,518	—		4,290
Gross profit	6,898	185	—		7,083
Commissions	952	—	—		952
All other expenses (i)	5,284	4	3,417		8,705
Income (loss) from operations	662	181	( 3,417	)	( 2,574	)
Interest income	—	—	278		278
Interest expense	—	—	( 1,393	)	( 1,393	)
Income (loss) before income taxes	662	181	( 4,532	)	( 3,689	)
Income tax expense	—	—	49		49
Net income (loss)	662	181	( 4,581	)	( 3,738	)

(In thousands)	Three Months Ended June 30, 2024 — Advanced Energy	OEM		Corporate & Other	Total
Sales	$ 9,766	$	2,383	$ —	$	12,149
Cost of sales	2,734		1,922	—		4,656
Gross profit	7,032		461	—		7,493
Commissions	1,123		—	—		1,123
All other expenses (i)	7,605		—	4,312		11,917
(Loss) income from operations	( 1,696	)	461	( 4,312	)	( 5,547	)
Interest income	—		—	439		439
Interest expense	—		—	( 1,427	)	( 1,427	)
Other loss, net	—		—	( 1	)	( 1	)
(Loss) income before income taxes	( 1,696	)	461	( 5,301	)	( 6,536	)
Income tax expense	—		—	50		50
Net (loss) income	( 1,696	)	461	( 5,351	)	( 6,586	)

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

(In thousands)	Six Months Ended June 30, 2025 — Advanced Energy	OEM	Corporate & Other	Total
Sales	$ 17,557	$ 3,246	$ —	$	20,803
Cost of sales	5,092	2,963	—		8,055
Gross profit	12,465	283	—		12,748
Commissions	1,791	—	—		1,791
All other expenses (i)	9,997	10	6,575		16,582
Income (loss) from operations	677	273	( 6,575	)	( 5,625	)
Interest income	—	—	582		582
Interest expense	—	—	( 2,769	)	( 2,769	)
Income (loss) income before income taxes	677	273	( 8,762	)	( 7,812	)
Income tax expense	—	—	98		98
Net income (loss)	677	273	( 8,860	)	( 7,910	)

(In thousands)	Six Months Ended June 30, 2024 — Advanced Energy	OEM		Corporate & Other	Total
Sales	$ 17,219	$	5,174	$ —	$	22,393
Cost of sales	4,996		3,955	—		8,951
Gross profit	12,223		1,219	—		13,442
Commissions	1,840		—	—		1,840
All other expenses (i)	15,019		26	8,719		23,764
(Loss) income from operations	( 4,636	)	1,193	( 8,719	)	( 12,162	)
Interest income	—		—	934		934
Interest expense	—		—	( 2,823	)	( 2,823	)
Other income, net	—		—	( 22	)	( 22	)
(Loss) income before income taxes	( 4,636	)	1,193	( 10,630	)	( 14,073	)
Income tax expense	—		—	103		103
Net (loss) income	( 4,636	)	1,193	( 10,733	)	( 14,176	)

(i) For the Advanced Energy segment, all other expenses includes salaries and related costs, research and development, professional services, including marketing and physician consulting, and other selling, general, and administrative expenses such as travel and entertainment, advertising, trade show fees and meeting and training costs. For the OEM segment, substantially all related expenses are recorded as cost of sales, therefore no significant segment specific operating expenses are incurred. For Corporate & Other, all other expenses includes salaries and related costs, professional services, including legal, accounting and audit fees, investor relations consulting, information technology consulting, board of directors’ stock compensation expense, and general and administrative expenses, such as insurance, building lease costs, depreciation and computer software.

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APYX MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Unaudited)

International sales represented approximately 31.6 % and 30.2 % of total revenues for the three and six months ended June 30, 2025 , respectively, as compared with approximately 28.5 % and 30.0 % of total revenues for the three and six months ended June 30, 2024 , respectively.

Sales by geographic region, based on the customer's “ship to” location on the invoice, are as follows:

	Three Months Ended — June 30,		Six Months Ended — June 30,
(In thousands)	2025	2024	2025	2024
Sales by Domestic and International
Domestic	$ 7,776	$ 8,687	$ 14,519	$ 15,666
International	3,597	3,462	6,284	6,727
Total	$ 11,373	$ 12,149	$ 20,803	$ 22,393

Tangible long-lived assets by geographic location are as follows:

	June 30,	December 31,
(In thousands)	2025	2024
Long-lived assets by Domestic and International
Domestic	$ 5,517	$ 5,532
International	1,033	1,206
Total	$ 6,550	$ 6,738

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APYX MEDICAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2 . Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our financial statements and related notes contained elsewhere in this report and with the audited consolidated financial statements and footnotes as of and for the year ended December 31, 2024 contained within our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 13, 2025. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors discussed in this report and those discussed in other documents we file with the SEC. In light of these risks, uncertainties and assumptions, readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements represent beliefs and assumptions as of the date of this report. While we may elect to update forward-looking statements and at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Past performance does not guarantee future results.

Executive Level Overview

We are an advanced energy technology company with a passion for elevating people’s lives through innovative products, including our Helium Plasma Platform Technology products marketed and sold as Renuvion ® in the cosmetic surgery market and J-Plasma ® in the hospital surgical market. Renuvion and J-Plasma offer surgeons a unique ability to provide controlled heat to tissue to achieve their desired results. We also leverage our deep expertise and decades of experience in unique waveforms through OEM agreements with other medical device manufacturers.

We operate in two business segments: OEM and Advanced Energy. The OEM segment is primarily development and manufacturing contract and product driven. The Advanced Energy segment sells both capital equipment and consumables in the form of a single-use handpiece. Sales of handpiece units are a substantial portion of our business and for the six months ended June 30, 2025 and 2024, we sold approximately 40,000 and 45,000 units, respectively, as a result of an overall lower number of liposuction procedures and commercial focus on the launch of AYON in the U.S. Handpiece revenue accounts for more than 60% of our total Advanced Energy revenue.

Recent Activities

Glucagon- like peptide -1 receptor agonists ("GLP-1s"), such as Mounjaro ® , Wegovy ® and Ozempic ® , are prescribed for the treatment of diabetes and/or weight loss in combination with exercise to improve glycemic control. GLP-1’s have also been found to mimic the GLP-1 satiety hormone in our bodies. When one eats, GLP-1 is released in the small intestines regulating blood sugar and sending signals to the brain centers that control appetite. Studies have shown patients taking GLP-1’s have experienced a loss of body weight. Currently, three GLP-1’s are cleared by the FDA for weight loss, but we anticipate a number of additional drug candidates will be cleared as well as, oral versions of these injectable medications.

We believe the increased use of GLP-1s had an initial negative impact on the revenue for plastic and cosmetic surgeons and created uncertainty in the aesthetic space. However, we believe, that the use of these drugs will have a ripple effect which will drive people towards plastic surgery and may provide a tailwind for sales of our Renuvion products. Rapid weight loss caused by these drugs can contribute to loose skin. To address this, the cosmetic surgery market focuses on body contouring. Body contouring is a customizable treatment for patients to target specific fat deposits, engage in the transfer of fat, and treatments to address loose or lax skin. Renuvion is the only FDA approved device for the treatment of this issue post liposuction. Additionally, Renuvion may be used to treat skin laxity without the use of liposuction, potentially increasing the total available market for our products.

On May 13, 2025, we announced that we had received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) for the AYON Body Contouring System™ (“AYON”). We are actively preparing for a commercial launch of AYON leveraging our relationships with key surgeons in critical geographies. The official commercial launch of AYON will commence in the second half of 2025.

This initial 510(k) clearance for AYON covers a wide variety of aesthetic treatments, including Renuvion to address loose and lax skin, ultrasound-assisted liposuction, electrocoagulation to support procedures requiring removal of excess tissue, along with several others. We intend to expand the cleared indications for AYON, to include power liposuction, with an additional 510(k) submission planned for later this year.

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APYX MEDICAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Liquidity

We have incurred recurring net losses and cash outflows from operations and we anticipate that losses will continue in the near term. We plan to continue to fund our operations and capital funding needs through existing cash, sales of our products and, if necessary, additional equity and/or debt financing. However, we cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms acceptable to us. The sale of additional equity would result in dilution to our stockholders. Incurring additional debt financing would result in further debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, it may be necessary to delay, limit, reduce, or terminate our sales, marketing and product development. Any of these actions could harm our business, prospects and results of operations.

In November 2024, we undertook a cost saving restructuring which included an organizational reduction in force to better focus, optimize and streamline operations. As a result of the organizational changes, we reduced our workforce by nearly 25%. We estimate the annualized future cost savings from the reduction in force to be approximately $4.3 million which we expect to contribute to our goal of decreasing loss and achieving cash-flow breakeven. In addition, to the reduction in force, we eliminated bonuses in 2024, reduced the board of directors from eight to five members and reduced board cash compensation from $0.5 million annually to $0.1 million. In addition to the organizational changes, we have identified other direct cost savings we anticipate achieving in 2025. The identified cost savings include reductions in professional fees, lower research and development costs as we complete the development of AYON, credit card fees and stock-based compensation. We foresee, in totality, these cost savings will reduce our annual operating expenses below $40 million in 2025.

We are actively monitoring trade policy and tariff announcements including the recent executive orders issued by the U.S. federal administration regarding tariffs on imports from various countries, including the European Union, Canada, Mexico and China. In addition, we are monitoring the potential impact of actions taken by these countries in response to the announced tariffs. We currently manufacture in Clearwater, Florida and Sofia, Bulgaria and we intend to utilize these locations to minimize the impact of the tariffs, but such tariffs may make our products less cost competitive and reduce gross margins. At this time, the overall impact on our business related to these or any other tariffs that may be imposed, remains uncertain and depends on multiple factors, including the duration and expansion of current tariffs, future changes to tariff rates, scope or enforcement, retaliatory measures by impacted trade partners, inflationary effects, and the effectiveness of our responses in managing these challenges.

*Inflation***

The consequences of global supply chain instability and inflationary cost increases, potential and actual tariffs, and their adverse impact to the global economy, continue to evolve. Accordingly, the significance of the future impact to our business and financial statements remains subject to significant uncertainty. We continue to work on initiatives to combat inflation, including finding alternative suppliers that meet our quality standards, streamlining our supplier network to reduce the use of middlemen and redesigning some components to achieve better volume purchase prices. Inflation has not, to date, materially impacted our operations or financial performance. However, as these trends continue for raw materials, freight, and labor costs, our future financial performance could be adversely impacted.

In regard to our operating segments, results are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics, we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our 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 and, accordingly, we have not presented a measure of assets by reportable segment.

Our 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 are 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 and therefore no segment specific operating expenses are incurred.

We strongly encourage investors to visit our website: www.apyxmedical.com to view the most current news and to review our filings with the Securities and Exchange Commission.

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APYX MEDICAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Results of Operations

Sales

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025	2024	Change		2025	2024	Change
Sales by Reportable Segment
Advanced Energy	$ 9,670	$ 9,766	(1.0	)%	$ 17,557	$ 17,219	2.0	%
OEM	1,703	2,383	(28.5	)%	3,246	5,174	(37.3	)%
Total	$ 11,373	$ 12,149	(6.4	)%	$ 20,803	$ 22,393	(7.1	)%
Sales by Domestic and International
Domestic	$ 7,776	$ 8,687	(10.5	)%	$ 14,519	$ 15,666	(7.3	)%
International	3,597	3,462	3.9	%	6,284	6,727	(6.6	)%
Total	$ 11,373	$ 12,149	(6.4	)%	$ 20,803	$ 22,393	(7.1	)%

Total revenue decreased by 6.4%, or approximately $0.8 million, for the three months ended June 30, 2025 when compared with the three months ended June 30, 2024. Advanced Energy segment sales decreased 1.0%, or approximately $0.1 million, for the three months ended June 30, 2025 when compared with the three months ended June 30, 2024. In the second quarter of 2025, in the U.S., we took preorders for the AYON system, which includes an Apyx One Console. For customers that did not already have an Apyx One Console, we shipped the Apyx One Console during the quarter and expect to ship the balance of the AYON system in the third and fourth quarters. OEM segment sales decreased 28.5%, or approximately $0.7 million, for the three months ended June 30, 2025 when compared with the three months ended June 30, 2024. The decrease in OEM sales was due to decreases in sales volume to existing customers, including Symmetry Surgical under our 10-year generator manufacturing and supply agreement.

Total revenue decreased by 7.1%, or approximately $1.6 million, for the six months ended June 30, 2025 when compared with the six months ended June 30, 2024. Advanced Energy segment sales increased 2.0%, or approximately $0.3 million, for the six months ended June 30, 2025 when compared with the six months ended June 30, 2024. In the second quarter of 2025, in the U.S., we took preorders for the AYON system, which includes an Apyx One Console. For customers that did not already have an Apyx One Console, we shipped the Apyx One Console during the quarter and expect to ship the balance of the AYON system in the third and fourth quarters. OEM segment sales decreased 37.3%, or approximately $1.9 million, for the six months ended June 30, 2025 when compared with the six months ended June 30, 2024. The decrease in OEM sales was due to decreases in sales volume to existing customers, including Symmetry Surgical under our 10-year generator manufacturing and supply agreement.

International sales represented approximately 31.6% and 30.2% of total revenues for the three and six months ended June 30, 2025, respectively, as compared with 28.5% and 30.0% of total revenues for the same period in the prior year. Management estimates our products have been sold in more than 60 countries through local dealers coordinated by sales and marketing personnel through our facilities in Clearwater, Florida and Sofia, Bulgaria.

Gross Profit

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025	2024	Change		2025	2024	Change
Cost of sales	$ 4,290	$ 4,656	(7.9	)%	$ 8,055	$ 8,951	(10.0	)%
Percentage of sales	37.7 %	38.3 %			38.7 %	40.0 %
Gross profit	$ 7,083	$ 7,493	(5.5	)%	$ 12,748	$ 13,442	(5.2	)%
Percentage of sales	62.3 %	61.7 %			61.3 %	60.0 %

Gross profit for the three months ended June 30, 2025, decreased 5.5% to $7.1 million, compared to $7.5 million for the same period in the prior year. Gross margin for the three months ended June 30, 2025, was 62.3%, compared to 61.7% for the same period in 2024. The increase in gross margin for the three months ended June 30, 2025 from the prior year period is primarily attributable to mix between our segments with Advanced Energy comprising a higher percentage of total sales and product mix within our Advanced Energy segment. These increases were partially offset by a decrease in the average selling price of generators to domestic customers, geographic mix within our Advanced Energy segment, with international sales comprising a higher percentage of total sales and product mix within our OEM segment.

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APYX MEDICAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Gross profit for the six months ended June 30, 2025, decreased 5.2% to $12.7 million, compared to $13.4 million for the same period in the prior year. Gross margin for the six months ended June 30, 2025, was 61.3%, compared to 60.0% for the same period in 2024. The increase in gross margin for the six months ended June 30, 2025 from the prior year period is primarily attributable to mix between our segments with Advanced Energy comprising a higher percentage of total sales and product mix within our Advanced Energy segment. These increases were partially offset by a decrease in the average selling price of generators to domestic customers and product mix within our OEM segment.

Other Costs and Expenses

Research and development

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025	2024	Change		2025	2024	Change
Research and development expense	$ 824	$ 1,424	(42.1	)%	$ 1,628	$ 2,821	(42.3	)%
Percentage of sales	7.2 %	11.7 %			7.8 %	12.6 %

Research and development expenses decreased 42.1% for the three months ended June 30, 2025, primarily due to lower compensation and benefits costs ($0.4 million) and lower spending on our product development initiatives and clinical studies ($0.2 million).

Research and development expenses decreased 42.3% for the six months ended June 30, 2025, primarily due to lower compensation and benefits costs ($0.8 million) and lower spending on our product development initiatives and clinical studies ($0.4 million).

Professional services

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025	2024	Change		2025	2024	Change
Professional services expense	$ 1,621	$ 2,096	(22.7	)%	$ 3,070	$ 3,670	(16.3	)%
Percentage of sales	14.3 %	17.3 %			14.8 %	16.4 %

Professional services expense decreased 22.7% for the three months ended June 30, 2025, primarily due to a decreases in legal expenses ($0.3 million), physician and marketing consulting ($0.1 million) and accounting and audit fees ($0.1 million).

Professional services expense decreased 16.3% for the six months ended June 30, 2025, primarily due to a decreases in legal expenses ($0.3 million), physician and marketing consulting ($0.1 million), recruiting expenses ($0.1 million) and accounting and audit fees ($0.1 million).

Salaries and related costs

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025	2024	Change		2025	2024	Change
Salaries and related expenses	$ 3,072	$ 4,682	(34.4	)%	$ 6,153	$ 9,378	(34.4	)%
Percentage of sales	27.0 %	38.5 %			29.6 %	41.9 %

During the three months ended June 30, 2025, salaries and related expenses decreased 34.4%, primarily due to a decrease in salaries and benefits ($0.7 million), which was due to lower headcount following our reduction in force in the fourth quarter of 2024, lower stock based compensation expense ($0.5 million) and bonus expense ($0.4 million), as bonuses for 2025 are discretionary.

During the six months ended June 30, 2025, salaries and related expenses decreased 34.4%, primarily due to a decrease in salaries and benefits ($1.4 million), which was due to lower headcount following our reduction in force in the fourth quarter of 2024, lower stock based compensation expense ($0.9 million) and bonus expense ($0.9 million), as bonuses for 2025 are discretionary.

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APYX MEDICAL CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Selling, general and administrative expenses

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025	2024	Change		2025	2024	Change
SG&A expense	$ 4,140	$ 4,838	(14.4	)%	$ 7,522	$ 9,735	(22.7	)%
Percentage of sales	36.4 %	39.8 %			36.2 %	43.5 %

During the three months ended June 30, 2025, selling, general and administrative expense decreased 14.4%, primarily due to lower meeting and training costs ($0.2 million), commissions ($0.2 million), travel expenses ($0.1 million), board of directors cash compensation ($0.1 million) and foreign currency gains and losses ($0.1 million). These decreases were partially offset by an increase in allowances for credit losses ($0.1 million).

During the six months ended June 30, 2025, selling, general and administrative expense decreased 22.7%, primarily due to lower travel expenses ($0.8 million), meeting and training costs ($0.7 million), regulatory expenses ($0.2 million), board of directors cash compensation ($0.2 million), foreign currency gains and losses ($0.2 million), sales and property taxes ($0.1 million), payment processing fees ($0.1 million) and commissions ($0.1 million). These decreases were partially offset by higher advertising expense, including trade show fees and related costs ($0.2 million) and allowances for credit losses ($0.1 million).

Interest Income (Expense)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2025		2024		2025		2024
Interest income	$ 278		$ 439		$ 582		$ 934
Percentage of sales	2.4	%	3.6	%	2.8	%	4.2	%
Interest expense	$ (1,393	)	$ (1,427	)	$ (2,769	)	$ (2,823	)
Percentage of sales	(12.2	)%	(11.7	)%	(13.3	)%	(12.6	)%

Interest income decreased approximately $0.2 million and $0.4 million for the three and six months ended June 30, 2025, respectively, when compared with the same period in the prior year. These decreases are due to a lower average balance and lower average yield in our investments in money market funds and U.S. Treasury securities included in cash and cash equivalents.

Interest expense was flat at approximately $1.4 million and $2.8 million for the three and six months ended June 30, 2025 and 2024, respectively.

Income Taxes

	Three Months Ended
	June 30,			June 30,
(In thousands)	2025	2024		2025		2024
Income tax expense	$ 49	$	50	$	98	$	103
Effective tax rate	(1.3	)%	(0.8	)%	(1.3	)%	(0.7	)%

Income tax expense was approximately $49,000 and $50,000 with effective tax rates of (1.3)% and (0.8)% for the three months ended June 30, 2025 and 2024, respectively. Income tax expense was approximately $98,000 and $103,000 with effective tax rates of (1.3)% and (0.7)% for the six months ended June 30, 2025 and 2024, respectively. For the three and six months ended June 30, 2025 and 2024, the effective rate differs from the statutory rate primarily due to the full valuation allowance recorded on the net operating loss (“NOL”) and net deferred tax assets generated during the period.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Liquidity and Capital Resources

At June 30, 2025, we had approximately $29.3 million in cash and cash equivalents as compared to approximately $31.7 million in cash and cash equivalents at December 31, 2024. Our working capital at June 30, 2025 was approximately $39.3 million compared with $45.7 million at December 31, 2024.

For the six months ended June 30, 2025, net cash used in operating activities was approximately $1.9 million, compared with net cash used in operating activities of approximately $10.7 million in the six months ended June 30, 2024. The decrease in cash used in operations is primarily due to improvements in our accounts receivable position and the decrease in operating loss, which is a result of the cost cutting measures implemented in the fourth quarter of 2024, compared to the same period in the prior year.

Net cash used in investing activities for the six months ended June 30, 2025 and 2024, was $0.3 million related to investments in property and equipment.

Net cash provided by financing activities for the six months ended June 30, 2025 was $50,000 and was primarily related to contributions to the China JV by the non-controlling member.

We have incurred recurring net losses and cash outflows from operations and we anticipate that losses will continue in the near term. We plan to continue to fund our operations and capital funding needs through existing cash, sales of our products and if necessary additional equity and/or debt financing. However, we cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms acceptable to us. The sale of additional equity would result in dilution to our stockholders. Incurring additional debt financing would result in further debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital in sufficient amounts or on acceptable terms, it may be necessary to delay, limit, reduce, or terminate our sales, marketing and product development. Any of these actions could harm our business, results of operations and prospects.

On November 22, 2022, we filed a shelf registration statement providing us the ability to register and sell our securities in the aggregate amount up to $100 million. The shelf registration statement included an embedded ATM facility for up to $40 million.

On November 7, 2024, we entered into an amendment to the Perceptive Credit Agreement. The amendment reduced the financial covenant trailing twelve-month revenue targets relating to its Advanced Energy segment (tested quarterly), with amended year-end targets of $37.0 million, $52.4 million and $60.3 million for 2025, 2026 and 2027, respectively. The amendment also introduced a maximum operating expense financial covenant, with full year targets of $40.0 million and $45.0 million for 2025 and 2026, respectively. The Perceptive Credit Agreement, as amended, continues to contain customary affirmative and negative covenants, including covenants limiting the ability of us and our subsidiaries, among other things, to incur debt, grant liens, make distributions, enter certain restrictive agreements, pay or modify subordinated debt, dispose of assets, make investments and acquisitions, enter into certain transactions with affiliates, and undergo certain fundamental changes, in each case, subject to limitations and exceptions set forth in the Perceptive Credit Agreement. Additionally, we must maintain a balance of $3.0 million in cash and cash equivalents during the term of the Perceptive Credit Agreement. As of June 30, 2025, we were in compliance with the financial covenants contained within the Perceptive Credit Agreement, as amended. Our continued compliance with covenants is subject to meeting or exceeding forecasted Advanced Energy revenues, as amended and reducing operating expenses.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

For a more in-depth description of the terms of the Perceptive Credit Agreement, as amended, see Note 11 in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024 and Note 5 of Notes to Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.

At June 30, 2025, we had purchase commitments totaling approximately $3.6 million, substantially all of which is expected to be purchased within the next twelve months.

Critical Accounting Estimates

In preparing the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), we have adopted various accounting policies. Our most significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025.

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Our estimates and assumptions, including those related to inventories, intangible assets, property, plant and equipment, legal proceedings, research and development, warranty obligations, product liability, sales returns and discounts, stock-based compensation and income taxes are updated as appropriate, which in most cases is at least quarterly. We base our estimates on historical experience, or various assumptions that are believed to be reasonable under the circumstances and the results form the basis for making judgments about the reported values of assets, liabilities, revenues and expenses. Actual results may materially differ from these estimates.

Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. Our critical accounting estimates include the following:

Accounts Receivable Allowance

We maintain a reserve for uncollectible accounts receivable. When evaluating the adequacy of the allowance for credit losses, we analyze historical bad debt experience, the composition of outstanding receivables by customer class, and the age of outstanding balances, and we make estimates in connection with establishing the allowance for credit losses, including the expected impacts of changes in the operating environment in multiple countries as well as the credit terms being offered to customer, to determine where adjustments to historical experience are warranted. The economic uncertainty in the capital equipment market being experienced in the aesthetic space as a result of the disruption from GLP-1's has resulted in the granting of extended credit terms. Accordingly, we believe that there is additional exposure in our outstanding receivables and have adjusted our accounts receivable allowance for this expectation. Changes in estimates are reflected in the period they are made. If the financial condition of our customers deteriorates, resulting in an inability to make payments, additional allowances may be required.

Litigation Contingencies

In accordance with authoritative guidance, we record a liability in our 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 accrued. 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. We discuss significant judgements with counsel, which include determining the legitimacy of asserted and unasserted claims, the probability that a loss has been incurred, the estimates of the net potential range of losses associated with these claims, the timing of the losses associated with these claims and historical experience with these claims. Additionally, the deductibles on our insurance policies that cover these claims have increased in recent periods, creating additional exposure and losses in excess of historical experience. It is at least reasonably possible that a change in the actual amount of loss will occur in the near term.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements at this time.

Recent Accounting Pronouncements

See Note 2 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q .

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ITEM 3 . Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Our management has established and maintains disclosure controls and procedures that are designed to ensure that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2025, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by the Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. Other Information

ITEM 1. Legal Proceedings

See Note 10 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q .

ITEM 1A. Risk Factors

There have been no material changes to the risk factors described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not Applicable.

ITEM 5. Other Information

None .

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ITEM 6. Exhibits

3.1	Articles of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s report on Form 10-K/A filed on March 31, 2011)
3.2	By laws of the Registrant (Incorporated by reference to Exhibit 3.2 to the Registrant’s report on Form 10-K/A filed on March 31, 2011)
3.3	Certificate of Amendment of the Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.5 to the Registrant’s Quarterly Report on Form 10-Q filed on November 3, 2017)
3.4	Certificate of Elimination (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 3, 2018)
3.5	Certificate of Amendment of the Certificate of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 28, 2018)
31.1*	Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2*	Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1*	Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2*	Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002
101.INS**	Inline XBRL Instance Document
101.SCH**	Inline XBRL Taxonomy Extension Schema Document
101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	Inline XBRL Taxonomy Extension Label Presentation Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

• Filed herewith.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 7, 2025	Apyx Medical Corporation — By:	/s/ Charles D. Goodwin II
		Charles D. Goodwin II
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
Date: August 7, 2025	By:	/s/ Matthew Hill
		Matthew Hill
		Chief Financial Officer,
		Treasurer and Secretary
		(Principal Financial Officer)

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