Apyx Medical Corp

Apyx Medical Corporation is a surgical aesthetics company that operates in the cosmetic surgery market and the broader medical device industry. The cosmetic surgery market includes surgical, minimally invasive, and nonsurgical cosmetic procedures. The filing notes that the increased use of GLP-1 medications has had an initial negative impact on revenue for plastic and cosmetic surgeons and created uncertainty in the aesthetic space, but management believes these drugs may eventually provide a tailwind for sales of Renuvion products as rapid weight loss can contribute to loose skin. According to the International Society of Aesthetic Plastic Surgery 2024 Global Survey report, liposuction procedures in the U.S. contracted approximately 10% year-over-year, while surgical lifts have increased greater than 20% as a result of the impact of GLP-1s on loose and lax skin. The company believes it is the leader in surgical aesthetics.

The filing states that Apyx Medical is currently the only company with helium-based plasma products and four specific indications from the FDA. With the launch of AYON, the company now competes directly with companies that have devices that perform liposuction procedures, with the major liposuction manufacturers being Solta Medical (owned by Bausch Health Companies, Inc.) and MicroAire Surgical Instruments. The company believes its focus on the surgical aesthetic market provides a competitive advantage over noninvasive products due to surgical treatments providing more transformative and durable results. The company's stated sustainable competitive advantages include its long history of developing unique energy devices, its unique Helium Plasma Technology, outstanding product quality supported by strong engineering and research and development capabilities, and the clinical support provided by its expanding global medical affairs team. The company has been issued 41 ¹ patents in the United States and 61 ² foreign patents, with 11 ³ pending patent applications in the United States and 21 ⁴ pending foreign applications, and has 10 ⁵ U.S. registered trademarks, 32 ⁶ international registered trademarks, 1 ⁷ pending U.S. trademark application, and 8 ⁸ pending international trademark applications.

The company generates revenue through two business segments: Surgical Aesthetics and OEM. The Surgical Aesthetics segment sells both capital equipment and consumables in the form of single-use handpieces, with sales of handpiece units being a substantial portion of the business. For the years ended December 31, 2025 and 2024, the company sold approximately 84,000 ⁹ and 94,000 ¹⁰ handpiece units, respectively. Single-use handpiece revenue accounts for approximately 50% ¹¹ and 63% ¹² of total Surgical Aesthetics revenue for the years ended December 31, 2025 and 2024, respectively. The OEM segment is primarily development and manufacturing contract and product driven, with all related expenses recorded as cost of sales. The company's direct sales force, along with an international network of distributors, is focused on becoming the sole provider of surgical equipment in the cosmetic surgical markets. Management estimates that its products have been sold in more than 60 ¹³ countries.

The Surgical Aesthetics segment contributed 85.8% ¹⁴ of consolidated total revenue for the year ended December 31, 2025, while the OEM segment contributed 14.2% ¹⁵. The Surgical Aesthetics product portfolio consists of Helium Plasma Technology marketed as Renuvion in the cosmetic surgery market and J-Plasma in the hospital surgical market, and the AYON Body Contouring System. The Helium Plasma Technology system consists of an electrosurgical generator unit, a handpiece, and a supply of helium gas, and has FDA clearance, CE mark, and clearance for sale in multiple other countries. The technology initially received FDA clearance in 2012 ¹⁶ and a CE mark in December 2014 ¹⁷. Key product lines include the Apyx One Console, a multi-functional generator incorporating an advanced 3-in-1 energy system launched in the U.S. in late January 2023 ¹⁸, and the Renuvion Micro Handpiece which received FDA clearance in June 2023 ¹⁹ and was launched in the fourth quarter of 2023. On May 13, 2025 ²⁰, the company announced it had received 510(k) clearance from the FDA for AYON, an all-in-one system that integrates infiltration, dual aspiration, ultrasound-assisted liposuction, electrocoagulation, volume enhancement capabilities, and Renuvion treatment. The commercial launch of AYON commenced in September 2025 ²¹. On October 13, 2025 ²², the company announced it had submitted a 510(k) premarket notification to the FDA for the label expansion of AYON to include power liposuction, with anticipated clearance in the second quarter 2026 ²³. On July 28, 2025 ²⁴, the company announced the launch of Renuvion in China following receipt of initial market clearance from the National Medical Products Administration of China.

The OEM segment leverages the company's expertise in the design, development, and manufacturing of electrosurgical equipment and medical devices by producing generators, medical devices, and related accessories for large, well-known medical device manufacturers through OEM agreements, as well as start-up companies. In connection with an Asset Purchase Agreement with Symmetry Surgical in 2018, the company entered into a Manufacturing and Supply Agreement for a ten-year term, pursuant to which it manufactures certain products and sells to them at agreed upon prices. The company has been focusing its sales and marketing efforts in the Surgical Aesthetics segment due to the overall size of that market and margins, and anticipates that OEM segment revenue will decrease over time.

In November 2024, the company undertook a cost saving restructuring which included an organizational reduction in force, reducing its U.S. workforce by nearly 25% ²⁵. The estimated annualized future cost savings from the reduction in force was approximately $4.3 million ²⁶, and the company incurred pre-tax charges of approximately $0.6 million ²⁷ in the fourth quarter of 2024. In addition to the reduction in force, the company eliminated bonuses in 2024, reduced the size of the board of directors from eight to five members ²⁸, and reduced aggregate board cash compensation from $0.5 million ²⁹ annually to $0.1 million ³⁰, while increasing board stock-based compensation. On November 7, 2024 ³¹, the company closed a $7.0 million ³² registered direct offering with a healthcare-focused fund, issuing 3,000,000 ³³ shares of common stock and 2,934,690 ³⁴ pre-funded warrants to purchase common stock with an exercise price of $0.001 ³⁵ per share. On November 18, 2025 ³⁶, the company entered into an underwriting agreement where it sold 2,762,431 ³⁷ shares of common stock at an offering price of $3.62 ³⁸, with net proceeds of approximately $9.1 million ³⁹. On December 1, 2025 ⁴⁰, the company filed a shelf registration statement providing the ability to register and sell securities in the aggregate amount up to $100 million ⁴¹. On November 8, 2023 ⁴², the company entered into the Perceptive Credit Agreement providing for a facility of up to $45 million ⁴³, consisting of senior secured term loans, with an initial loan of $37.5 million ⁴⁴ and a delayed draw loan of $7.5 million ⁴⁵ that lapsed on December 31, 2024 ⁴⁶. On November 7, 2024 ⁴⁷, the company entered into an amendment to the Perceptive Credit Agreement that reduced the financial covenant trailing twelve-month revenue targets for the Surgical Aesthetics segment to $37.0 million ⁴⁸, $52.4 million ⁴⁹, and $60.3 million ⁵⁰ for 2025, 2026, and 2027, respectively, and introduced a maximum operating expense financial covenant with full year targets of $40.0 million ⁵¹ and $45.0 million ⁵² for 2025 and 2026, respectively. The company must maintain a balance of $3.0 million ⁵³ in cash and cash equivalents during the term of the Perceptive Credit Agreement.

For the year ended December 31, 2025, total revenue was $52,844,000 ⁵⁴, compared to $48,102,000 ⁵⁵ in 2024, representing growth of 9.9% ⁵⁶. Surgical Aesthetics segment sales increased 17.4% ⁵⁷ to $45,332,000 ⁵⁸ from $38,606,000 ⁵⁹ in the prior year. OEM segment revenue decreased 20.9% ⁶⁰ to $7,512,000 ⁶¹ from $9,496,000 ⁶². Gross profit was $33,044,000 ⁶³ in 2025 compared to $29,360,000 ⁶⁴ in 2024, with gross profit margin increasing to 62.5% ⁶⁵ from 61.0% ⁶⁶. The company incurred a loss from operations of $6,446,000 ⁶⁷ in 2025, compared to a loss of $18,845,000 ⁶⁸ in 2024. Net loss attributable to stockholders was $11,211,000 ⁶⁹ in 2025, compared to $23,463,000 ⁷⁰ in 2024. Basic and diluted loss per share was $0.27 ⁷¹ in 2025 versus $0.66 ⁷² in 2024. As of December 31, 2025, the company had cash and cash equivalents of $31,740,000 ⁷³ and working capital of approximately $46.8 million ⁷⁴. Net cash used in operating activities was $8,001,000 ⁷⁵ in 2025, compared to $18,047,000 ⁷⁶ in 2024.

A primary growth vector is the commercial launch of AYON, which commenced in September 2025 ⁷⁷ following FDA 510(k) clearance received on May 13, 2025 ⁷⁸. The company completed a soft launch leveraging relationships with key surgeons in critical geographies. AYON is designed to be the only device a surgeon needs for comprehensive body contouring solutions, integrating multiple modalities. On October 13, 2025 ⁷⁹, the company submitted a 510(k) premarket notification to the FDA for the label expansion of AYON to include power liposuction, with anticipated clearance in the second quarter 2026 ⁸⁰. The company also intends to continue the successful launch of AYON in the United States and eventually worldwide.

Another growth vector is geographic expansion, particularly the launch of Renuvion in China on July 28, 2025 ⁸¹, following receipt of initial market clearance from the National Medical Products Administration of China. The company also continues to expand its regulatory approvals to expand product availability in new markets worldwide. The company believes the increased use of GLP-1 medications may provide a tailwind for sales of Renuvion products, as rapid weight loss can contribute to loose skin, and Renuvion is the only FDA approved device for the treatment of this issue post liposuction. The company also plans to generate consumer interest in the treatment of loose and lax skin through a focused direct-to-consumer advertising strategy, including as a result of the side effects of GLP-1s.

The company has undertaken significant cost reduction measures. In November 2024, the company reduced its U.S. workforce by nearly 25% ⁸², with estimated annualized future cost savings of approximately $4.3 million ⁸³. In addition to the organizational changes, the company identified other direct cost savings achieved in 2025, including reductions in professional fees, lower research and development costs, lower credit card fees, and stock-based compensation. These cost savings reduced annual operating expenses below $40.0 million ⁸⁴ in 2025, as compared to $48.2 million ⁸⁵ and $53.7 million ⁸⁶ in 2024 and 2023, respectively. The Perceptive Credit Agreement amendment introduced a maximum operating expense financial covenant with full year targets of $40.0 million ⁸⁷ and $45.0 million ⁸⁸ for 2025 and 2026, respectively. Gross profit margin increased by approximately 1.5% ⁸⁹ during the year ended December 31, 2025, compared with 2024, primarily due to mix between the two segments and geographic mix, partially offset by tariffs that began affecting the company in the second half of 2025.

The company manufactures the majority of its products at its premises in Clearwater, Florida and at its facility in Sofia, Bulgaria, both certified under ISO13485:2016 international quality standards. The company maintains collaborative arrangements with two ⁹⁰ foreign suppliers, including a contract component manufacturer located in Ningbo, China. The company continues to work closely with suppliers to monitor the availability of raw material components, lead times, and freight carrier availability in response to global supply chain instability and inflationary cost increases. The company expects global supply chain instability will continue to have an impact on its business, but to date that has not been material to financial performance. At December 31, 2025, the company had 205 ⁹¹ full-time employees world-wide. During 2025, the voluntary employee turnover rate was approximately 4% ⁹².

Research and development expenses were $3,373,000 ⁹³ for the year ended December 31, 2025, compared to $5,080,000 ⁹⁴ in 2024, a decrease of 33.6% ⁹⁵ primarily due to lower spending on product development initiatives and clinical studies as the company completed the development of AYON. Net cash used in investing activities for the year ended December 31, 2025, was $1,114,000 ⁹⁶ related to investments in property and equipment. On November 18, 2025 ⁹⁷, the company sold 2,762,431 ⁹⁸ shares of common stock at an offering price of $3.62 ⁹⁹, with net proceeds of approximately $9.1 million ¹⁰⁰. On December 1, 2025 ¹⁰¹, the company filed a shelf registration statement providing the ability to register and sell securities in the aggregate amount up to $100 million ¹⁰². The company has never declared or paid any cash dividends on its common stock and currently does not anticipate paying cash dividends in the foreseeable future.

The company has incurred recurring net losses and cash outflows from operations and anticipates that losses will continue in the near term. For the year ended December 31, 2025, the company incurred a loss from operations of $6.4 million ¹⁰³ and used $8.0 million ¹⁰⁴ of cash in operations. The company's ability to maintain sufficient liquidity, meet current debt covenants, and preserve working capital in order to maintain operations is identified as a risk factor. The company's continued compliance with covenants under the Perceptive Credit Agreement is subject to meeting or exceeding forecasted Surgical Aesthetics revenues and operating expense targets. The company also faces headwinds from the increased use of GLP-1 medications, which has had an initial negative impact on revenue for plastic and cosmetic surgeons and created uncertainty in the aesthetic space. Macroeconomic trends including inflation and higher interest rates may adversely affect financial condition, results of operations, and cash flows, and higher interest rates can impact customers' ability to purchase capital.

The company has incurred recurring net losses and cash outflows from operations, with a loss from operations of $6.4 million ¹⁰⁵ and cash used in operations of $8.0 million ¹⁰⁶ for the year ended December 31, 2025, and may need to raise additional capital to fund operations, with no assurance that financing will be available on acceptable terms. The company's indebtedness under the Perceptive Credit Agreement, with a term loan of $37.5 million ¹⁰⁷ net of discounts and issuance costs, subjects it to financial covenants including trailing twelve-month Surgical Aesthetics revenue targets of $37.0 million ¹⁰⁸, $52.4 million ¹⁰⁹, and $60.3 million ¹¹⁰ for 2025, 2026, and 2027, respectively, and a maximum operating expense covenant of $40.0 million ¹¹¹ and $45.0 million ¹¹² for 2025 and 2026, and failure to comply could result in acceleration of amounts due. The company is involved in a number of legal actions relating to the use of its Helium Plasma Platform Technology, with estimated losses for certain product liability matters of approximately $1,950,000 ¹¹³ and a range of losses between $1,625,000 ¹¹⁴ and $1,825,000 ¹¹⁵ for other matters, and in the event damages exceed aggregate insurance coverage limits or carriers disclaim coverage, costs could have a material adverse impact. The aesthetic equipment market is characterized by rapid innovation, and the company must develop new products and seek regulatory clearance to compete effectively, with the failure to successfully commercialize products including AYON potentially having a material adverse effect. The company relies on certain suppliers for raw materials, with the majority purchased from single-source suppliers, and any significant disruptions in this key supply chain could render the company unable to meet customer demands.

Management's message emphasizes the company's position as a surgical aesthetics company with innovative products including its Helium Plasma Platform Technology and the AYON Body Contouring System. Key themes include the successful receipt of FDA 510(k) clearance for AYON on May 13, 2025 ¹¹⁶, the commercial launch of AYON in September 2025 ¹¹⁷, and the launch of Renuvion in China on July 28, 2025 ¹¹⁸. Management highlights the cost saving restructuring undertaken in November 2024, which included a reduction in the U.S. workforce by nearly 25% ¹¹⁹ with estimated annualized future cost savings of approximately $4.3 million ¹²⁰, and the identification of additional direct cost savings that reduced annual operating expenses below $40.0 million ¹²¹ in 2025. Management states that the company plans to continue to fund operations and capital funding needs through existing cash, sales of products, and if necessary, additional equity and/or debt financing. The strategic priorities emphasized for the period ahead include providing enhanced physician and practice support for cosmetic surgery customers, expanding regulatory approvals to expand product availability in new markets worldwide, continuing to execute the regulatory pathway for AYON in the United States, continuing the successful launch of AYON in the United States and eventually worldwide, and generating consumer interest in the treatment of loose and lax skin through a focused direct-to-consumer advertising strategy, including as a result of the side effects of GLP-1s.