Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 15, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 0-12183 | ||
Entity Registrant Name | APYX MEDICAL CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 11-2644611 | ||
Entity Address, Address Line One | 5115 Ulmerton Road | ||
Entity Address, City or Town | Clearwater | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33760 | ||
City Area Code | 727 | ||
Local Phone Number | 384-2323 | ||
Title of 12(b) Security | Common Stock, $.001 Par Value | ||
Trading Symbol | APYX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 202.1 | ||
Entity Common Stock, Shares Outstanding | 34,597,822 | ||
Entity Central Index Key | 0000719135 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 49 |
Auditor Name | RSM US LLP |
Auditor Location | Orlando, Florida |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 10,192 | $ 30,870 |
Trade accounts receivable, net of allowance of $668 and $430 | 10,602 | 13,038 |
Income tax receivables | 7,545 | 7,642 |
Other receivables | 99 | 483 |
Inventories, net of provision for obsolescence of $457 and $263 | 11,797 | 6,778 |
Prepaid expenses and other current assets | 2,737 | 1,926 |
Total current assets | 42,972 | 60,737 |
Property and equipment, net | 6,761 | 6,575 |
Operating lease right-of-use assets | 710 | 121 |
Finance lease right-of-use assets | 115 | 178 |
Other assets | 1,217 | 1,110 |
Total assets | 51,775 | 68,721 |
Current liabilities: | ||
Accounts payable | 2,669 | 2,631 |
Accrued expenses and other current liabilities | 8,928 | 10,287 |
Current portion of operating lease liabilities | 216 | 122 |
Current portion of finance lease liabilities | 37 | 165 |
Total current liabilities | 11,850 | 13,205 |
Long-term operating lease liabilities | 470 | 0 |
Long-term finance lease liabilities | 73 | 18 |
Long-term contract liabilities | 1,408 | 1,323 |
Other liabilities | 181 | 166 |
Total liabilities | 13,982 | 14,712 |
Commitments and Contingencies (Note 17) | ||
EQUITY | ||
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 issued and outstanding as of December 31, 2022 and 2021 | 0 | 0 |
Common stock, $0.001 par value; 75,000,000 shares authorized; 34,597,822 issued and outstanding as of December 31, 2022, and 34,409,912 issued and outstanding as of December 31, 2021 | 35 | 34 |
Additional paid-in capital | 73,282 | 66,221 |
Accumulated deficit | (35,735) | (12,551) |
Total stockholders' equity | 37,582 | 53,704 |
Non-controlling interest | 211 | 305 |
Total equity | 37,793 | 54,009 |
Total liabilities and equity | $ 51,775 | $ 68,721 |
Common stock, shares outstanding (in shares) | 34,597,822 | 34,409,912 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 668 | $ 430 |
Provision for obsolescence | $ 457 | $ 263 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares outstanding (in shares) | 34,597,822 | 34,409,912 |
Common stock, shares issued (in shares) | 34,597,822 | 34,409,912 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Sales | $ 44,510 | $ 48,517 |
Cost of sales | 15,379 | 14,916 |
Gross profit | 29,131 | 33,601 |
Other costs and expenses: | ||
Research and development | 4,544 | 4,321 |
Professional services | 9,044 | 7,589 |
Salaries and related costs | 18,621 | 17,522 |
Selling, general and administrative | 20,484 | 18,617 |
Total other costs and expenses | 52,693 | 48,049 |
Loss from operations | (23,562) | (14,448) |
Interest income | 157 | 11 |
Interest expense | (15) | (10) |
Other income (losses), net | 509 | (373) |
Total other income (loss), net | 651 | (372) |
Loss from operations before income taxes | (22,911) | (14,820) |
Income tax expense | 367 | 380 |
Net loss | (23,278) | (15,200) |
Net loss attributable to non-controlling interest | (94) | (28) |
Net loss attributable to stockholders | $ (23,184) | $ (15,172) |
Loss per share - basic (in dollars per share) | $ (0.67) | $ (0.44) |
Loss per share - diluted (in dollars per share) | $ (0.67) | $ (0.44) |
Weighted average number of shares outstanding - basic (in shares) | 34,516 | 34,332 |
Weighted average number of shares outstanding - dilutive (in shares) | 34,516 | 34,332 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Non-controlling interest |
Beginning balance (in shares) at Dec. 31, 2020 | 34,289 | ||||
Beginning balance at Dec. 31, 2020 | $ 63,859 | $ 34 | $ 61,066 | $ 2,621 | $ 138 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Contributions from non-controlling interest | 195 | 195 | |||
Shares issued on stock options exercises for cash (in shares) | 13 | ||||
Shares issued on stock options exercises for cash | 67 | 67 | |||
Stock based compensation | 5,088 | 5,088 | |||
Shares issued on net settlement of stock options (in shares) | 108 | ||||
Net loss | (15,200) | (15,172) | (28) | ||
Ending balance (in shares) at Dec. 31, 2021 | 34,410 | ||||
Ending balance at Dec. 31, 2021 | 54,009 | $ 34 | 66,221 | (12,551) | 305 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued on stock options exercises for cash (in shares) | 106 | ||||
Shares issued on stock options exercises for cash | 365 | $ 1 | 364 | ||
Stock based compensation | 6,697 | 6,697 | |||
Shares issued on net settlement of stock options (in shares) | 82 | ||||
Net loss | (23,278) | (23,184) | (94) | ||
Ending balance (in shares) at Dec. 31, 2022 | 34,598 | ||||
Ending balance at Dec. 31, 2022 | $ 37,793 | $ 35 | $ 73,282 | $ (35,735) | $ 211 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (23,278) | $ (15,200) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 890 | 903 |
Provision for inventory obsolescence | 240 | 109 |
Provision for product warranties | (2) | 318 |
Loss on disposal of property and equipment | 75 | 48 |
Stock based compensation | 6,697 | 5,088 |
Provision for allowance for doubtful accounts | 315 | 128 |
Changes in current assets and liabilities: | ||
Trade receivables | 1,918 | (4,901) |
Income tax receivables | 97 | 12 |
Prepaid expenses and other assets | (523) | 1,355 |
Inventories | (5,568) | (2,859) |
Accounts payable | 67 | 1,154 |
Accrued expenses and other liabilities | (1,208) | 3,396 |
Net cash used in operating activities | (20,280) | (10,449) |
Cash flows from investing activities | ||
Purchases of property and equipment | (1,010) | (723) |
Net cash used in investing activities | (1,010) | (723) |
Cash flows from financing activities | ||
Proceeds from stock option exercises | 365 | 67 |
Repayment of finance lease liabilities | (148) | (238) |
Contributions from non-controlling interests | 0 | 195 |
Net cash provided by financing activities | 217 | 24 |
Effect of exchange rates on cash | 395 | 103 |
Net change in cash and cash equivalents | (20,678) | (11,045) |
Cash and cash equivalents, beginning of year | 30,870 | 41,915 |
Cash and cash equivalents, end of year | 10,192 | 30,870 |
Cash paid for: | ||
Interest expense | 15 | 10 |
Income taxes | 128 | 111 |
Non cash activities: | ||
Right-of-use assets capitalized and operating lease liabilities recognized upon lease modification | 769 | 0 |
Right-of-use assets capitalized and finance lease liabilities recognized upon execution of lease | 103 | 0 |
Right-of-use assets and finance lease liabilities derecognized upon execution of lease modification | 28 | 0 |
Transfer of right-of-use assets to property and equipment on exercise of purchase option | $ 0 | $ 43 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Apyx Medical Corporation (“Company", "Apyx", "it" and similar terms) was incorporated in 1982, under the laws of the State of Delaware and has its principal executive office at 5115 Ulmerton Road, Clearwater, FL 33760. The Company is an advanced energy technology company with a passion for elevating people’s lives through innovative products, including its Helium Plasma Technology products marketed and sold as Renuvion® in the cosmetic surgery 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. As part of its plan to accelerate and fully fund the development of its advanced energy business, with a focus in the cosmetic surgery market, the Company sold its Core business in 2018 for gross proceeds of $97 million. These proceeds were used to launch broad marketing and sales initiatives which resulted in rapid sales growth through December 31, 2021 and into the first quarter of 2022. This planned growth in the business was accompanied by scaled operations, including procurement of components, expanded manufacturing capacity to turn those materials into saleable inventory, additional discretionary expenditures, including increased global participation at trade shows, additional employee trainings, user meetings, increased travel and entertainment expenses, more expansive research and development projects, and additional headcount to support those activities. Additionally, the Company had, and still has, some significant non-recurring discretionary expenditures associated with completing its multi-year marketing initiatives related to its dermal resurfacing and skin laxity clearances. On March 14, 2022, the U.S. Food and Drug Administration (“FDA”) posted a Safety Communication that warns consumers and health care providers against the use of the Company’s Advanced Energy products outside of their FDA-cleared indications for general use in cutting, coagulation, and ablation of soft tissue during open and laparoscopic surgical procedures. Following the Safety Communication, the Company experienced slowed demand for the adoption of its Helium Plasma Technology. On May 26, 2022, the Company announced that it had received 510(k) clearance from the FDA for the use of the Renuvion® Dermal Handpiece for specific dermal resurfacing procedures. On July 18, 2022, the Company announced that it had received 510(k) clearance from the FDA for the use of the Renuvion® APR Handpiece for certain skin contraction procedures. On June 2, 2022, and July 21, 2022, the FDA updated the Medical Device Safety Communication to recognize the new 510(k) clearances for the Renuvion® Dermal handpiece, and the expanded indications for the Renuvion® APR handpieces. The 510(k) clearance for the Renuvion® Dermal handpiece allows surgeons to perform dermal resurfacing procedures for the treatment of moderate to severe wrinkles and rhytides, limited to patients with Fitzpatrick Skin Types I, II or III. The 510(k) clearance for the Renuvion® APR handpieces now addresses improving the appearance of lax (loose) skin in the neck and submental region. On February 1, 2023, we announced we had submitted a 510(k) premarket notification (“510(k) submission”) for the Renuvion APR Handpiece to the FDA, supported by a clinical study and real-world evidence. The 510(k) submission is intended to expand Renuvion’s indications for use to include a specific indication for the use of the Renuvion APR Handpiece for the coagulation of subcutaneous soft tissues where needed, following liposuction. On February 27, 2023, we announced that we received 510(k) clearance from the FDA for the use of the Renuvion APR Handpiece for the delivery of radiofrequency energy and/or helium plasma where coagulation/contraction of soft tissue is needed. Soft tissue includes subcutaneous tissue. While management expected that receiving these clearances would materially mitigate the financial effects of the Safety Communication in future periods, the Company continues to experience reduced demand for the adoption and utilization of its technology and management believes that this may have an adverse effect in future periods. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these consolidated financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the condensed consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. While sales were continuing to grow into the first quarter of 2022 prior to the FDA Safety Communication, over the last few years, exclusive of the Company’s sale of the Core business segment to Symmetry Surgical during 2018, it has incurred recurring net losses and cash outflows from operations and the Company anticipates that losses will continue in the near term. During the year ended December 31, 2022, the Company incurred an operating loss of $23.6 million and used $20.3 million of cash in operations. As of December 31, 2022, the Company had cash and cash equivalents of $10.2 million. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements. In an effort to alleviate these conditions, the Company pursued various funding solutions in order to improve liquidity. On November 22, 2022, the Company filed a shelf registration statement providing it the ability to register securities in the aggregate amount up to $100 million. The shelf registration included an embedded ATM facility for up to $40 million. To date the Company has not utilized this facility. On February 17, 2023, the Company entered into a Credit, Security and Guaranty Agreement (the “Credit Agreement”) with MidCap Funding IV Trust (as agent), and MidCap Financial Trust (as term loan servicer), and the lenders party thereto from time to time. The Credit Agreement provides for an up to $35 million facility, consisting of senior secured term loans and a secured revolving facility. The Credit Agreement provides for senior secured term loans of up to $25 million, comprised of (i) an initial tranche of $10 million, (ii) a second tranche of $5 million, and (iii) a third tranche of $10 million. The secured revolving facility provides for loans in an aggregate principal amount of up to $10 million, subject to a borrowing base equal to certain percentages of the Company’s eligible accounts receivable and inventory, as determined in accordance with the terms of the Credit Agreement. For a more in depth description of the terms of the Credit Agreement see Note 20. On February 27, 2023, the Company’s Board of Directors approved a plan to sell and leaseback the Company's real property located in Clearwater, FL. On March 14, 2023, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with VK Acquisitions VI, LLC (the “Purchaser”), for the sale of the Company's facility located at 5115 Ulmerton Road, Clearwater, Florida, as more fully described in the Purchase Agreement (collectively, the “Property”) for a purchase price of $7,650,000. The Purchase Agreement is subject to the satisfactory completion of due diligence by the Purchaser. Upon the closing of the sale of the Property, the Company will enter into a lease agreement with the Purchaser, pursuant to which the Property will be leased back to the Company. For a more in depth description of the terms of the Purchase Agreement see Note 20. During January 2023, the Company was notified that the IRS examination process of our 2018, 2019 and 2020 tax returns was complete and that the Company's tax refunds were approved for substantially the amount recorded in the Company's Consolidated Balance Sheet at December 31, 2022. As of the date of this report, the Company is awaiting receipt of the tax refunds. The Company also continues to re-assess its operating expenditures and cost structure to be commensurate with expected levels of revenue and management has the ability to reduce or delay expenditures to enhance and preserve liquidity. Management has already reduced some operating expenditures, including a reduction-in-force on January 9, 2023, that reduced the Company's U.S. headcount by 14%. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Apyx, its wholly owned subsidiary, Apyx Bulgaria, EOOD, and its 51% owned subsidiary, Apyx SY Medical Devices (Ningbo) Co., Ltd. (collectively, “Apyx,” or the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions the Company is required to make. Cash and Cash Equivalents Holdings of highly liquid investments with original maturities of three months or less from the date of purchase are considered to be cash equivalents. As of December 31, 2022 and 2021, all of the Company’s investments are in money market funds or in Treasury Bills with original maturities of three months or less and are included in cash and cash equivalents. Concentration of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of trade accounts receivable. With respect to cash, the Company frequently maintains cash and cash equivalent balances in excess of federally insured limits; it has not experienced any losses in such accounts. Trade Accounts Receivable and Allowance for Doubtful Accounts The Company's standard credit terms for billings range from net 30 days to net 120 days, depending on the customer agreement. Accounts receivable are determined to be past due if payments are not made in accordance with such agreements and an allowance is generally recorded for accounts that become three months past due, or sooner if there are other indicators that the receivables may not be recovered. Customary collection efforts are initiated, and receivables are written off when the Company determines they are not collectible and abandons these collection efforts. The Company evaluates the allowance for doubtful accounts on a regular basis for adequacy based upon its periodic review of the collectability of the receivables in light of historical experience, adverse situations that may affect its customers’ ability to pay and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Management believes that the allowances for doubtful accounts of approximately $0.7 million and $0.4 million at December 31, 2022 and 2021, respectively, are adequate to provide for probable bad debts. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to manufactured inventory based upon labor hours. The Company monitors inventory usage to determine if the carrying value of any items should be adjusted due to lack of demand for the item and adjusts inventory for estimated obsolescence or unusable inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the assets. The amortization of leasehold improvements is based on the shorter of the lease term or the life of the improvement. Betterments and major improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and routine improvements are expensed as incurred. The estimated useful lives are: buildings and improvements, 39 years; machinery and equipment, 3-10 years; furniture and fixtures, 5-10 years; computer equipment and software, 3-5 years; and molds, 7-15 years. Valuation of Long-Lived Assets The Company reviews long-lived assets for recoverability if events or changes in circumstances indicate that the assets may have been impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. In those cases, an impairment loss is recognized to the extent that the assets’ carrying amount exceeds its fair value. Any impairment losses are not restored in the future if the fair value increases. At December 31, 2022 and 2021, the Company believes the remaining carrying values of its long-lived assets are recoverable. Product Warranties The Company provides a four year limited warranty on end-user sales of its Renuvion®/J-Plasma® generators, a two year warranty on mounting fixtures, and a one-year warranty on certain accessories. The Company estimates and provides for future costs for product warranties in cost of sales at the time revenue is recognized. The Company bases its product warranty costs on related material costs, repair labor costs and shipping costs. The Company estimates the future cost of product warranties by considering historical material, repair labor, and shipping costs, and applying the experience rates to the outstanding warranty period for products sold. It is reasonably possible that actual results could differ from those estimates. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive for those goods or services. To recognize revenue, the Company (i) identifies the contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, it satisfies the performance obligation(s). For sales of the Company's Advanced Energy products (Renuvion®/J-Plasma®), this is at a point in time when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. For sales of products under its OEM agreements, the Company recognizes revenue over time when no alternative use exists for the manufactured goods and the Company has rights to payment. Presently, the Company does not stock any significant completed goods under its OEM agreements, accordingly, the recognition of revenue under these agreements approximates point in time recognition. The following policies apply to its major categories of revenue transactions: • The majority of sales to customers are evidenced by firm purchase orders. Generally, title and the risks and rewards of ownership are transferred to the customer when the product is shipped. Payment by the customer is due under fixed payment terms. • Product returns are only accepted at the Company's discretion and in accordance with its “Returned Goods Policy”. Historically, the level of product returns has not been significant. Accruals for sales returns, rebates and allowances are made as a reduction of revenue based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions. • The terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are generally provided for sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data. • In connection with the execution of OEM supply agreements, the Company may enter into an accompanying product development agreement. If the Company enters into a product development agreement, and development of the goods does not represent a performance obligation on a standalone basis, the Company defers the development fees billed to customers and the associated costs. Recognition of the deferred billings and costs occurs as the Company performs on the accompanying supply arrangements. Advertising Costs Advertising costs are expensed as incurred. The amounts of advertising costs, including trade shows, were approximately $2.3 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation . FASB ASC 718 requires recognizing compensation expense for all share-based payment awards made to employees, directors and non-employees based upon the grant date fair value of such awards. It accounts for forfeitures as they occur. The standard covers employee stock options, restricted stock and other equity awards. The Company utilizes a Black-Scholes model to estimate the grant date fair value of stock option awards. For employee and director awards, compensation expense is recognized on a straight-line basis over the vesting periods. For non-employee awards, compensation expense is recorded for non-forfeitable, fully vested awards at the grant date. For other awards granted to non-employees, compensation cost is recognized as services are provided, which approximates a straight-line basis over the vesting period. Litigation Contingencies In accordance with authoritative guidance, the Company accrues a liability in its consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is 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; actual results may differ from those estimates. Earnings (Loss) Per Share The Company computes basic (loss) earnings attributable to common stockholders per share by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted (loss) earnings per share attributable to common stockholders gives effect to all potential dilutive shares outstanding during the period. The number of dilutive shares is calculated using the treasury stock method which reduces the effective number of shares by the amount of shares the Company could purchase with the proceeds of assumed exercises. Anti-dilutive units are excluded from the calculation of diluted shares. In periods of loss, all potentially dilutive units are anti-dilutive and are excluded from the calculation of diluted income (loss) per share. Research and Development Costs Research and development expenses are charged to operations as incurred. Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, Income Taxes . Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the deferred taxes reverse. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income, the timing of reversals of temporary differences, and the availability of tax planning strategies. As of December 31, 2022 and 2021, the Company recorded a valuation allowance on the net deferred tax assets. The Company assesses the realizability of deferred tax assets each reporting period and will be able to reduce the valuation allowance to the extent the financial results of continuing operations improve, and it becomes more likely than not that the deferred tax assets will be realized. As Management has not fully determined the timing of when it will generate taxable income in the U.S., the Company will continue to record a full valuation allowance on the net deferred tax assets as of December 31, 2022. The Company assesses the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. Foreign Currency Transactions The functional currency of Apyx Bulgaria is the U.S. dollar. The monetary assets and liabilities that are denominated in a currency other than U.S. dollar are remeasured into U.S. dollars at the exchange rate on the balance sheet date, while nonmonetary items are remeasured at historical rates. Revenue and expenses are remeasured at weighted average exchange rates during the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in selling, general and administrative expenses in the Consolidated Statements of Operations and were not material for the years ended December 31, 2022 and 2021. Reclassifications We have reclassified certain amounts presented in the prior year to conform to the current year presentation. These reclassifications had no impact on previously reported net income, retained earnings or operating cash flows for the periods presented. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, contract assets, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update, as originally issued, was effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates , which deferred the effective dates of these standards for Smaller Reporting Companies until fiscal years beginning after December 15, 2022. The Company currently expects to continue to qualify as a Smaller Reporting Company, based upon the current SEC definition and, as a result, will be utilizing the deferred elective date. While the Company is in the process of determining the effects of the adoption of the standard on the consolidated financial statements, it does not expect the impact to be material. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on the Company's consolidated financial statements or disclosures. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | SIGNIFICANT ACCOUNTING POLICIES Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Apyx, its wholly owned subsidiary, Apyx Bulgaria, EOOD, and its 51% owned subsidiary, Apyx SY Medical Devices (Ningbo) Co., Ltd. (collectively, “Apyx,” or the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions the Company is required to make. Cash and Cash Equivalents Holdings of highly liquid investments with original maturities of three months or less from the date of purchase are considered to be cash equivalents. As of December 31, 2022 and 2021, all of the Company’s investments are in money market funds or in Treasury Bills with original maturities of three months or less and are included in cash and cash equivalents. Concentration of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of trade accounts receivable. With respect to cash, the Company frequently maintains cash and cash equivalent balances in excess of federally insured limits; it has not experienced any losses in such accounts. Trade Accounts Receivable and Allowance for Doubtful Accounts The Company's standard credit terms for billings range from net 30 days to net 120 days, depending on the customer agreement. Accounts receivable are determined to be past due if payments are not made in accordance with such agreements and an allowance is generally recorded for accounts that become three months past due, or sooner if there are other indicators that the receivables may not be recovered. Customary collection efforts are initiated, and receivables are written off when the Company determines they are not collectible and abandons these collection efforts. The Company evaluates the allowance for doubtful accounts on a regular basis for adequacy based upon its periodic review of the collectability of the receivables in light of historical experience, adverse situations that may affect its customers’ ability to pay and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Management believes that the allowances for doubtful accounts of approximately $0.7 million and $0.4 million at December 31, 2022 and 2021, respectively, are adequate to provide for probable bad debts. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to manufactured inventory based upon labor hours. The Company monitors inventory usage to determine if the carrying value of any items should be adjusted due to lack of demand for the item and adjusts inventory for estimated obsolescence or unusable inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the assets. The amortization of leasehold improvements is based on the shorter of the lease term or the life of the improvement. Betterments and major improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and routine improvements are expensed as incurred. The estimated useful lives are: buildings and improvements, 39 years; machinery and equipment, 3-10 years; furniture and fixtures, 5-10 years; computer equipment and software, 3-5 years; and molds, 7-15 years. Valuation of Long-Lived Assets The Company reviews long-lived assets for recoverability if events or changes in circumstances indicate that the assets may have been impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. In those cases, an impairment loss is recognized to the extent that the assets’ carrying amount exceeds its fair value. Any impairment losses are not restored in the future if the fair value increases. At December 31, 2022 and 2021, the Company believes the remaining carrying values of its long-lived assets are recoverable. Product Warranties The Company provides a four year limited warranty on end-user sales of its Renuvion®/J-Plasma® generators, a two year warranty on mounting fixtures, and a one-year warranty on certain accessories. The Company estimates and provides for future costs for product warranties in cost of sales at the time revenue is recognized. The Company bases its product warranty costs on related material costs, repair labor costs and shipping costs. The Company estimates the future cost of product warranties by considering historical material, repair labor, and shipping costs, and applying the experience rates to the outstanding warranty period for products sold. It is reasonably possible that actual results could differ from those estimates. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive for those goods or services. To recognize revenue, the Company (i) identifies the contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, it satisfies the performance obligation(s). For sales of the Company's Advanced Energy products (Renuvion®/J-Plasma®), this is at a point in time when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. For sales of products under its OEM agreements, the Company recognizes revenue over time when no alternative use exists for the manufactured goods and the Company has rights to payment. Presently, the Company does not stock any significant completed goods under its OEM agreements, accordingly, the recognition of revenue under these agreements approximates point in time recognition. The following policies apply to its major categories of revenue transactions: • The majority of sales to customers are evidenced by firm purchase orders. Generally, title and the risks and rewards of ownership are transferred to the customer when the product is shipped. Payment by the customer is due under fixed payment terms. • Product returns are only accepted at the Company's discretion and in accordance with its “Returned Goods Policy”. Historically, the level of product returns has not been significant. Accruals for sales returns, rebates and allowances are made as a reduction of revenue based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions. • The terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are generally provided for sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data. • In connection with the execution of OEM supply agreements, the Company may enter into an accompanying product development agreement. If the Company enters into a product development agreement, and development of the goods does not represent a performance obligation on a standalone basis, the Company defers the development fees billed to customers and the associated costs. Recognition of the deferred billings and costs occurs as the Company performs on the accompanying supply arrangements. Advertising Costs Advertising costs are expensed as incurred. The amounts of advertising costs, including trade shows, were approximately $2.3 million and $1.3 million for the years ended December 31, 2022 and 2021, respectively. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation . FASB ASC 718 requires recognizing compensation expense for all share-based payment awards made to employees, directors and non-employees based upon the grant date fair value of such awards. It accounts for forfeitures as they occur. The standard covers employee stock options, restricted stock and other equity awards. The Company utilizes a Black-Scholes model to estimate the grant date fair value of stock option awards. For employee and director awards, compensation expense is recognized on a straight-line basis over the vesting periods. For non-employee awards, compensation expense is recorded for non-forfeitable, fully vested awards at the grant date. For other awards granted to non-employees, compensation cost is recognized as services are provided, which approximates a straight-line basis over the vesting period. Litigation Contingencies In accordance with authoritative guidance, the Company accrues a liability in its consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is 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; actual results may differ from those estimates. Earnings (Loss) Per Share The Company computes basic (loss) earnings attributable to common stockholders per share by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted (loss) earnings per share attributable to common stockholders gives effect to all potential dilutive shares outstanding during the period. The number of dilutive shares is calculated using the treasury stock method which reduces the effective number of shares by the amount of shares the Company could purchase with the proceeds of assumed exercises. Anti-dilutive units are excluded from the calculation of diluted shares. In periods of loss, all potentially dilutive units are anti-dilutive and are excluded from the calculation of diluted income (loss) per share. Research and Development Costs Research and development expenses are charged to operations as incurred. Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, Income Taxes . Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the deferred taxes reverse. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income, the timing of reversals of temporary differences, and the availability of tax planning strategies. As of December 31, 2022 and 2021, the Company recorded a valuation allowance on the net deferred tax assets. The Company assesses the realizability of deferred tax assets each reporting period and will be able to reduce the valuation allowance to the extent the financial results of continuing operations improve, and it becomes more likely than not that the deferred tax assets will be realized. As Management has not fully determined the timing of when it will generate taxable income in the U.S., the Company will continue to record a full valuation allowance on the net deferred tax assets as of December 31, 2022. The Company assesses the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. Foreign Currency Transactions The functional currency of Apyx Bulgaria is the U.S. dollar. The monetary assets and liabilities that are denominated in a currency other than U.S. dollar are remeasured into U.S. dollars at the exchange rate on the balance sheet date, while nonmonetary items are remeasured at historical rates. Revenue and expenses are remeasured at weighted average exchange rates during the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in selling, general and administrative expenses in the Consolidated Statements of Operations and were not material for the years ended December 31, 2022 and 2021. Reclassifications We have reclassified certain amounts presented in the prior year to conform to the current year presentation. These reclassifications had no impact on previously reported net income, retained earnings or operating cash flows for the periods presented. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, contract assets, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update, as originally issued, was effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates , which deferred the effective dates of these standards for Smaller Reporting Companies until fiscal years beginning after December 15, 2022. The Company currently expects to continue to qualify as a Smaller Reporting Company, based upon the current SEC definition and, as a result, will be utilizing the deferred elective date. While the Company is in the process of determining the effects of the adoption of the standard on the consolidated financial statements, it does not expect the impact to be material. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on the Company's consolidated financial statements or disclosures. |
DISPOSITION OF THE CORE BUSINES
DISPOSITION OF THE CORE BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION OF THE CORE BUSINESS | DISPOSITION OF THE CORE BUSINESS On August 30, 2018, the Company closed on a definitive asset purchase agreement (the “Asset Purchase Agreement”) with Specialty Surgical Instrumentation Inc., a Tennessee Corporation and wholly owned subsidiary of Symmetry Surgical Inc. (“Symmetry”), pursuant to which the Company divested and sold the Company’s electrosurgical “Core” business segment and related intellectual property, including the Bovie ® brand and trademarks, to Symmetry for gross proceeds of $97 million in cash. In connection with the Asset Purchase Agreement, the Company entered into an Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement with Symmetry for a four-year term, which expired August 30, 2022, whereby it manufactured certain Core pro ducts and sold them to Symmetry at agreed upon prices. Any activity resulting from this agreement is netted and reported in the Consolidated Statements of Operations as other income (loss). Core activity for 2022 amounted to $0.6 million with cost of sales equivalents of $0.6 million and other related expenses of $0.1 million for net other loss of $0.1 million. Core activity for 2021 amounted to $6.5 million with cost of sales equivalents of $5.5 million and other related expenses of $1.5 million for net other loss of $0.4 million. |
INTEREST IN JOINT VENTURE INVES
INTEREST IN JOINT VENTURE INVESTMENT | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
INTEREST IN JOINT VENTURE INVESTMENT | INTEREST IN JOINT VENTURE INVESTMENT In 2019, the Company executed a joint venture agreement with its Chinese supplier (the “China JV”) whereby the Company has a 51% interest. The China JV has been consolidated in these consolidated financial statements. The agreement required the Company to make capital contributions into the newly formed entity of approximately $357,000, of which approximately $203,000 and $154,000, respectively, were contributed during the years ended December 31, 2021 and 2020. As of the date of these consolidated financial statements, the joint venture has not commenced principal operations. Changes in the Company’s ownership investment in the China JV were as follows: Year Ended December 31, (In thousands) 2022 2021 Beginning interest in China JV $ 317 $ 144 Contributions — 203 Net loss attributable to Apyx (98) (30) Ending interest in China JV $ 219 $ 317 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: (In thousands) December 31, December 31, Raw materials $ 4,979 $ 3,603 Work in process 2,160 1,441 Finished goods 5,115 1,997 Gross inventories 12,254 7,041 Less: provision for obsolescence (457) (263) Inventories, net $ 11,797 $ 6,778 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following: (In thousands) December 31, December 31, Land $ 1,600 $ 1,600 Building and improvements 4,426 4,429 Machinery and equipment 2,613 2,337 Furniture and fixtures 211 306 Computer equipment and software 1,420 1,535 Leasehold improvements 178 171 Molds 847 859 Total property, plant and equipment 11,295 11,237 Less: accumulated depreciation and amortization (5,041) (5,316) Property and equipment in service 6,254 5,921 Construction in progress 507 654 Property and equipment, net $ 6,761 $ 6,575 Total depreciation expense was $0.7 million for the years ended December 31, 2022 and 2021. Depreciation expense is included within cost of goods sold and selling, general and administrative expense in the Consolidated Statements of Operations. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company does not recognize leases with terms less than twelve months in duration, or that have variable only payments, in its Consolidated Balance Sheet as right-of-use assets and lease liabilities. The Company has adopted the practical expedient which allows for the Company to not separate lease and non-lease components of contracts. Accordingly, non-lease components are included in the measurement of the Company’s lease liabilities and right-of-use assets. If the Company is aware of the implicit rate in leases, the Company determines the operating lease liability using the implicit rate. For those leases where the Company is not aware of the implicit rate in the lease, the Company utilizes an incremental borrowing rate, which is indicative of its collateralized borrowing rate. We utilized rates of 1.83% to 6.49% for our outstanding leases at December 31, 2022. Operating Leases The Company leases its facility in Sofia, Bulgaria and computers under non-cancelable operating lease agreements. During the year ended December 31, 2022, the Company’s leases on the vehicles in Clearwater, Florida expired and the Company purchased the vehicles at fair value. During the year ended December 31, 2022, the Company entered into a one year extension on one of its leases on computer equipment. This extension resulted in reclassification of the lease from finance to operating. During the year ended December 31, 2022, the Company entered into a five year extension of its Sofia, Bulgaria facility. These operating leases have terms expiring through December 2027. Finance Leases The Company has entered into non-cancelable finance leases for certain computer equipment and a vehicle in Clearwater, Florida. During the year ended December 31, 2022, the Company entered into a 63 month lease for computer equipment. These finance leases have terms expiring through July 2027. Information about the Company’s lease costs are as follows: Year Ended Lease costs (in thousands) : 2022 2021 Operating lease costs $ 213 $ 134 Finance lease costs: Amortization of right-of-use assets 138 216 Interest on lease liabilities 5 12 Variable lease costs 16 12 Total lease costs $ 372 $ 374 Cash information related to our leases are as follows: Year Ended Year Ended (in thousands) Operating Finance Operating Finance Cash paid for lease liabilities $ 219 $ 153 $ 135 $ 228 Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: Year Ended Year Ended Operating Finance Operating Finance Weighted average remaining lease term (in years) 4.4 3.9 1.0 0.8 Weighted average discount rate 2.54% 2.60% 3.98% 4.00% Maturities of lease liabilities as of December 31, 2022 are as follows: (In thousands) Operating Finance 2023 $ 229 $ 40 2024 122 21 2025 122 21 2026 122 21 2027 122 12 Total lease payments 717 115 Less imputed interest (31) (5) Present value of lease liabilities 686 110 Less current portion of lease liabilities (216) (37) Long-term portion of lease liabilities $ 470 $ 73 |
LEASES | LEASES The Company does not recognize leases with terms less than twelve months in duration, or that have variable only payments, in its Consolidated Balance Sheet as right-of-use assets and lease liabilities. The Company has adopted the practical expedient which allows for the Company to not separate lease and non-lease components of contracts. Accordingly, non-lease components are included in the measurement of the Company’s lease liabilities and right-of-use assets. If the Company is aware of the implicit rate in leases, the Company determines the operating lease liability using the implicit rate. For those leases where the Company is not aware of the implicit rate in the lease, the Company utilizes an incremental borrowing rate, which is indicative of its collateralized borrowing rate. We utilized rates of 1.83% to 6.49% for our outstanding leases at December 31, 2022. Operating Leases The Company leases its facility in Sofia, Bulgaria and computers under non-cancelable operating lease agreements. During the year ended December 31, 2022, the Company’s leases on the vehicles in Clearwater, Florida expired and the Company purchased the vehicles at fair value. During the year ended December 31, 2022, the Company entered into a one year extension on one of its leases on computer equipment. This extension resulted in reclassification of the lease from finance to operating. During the year ended December 31, 2022, the Company entered into a five year extension of its Sofia, Bulgaria facility. These operating leases have terms expiring through December 2027. Finance Leases The Company has entered into non-cancelable finance leases for certain computer equipment and a vehicle in Clearwater, Florida. During the year ended December 31, 2022, the Company entered into a 63 month lease for computer equipment. These finance leases have terms expiring through July 2027. Information about the Company’s lease costs are as follows: Year Ended Lease costs (in thousands) : 2022 2021 Operating lease costs $ 213 $ 134 Finance lease costs: Amortization of right-of-use assets 138 216 Interest on lease liabilities 5 12 Variable lease costs 16 12 Total lease costs $ 372 $ 374 Cash information related to our leases are as follows: Year Ended Year Ended (in thousands) Operating Finance Operating Finance Cash paid for lease liabilities $ 219 $ 153 $ 135 $ 228 Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: Year Ended Year Ended Operating Finance Operating Finance Weighted average remaining lease term (in years) 4.4 3.9 1.0 0.8 Weighted average discount rate 2.54% 2.60% 3.98% 4.00% Maturities of lease liabilities as of December 31, 2022 are as follows: (In thousands) Operating Finance 2023 $ 229 $ 40 2024 122 21 2025 122 21 2026 122 21 2027 122 12 Total lease payments 717 115 Less imputed interest (31) (5) Present value of lease liabilities 686 110 Less current portion of lease liabilities (216) (37) Long-term portion of lease liabilities $ 470 $ 73 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Accrued payroll $ 563 $ 546 Accrued bonus — 2,117 Accrued commissions 847 1,656 Accrued product warranties 391 593 Accrued product liability claim insurance deductibles 1,825 610 Accrued professional fees and legal related contingent liabilities 901 421 Joint and several payroll liability 345 1,027 Short-term contract liabilities 853 533 Uncertain tax positions 2,079 1,863 Sales tax payable 245 428 Other accrued expenses and current liabilities 879 493 Total accrued expenses and other current liabilities $ 8,928 $ 10,287 |
PRODUCT WARRANTIES
PRODUCT WARRANTIES | 12 Months Ended |
Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTIES | PRODUCT WARRANTIES Product warranty activity consisted of the following for the years ended: (In thousands) December 31, December 31, Beginning balance $ 593 $ 498 Provision for product warranties 196 318 Change in estimate to fulfill prior-year warranty obligations (198) — Product warranty costs incurred (200) (223) Accrued product warranties $ 391 $ 593 |
JOINT AND SEVERAL PAYROLL LIABI
JOINT AND SEVERAL PAYROLL LIABILITY | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
JOINT AND SEVERAL PAYROLL LIABILITY | JOINT AND SEVERAL PAYROLL LIABILITYDuring 2018 and 2019, the Company improperly calculated and reported the amount of income to certain employees, and did not collect and remit the correct amount of its employees' portion of income and payroll taxes, related to stock option exercises as required by the IRS. Due to IRS statutory requirements, the Company has joint and several liability for the full amount that was not withheld and remitted to the proper taxing authorities. During 2022, the Company was relieved of approximately $650,000 of its joint and several payroll liability due to the lapse of the statute of limitations on the liability. This adjustment is included in other income (losses), net in the accompany Consolidated Statement of Operations for the year ended December 31, 2022. This amount of the liability was approximately $0.3 million and $1.0 million at December 31, 2022 and 2021, respectively. The Company will be relieved of the remainder of the liability as the statute of limitations on the liability expires, which the Company expects to occur during April 2023, or once the Company can establish that its employees have in fact paid these obligations. |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
CONTRACT ASSETS AND LIABILITIES | CONTRACT ASSETS AND LIABILITIES The Company’s contracts with customers may result in the Company having contract assets and liabilities. These contract assets and liabilities arise primarily from OEM development and supply agreements where the development of the goods does not represent a performance obligation on a standalone basis. The Company defers the development fees billed to customers, and the associated costs, and recognizes them as it completes performance obligations on the supply portion of the agreement. Other contract liabilities may be recognized when a customer prepays for goods or services. At December 31, 2022 and 2021, respectively, the Company had recorded approximately $2.3 million and $1.9 million of contract liabilities and $0.6 million and $0.5 million of contract assets related to customer prepayments and the deferral of revenues and expenses under these agreements. At December 31, 2022, $0.9 million of the contract liabilities and $0.1 million of the contract assets are presented as current in the accompanying Consolidated Balance Sheet within accrued expenses and other current liabilities and prepaid expenses and other current assets, respectively. At December 31, 2021, $0.5 million of the contract liabilities and $0.1 million of the contract assets are presented as current in the accompanying Consolidated Balance Sheet within accrued expenses and other current liabilities and prepaid expenses and other current assets, respectively. During 2022, the Company recognized approximately $0.2 million of contract liabilities and $0.1 million of contract assets that existed as of December 31, 2021 in sales and cost of sales, respectively, in the accompanying Consolidated Statement of Operations for the year ended December 31, 2022. During 2021, the Company did not recognize any significant contract liabilities or contract assets that existed as of December 31, 2020 in sales or cost of sales in the accompanying Consolidated Statement of Operations for the year ended December 31, 2021. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“basic EPS”) is computed by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings 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 earnings (loss) per share. Year Ended December 31, (in thousands, except per share data) 2022 2020 Numerators: Net loss attributable to stockholders $ (23,184) $ (15,172) Weighted average shares outstanding - basic and diluted 34,516 34,332 Loss per share - basic and diluted $ (0.67) $ (0.44) Anti-dilutive instruments excluded from diluted loss per common share: Options 6,520 5,398 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Components of income tax expense are as follows: (In thousands) December 31, December 31, Current: Federal $ 214 $ 217 State 29 54 Foreign 124 109 367 380 Deferred: Federal (4,096) (2,518) State (1,004) (613) (5,100) (3,131) Valuation allowance 5,100 3,131 Total income tax expense $ 367 $ 380 Below is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate: Year Ended December 31, 2022 2021 Federal tax provision 21.0 % 21.0 % State taxes (net of federal benefit) 4.4 % 3.8 % Valuation allowance (22.3) % (21.1) % Incentive stock compensation expense (2.2) % (1.8) % Section 162(m) compensation (1.1) % (3.8) % GILTI (0.9) % (1.2) % Other (0.5) % 0.5 % Total (1.6) % (2.6) % Major components of the Company’s deferred tax assets (liabilities) are as follows: (In thousands) December 31, December 31, Deferred tax assets: Loss and credit carryforwards $ 7,476 $ 4,256 Stock-based compensation 2,381 1,701 Research and development capitalization 982 — Accrued insurance deductibles 400 70 Inventory 263A adjustment 394 — Deferred revenue 339 163 Accrued bonus — 555 Other 553 653 Total deferred tax assets 12,525 7,398 Valuation allowance (12,068) (6,968) Total deferred tax assets, net of valuation allowance 457 430 Deferred tax liabilities: Property and equipment (205) (205) Other (252) (225) Total deferred tax liabilities (457) (430) Net deferred tax assets $ — $ — The Company considers all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. The Company considers the earnings of Apyx Bulgaria, EOOD to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. It has not recorded a deferred tax liability related to the U.S. Federal and State income taxes and foreign withholding taxes on the undistributed earnings of Apyx Bulgaria, EOOD indefinitely invested outside the United States. If it decides to repatriate the foreign earnings, the Company will need to adjust its income tax provision in the period it determines that the earnings will no longer be indefinitely invested outside the United States. The Company assesses the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. As of December 31, 2022 and 2021, the Company has recorded a liability of approximately $1.3 million related to uncertain tax positions and accrued approximately $0.8 million and $0.6 million, respectively, of interest and penalties on these positions. The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the years ended December 31: (in thousands) Gross Unrealized Tax Benefits 2022 2021 Beginning of year balance $ 1,313 $ 1,313 Additions of tax positions related to the current year — — Additions of tax positions related to the prior year — — Decreases for tax positions related to prior year — — End of year balance $ 1,313 $ 1,313 The Company is subject to U.S. federal and state income tax examination. The Company’s 2019 through 2021 U.S. federal income tax returns are subject to examination by the Internal Revenue Service (“IRS”). The Company’s state income tax returns are subject to examination for the 2018 through 2021 tax years. |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLAN | RETIREMENT PLAN The Company provides a tax-qualified profit-sharing retirement plan under section 401(k) of the Internal Revenue Code for the benefit of eligible employees with an accumulation of funds for retirement on a tax-deferred basis and provides for annual discretionary contribution to individual trust funds. All employees are eligible to participate upon completing three months of service. The employees may make voluntary contributions to the plan up to the maximum percentage allowed by the Internal Revenue Code. Vesting in employee matching contributions is graded and depends on the years of service. After three years from their date of hire, the employees are 100% vested. The Company makes matching contributions of 50% of the employee contributions up to a total of 3% of participant payroll. Matching contributions made by the Company totaled approximately $0.4 million for each of the years ended December 31, 2022 and 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Several relatives of Nikolay Shilev, Apyx Bulgaria’s Managing Director, are considered related parties. Teodora Shileva, Mr. Shilev’s spouse, is an employee of the Company working in the accounting department. Antoaneta Dimitrova Shileva-Tor omanova, Mr. Shilev’s sister, is the manager of human resources. Svetoslav Shilev, Mr. Shilev’s son, is a quality manager in the quality assurance department. The partner in the Company’s China joint venture is also a supplie r of the Company. For the years ended December 31, 2022 and 2021, the Company made purchases from this supplier of approximately $0.6 million and $1.3 million, respectively. At December 31, 2022 and 2021, the Company had net receivables from and payables to this supplier of approximately $8,000 and $1,000, respective ly. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The medical device industry is characterized by frequent claims and litigation, and the Company may become subject to various claims, lawsuits and proceedings in the ordinary course of our business. Such claims may include claims by current or former employees, distributors and competitors, claims concerning the marketing and promotion of our products and product liability claims. The Company is involved in a number of legal actions relating to the use of our Helium Plasma technology. The outcomes of these legal actions are not within the Company’s control and may not be known for prolonged periods of time. It believes that such claims are adequately covered by insurance; however, in the case of one of the Company’s carriers, the Company is in a dispute regarding the total level of coverage available. Notwithstanding the foregoing, in the opinion of management, the Company has meritorious defenses, and such claims are not expected, individually or in the aggregate, to result in a material, adverse effect on its financial condition, results of operations and cash flows. However, in the event that damages exceed the aggregate coverage limits of the Company’s policies or if its insurance carriers disclaim coverage, management believes it is possible that costs associated with these claims could have a material adverse impact on the consolidated financial condition, results of operations and cash flows. During December 2021, the Company provided notice of contract termination to an international distributor of the Company. In March 2022, the Company received a letter from the former distributor citing improper contract termination and alleging damages. While the matter is still in the early stages, management has determined that a loss is probable and that a range of estimated losses is approximately $250,000 to $1,000,000. The Company has recorded an estimated loss of $250,000 in professional services in the accompanying Consolidated Statement of Operations for the year ended December 31, 2022. It is at least possible that a change in the actual amount of loss will occur in the near term, though management expects the actual amount of loss will be within the estimated range of losses. As previously disclosed with the U.S. Securities and Exchange Commission on the Company’s Current Report on Form 8-K filed June 7, 2022, on June 6, 2022, a complaint (the “Complaint”) was filed in the United States District Court for the Middle District of Florida by plaintiff William E. Hattaway, individually and on behalf of all others similarly situated against the Company, Charles D. Goodwin (“Goodwin”), the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors, and Tara Semb (“Semb”), the Company’s Chief Financial Officer, Treasurer and Secretary, alleging violations by the Company, Goodwin and Semb of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, primarily related to certain public statements and disclosures concerning the off-label usage of certain of the Company’s Advanced Energy products and the impact such usage would have on the Company’s business, operations and prospects. The Complaint seeks an unspecified amount of damages. Although the ultimate outcome of this matter cannot be determined with certainty, the Company believes that the allegations stated in the Complaint are without merit. The Company, Goodwin and Semb intend to defend themselves vigorously in the suit. In the opinion of management, such claims are adequately covered by insurance, however, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with this claim could have a material adverse impact on our consolidated results of operations, financial position or cash flows. While the matter is still in the early stages, management has determined that a loss is probable and that a range of estimated losses is approximately $475,000 to $2,500,000. The Company has recorded an estimated loss of $475,000 in professional services in the accompanying Consolidated Statement of Operations for the year ended December 31, 2022. It is at least possible that a change in the actual amount of loss will occur in the near term, though management expects the actual amount of loss will be within the estimated range of losses. 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. Subsequent to year end, 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. The Company has determined that a loss is probable and that a range of estimated losses is approximately $1,450,000 to $2,400,000. The Company has recorded an estimated loss of $1,450,000 in selling, general and administrative expenses associated with the insurance deductibles in the accompanying Consolidated Statement of Operations for the year ended December 31, 2022. It is at least possible that a change in the actual amount of loss will occur in the near term, though management expects the actual amount of loss will be within the estimated range of losses. The Company accrues a liability in its consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the condensed consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded, actual results may differ from these estimates. Purchase Commitments At December 31, 2022, the Company has purchase commitments for inventories totaling approximately $4.1 million, all of which is expected to be purchased by the end of 2023. Concentrations There were no significant sales concentrations for the year ended December 31, 2022. Sales to one customer within the Advanced Energy segment represented 11% of total sales for the year ended December 31, 2021. Receivables from one customer and two customers within the Advanced Energy segment represented 13% and 22%, respectively, of trade accounts receivable at December 31, 2022 and December 31, 2021. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS | STOCK OPTIONS On October 30, 2007, the Company’s stockholders approved, and the Board of Directors adopted an amendment to the 2003 Executive and Employee Stock Option Plan (the “Plan”) to increase the maximum aggregate number of shares of common stock reserved for issuance under the Plan from 1.2 million shares (already reserved against outstanding options) to 1.7 million shares. Except for the increase in the number of shares covered by the Plan, the Plan remained otherwise unchanged. In 2001, the Board of Directors adopted the 2001 Executive and Employee Stock Option Plan which reserved for issuance 1.2 million stock options. Stock options to employees typically have a ten-year life and currently vest over periods between one In July 2012, the Company’s stockholders approved the 2012 Share Incentive Plan covering a total of 750,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2022 approximately 170,000 are available to be issued in this plan. In July 2015, the Company’s stockholders approved the 2015 Executive and Employee Stock Option Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2022 approximately 40,000 are available to be issued in this plan. In August 2017, the Company’s stockholders approved the 2017 Executive and Employee Stock Option Plan covering a total of 3,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2022 approximately 30,000 are available to be issued in this plan. In August 2019, the Company’s stockholders approved the 2019 Share Incentive Plan covering a total of 2,000,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2022, all 200,000 are available to be issued in this plan. In August 2021, the Company’s stockholders approved the 2021 Share Incentive Plan covering a total of 1,375,000 shares of common stock issuable upon exercise of options to be granted under the plan. At December 31, 2022, all 1,375,000 are available to be issued in this plan. On January 11, 2023, the Company granted employees appro ximately 1,400,000 options to purchase common shares of the Company's stock. All options granted were pursuant to the plans noted above. The options ves t over a period of three years. The status of the Company’s stock options is summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2020 4,938,943 $ 5.46 Granted 894,980 9.37 Exercised (232,521) 6.65 Canceled and forfeited (203,711) 8.27 Outstanding at December 31, 2021 5,397,691 $ 5.95 Granted 1,692,417 10.64 Exercised (316,506) 3.96 Canceled and forfeited (253,158) 9.59 Outstanding at December 31, 2022 6,520,444 $ 7.12 Number of options Weighted average grant date fair value Non-vested at December 31, 2021 1,802,216 $ 5.21 Granted 1,692,417 6.71 Vested (1,028,867) 5.11 Forfeited (238,158) 6.23 Non-vested at December 31, 2022 2,227,608 $ 6.27 Common shares required to be issued upon the exercise of stock options would be issued from authorized and unissued shares. Options are valued using the Black-Scholes model. For employee grants, the Company calculates expected life via the simplified method as it does not have sufficient history to determine actual expected life. For non-employee grants, the Company calculates expected life using a combination of past exercise behavior, the contractual term and expected remaining exercise behavior. Inputs used in the valuation models are as follows: 2022 Grants 2021 Grants Option value $5.10 - $10.96 $9.29 - $11.51 Risk-free rate 1.6% - 3.9% 0.6% - 0.8% Expected dividend yield —% —% Expected volatility 69.6% - 78.5% 68.9% - 70.8% Expected term (in years) 5 - 6 4.5 - 6 The Company recognized approximately $6,697,000 and $5,088,000 in stock-based compensation expense during the years ended December 31, 2022 and 2021, respectively. The intrinsic value of each option share is the difference between the fair value of our common stock and the exercise price of such option share to the extent it is “in-the-money”. Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation at December 31, 2022 is based on the $2.34 closing stock price of the Company's common stock on December 30, 2022, the last trading day of 2022. As of December 31, 2022, there were 6,074,922 stock options outstanding and expected to vest with an aggregate intrinsic value of approximately $160,000. These options have a weighted average exercise price of $6.91 and a weighted average remaining contractual term of approximately 6 years. As of December 31, 2022, there were 4,292,836 stock options outstanding and exercisable with an aggregate intrinsic value of approximately $160,000. These options have a weighted average exercise price of $5.60 and a weighted average remaining contractual term of approximately 6 years. The total intrinsic value of in the money options exercised during the years ended December 31, 2022 and 2021, was approximately $900,000 and $1,600,000, respectively. Intrinsic value of exercised shares is the total value of such shares on the date of exercise less the cash received from the option holder to exercise the options or other consideration paid. The total fair value of options granted during the years ended December 31, 2022 and 2021, was approximately $11,350,000 and $5,150,000, respectively. The weighted average fair value of options granted during the years ended December 31, 2022 and 2021, was $6.71 and $5.76, respectively. The total fair value of options vested during the years ended December 31, 2022 and 2021, was approximately $5,260,000 and $4,270,000, respectively. The Company allows employees 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. During the years ended December 31, 2022 and 2021, the Company received 125,596 and 111,831 options as payment in the exercise of 81,737 and 107,357 options, respectively. |
GEOGRAPHIC AND SEGMENT INFORMAT
GEOGRAPHIC AND SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC AND SEGMENT INFORMATION | GEOGRAPHIC AND SEGMENT INFORMATION Operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics, the Company also considers the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to its chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Asset information is not reviewed by the chief operating decision maker by segment and is not available by segment, accordingly, the Company has not presented a measure of assets by segment. The Company’s reportable segments are disclosed as principally organized and managed as two operating segments: Advanced Energy and OEM. "Corporate & Other" includes certain unallocated corporate and administrative costs which were not specifically attributed to any reportable segment. The OEM segment is primarily development and manufacturing contract and product driven, all related expenses are recorded as cost of sales, therefore no segment specific operating expenses are incurred. Summarized financial information with respect to reportable segments is as follows: Year Ended December 31, 2022 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 36,803 $ 7,707 $ — 44,510 (Loss) income from operations (4,103) 1,641 (21,100) (23,562) Interest income — — 157 157 Interest expense — — (15) (15) Other income, net — — 509 509 Income tax expense — — 367 367 Year ended December 31, 2021 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 42,985 $ 5,532 $ — $ 48,517 Income (loss) from operations 2,784 1,033 (18,265) (14,448) Interest income — — 11 11 Interest expense — — (10) (10) Other losses, net — — (373) (373) Income tax benefit — — 380 380 International sales in 2022 and 2021, were 29.9% and 32.0% of sales, respectively. Revenue by geographic region, based on the "ship to" location on the invoice are as follows: Year Ended December 31, (In thousands) 2022 2021 Sales by Domestic and International Domestic $ 31,208 $ 32,980 International 13,302 15,537 Total $ 44,510 $ 48,517 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Execution of Credit Agreement On February 17, 2023, the Company entered into a Credit, Security and Guaranty Agreement (the “Credit Agreement”), by and among the Company (as borrower) and Apyx China Holding Corp., the Company’s wholly-owned subsidiary (as guarantor), and MidCap Funding IV Trust (as agent), and MidCap Financial Trust (as term loan servicer), and the lenders party thereto from time to time. The Credit Agreement provides for an up to $35 million facility, consisting of senior secured term loans and a secured revolving facility. The Credit Agreement provides for senior secured term loans of up to $25 million, comprised of (i) an initial tranche of $10 million, (ii) a second tranche of $5 million, and (iii) a third tranche of $10 million. The secured revolving facility provides for loans in an aggregate principal amount of up to $10 million, subject to a borrowing base equal to certain percentages of the Company’s eligible accounts receivable and inventory, as determined in accordance with the terms of the Credit Agreement. The Credit Agreement matures on February 1, 2028. Term Loans The initial tranche of $10 million was fully funded on February 17, 2023, with approximately $2 million of the proceeds used to pay for transaction fees and other costs incurred in connection with the Credit Agreement. Subject to certain terms and conditions of the Credit Agreement, the second tranche would be available between June 30, 2023 and December 31, 2023 and the third tranche would be available between January 1, 2024 and September 30, 2024, respectively. The Company’s ability to access these additional tranches is conditioned upon, among other things, the achievement of certain minimum revenue targets. The net proceeds of these term loans are to be used for working capital and general corporate purposes. Each term loan bears interest at a floating rate based on an Adjusted Term SOFR (as defined in the Credit Agreement), subject to a floor of 2.5%, plus 7.35%. The first twenty-four (24) months of the term loans constitute an interest-only period (with a possible twelve (12) month extension), with interest payable monthly on the first day of each month. Subsequent to the interest-only period, the outstanding principal amount of the term loans is repayable in thirty-six (36) equal monthly payments (or twenty-four (24) with the extension of the interest-only period). All remaining outstanding principal, together with all accrued and unpaid interest, is due at maturity. The term loans may be voluntarily prepaid in full, or in part, at any time, subject to terms and conditions set forth in the Credit Agreement. Additionally, the term loans are subject to mandatory prepayment obligations, pursuant to the terms of the Credit Agreement. Prepayments of the term loans are subject to fees of 3%, 2%, and 1% of the prepayment amounts made during the first year, second year, and thereafter, respectively. At the time of the final payment of the term loans, the Company is also obligated to pay an exit fee of 4% of the total amount funded thereunder. Revolving Facility The Company may borrow, repay and reborrow under the revolving facility until February 1, 2028, at which time the facility will terminate and all outstanding amounts thereunder, including all accrued and unpaid interest, must be repaid. The proceeds of the revolving facility may be used for working capital needs and general corporate purposes. Loans made under the revolving facility bear interest at a floating rate based on an Adjusted Term SOFR (as defined in the Credit Agreement), subject to a floor of 2.5%, plus 4%. The Company is obligated to pay a fee equal to 0.5% per annum on the outstanding balance of the revolving loans and the average unused portion of the available revolving commitments, respectively. Additionally, if the revolving facility is terminated or reduced before maturity, the Company is subject to a deferred origination fee pursuant to the terms of the Credit Agreement. Terminations and reductions of the commitments are subject to fees of 3%, 2%, and 1% of the terminated or reduced commitments during the first year, second year, and thereafter, respectively. The Company is required to maintain a minimum balance of 30% of the lesser of the borrowing base or $10 million under the revolving facility. If the average outstanding balance for a month is less than the minimum balance, the Company will pay a minimum balance fee for the difference between the minimum balance and the average outstanding balance for the month at the highest rate for the revolving loans during the month. For such loans, interest and fees are payable monthly on the first day of each month. Collateral The obligations of the Company under the Credit Agreement are secured by first priority liens on substantially all of its assets. Covenants The Credit Agreement 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 Credit Agreement. The Credit Agreement also requires the Company to satisfy certain financial covenants, including minimum trailing twelve (12) month net revenue targets relating to its Advanced Energy segment (tested quarterly), with year-end targets of $49 million, $60 million and $70 million for 2023, 2024, and 2025, respectively. Additionally, the Company must maintain a balance of $10 million in cash and cash equivalents during the duration of the Credit Agreement’s term. Events of Default The Credit Agreement also contains customary Events of Default (as defined in the Credit Agreement) that include, among other things, certain payment defaults, cross defaults to certain other contracts and indebtedness, covenant defaults, inaccuracy of representations and warranties, bankruptcy and insolvency defaults, judgment defaults, change of control defaults, defaults related to the failure to remain registered with the Securities and Exchange Commission and listed for trading on the Nasdaq Stock Market, and any material adverse change. Upon the occurrence and during the continuance of an Event of Default under the Credit Agreement, the respective administrative agent, if requested by the respective lenders, may, among other things, (i) suspend or terminate commitments, as well as obligations of the relevant administrative agent and lenders, (ii) declare all outstanding obligations under the agreement (including principal and accrued and unpaid interest) immediately due and payable, and (iii) exercise the other rights and remedies provided for under the agreement. The Credit Agreement provides that, under certain circumstances, a default interest rate will apply on all obligations under such agreement during the existence of an Event of Default, at a per annum rate equal to 2% in excess of the applicable interest rate. Issuance of Warrants In connection with the Company’s obligations under the Credit Agreement, the Company issued to a statutory trust of MidCap Financial warrants to purchase up to 250,000 shares of its common stock, par value $0.001, with an exercise price of $3.40 per share. Sale Leaseback of Clearwater, FL Real Property In an effort to improve liquidity and the balance sheet condition of the Company, management has been exploring options to leverage the Company's unencumbered real property. On February 27, 2023 the Company’s Board of Directors approved a plan to sell and leaseback the Company's real property located in Clearwater, FL. On March 14, 2023, Apyx Medical Corporation (the “Company”) entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with VK Acquisitions VI, LLC (the “Purchaser”), for the sale of the Company’s facility located at 5115 Ulmerton Road, Clearwater, Florida, as more fully described in the Purchase Agreement (collectively, the “Property”) for a purchase price of $7,650,000. The Purchase Agreement is subject to the satisfactory completion of due diligence by the Purchaser within thirty (30) days from the date of execution, during which time the Purchaser retains the right to cancel the Purchase Agreement. The closing shall occur five (5) days following the expiration of the due diligence period. Upon execution of the Purchase Agreement, the Purchaser paid a down payment of $400,000 into escrow, which shall be held in accordance with the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, the transaction is not conditioned upon Purchaser obtaining any form of financing. The Purchase Agreement contains customary representations, warranties and covenants. In accordance with the terms of the Purchase Agreement, upon the closing of the sale of the Property, the Company will enter into a Single Tenant Industrial Building Lease (the “Lease”) with the Purchaser, pursuant to which the Property will be leased back to the Company. The Lease will have an initial term of ten (10) years commencing from the closing (the “Initial Term”), and a renewal term of five (5) years, exercisable at the Company’s option. The annual fixed rent will be $619,500 for the first year of the Initial Term, and will be subject to a 4% escalation every year thereafter through the Initial Term. Rent will be reset to the current market rate should the Company exercise the renewal option. The Lease provides for a 3% management fee on rent payments throughout the Initial Term and optional renewal term. The Lease is a triple net lease, pursuant to which all costs, expenses, and obligations relating to the Property, including, repair and maintenance charges, utility charges, real estate taxes or other taxes that may be imposed that relate to the Property, shall be paid by the Company. In addition, the Lease contains other customary terms and provisions generally contained within leases of this type. The net cash proceeds the Company expects to receive following closing is approximately $6,700,000 after taxes, expenses, and fees. This estimate is subject to the consummation of the transaction and the finalization of the Company’s obligations associated with the sale. The Company anticipates that the net cash proceeds will be used to strengthen its balance sheet and provide working capital Litigation On March 1, 2023, Shiva Stein as plaintiff filed a derivative complaint in the Court of Chancery of the State of Delaware, captioned Stein v. Makrides, et al., C.A. No. 2023-0239-MTZ (the “Stein Suit”) against individual members of the Company’s board of directors and naming the Company as a nominal defendant, primarily concerning the facts at issue in a previously disclosed federal securities class action lawsuit filed in 2019 and settled in 2020, captioned Pritchard v. Apyx Medical Corporation, et al., Case No. 8:19-cv-00919 (M.D. Fla.) (the “Pritchard Case”). The Stein Suit seeks unspecified damages alleged to have resulted from purported breaches of fiduciary duty, unjust enrichment and related claims based on the same set of allegedly misleading statements and material omissions described in the settled Pritchard Case, which concerned the 2018-2019 clinical study conducted by the Company to evaluate the safety and efficacy of its J-Plasma technology for dermal resurfacing. The Company believes that the claims are subject to procedural and substantive defenses, anticipates defense and indemnity coverage to be made available by the relevant insurer, and expects the individual defendants to defend all of the allegations vigorously. The outcome of the action is not within the Company’s control and may not be known for a prolonged period of time. In the opinion of management, neither the alleged claims against the individual defendants nor the defense thereof are expected to result in a material, adverse effect on the Company’s financial condition, results of operations and cash flows. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statements | Consolidated Financial StatementsThe accompanying consolidated financial statements include the accounts of Apyx, its wholly owned subsidiary, Apyx Bulgaria, EOOD, and its 51% owned subsidiary, Apyx SY Medical Devices (Ningbo) Co., Ltd. (collectively, “Apyx,” or the “Company”). All significant intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions the Company is required to make. |
Cash and Cash Equivalents | Cash and Cash EquivalentsHoldings of highly liquid investments with original maturities of three months or less from the date of purchase are considered to be cash equivalents. As of December 31, 2022 and 2021, all of the Company’s investments are in money market funds or in Treasury Bills with original maturities of three months or less and are included in cash and cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of trade accounts receivable. With respect to cash, the Company frequently maintains cash and cash equivalent balances in excess of federally insured limits; it has not experienced any losses in such accounts. |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade Accounts Receivable and Allowance for Doubtful Accounts The Company's standard credit terms for billings range from net 30 days to net 120 days, depending on the customer agreement. Accounts receivable are determined to be past due if payments are not made in accordance with such agreements and an allowance is generally recorded for accounts that become three months past due, or sooner if there are other indicators that the receivables may not be recovered. Customary collection efforts are initiated, and receivables are written off when the Company determines they are not collectible and abandons these collection efforts. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to manufactured inventory based upon labor hours. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of the assets. The amortization of leasehold improvements is based on the shorter of the lease term or the life of the improvement. Betterments and major improvements, which extend the life of the asset, are capitalized, whereas maintenance and repairs and routine improvements are expensed as incurred. The estimated useful lives are: buildings and improvements, 39 years; machinery and equipment, 3-10 years; furniture and fixtures, 5-10 years; computer equipment and software, 3-5 years; and molds, 7-15 years. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets The Company reviews long-lived assets for recoverability if events or changes in circumstances indicate that the assets may have been impaired. This circumstance exists when the carrying amount of the asset exceeds the sum of the undiscounted cash flows expected to result from its use and eventual disposition. In those cases, an impairment loss is recognized to the extent that the assets’ carrying amount exceeds its fair value. Any impairment losses are not restored in the future if the fair value increases. At December 31, 2022 and 2021, the Company believes the remaining carrying values of its long-lived assets are recoverable. |
Product Warranties | Product WarrantiesThe Company provides a four year limited warranty on end-user sales of its Renuvion®/J-Plasma® generators, a two year warranty on mounting fixtures, and a one-year warranty on certain accessories. The Company estimates and provides for future costs for product warranties in cost of sales at the time revenue is recognized. The Company bases its product warranty costs on related material costs, repair labor costs and shipping costs. The Company estimates the future cost of product warranties by considering historical material, repair labor, and shipping costs, and applying the experience rates to the outstanding warranty period for products sold. It is reasonably possible that actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive for those goods or services. To recognize revenue, the Company (i) identifies the contract(s) with a customer; (ii) identifies the performance obligations in the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, it satisfies the performance obligation(s). For sales of the Company's Advanced Energy products (Renuvion®/J-Plasma®), this is at a point in time when title has been transferred to the customer, which is generally at the time of shipment or receipt by customer for FOB destination terms. For sales of products under its OEM agreements, the Company recognizes revenue over time when no alternative use exists for the manufactured goods and the Company has rights to payment. Presently, the Company does not stock any significant completed goods under its OEM agreements, accordingly, the recognition of revenue under these agreements approximates point in time recognition. The following policies apply to its major categories of revenue transactions: • The majority of sales to customers are evidenced by firm purchase orders. Generally, title and the risks and rewards of ownership are transferred to the customer when the product is shipped. Payment by the customer is due under fixed payment terms. • Product returns are only accepted at the Company's discretion and in accordance with its “Returned Goods Policy”. Historically, the level of product returns has not been significant. Accruals for sales returns, rebates and allowances are made as a reduction of revenue based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions. • The terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are generally provided for sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data. |
Advertising Costs | Advertising CostsAdvertising costs are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation . FASB ASC 718 requires recognizing compensation expense for all share-based payment awards made to employees, directors and non-employees based upon the grant date fair value of such awards. It accounts for forfeitures as they occur. The standard covers employee stock options, restricted stock and other equity awards. The Company utilizes a Black-Scholes model to estimate the grant date fair value of stock option awards. For employee and director awards, compensation expense is recognized on a straight-line basis over the vesting periods. For non-employee awards, compensation expense is recorded for non-forfeitable, fully vested awards at the grant date. For other awards granted to non-employees, compensation cost is recognized as services are provided, which approximates a straight-line basis over the vesting period. |
Litigation Contingencies | Litigation Contingencies In accordance with authoritative guidance, the Company accrues a liability in its consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is 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; actual results may differ from those estimates. |
Earning (Loss) Per Share | Earnings (Loss) Per Share The Company computes basic (loss) earnings attributable to common stockholders per share by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding for the reporting period. Diluted (loss) earnings per share attributable to common stockholders gives effect to all potential dilutive shares outstanding during the period. The number of dilutive shares is calculated using the treasury stock method which reduces the effective number of shares by the amount of shares the Company could purchase with the proceeds of assumed exercises. Anti-dilutive units are excluded from the calculation of diluted shares. In periods of loss, all potentially dilutive units are anti-dilutive and are excluded from the calculation of diluted income (loss) per share. |
Research and Development Costs | Research and Development CostsResearch and development expenses are charged to operations as incurred. |
Income Taxes | Income Taxes The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC Topic 740, Income Taxes . Under the liability method, deferred taxes are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using tax rates expected to be in effect during the years in which the deferred taxes reverse. The Company accounts for interest and penalties on income taxes as income tax expense. A valuation allowances is recorded when it is more likely than not that a tax benefit will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income, the timing of reversals of temporary differences, and the availability of tax planning strategies. As of December 31, 2022 and 2021, the Company recorded a valuation allowance on the net deferred tax assets. The Company assesses the realizability of deferred tax assets each reporting period and will be able to reduce the valuation allowance to the extent the financial results of continuing operations improve, and it becomes more likely than not that the deferred tax assets will be realized. As Management has not fully determined the timing of when it will generate taxable income in the U.S., the Company will continue to record a full valuation allowance on the net deferred tax assets as of December 31, 2022. |
Foreign Currency Transactions | Foreign Currency TransactionsThe functional currency of Apyx Bulgaria is the U.S. dollar. The monetary assets and liabilities that are denominated in a currency other than U.S. dollar are remeasured into U.S. dollars at the exchange rate on the balance sheet date, while nonmonetary items are remeasured at historical rates. Revenue and expenses are remeasured at weighted average exchange rates during the period. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in selling, general and administrative expenses in the Consolidated Statements of Operations and were not material for the years ended December 31, 2022 and 2021. |
Reclassifications | Reclassifications We have reclassified certain amounts presented in the prior year to conform to the current year presentation. These reclassifications had no impact on previously reported net income, retained earnings or operating cash flows for the periods presented. |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326). The update changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, contract assets, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update, as originally issued, was effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates , which deferred the effective dates of these standards for Smaller Reporting Companies until fiscal years beginning after December 15, 2022. The Company currently expects to continue to qualify as a Smaller Reporting Company, based upon the current SEC definition and, as a result, will be utilizing the deferred elective date. While the Company is in the process of determining the effects of the adoption of the standard on the consolidated financial statements, it does not expect the impact to be material. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on the Company's consolidated financial statements or disclosures. |
INTEREST IN JOINT VENTURE INV_2
INTEREST IN JOINT VENTURE INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of Noncontrolling Interest | Changes in the Company’s ownership investment in the China JV were as follows: Year Ended December 31, (In thousands) 2022 2021 Beginning interest in China JV $ 317 $ 144 Contributions — 203 Net loss attributable to Apyx (98) (30) Ending interest in China JV $ 219 $ 317 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following: (In thousands) December 31, December 31, Raw materials $ 4,979 $ 3,603 Work in process 2,160 1,441 Finished goods 5,115 1,997 Gross inventories 12,254 7,041 Less: provision for obsolescence (457) (263) Inventories, net $ 11,797 $ 6,778 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following: (In thousands) December 31, December 31, Land $ 1,600 $ 1,600 Building and improvements 4,426 4,429 Machinery and equipment 2,613 2,337 Furniture and fixtures 211 306 Computer equipment and software 1,420 1,535 Leasehold improvements 178 171 Molds 847 859 Total property, plant and equipment 11,295 11,237 Less: accumulated depreciation and amortization (5,041) (5,316) Property and equipment in service 6,254 5,921 Construction in progress 507 654 Property and equipment, net $ 6,761 $ 6,575 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease Costs | Information about the Company’s lease costs are as follows: Year Ended Lease costs (in thousands) : 2022 2021 Operating lease costs $ 213 $ 134 Finance lease costs: Amortization of right-of-use assets 138 216 Interest on lease liabilities 5 12 Variable lease costs 16 12 Total lease costs $ 372 $ 374 Cash information related to our leases are as follows: Year Ended Year Ended (in thousands) Operating Finance Operating Finance Cash paid for lease liabilities $ 219 $ 153 $ 135 $ 228 Information about the Company’s weighted average remaining lease terms and discount rate assumptions are as follows: Year Ended Year Ended Operating Finance Operating Finance Weighted average remaining lease term (in years) 4.4 3.9 1.0 0.8 Weighted average discount rate 2.54% 2.60% 3.98% 4.00% |
Maturity of Finance Lease Liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows: (In thousands) Operating Finance 2023 $ 229 $ 40 2024 122 21 2025 122 21 2026 122 21 2027 122 12 Total lease payments 717 115 Less imputed interest (31) (5) Present value of lease liabilities 686 110 Less current portion of lease liabilities (216) (37) Long-term portion of lease liabilities $ 470 $ 73 |
Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows: (In thousands) Operating Finance 2023 $ 229 $ 40 2024 122 21 2025 122 21 2026 122 21 2027 122 12 Total lease payments 717 115 Less imputed interest (31) (5) Present value of lease liabilities 686 110 Less current portion of lease liabilities (216) (37) Long-term portion of lease liabilities $ 470 $ 73 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: (in thousands) December 31, 2022 December 31, 2021 Accrued payroll $ 563 $ 546 Accrued bonus — 2,117 Accrued commissions 847 1,656 Accrued product warranties 391 593 Accrued product liability claim insurance deductibles 1,825 610 Accrued professional fees and legal related contingent liabilities 901 421 Joint and several payroll liability 345 1,027 Short-term contract liabilities 853 533 Uncertain tax positions 2,079 1,863 Sales tax payable 245 428 Other accrued expenses and current liabilities 879 493 Total accrued expenses and other current liabilities $ 8,928 $ 10,287 |
PRODUCT WARRANTIES (Tables)
PRODUCT WARRANTIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Activity | Product warranty activity consisted of the following for the years ended: (In thousands) December 31, December 31, Beginning balance $ 593 $ 498 Provision for product warranties 196 318 Change in estimate to fulfill prior-year warranty obligations (198) — Product warranty costs incurred (200) (223) Accrued product warranties $ 391 $ 593 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings (Loss) Per Share | The following table provides the computation of basic and diluted earnings (loss) per share. Year Ended December 31, (in thousands, except per share data) 2022 2020 Numerators: Net loss attributable to stockholders $ (23,184) $ (15,172) Weighted average shares outstanding - basic and diluted 34,516 34,332 Loss per share - basic and diluted $ (0.67) $ (0.44) Anti-dilutive instruments excluded from diluted loss per common share: Options 6,520 5,398 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components Of Provision For Income Taxes | Components of income tax expense are as follows: (In thousands) December 31, December 31, Current: Federal $ 214 $ 217 State 29 54 Foreign 124 109 367 380 Deferred: Federal (4,096) (2,518) State (1,004) (613) (5,100) (3,131) Valuation allowance 5,100 3,131 Total income tax expense $ 367 $ 380 |
Statutory Federal Income Tax Rate | Below is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate: Year Ended December 31, 2022 2021 Federal tax provision 21.0 % 21.0 % State taxes (net of federal benefit) 4.4 % 3.8 % Valuation allowance (22.3) % (21.1) % Incentive stock compensation expense (2.2) % (1.8) % Section 162(m) compensation (1.1) % (3.8) % GILTI (0.9) % (1.2) % Other (0.5) % 0.5 % Total (1.6) % (2.6) % |
Deferred Tax Assets (Liabilities) | Major components of the Company’s deferred tax assets (liabilities) are as follows: (In thousands) December 31, December 31, Deferred tax assets: Loss and credit carryforwards $ 7,476 $ 4,256 Stock-based compensation 2,381 1,701 Research and development capitalization 982 — Accrued insurance deductibles 400 70 Inventory 263A adjustment 394 — Deferred revenue 339 163 Accrued bonus — 555 Other 553 653 Total deferred tax assets 12,525 7,398 Valuation allowance (12,068) (6,968) Total deferred tax assets, net of valuation allowance 457 430 Deferred tax liabilities: Property and equipment (205) (205) Other (252) (225) Total deferred tax liabilities (457) (430) Net deferred tax assets $ — $ — |
Unrecognized Tax Benefits Roll-Forward | The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the years ended December 31: (in thousands) Gross Unrealized Tax Benefits 2022 2021 Beginning of year balance $ 1,313 $ 1,313 Additions of tax positions related to the current year — — Additions of tax positions related to the prior year — — Decreases for tax positions related to prior year — — End of year balance $ 1,313 $ 1,313 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Options And Stock Awards | The status of the Company’s stock options is summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2020 4,938,943 $ 5.46 Granted 894,980 9.37 Exercised (232,521) 6.65 Canceled and forfeited (203,711) 8.27 Outstanding at December 31, 2021 5,397,691 $ 5.95 Granted 1,692,417 10.64 Exercised (316,506) 3.96 Canceled and forfeited (253,158) 9.59 Outstanding at December 31, 2022 6,520,444 $ 7.12 |
Number of Weighted Average Grant-Date Fair Values of Options | Number of options Weighted average grant date fair value Non-vested at December 31, 2021 1,802,216 $ 5.21 Granted 1,692,417 6.71 Vested (1,028,867) 5.11 Forfeited (238,158) 6.23 Non-vested at December 31, 2022 2,227,608 $ 6.27 |
Schedule of Option Fair Value Assumptions | Inputs used in the valuation models are as follows: 2022 Grants 2021 Grants Option value $5.10 - $10.96 $9.29 - $11.51 Risk-free rate 1.6% - 3.9% 0.6% - 0.8% Expected dividend yield —% —% Expected volatility 69.6% - 78.5% 68.9% - 70.8% Expected term (in years) 5 - 6 4.5 - 6 |
GEOGRAPHIC AND SEGMENT INFORM_2
GEOGRAPHIC AND SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Reporting Information by Segment | Summarized financial information with respect to reportable segments is as follows: Year Ended December 31, 2022 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 36,803 $ 7,707 $ — 44,510 (Loss) income from operations (4,103) 1,641 (21,100) (23,562) Interest income — — 157 157 Interest expense — — (15) (15) Other income, net — — 509 509 Income tax expense — — 367 367 Year ended December 31, 2021 (In thousands) Advanced Energy OEM Corporate (Other) Total Sales $ 42,985 $ 5,532 $ — $ 48,517 Income (loss) from operations 2,784 1,033 (18,265) (14,448) Interest income — — 11 11 Interest expense — — (10) (10) Other losses, net — — (373) (373) Income tax benefit — — 380 380 |
Schedule of Revenue by Geographic Area | Revenue by geographic region, based on the "ship to" location on the invoice are as follows: Year Ended December 31, (In thousands) 2022 2021 Sales by Domestic and International Domestic $ 31,208 $ 32,980 International 13,302 15,537 Total $ 44,510 $ 48,517 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Mar. 14, 2023 | Jan. 19, 2023 | Nov. 22, 2022 | Aug. 30, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | Feb. 17, 2023 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Gross proceeds | $ 97,000 | $ 97,000 | ||||||
Operating loss | $ 23,562 | $ 14,448 | ||||||
Net cash used in operating activities | 20,280 | 10,449 | ||||||
Cash and cash equivalents | $ 10,192 | $ 30,870 | ||||||
Subsequent Event | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Reduction in headcount | 14% | |||||||
Sale leaseback, purchase agreement | $ 7,650 | |||||||
Line of Credit | Subsequent Event | Credit Agreement | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Credit agreement | $ 35,000 | |||||||
Revolving Credit Facility | Line of Credit | Subsequent Event | Credit Agreement | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Credit agreement | 10,000 | |||||||
Secured Debt | Line of Credit | Subsequent Event | Credit Agreement | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Term loan | 25,000 | |||||||
Secured Debt | Line of Credit | Subsequent Event | Credit Agreement | Tranche One | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Term loan | 10,000 | |||||||
Secured Debt | Line of Credit | Subsequent Event | Credit Agreement | Tranche Two | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Term loan | 5,000 | |||||||
Secured Debt | Line of Credit | Subsequent Event | Credit Agreement | Tranche Three | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Term loan | $ 10,000 | |||||||
Shelf Registration | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Securities Registered, New Issues | $ 100,000 | |||||||
At-The-Market Facility | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Securities Registered, New Issues | $ 40,000 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Allowances for doubtful accounts | $ 668 | $ 430 |
Advertising expense | $ 2,300 | $ 1,300 |
Apyx SY Medical Devices (Ningbo) Co., Ltd | ||
Property, Plant and Equipment [Line Items] | ||
Ownership percentage | 51% | |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 39 years | |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 3 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 10 years | |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 5 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 10 years | |
Computer equipment and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 3 years | |
Computer equipment and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 5 years | |
Molds | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 7 years | |
Molds | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 15 years | |
Renuvion/J-Plasma generators | ||
Property, Plant and Equipment [Line Items] | ||
Product warranty | 4 years | |
Mounting Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Product warranty | 2 years | |
Accessories | ||
Property, Plant and Equipment [Line Items] | ||
Product warranty | 1 year |
DISPOSITION OF THE CORE BUSIN_2
DISPOSITION OF THE CORE BUSINESS - (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Aug. 30, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gross proceeds | $ 97 | $ 97 | ||
Symmetry Surgical Inc. | Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Asset purchase agreement, term | 4 years | |||
Revenue | $ 0.6 | $ 6.5 | ||
Cost of sales | 0.6 | 5.5 | ||
Operating expenses | 0.1 | 1.5 | ||
Net other loss | $ 0.1 | $ 0.4 |
INTEREST IN JOINT VENTURE INV_3
INTEREST IN JOINT VENTURE INVESTMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Noncontrolling Interest [Line Items] | ||||
Required capital contribution | $ 357 | |||
Contributions from non-controlling interest | $ 195 | |||
China joint venture | ||||
Noncontrolling Interest [Line Items] | ||||
Contributions from non-controlling interest | $ 0 | $ 203 | $ 154 | |
Chinese Supplier | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership interest | 51% |
INTEREST IN JOINT VENTURE INV_4
INTEREST IN JOINT VENTURE INVESTMENT - Changes in Ownership Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Abstract] | |||
Beginning interest in China JV | $ 305 | ||
Contributions | $ 195 | ||
Net loss attributable to Apyx | (94) | (28) | |
Ending interest in China JV | 211 | 305 | |
China joint venture | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Abstract] | |||
Beginning interest in China JV | 317 | 144 | |
Contributions | 0 | 203 | $ 154 |
Net loss attributable to Apyx | (98) | (30) | |
Ending interest in China JV | $ 219 | $ 317 | $ 144 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,979 | $ 3,603 |
Work in process | 2,160 | 1,441 |
Finished goods | 5,115 | 1,997 |
Gross inventories | 12,254 | 7,041 |
Less: provision for obsolescence | (457) | (263) |
Inventories, net | $ 11,797 | $ 6,778 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 11,295 | $ 11,237 |
Less: accumulated depreciation and amortization | (5,041) | (5,316) |
Property and equipment in service | 6,254 | 5,921 |
Construction in progress | 507 | 654 |
Property and equipment, net | 6,761 | 6,575 |
Depreciation | 700 | 700 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 1,600 | 1,600 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 4,426 | 4,429 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 2,613 | 2,337 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 211 | 306 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 1,420 | 1,535 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 178 | 171 |
Molds | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 847 | $ 859 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 lease | |
Lessee, Lease, Description [Line Items] | |
Finance lease, term of contract | 63 months |
Computer Equipment | |
Lessee, Lease, Description [Line Items] | |
Lease term | 1 year |
Number of leases extended | 1 |
Building | |
Lessee, Lease, Description [Line Items] | |
Lease term | 5 years |
Minimum | |
Leases [Abstract] | |
Discount rate | 1.83% |
Lessee, Lease, Description [Line Items] | |
Discount rate | 1.83% |
Maximum | |
Leases [Abstract] | |
Discount rate | 6.49% |
Lessee, Lease, Description [Line Items] | |
Discount rate | 6.49% |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease costs | $ 213 | $ 134 |
Finance lease costs: | ||
Amortization of right-of-use assets | 138 | 216 |
Interest on lease liabilities | 5 | 12 |
Variable lease costs | 16 | 12 |
Total lease costs | $ 372 | $ 374 |
LEASES - Cash and Non-Cash Info
LEASES - Cash and Non-Cash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating | ||
Cash paid for lease liabilities | $ 219 | $ 135 |
Finance | ||
Cash paid for lease liabilities | $ 153 | $ 228 |
LEASES - Lease Terms and Discou
LEASES - Lease Terms and Discount Rates (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Operating | ||
Weighted average remaining lease term (in years) | 4 years 4 months 24 days | 1 year |
Weighted average discount rate | 2.54% | 3.98% |
Finance | ||
Weighted average remaining lease term (in years) | 3 years 10 months 24 days | 9 months 18 days |
Weighted average discount rate | 2.60% | 4% |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating | ||
2023 | $ 229 | |
2024 | 122 | |
2025 | 122 | |
2026 | 122 | |
2027 | 122 | |
Total lease payments | 717 | |
Less imputed interest | (31) | |
Present value of lease liabilities | 686 | |
Less current portion of lease liabilities | (216) | $ (122) |
Long-term operating lease liabilities | 470 | 0 |
Finance | ||
2023 | 40 | |
2024 | 21 | |
2025 | 21 | |
2026 | 21 | |
2027 | 12 | |
Total lease payments | 115 | |
Less imputed interest | (5) | |
Present value of lease liabilities | 110 | |
Less current portion of lease liabilities | (37) | (165) |
Long-term finance lease liabilities | $ 73 | $ 18 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 563 | $ 546 |
Accrued bonus | 0 | 2,117 |
Accrued commissions | 847 | 1,656 |
Accrued product warranties | 391 | 593 |
Accrued product liability claim insurance deductibles | 1,825 | 610 |
Accrued professional fees and legal related contingent liabilities | 901 | 421 |
Joint and several payroll liability | 345 | 1,027 |
Short-term contract liabilities | 853 | 533 |
Uncertain tax positions | 2,079 | 1,863 |
Sales tax payable | 245 | 428 |
Other accrued expenses and current liabilities | 879 | 493 |
Total accrued expenses and other current liabilities | $ 8,928 | $ 10,287 |
PRODUCT WARRANTIES (Details)
PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 593 | $ 498 |
Provision for product warranties | 196 | 318 |
Change in estimate to fulfill prior-year warranty obligations | (198) | 0 |
Product warranty costs incurred | (200) | (223) |
Accrued product warranties | $ 391 | $ 593 |
JOINT AND SEVERAL PAYROLL LIA_2
JOINT AND SEVERAL PAYROLL LIABILITY (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Joint and several payroll liability | $ 345 | $ 1,027 |
Joint and several payroll liability, eecrease due to lapse of time | $ 650 |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Contract liabilities | $ 2.3 | $ 1.9 |
Contract assets | 0.6 | 0.5 |
Contract liability, current | 0.9 | 0.5 |
Contract assets, current | 0.1 | $ 0.1 |
Contract liabilities, revenue recognized | 0.2 | |
Contract assets, revenue recognized | $ 0.1 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerators: | ||
Net loss attributable to stockholders | $ (23,184) | $ (15,172) |
Weighted average shares outstanding - basic (in shares) | 34,516 | 34,332 |
Weighted average shares outstanding - diluted (in shares) | 34,516 | 34,332 |
Loss per share - basic (in dollars per share) | $ (0.67) | $ (0.44) |
Loss per share - diluted (in dollars per share) | $ (0.67) | $ (0.44) |
Options | ||
Anti-dilutive instruments excluded from diluted loss per common share: | ||
Options (in shares) | 6,520 | 5,398 |
INCOME TAXES - Components of Pr
INCOME TAXES - Components of Provision For Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | ||
Federal | $ 214 | $ 217 |
State | 29 | 54 |
Foreign | 124 | 109 |
Current income tax expense (benefit) | 367 | 380 |
Deferred: | ||
Federal | (4,096) | (2,518) |
State | (1,004) | (613) |
Deferred income tax expense (benefit) | (5,100) | (3,131) |
Valuation allowance | 5,100 | 3,131 |
Total income tax expense | $ 367 | $ 380 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Statutory Federal Income Tax Rate to Effective Rate (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the statutory federal income tax rate to our effective tax rate | ||
Federal tax provision | 21% | 21% |
State taxes (net of federal benefit) | 4.40% | 3.80% |
Valuation allowance | (22.30%) | (21.10%) |
Incentive stock compensation expense | (2.20%) | (1.80%) |
Section 162(m) compensation | (1.10%) | (3.80%) |
GILTI | (0.90%) | (1.20%) |
Other | (0.50%) | 0.50% |
Total | (1.60%) | (2.60%) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Loss and credit carryforwards | $ 7,476 | $ 4,256 |
Stock-based compensation | 2,381 | 1,701 |
Research and development capitalization | 982 | 0 |
Accrued insurance deductibles | 400 | 70 |
Inventory 263A adjustment | 394 | 0 |
Deferred revenue | 339 | 163 |
Accrued bonus | 0 | 555 |
Other | 553 | 653 |
Total deferred tax assets | 12,525 | 7,398 |
Valuation allowance | (12,068) | (6,968) |
Total deferred tax assets, net of valuation allowance | 457 | 430 |
Deferred tax liabilities: | ||
Property and equipment | (205) | (205) |
Other | (252) | (225) |
Total deferred tax liabilities | (457) | (430) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits | $ 1,313 | $ 1,313 | $ 1,313 |
Accrued interest and penalties | $ 800 | $ 600 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits Roll-Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Gross Unrealized Tax Benefits | ||
Beginning of year balance | $ 1,313 | $ 1,313 |
Additions of tax positions related to the current year | 0 | 0 |
Additions of tax positions related to the prior year | 0 | 0 |
Decreases for tax positions related to prior year | 0 | 0 |
End of year balance | $ 1,313 | $ 1,313 |
RETIREMENT PLAN - Narrative (De
RETIREMENT PLAN - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Retirement Benefits [Abstract] | |
Service period | 3 months |
Defined contribution plan, vesting period | 3 years |
Defined contribution plan, vesting percentage after 3 years | 100% |
Defined contribution plan, employer matching contribution | 50% |
Defined contribution plan, percent of employees' gross pay | 3% |
Company matching contributions | $ 0.4 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - Co-venturer - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Purchases from supplier | $ 600 | $ 1,300 |
Due to supplier | $ 8 | $ 1 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 16, 2023 USD ($) lease | Dec. 31, 2022 USD ($) lease | Dec. 31, 2021 | Mar. 31, 2022 USD ($) | |
Other Commitments [Line Items] | ||||
Purchase commitments | $ 4,100 | |||
Contract With International Distributor | ||||
Other Commitments [Line Items] | ||||
Cost accrued | 250 | |||
Contract With International Distributor | Minimum | ||||
Other Commitments [Line Items] | ||||
Estimate of possible loss | $ 250 | |||
Contract With International Distributor | Maximum | ||||
Other Commitments [Line Items] | ||||
Estimate of possible loss | $ 1,000 | |||
Suit Against Goodwin And Simb | ||||
Other Commitments [Line Items] | ||||
Cost accrued | 475 | |||
Suit Against Goodwin And Simb | Minimum | ||||
Other Commitments [Line Items] | ||||
Estimate of possible loss | 475 | |||
Suit Against Goodwin And Simb | Maximum | ||||
Other Commitments [Line Items] | ||||
Estimate of possible loss | $ 2,500 | |||
Suits Filed in 2022 | ||||
Other Commitments [Line Items] | ||||
Number of claims | lease | 2 | |||
Suits Filed in 2022 | Subsequent Event | ||||
Other Commitments [Line Items] | ||||
Cost accrued | $ 1,450 | |||
Number of plaintiffs | lease | 10 | |||
Suits Filed in 2022 | Minimum | Subsequent Event | ||||
Other Commitments [Line Items] | ||||
Estimate of possible loss | $ 1,450 | |||
Suits Filed in 2022 | Maximum | Subsequent Event | ||||
Other Commitments [Line Items] | ||||
Estimate of possible loss | $ 2,400 | |||
Largest Customer | Sales | Customer Concentration Risk | ||||
Other Commitments [Line Items] | ||||
Concentration risk | 11% | |||
Two Largest Customers | Accounts Receivable Benchmark | Customer Concentration Risk | ||||
Other Commitments [Line Items] | ||||
Concentration risk | 13% | 22% |
STOCK OPTIONS - Narrative (Deta
STOCK OPTIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||||
Jan. 11, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | Aug. 31, 2019 | Aug. 31, 2017 | Jul. 31, 2015 | Jul. 31, 2012 | Oct. 30, 2007 | Dec. 31, 2001 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Option expiration period | 10 years | |||||||||
Share-based compensation expense | $ 6,697 | $ 5,088 | ||||||||
Closing stock price for computation of intrinsic value (in dollars per share) | $ 2.34 | |||||||||
Stock options outstanding and expected to vest (in shares) | 6,074,922 | |||||||||
Aggregate intrinsic value of all stock options outstanding and expected to vest | $ 160 | |||||||||
Stock options outstanding and expected to vest, weighted average exercise price (in dollars per share) | $ 6.91 | |||||||||
Stock options outstanding and exercisable, weighted average remaining contractual term | 6 years | |||||||||
Stock options outstanding and exercisable (in shares) | 4,292,836 | |||||||||
Aggregate intrinsic value of currently exercisable stock options | $ 160 | |||||||||
Weighted average exercise price (in dollars per share) | $ 5.60 | |||||||||
Weighted average remaining contractual term | 6 years | |||||||||
Intrinsic value of options exercised | $ 900 | 1,600 | ||||||||
Intrinsic value of options granted | $ 11,350 | $ 5,150 | ||||||||
Weighted average grant date fair value of options granted (in dollars per share) | $ 6.71 | $ 5.76 | ||||||||
Fair value of option shares vested | $ 5,260 | $ 4,270 | ||||||||
Shares received in stock swaps (in shares) | 125,596 | 111,831 | ||||||||
Shares issued in stock swaps (in shares) | 81,737 | 107,357 | ||||||||
Unrecognized stock-based compensation cost | $ 8,430 | |||||||||
Unrecognized stock-based compensation cost, recognition period | 1 year | |||||||||
Subsequent Event | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 1,400,000 | |||||||||
Vesting period | 3 years | |||||||||
Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 7 years | |||||||||
2001 Executive and Employee Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 1,200,000 | |||||||||
2003 Executive and Employee Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 1,700,000 | |||||||||
2012 Share Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 750,000 | |||||||||
Remaining shares for issuance (in shares) | 170,000 | |||||||||
2015 Executive and Employee Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 2,000,000 | |||||||||
Remaining shares for issuance (in shares) | 40,000 | |||||||||
2017 Executive and Employee Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 3,000,000 | |||||||||
Remaining shares for issuance (in shares) | 30,000 | |||||||||
2019 Share Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 2,000,000 | |||||||||
Remaining shares for issuance (in shares) | 200,000 | |||||||||
2021 Share Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares authorized under common stock option plans (in shares) | 1,375,000 | |||||||||
Remaining shares for issuance (in shares) | 1,375,000 |
STOCK OPTIONS - Summary of Stoc
STOCK OPTIONS - Summary of Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of options | ||
Outstanding, beginning of period (in shares) | 5,397,691 | 4,938,943 |
Granted (in shares) | 1,692,417 | 894,980 |
Exercised (in shares) | (316,506) | (232,521) |
Cancelled and forfeited (in shares) | (253,158) | (203,711) |
Outstanding, end of period (in shares) | 6,520,444 | 5,397,691 |
Weighted average exercise price | ||
Outstanding, beginning of period (in dollars per share) | $ 5.95 | $ 5.46 |
Granted (in dollars per share) | 10.64 | 9.37 |
Exercised (in dollars per share) | 3.96 | 6.65 |
Cancelled and forfeited (in dollars per share) | 9.59 | 8.27 |
Outstanding, end of period (in dollars per share) | $ 7.12 | $ 5.95 |
STOCK OPTIONS - Summary of Nonv
STOCK OPTIONS - Summary of Nonvested Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of options | ||
Number of Options Non-vested at beginning of period (in shares) | 1,802,216 | |
Number of Options Non-vested, Granted (in shares) | 1,692,417 | 894,980 |
Number of Options Non-vested, Vested (in shares) | (1,028,867) | |
Number of Options Non-vested, Forfeited (in shares) | (238,158) | |
Number of Options Non-vested at end of period (in shares) | 2,227,608 | 1,802,216 |
Weighted average grant date fair value | ||
Weighted average grant date fair value, Non-vested Options at beginning of period (in dollars per share) | $ 5.21 | |
Weighted average grant date fair value, Non-vested Options, Granted (in dollars per share) | 6.71 | $ 5.76 |
Weighted average grant date fair value, Non-vested Options, Vested (in dollars per share) | 5.11 | |
Weighted average grant date fair value, Non-vested Options, Forfeited (in dollars per share) | 6.23 | |
Weighted average grant date fair value, Non-vested Options at end of period (in dollars per share) | $ 6.27 | $ 5.21 |
STOCK OPTIONS STOCK OPTIONS - F
STOCK OPTIONS STOCK OPTIONS - Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option value (in dollars per share) | $ 10.64 | $ 9.37 |
Expected dividend yield | 0% | 0% |
Expected volatility - minimum | 69.60% | 68.90% |
Expected volatility - maximum | 78.50% | 70.80% |
Expected term (in years) | 5 years | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option value (in dollars per share) | $ 5.10 | $ 9.29 |
Risk-free rate | 1.60% | 0.60% |
Expected term (in years) | 4 years 6 months | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option value (in dollars per share) | $ 10.96 | $ 11.51 |
Risk-free rate | 3.90% | 0.80% |
Expected term (in years) | 6 years | 6 years |
GEOGRAPHIC AND SEGMENT INFORM_3
GEOGRAPHIC AND SEGMENT INFORMATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
GEOGRAPHIC AND SEGMENT INFORM_4
GEOGRAPHIC AND SEGMENT INFORMATION - Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 44,510 | $ 48,517 |
(Loss) income from operations | (23,562) | (14,448) |
Interest income | 157 | 11 |
Interest expense | (15) | (10) |
Other income (losses), net | 509 | (373) |
Income tax expense | 367 | 380 |
Operating Segments | Advanced Energy | ||
Segment Reporting Information [Line Items] | ||
Sales | 36,803 | 42,985 |
(Loss) income from operations | (4,103) | 2,784 |
Interest expense | 0 | |
Income tax expense | 0 | 0 |
Operating Segments | OEM | ||
Segment Reporting Information [Line Items] | ||
Sales | 7,707 | 5,532 |
(Loss) income from operations | 1,641 | 1,033 |
Income tax expense | 0 | 0 |
Corporate (Other) | ||
Segment Reporting Information [Line Items] | ||
(Loss) income from operations | (21,100) | (18,265) |
Interest income | 157 | 11 |
Interest expense | (15) | (10) |
Other income (losses), net | 509 | (373) |
Income tax expense | $ 367 | $ 380 |
GEOGRAPHIC AND SEGMENT INFORM_5
GEOGRAPHIC AND SEGMENT INFORMATION - Geographic (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Sales | $ 44,510 | $ 48,517 |
Domestic | ||
Segment Reporting Information [Line Items] | ||
Sales | 31,208 | 32,980 |
International | ||
Segment Reporting Information [Line Items] | ||
Sales | $ 13,302 | $ 15,537 |
International | Sales | Geographic Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 29.90% | 32% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Mar. 14, 2023 USD ($) | Feb. 17, 2023 USD ($) numberOfMonthlyPayment $ / shares shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares |
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Payments of transaction fees and other costs | $ 2,000,000 | |||
Debt covenant, 12 month net revenue target, year one | 49,000,000 | |||
Debt covenant, 12 month net revenue target, year two | 60,000,000 | |||
Debt covenant, 12 month net revenue target, year three | 70,000,000 | |||
Debt covenant, cash and cash equivalents balance | $ 10,000,000 | |||
Warrants issued (in shares) | shares | 250,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Warrants, exercise price (in dollars per share) | $ / shares | $ 3.40 | |||
Sale leaseback, purchase agreement | $ 7,650,000 | |||
Sale leaseback, due diligence period | 30 days | |||
Sale leaseback, completion period after due diligence | 5 years | |||
Sale leaseback, escrow | $ 400,000 | |||
Sale leaseback, term of lease | 10 years | |||
Sale leaseback, renewal term | 5 years | |||
Sale leaseback. annual rent payment | $ 619,500 | |||
Sale leaseback, annual rent increase | 4% | |||
Sale leaseback, management fee on rent payment | 3% | |||
Sale leaseback, net cash proceeds | $ 6,700,000 | |||
Credit Agreement | Line of Credit | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Credit agreement | $ 35,000,000 | |||
Default, applicable interest rate | 2% | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | ||||
Subsequent Event [Line Items] | ||||
Mortgage loan, principal amount | $ 25,000,000 | |||
Interest rate floor | 2.50% | |||
Period of interest only | 24 months | |||
Extension period | 12 months | |||
Number of monthly payments | numberOfMonthlyPayment | 36 | |||
Number of monthly payments, extension | numberOfMonthlyPayment | 24 | |||
Exit fee | 4% | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Debt Instrument, Prepayment Period, One | ||||
Subsequent Event [Line Items] | ||||
Prepayment fee | 3% | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Debt Instrument, Prepayment Period Two | ||||
Subsequent Event [Line Items] | ||||
Prepayment fee | 2% | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Debt Instrument, Prepayment Period Three | ||||
Subsequent Event [Line Items] | ||||
Prepayment fee | 1% | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Adjusted Term Secured Overnight Financing Rate (SOFR) | ||||
Subsequent Event [Line Items] | ||||
Variable rate | 7.35% | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Tranche One | ||||
Subsequent Event [Line Items] | ||||
Mortgage loan, principal amount | $ 10,000,000 | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Tranche Two | ||||
Subsequent Event [Line Items] | ||||
Mortgage loan, principal amount | 5,000,000 | |||
Credit Agreement | Line of Credit | Subsequent Event | Secured Debt | Tranche Three | ||||
Subsequent Event [Line Items] | ||||
Mortgage loan, principal amount | 10,000,000 | |||
Credit Agreement | Line of Credit | Subsequent Event | Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Credit agreement | $ 10,000,000 | |||
Interest rate floor | 2.50% | |||
Annual fee | 0.50% | |||
Credit Agreement | Line of Credit | Subsequent Event | Revolving Credit Facility | Debt Instrument, Termination Period One | ||||
Subsequent Event [Line Items] | ||||
Termination fees | 3% | |||
Borrowing base, minimum balance | 30% | |||
Borrowing base, minimum balance | $ 10,000,000 | |||
Credit Agreement | Line of Credit | Subsequent Event | Revolving Credit Facility | Debt Instrument, Termination Period Two | ||||
Subsequent Event [Line Items] | ||||
Termination fees | 2% | |||
Credit Agreement | Line of Credit | Subsequent Event | Revolving Credit Facility | Debt Instrument, Termination Period Three | ||||
Subsequent Event [Line Items] | ||||
Termination fees | 1% | |||
Credit Agreement | Line of Credit | Subsequent Event | Revolving Credit Facility | Adjusted Term Secured Overnight Financing Rate (SOFR) | ||||
Subsequent Event [Line Items] | ||||
Variable rate | 4% |