Apyx Medical (APYX) risk factors, FY2025 10-K

Risks Relating to Our Business

1. 01We manufacture the majority of our products at our Clearwater, Florida and Sofia, Bulgaria facilities. Components, labor-intensive assemblies and sub-assemblies, and sterilization services are outsourced to third parties and produced to our specifications
2. 02Macroeconomic trends including inflation and higher interest rates may adversely affect our financial condition, results of operations and cash flows42% rewritten
3. 03The health of the economy may affect consumer purchases of discretionary services, such as cosmetic and aesthetic services, which could have a material adverse effect on our business, financial condition, results of operations and cash flows
4. 04Our revenue could decline due to changes in credit markets and decisions made by credit providers
5. 05We have had a history of operating losses that have impacted our overall cash flows and may impact our ability to continue as a going concern. We anticipate that we may need to adjust our operating expenditures to be commensurate with our expected levels of revenue and/or raise additional capital to finance operations
6. 06Our indebtedness levels and achievement of covenants could impact our business
7. 07The aesthetic equipment market is characterized by rapid innovation. To compete effectively, we must develop and/or acquire new products, seek regulatory clearance, ensure adequate product supply, execute successful marketing, and identify new markets for our technology
8. 08Even if we are successful in developing new, or enhancing our existing products, there are various circumstances that could prevent their successful commercialization
9. 09The energy-based medical device industry for the aesthetics market is highly competitive. Many competitors in this industry are well-established, do a substantially greater amount of business, and have greater financial resources and facilities than we do
10. 10If we are unable to protect our patents or other proprietary rights, or if we infringe on the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged
11. 11We have been, and may in the future, become subject to litigation proceedings that could materially and adversely affect our business
12. 12We rely on certain suppliers, subcontractors, and manufacturers for raw materials and other products and are vulnerable to fluctuations in the availability and price of such products and services
13. 13Our manufacturing facilities are located in Clearwater, Florida and Sofia, Bulgaria and could be affected due to multiple weather risks, including risks to our Florida facility from hurricanes and similar phenomena
14. 14If there is not sufficient consumer demand for the procedures performed with our products, surgeon demand for our products could be inhibited, resulting in unfavorable operating results and reduced growth potential27% rewritten
15. 15Quality problems and product liability claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect on our business, results of operations, financial condition and cash flows

Risk Related to Government Regulations

1. 16Product Approval and Monitoring
2. 17We are subject to costly and complex laws and governmental regulations and any adverse regulatory action may materially adversely affect our financial condition and business operations
3. 18limit the proposed intended uses of our products
4. 19Hazardous Air Pollutants: Ethylene Oxide
5. 20Anti-Corruption Regulation

Risks Relating to Our Stock

1. 21The market price of our stock has been and may continue to be highly volatile
2. 22changes in the position of securities analysts with respect to our stock
3. 23We have no present intention to pay dividends on our common stock and, even if we change that policy, we may be unable to pay dividends
4. 24Issuance of equity through our shelf registration statement, as well as the exercise of options and warrants issued by us will dilute the ownership interest of existing stockholders42% rewritten

General Risks

1. 25We may, in the future, identify deficiencies in internal controls over financial reporting
2. 26We rely on our management team and other key personnel, and we may lose key personnel or fail to attract, train, and retain other talented personnel
3. 27Adverse global and regional economic conditions could materially adversely affect the Company’s business, results of operations and financial condition
4. 28The Company’s business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions
5. 29Changes in U.S. or foreign trade policies could significantly increase the cost of imported goods into the United States, which may materially reduce our sales or profitability