Core Insights - Myomo (MYO) has raised its revenue growth target for 2025 to 23%-29%, focusing on improving the quality of potential customers and sales conversion rates [1] - The company reported a 28% increase in revenue for the second quarter and is currently implementing a cost reduction plan to achieve sustainable positive cash flow operations [1]

Myomo, Inc. (MYO) came out with a quarterly loss of $0.11 per share in line with the Zacks Consensus Estimate. This compares to a loss of $0.03 per share a year ago. These figures are adjusted for non-recurring items. Ahead of this earnings release, the estimate revisions trend for Myomo was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares ...

Core Viewpoint - Myomo, Inc. is conducting its Q2 2025 earnings conference call, highlighting its financial results and future outlook [1][2]. Group 1: Company Overview - Myomo's conference call features key executives including CEO Paul Gudonis and CFO Dave Henry [3]. - The call is being facilitated by Tirth Patel from Alliance Advisors IR [3]. Group 2: Financial Results - The conference call is focused on discussing Myomo's financial performance for the second quarter of 2025 [2]. Group 3: Forward-Looking Statements - Management has issued forward-looking statements regarding the company's expectations and projections, which are subject to various risks and uncertainties [4][5].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $9.7 million, representing a 28% increase year-over-year, driven by a higher number of revenue units and an increase in average selling price (ASP) by 14% to approximately $54,200 [21][22] - Operating loss for Q2 2025 was $4.6 million, compared to an operating loss of $1.1 million in the prior year quarter [27] - Gross margin decreased to 62.7% from 70.8% in the prior year quarter, primarily due to higher material costs and overhead spending [25][26] Business Line Data and Key Metrics Changes - The company delivered 178 MyoPro revenue units in Q2 2025, up 13% year-over-year, with 91% of revenue recorded as shipment or delivery [21] - Medicare Part B patients represented 56% of revenue in Q2 2025, while Medicare Advantage revenue accounted for 20% of revenue, which was down slightly from the previous year [22][24] - The pipeline stood at 1,611 patients, a 37% increase year-over-year, with 816 patients added in Q2 2025, up 49% from the prior year quarter [23][24] Market Data and Key Metrics Changes - International revenue was $1.5 million in Q2 2025, representing 15% of total revenue and up 41% year-over-year, primarily from Germany [22] - The number of O and P orders doubled from Q1 to Q2 2025, indicating growth in that channel [15] Company Strategy and Development Direction - The company aims to achieve sustainable cash flow positive operations while expanding its MyoPro product line and improving conversion efficiency [6][19] - A shift in advertising strategy from social media to television is expected to improve lead quality and engagement [12][79] - The company is expanding its clinical referral program to increase education activities at rehab hospitals, which is anticipated to result in more high-quality patients entering the pipeline [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in converting leads to pipeline adds and the impact of Medicare Advantage plan behaviors on authorizations [16][18] - The company expects revenue growth in 2025 to be between 23% to 29%, reflecting the number of leads and pipeline adds year-to-date [20][34] - Management expressed confidence in the adjustments being made to improve results and emphasized the importance of Medicare Part B patients for growth [19][68] Other Important Information - The company undertook a headcount reduction impacting about 8% of its U.S. workforce to align operating expenses with revenue [12][13] - Cash burn for Q2 2025 was $10 million, with expectations of a normalized cash burn of approximately $4.9 million reflecting operational performance [30][31] Q&A Session Summary Question: Clarification on Q3 guidance and backlog conversions - Management noted an increase in fill units and a higher percentage of backlog, supporting the guidance of $9.5 to $10 million for Q3 [39][40] Question: Plans to accelerate O and P channel contributions - The company plans for significant growth in the O and P channel, with about 100 certified providers actively working to build a pipeline [44][46] Question: Advertising spend and cost per pipeline ad expectations - Advertising spending is expected to remain flat in Q3, with a potential decrease in Q4, while cost per pipeline ad is anticipated to decrease in Q3 compared to Q2 [49][50] Question: Challenges with Medicare Advantage authorizations - Management indicated that the authorization rate for Medicare Advantage patients is a significant headwind, with ongoing appeals processes affecting conversion rates [62][63] Question: Quality of leads from Facebook and future expectations - The company experienced lower quality leads from Facebook due to new privacy policies, leading to a shift in advertising strategy towards television [78][79] Question: Supply side costs and tariffs impact - Higher material costs were attributed to increased usage rather than pricing, with minimal impact from tariffs expected on gross margin [74][75] Question: Confidence in metrics and operational adjustments - Management expressed encouragement from July results and confidence in the plans put in place to address identified issues [68][69]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Myomo's Q2 2025 revenue exceeded expectations, driven by increased units and ASP, despite concerns over lead quality and pipeline conversion impacting gross margin and cost per pipeline add [Second Quarter 2025 Financial and Operating Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operating%20Highlights) Myomo reported strong revenue growth in Q2 2025, exceeding expectations, driven by increased revenue units and a higher average selling price, though forward-looking operating metrics like lead quality and pipeline conversion were not as anticipated, leading to a decrease in gross margin and an increase in cost per direct billing pipeline add Q2 2025 Financial and Operating Highlights (YoY Comparison) | Metric | Q2 2025 Value | Change vs. Q2 2024 | Source Chunk | | :-------------------------------- | :---------------- | :------------------- | :----------- | | Revenue ($) | $9.7 million | +28% | 5 | | Revenue units (units) | 178 | +13% | 5 | | Orders and insurance authorizations (units) | 207 units | -3% | 5 | | Backlog (units, as of June 30, 2025) | 230 units | -18% | 5 | | New candidates added to pipeline (count) | 816 | +49% | 5 | | Total MyoPro candidates in pipeline (count, as of June 30, 2025) | 1,611 | +37% | 5 | | Gross margin (%) | 62.7% | -810 basis points | 5 | | Cost per direct billing pipeline add ($) | $2,926 | +89% | 5 | [Management Commentary & Strategic Actions](index=1&type=section&id=Management%20Commentary%20%26%20Strategic%20Actions) CEO Paul R. Gudonis highlighted that Q2 revenues surpassed expectations due to improved conversion of current quarter authorizations, but noted concerns regarding lead quality and pipeline conversion, prompting a shift in advertising focus to television, engagement of clinical teams, and enhancement of the provider ecosystem - Second quarter revenues exceeded expectations with **28% growth**, strengthening the ability to convert current quarter authorizations and orders into revenue[2](index=2&type=chunk) - Forward-looking operating metrics were not as strong as anticipated due to factors affecting lead quality and pipeline conversion[2](index=2&type=chunk) - Strategic actions include shifting advertising focus from digital to television for higher quality leads and using clinical teams to engage therapists and physicians to expand MyoPro understanding and secure referrals[3](index=3&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) This section analyzes Myomo's Q2 2025 financial results, detailing revenue growth, gross profit changes, increased operating expenses, and the resulting net loss and Adjusted EBITDA [Revenue and Gross Profit](index=1&type=section&id=Revenue%20and%20Gross%20Profit) Myomo's revenue for Q2 2025 increased by 28% to $9.7 million, driven by a 13% increase in revenue units and a 14% rise in average selling price (ASP), with year-to-date revenue seeing a substantial 73% increase, though gross margin decreased to 62.7% primarily due to higher material and overhead spending Revenue and Gross Profit (Q2 and YTD 2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :---------------- | :---------- | :---------- | :--------- | :--------- | :----------- | :----------- | :--------- | :--------- | | Revenue | $9,652,234 | $7,520,767 | $2,131,467 | 28% | $19,484,048 | $11,275,156 | $8,208,892 | 73% | | Cost of revenue | $3,600,061 | $2,195,255 | $1,404,806 | 64% | $6,822,246 | $3,650,601 | $3,171,645 | 87% | | Gross profit | $6,052,173 | $5,325,512 | $726,661 | 14% | $12,661,802 | $7,624,555 | $5,037,247 | 66% | | Gross margin % | 62.7% | 70.8% | -8.1% | -8.1% | 65.0% | 67.6% | -2.7% | -2.7% | - Revenue units for Q2 2025 were **178**, up **13% YoY**[6](index=6&type=chunk) - Average Selling Price (ASP) was approximately **$54,200**, up **14%** versus the prior year[6](index=6&type=chunk) - Medicare Part B patients represented **56%** of second quarter 2025 revenue[6](index=6&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Operating expenses for Q2 2025 surged by 65% to $10.6 million, primarily due to increased payroll, R&D spending, and advertising, leading to an 89% rise in cost per direct billing pipeline add despite workforce reductions Operating Expenses (Q2 and YTD 2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :----------- | :----------- | :--------- | | Operating expenses | $10.6 million | $6.4 million | 65% | $20.8 million | $12.6 million | 64% | | Advertising costs | $2.2 million | - | 162% | - | - | - | | Cost per direct billing pipeline add | $2,926 | - | 89% | - | - | - | - The increase in operating expenses was primarily due to higher payroll expense (reflecting higher headcount for direct billing channel support), increased engineering activity and headcount (resulting in higher R&D spending), and higher advertising expenditures[8](index=8&type=chunk) - Workforce reduced by approximately **8%** in July, and certain spending on outside services eliminated, expected to reduce cash expenditures by at least **$2 million** over the next 12 months[8](index=8&type=chunk) [Net Loss and Adjusted EBITDA](index=2&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) Myomo reported a significant increase in operating loss and net loss for Q2 2025 and year-to-date, reflecting the higher operating expenses, with net loss per share also increasing and Adjusted EBITDA showing a larger negative value compared to the prior year Operating Loss, Net Loss, and Adjusted EBITDA (Q2 and YTD 2025 vs. 2024) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :---------- | :---------- | :----------- | :----------- | | Operating loss | $(4.6) million | $(1.1) million | $(8.1) million | $(5.0) million | | Net loss | $(4.6) million | $(1.1) million | $(8.1) million | $(5.0) million | | Net loss per share | $(0.11) | $(0.03) | $(0.20) | $(0.13) | | Adjusted EBITDA | $(4.0) million | $(1.2) million | $(6.8) million | $(4.7) million | - Operating loss for Q2 2025 was **$4.6 million**, compared with **$1.1 million** for Q2 2024[9](index=9&type=chunk) - Net loss for Q2 2025 was **$4.6 million**, or **$0.11 per share**, compared with **$1.1 million**, or **$0.03 per share**, for Q2 2024[9](index=9&type=chunk) [Operational Performance](index=2&type=section&id=Operational%20Performance) This section examines Myomo's MyoPro pipeline growth, order trends, and the key factors influencing operating metrics, including lead quality, conversion rates, and advertising cycle time [MyoPro Pipeline and Orders](index=2&type=section&id=MyoPro%20Pipeline%20and%20Orders) The MyoPro patient pipeline grew significantly by 37% to 1,611 patients as of June 30, 2025, with 816 new medically-qualified patients added in Q2 2025, a 49% increase, though authorizations and orders decreased by 3% to 207 units, and the ending backlog fell by 18% to 230 patients due to slower authorizations and higher revenue velocity MyoPro Pipeline and Order Metrics (Q2 2025 vs. 2024) | Metric | Q2 2025 Value | Change vs. Q2 2024 | Source Chunk | | :-------------------------------- | :---------------- | :------------------- | :----------- | | MyoPro pipeline (as of June 30, 2025) | 1,611 patients | +37% | 11 | | Medically-qualified patients added to pipeline (Q2 2025) | 816 | +49% | 11 | | MyoPro authorizations and orders (Q2 2025) | 207 | -3% | 11 | | Backlog (as of June 30, 2025) | 230 patients | -18% | 12 | [Factors Impacting Operating Metrics](index=3&type=section&id=Factors%20Impacting%20Operating%20Metrics) Management identified three key factors impacting operating metrics: the quality of leads generated post-digital advertising changes, lower conversion rates due to patient response and stricter clinical eligibility, and a cycle time effect where a significant portion of current advertising spending will yield pipeline additions in future years - Lead quality issues after changes to digital advertising in response to an algorithm change[13](index=13&type=chunk) - Lower conversion rates to both pipeline adds and authorizations and orders, driven by patient response and enhanced outcome focus of the clinical team disqualifying more patients[13](index=13&type=chunk) - A cycle time effect where **40-50%** of pipeline adds in a given quarter come from leads generated a year or more ago, implying current advertising spending will impact future pipeline adds[13](index=13&type=chunk) [Financial Position](index=3&type=section&id=Financial%20Position) This section details Myomo's cash and liquidity position, highlighting the $15.5 million cash balance, increased cash used in operating activities, and the company's assessment of sufficient funding for the next 12 months [Cash Position and Liquidity](index=3&type=section&id=Cash%20Position%20and%20Liquidity) As of June 30, 2025, Myomo's cash, cash equivalents, and short-term investments stood at $15.5 million, bolstered by $4.0 million in borrowings, with cash used in operating activities significantly increasing to $8.9 million in Q2 2025, attributed to higher operating loss, capital expenditures, working capital needs, and specific payment issues, though the company expects a normalized cash burn of $4.9 million in Q2 and believes its current cash position is sufficient for the next 12 months Cash Position and Usage (Q2 2025) | Metric | Value | Source Chunk | | :------------------------------------------ | :---------- | :----------- | | Cash, cash equivalents and short-term investments (June 30, 2025) | $15.5 million | 14 | | Borrowings against line of credit and term loan (Q2) | $4.0 million | 14 | | Cash used in operating activities (Q2 2025) | $8.9 million | 14 | | Normalized cash burn (Q2 2025) | $4.9 million | 16 | - Elevated cash use was due to higher operating loss, capital expenditures for software development, manufacturing facility improvements, demo units, and increased working capital requirements, including 2024 incentive compensation payment, a payment hold by a DME MAC, increased days sales outstanding, and an insurance payer repayment[15](index=15&type=chunk) - The company believes its cash, cash equivalents, and short-term investments are sufficient to fund operations for the next 12 months[16](index=16&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) This section outlines Myomo's revised 2025 full-year revenue guidance, which has been reduced to $40 million to $42 million, while still projecting a significant increase over 2024 [2025 Revenue Guidance Update](index=3&type=section&id=2025%20Revenue%20Guidance%20Update) Myomo has updated its 2025 full-year revenue guidance to a range of $40 million to $42 million, a reduction from the previous guidance of $50 million to $53 million, though this revised guidance still represents a 23% to 29% increase over 2024, with Q3 2025 revenue expected to be between $9.5 million and $10.0 million 2025 Revenue Guidance Update | Metric | Previous Guidance | Updated Guidance | Change | | :-------------------------- | :------------------ | :----------------- | :----- | | Full-year 2025 Revenue ($) | $50 million - $53 million | $40 million - $42 million | Downward revision | | Q3 2025 Revenue Expectation ($) | - | $9.5 million - $10.0 million | - | - The updated 2025 revenue guidance represents an increase of **23% to 29%** versus 2024[17](index=17&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section provides an overview of Myomo, Inc., its MyoPro product line, non-GAAP financial measures, and important forward-looking statements and risk factors [About Myomo](index=4&type=section&id=About%20Myomo) Myomo, Inc. is a wearable medical robotics company specializing in the MyoPro product line, which offers improved arm and hand function for individuals with neurological disorders and upper-limb paralysis, utilizing EMG signals to restore daily living activities and enable patients to regain independence - Myomo, Inc. is a wearable medical robotics company that offers improved arm and hand function for those suffering from neurological disorders and upper-limb paralysis[22](index=22&type=chunk) - The MyoPro product line is a powered upper-limb orthosis designed to support the arm and restore function to weakened or paralyzed arms of patients with conditions like CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, or other neuromuscular diseases[22](index=22&type=chunk) - MyoPro is currently the only marketed device in the U.S. that senses a patient's own EMG signals through non-invasive sensors to restore the ability to perform activities of daily living[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Myomo provides financial information, including Adjusted EBITDA, that is not prepared in accordance with GAAP, using this non-GAAP measure to offer supplementary information for investors to evaluate operating performance and compare Myomo's financial measures with other companies in its industry, defined as EBITDA adjusted for stock-based compensation expense - Myomo provides financial information, including Adjusted EBITDA, that has not been prepared in accordance with GAAP[21](index=21&type=chunk) - Adjusted EBITDA is a non-GAAP financial measure used to provide supplementary information for investors to evaluate operating performance and compare Myomo's financial measures with other companies[21](index=21&type=chunk) - Adjusted EBITDA is defined as EBITDA adjusted for stock-based compensation expense[21](index=21&type=chunk) [Forward-Looking Statements & Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This press release contains forward-looking statements regarding Myomo's future business expectations, including revenue guidance, which are subject to various factors that could cause actual results to differ materially, such as challenges related to reimbursement, financing, scaling operations, revenue concentration, supply chain disruptions, marketing effectiveness, strategic collaborations, internal controls, product development, market acceptance, clinical research, intellectual property, regulatory approvals, competition, and general market conditions - The press release contains forward-looking statements regarding future business expectations, including revenue for Q3 and full year 2025, subject to safe harbor provisions[23](index=23&type=chunk) - Factors that could cause actual results to differ materially include: ability to obtain sufficient reimbursement, dependence on external financing, ability to achieve positive cash flow, revenue concentration with Medicare and specific payers, supply chain disruption, marketing efforts, strategic collaborations, remediation of material weakness in internal control, product development, market acceptance, clinical research, intellectual property protection, regulatory approvals, competition, and general market factors[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Myomo's detailed condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows, for the specified periods [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the detailed income statement for Myomo, Inc. for the three and six months ended June 30, 2025, and 2024, outlining revenue, cost of revenue, gross profit, operating expenses (research and development, selling, clinical and marketing, general and administrative), loss from operations, other income/expense, income tax expense, and net loss, along with weighted average shares and net loss per share Condensed Consolidated Statements of Operations | | For the Three Months ended | | For the Six Months Ended | | :------------------------------------------ | :---------- | :---------- | :----------- | :----------- | | | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | | Revenue | $9,652,234 | $7,520,767 | $19,484,048 | $11,275,156 | | Cost of revenue | 3,600,061 | 2,195,255 | 6,822,246 | 3,650,601 | | Gross profit | 6,052,173 | 5,325,512 | 12,661,802 | 7,624,555 | | Operating expenses: | | | | | | Research and development | 2,001,331 | 1,007,224 | 3,791,355 | 1,963,438 | | Selling, clinical and marketing | 5,233,885 | 2,777,135 | 9,629,689 | 5,138,980 | | General and administrative | 3,407,277 | 2,656,217 | 7,351,332 | 5,525,968 | | Total Operating Expenses | 10,642,493 | 6,440,576 | 20,772,376 | 12,628,386 | | Loss from operations | (4,590,320) | (1,115,064) | (8,110,574) | (5,003,831) | | Interest (income), net | (106,549) | (107,242) | (298,540) | (242,535) | | Loss before income taxes | (4,483,771) | (1,007,822) | (7,812,034) | (4,761,296) | | Income tax expense | 148,201 | 113,785 | 284,996 | 195,943 | | Net loss | $(4,631,972) | $(1,121,607) | $(8,097,030) | $(4,957,239) | | Weighted average common shares outstanding (Basic and diluted) | 41,582,737 | 37,368,488 | 41,518,959 | 37,060,543 | | Net loss per share (Basic and diluted) | $(0.11) | $(0.03) | $(0.20) | $(0.13) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides Myomo, Inc.'s condensed consolidated balance sheets as of June 30, 2025 (unaudited) and December 31, 2024, detailing current and non-current assets, liabilities, and stockholders' equity, with key changes including a decrease in total current assets and total stockholders' equity, alongside an increase in total liabilities Condensed Consolidated Balance Sheets | | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :---------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $14,240,432 | $24,372,373 | | Short-term investments | 1,241,515 | 492,990 | | Accounts receivable, net | 7,054,545 | 3,825,291 | | Inventories | 4,125,597 | 3,165,965 | | Prepaid expenses and other current assets | 1,381,721 | 933,377 | | Total Current Assets | 28,043,810 | 32,789,996 | | Restricted Cash | 375,000 | 375,000 | | Operating lease assets with right of use | 7,058,063 | 7,584,663 | | Equipment, net | 2,908,804 | 1,330,008 | | Other assets | 286,670 | 164,412 | | **Total Assets** | **$38,672,347** | **$42,244,079** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable and accrued expenses | $8,313,862 | $9,021,817 | | Current operating lease liability | 460,351 | 748,021 | | Income taxes payable | 204,110 | 318,885 | | Deferred revenue | 108,780 | 83,115 | | Current portion long-term debt | 166,667 | — | | Revolving credit line | 2,500,000 | — | | Total Current Liabilities | 11,753,770 | 10,171,838 | | Non-current operating lease liability | 7,970,116 | 7,358,184 | | Long-term debt | 1,333,333 | — | | **Total Liabilities** | **21,057,219** | **17,530,022** | | **Stockholders' Equity:** | | | | Common stock | 3,778 | 3,439 | | Additional paid-in capital | 128,781,048 | 127,846,026 | | Accumulated other comprehensive income (loss) | 48,334 | (14,406) | | Accumulated deficit | (111,211,568) | (103,114,538) | | Treasury stock, at cost | (6,464) | (6,464) | | **Total Stockholders' Equity** | **17,615,128** | **24,714,057** | | **Total Liabilities and Stockholders' Equity** | **$38,672,347** | **$42,244,079** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details Myomo, Inc.'s condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, showing a significant increase in net cash used in operating activities, higher cash used in investing activities, and a decrease in cash provided by financing activities compared to the prior year, resulting in a substantial net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows | For the Six Months Ended June 30, | 2025 | 2024 | | :------------------------------------------ | :----------- | :----------- | | **CASH FLOWS FROM OPERATING ACTIVITIES** | | | | Net loss | $(8,097,030) | $(4,957,239) | | Adjustments to reconcile net loss to net cash used in operations: | | | | Depreciation | 349,240 | 65,663 | | Stock-based compensation | 935,093 | 228,395 | | Accretion of discount on short-term investments | (108,999) | — | | Credit losses | 51,643 | 5,257 | | Amortization of deferred offering costs | 60,045 | — | | Amortization of right-of-use assets | 526,600 | 124,057 | | Other non-cash charges | (91,984) | 44,631 | | Changes in operating assets and liabilities: | | | | Accounts receivable | (2,975,272) | (102,234) | | Inventories | (1,204,740) | (816,055) | | Prepaid expenses and other current assets | (615,940) | (363,375) | | Other assets | (130,801) | (214,937) | | Accounts payable and accrued expenses | (531,182) | 990,973 | | Income taxes payable | (144,392) | 176,235 | | Operating lease liabilities | 140,536 | (237,365) | | Deferred revenue | 25,666 | 3,505 | | Tenant improvement allowance | 183,726 | — | | **Net cash used in operating activities** | **$(11,542,175)** | **$(5,161,488)** | | **CASH USED IN INVESTING ACTIVITIES** | **$(2,653,446)** | **$(1,211,930)** | | **CASH PROVIDED BY FINANCING ACTIVITIES** | **$3,963,494** | **$5,361,909** | | Effect of foreign exchange rate changes on cash | 100,186 | (13,697) | | Net (decrease) increase in cash and cash equivalents | $(10,131,941) | $(1,025,206) | | Cash and cash equivalents, beginning of period | 24,747,373 | 6,871,306 | | Cash and cash equivalents, end of period | **$14,615,432** | **$5,846,100** | [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) This section provides a reconciliation of Myomo, Inc.'s GAAP net loss to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, adjusting net loss for interest income, depreciation expense, stock-based compensation, and income tax expense to arrive at the non-GAAP Adjusted EBITDA Reconciliation of GAAP Net Loss to Adjusted EBITDA | | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | | :------------------------------------------ | :---------- | :---------- | :----------- | :----------- | | | 2025 | 2024 | 2025 | 2024 | | GAAP net loss | $(4,631,972) | $(1,121,607) | $(8,097,030) | $(4,957,239) | | Adjustments to reconcile to Adjusted EBITDA: | | | | | | Interest income | (106,549) | (107,242) | (298,540) | (242,535) | | Depreciation expense | 190,798 | 35,979 | 349,240 | 65,663 | | Stock-based compensation | 394,889 | (91,893) | 935,093 | 228,395 | | Income tax expense | 148,201 | 113,785 | 284,996 | 195,943 | | **Adjusted EBITDA** | **$(4,004,633)** | **$(1,170,978)** | **$(6,826,241)** | **$(4,709,773)** | [Conference Call & Contacts](index=3&type=section&id=Conference%20Call%20%26%20Contacts) This section provides details for Myomo's Q2 2025 conference call and webcast, along with contact information for investor relations inquiries [Conference Call and Webcast Details](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Details) Myomo hosted a conference call and webcast on August 11, 2025, at 4:30 p.m. Eastern time to discuss the Q2 2025 results, with pre-registration and dial-in options available, and a webcast and dial-in replay provided for those unable to attend live - Conference call held on August 11, 2025, at **4:30 p.m. Eastern time**[18](index=18&type=chunk) - Participants could pre-register for a passcode and PIN or dial **844-707-6932** (U.S.) or **412-317-9250** (International)[18](index=18&type=chunk) - A webcast of the call and a replay were available on Myomo's Investor Relations page at http://ir.myomo.com/[18](index=18&type=chunk)[20](index=20&type=chunk) [Contacts](index=5&type=section&id=Contacts) This section provides contact information for Myomo's Investor Relations and Alliance Advisors IR for further inquiries - Myomo Investor Relations contact: ir@myomo.com[26](index=26&type=chunk) - Alliance Advisors IR contact: Tirth T. Patel, tpatel@allianceadvisors.com, **212-201-6614**[26](index=26&type=chunk)

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements subject to risks, and actual results may differ materially - The report contains forward-looking statements related to expectations, beliefs, projections, future plans, and strategies, which are **not historical facts**[6](index=6&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results could **differ materially** due to various factors, including the company's ability to achieve reimbursement, secure financing, scale operations, manage revenue concentration, and maintain intellectual property and regulatory approvals[7](index=7&type=chunk)[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's analysis of financial condition and results [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements%20(interim%20periods%20unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed notes on business, liquidity, and accounting policies [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific interim dates | Metric | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :-------------------------- | :------------------ | | Total Assets | $38,672,347 | $42,244,079 | | Total Liabilities | $21,057,219 | $17,530,022 | | Total Stockholders' Equity | $17,615,128 | $24,714,057 | | Cash and cash equivalents | $14,240,432 | $24,372,373 | | Accounts receivable, net | $7,054,545 | $3,825,291 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This table outlines the company's financial performance over interim periods, showing revenue, gross profit, operating loss, and net loss | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $9,652,234 | $7,520,767 | $19,484,048 | $11,275,156 | | Gross profit | $6,052,173 | $5,325,512 | $12,661,802 | $7,624,555 | | Loss from operations | $(4,590,320) | $(1,115,064) | $(8,110,574) | $(5,003,831) | | Net loss | $(4,631,972) | $(1,121,607) | $(8,097,030) | $(4,957,239) | | Basic and diluted EPS | $(0.11) | $(0.03) | $(0.20) | $(0.13) | [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This table presents the company's comprehensive loss, including net loss and other comprehensive income/loss items like foreign currency adjustments | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(4,631,972) | $(1,121,607) | $(8,097,030) | $(4,957,239) | | Foreign currency translation adjustments | $164,878 | $(8,623) | $62,739 | $55,219 | | Comprehensive loss | $(4,467,094) | $(1,130,230) | $(8,034,291) | $(4,902,020) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This table details changes in the company's stockholders' equity, including net loss, stock-based compensation, and common stock issuances | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------------- | :------------------ | :-------------- | | Total Stockholders' Equity | $24,714,057 | $17,615,128 | | Stock-based compensation (6M) | N/A | $935,093 | | Net loss (6M) | N/A | $(8,097,030) | | Common stock issued upon vesting of restricted stock units (6M) | N/A | 703,180 shares | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes the company's cash inflows and outflows from operating, investing, and financing activities over interim periods | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(11,542,175) | $(5,161,488) | | Net cash used in investing activities | $(2,653,446) | $(1,211,930) | | Net cash provided by financing activities | $3,963,494 | $5,361,909 | | Net (decrease) increase in cash and cash equivalents | $(10,131,941) | $(1,025,206) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [Note 1 — Description of Business](index=10&type=section&id=Note%201%20%E2%80%94%20Description%20of%20Business) This note describes Myomo Inc.'s core business of developing and marketing MyoPro® myoelectric upper limb orthotics for neuromuscular disorders - Myomo Inc. develops, designs, and produces **MyoPro®** myoelectric upper limb orthotics for people with neuromuscular disorders, registered as a U.S. FDA Class II medical device[24](index=24&type=chunk) - The company sells its products directly to patients, Orthotics and Prosthetics (O&P) providers, the Veterans Health Administration, and distributors in Europe and Australia[24](index=24&type=chunk) [Note 2 — Liquidity](index=10&type=section&id=Note%202%20%E2%80%94%20Liquidity) This note discusses the company's financial resources, historical funding, debt agreements, and management's outlook on future liquidity | Metric | June 30, 2025 | | :-------------------------------- | :-------------- | | Cash, cash equivalents and short-term investments | $15,482,000 | | Net losses (6M) | $8,097,000 | | Cash used in operating activities (6M) | $11,542,200 | - The company has historically funded operations through equity and debt, including a **$15.8 million** public offering in December 2024 and a **$5.4 million** registered direct offering in January 2024[26](index=26&type=chunk) - A Loan and Security Agreement with Silicon Valley Bank provides a revolving line of credit up to **$4.0 million** and a **$3.0 million** term loan facility (amended February 2025)[26](index=26&type=chunk) - Management believes current cash, cash equivalents, and short-term investments will fund operations for at least the next **twelve months**[27](index=27&type=chunk) [Note 3 — Summary of Significant Accounting Policies](index=10&type=section&id=Note%203%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the accounting principles and significant estimates used in preparing the interim financial statements, including revenue recognition and advertising expenses - Interim financial statements are prepared in accordance with U.S. GAAP for interim information and include all adjustments considered necessary for fair presentation[28](index=28&type=chunk) - The company's significant estimates include deferred tax valuation allowances, valuation of stock-based compensation, warranty obligations, and reserves for slow-moving inventory[33](index=33&type=chunk) | Revenue Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Direct to patient | $7,420,904 | $5,829,407 | $15,228,681 | $8,059,833 | | Clinical/Medical providers | $2,231,330 | $1,691,360 | $4,255,367 | $3,215,323 | | Total revenue | $9,652,234 | $7,520,767 | $19,484,048 | $11,275,156 | - For the six months ended June 30, 2025, **86%** of total revenues were from the United States and **14%** from Germany[49](index=49&type=chunk) | Advertising Expense | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Advertising expense | $2,229,900 | $849,600 | $3,839,600 | $1,636,900 | [Note 4 — Inventories](index=17&type=section&id=Note%204%20%E2%80%94%20Inventories) This note provides a breakdown of the company's inventory categories, including finished goods, work in process, and parts and subassemblies | Inventory Category | June 30, 2025 | December 31, 2024 | | :----------------- | :-------------- | :------------------ | | Finished goods | $1,334,290 | $1,289,368 | | Work in process | $121,836 | $60,731 | | Parts and subassemblies | $2,669,471 | $1,815,866 | | Inventories, net | $4,125,597 | $3,165,965 | [Note 5 — Fair Value of Financial Instruments](index=17&type=section&id=Note%205%20%E2%80%94%20Fair%20Value%20of%20Financial%20Instruments) This note explains the company's methodology for measuring fair value using a three-level hierarchy for financial instruments - The company measures fair value using ASC 820, which establishes a three-level hierarchy for inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[60](index=60&type=chunk)[62](index=62&type=chunk) | Asset Category | June 30, 2025 (Level 1) | June 30, 2025 (Level 2) | December 31, 2024 (Level 1) | December 31, 2024 (Level 2) | | :-------------------------- | :------------------------ | :------------------------ | :-------------------------- | :-------------------------- | | Money market funds | $12,698,545 | $0 | $23,334,374 | $0 | | US government agency debt securities | $0 | $497,605 | $0 | $492,990 | | US Treasury bills | $0 | $743,910 | $0 | $0 | [Note 6 - Accounts Payable and Other Accrued Expenses](index=19&type=section&id=Note%206%20-%20Accounts%20Payable%20and%20Other%20Accrued%20Expenses) This note details the composition of the company's accounts payable and other accrued expenses, including trade payables and compensation | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | Trade payables | $2,514,945 | $1,169,901 | | Accrued compensation and benefits | $2,970,257 | $5,009,385 | | Customer deposits | $2,020,985 | $2,194,804 | | Total | $8,313,862 | $9,021,817 | [Note 7 — Common Stock and Warrants](index=19&type=section&id=Note%207%20%E2%80%94%20Common%20Stock%20and%20Warrants) This note describes the company's equity offerings, including public and registered direct sales of common stock and warrant exercises - The company completed a public equity offering in December 2024, selling **3,450,000 shares** for **$15.8 million** net proceeds[65](index=65&type=chunk) - A registered direct equity offering in January 2024 sold **1,354,218 shares** and **224,730 pre-funded warrants** for **$5.4 million** net proceeds[66](index=66&type=chunk) - During the three months ended June 30, 2025, **2,698,105 pre-funded warrants** were exercised, compared to **774,730** in the same period of 2024[68](index=68&type=chunk) - **668,250 investor warrants** expired unexercised during the six months ended June 30, 2025[69](index=69&type=chunk) [Note 8 —Debt](index=21&type=section&id=Note%208%20%E2%80%94Debt) This note details the company's debt agreements, including a revolving line of credit and a term loan facility with Silicon Valley Bank - The company entered into a Loan and Security Agreement with Silicon Valley Bank in July 2024, providing a revolving line of credit up to **$4.0 million** (potentially **$5.5 million**)[71](index=71&type=chunk)[72](index=72&type=chunk) - An amendment in February 2025 added a term loan facility of up to **$3.0 million**, available until February 28, 2026[74](index=74&type=chunk) - During the three months ended June 30, 2025, the company borrowed **$2.5 million** under the Revolving Line and **$1.5 million** under the Term Loan facility[78](index=78&type=chunk) - The company was in compliance with all loan covenants as of June 30, 2025[76](index=76&type=chunk) [Note 9 — Stock Award Plans and Stock-Based Compensation](index=23&type=section&id=Note%209%20%E2%80%94%20Stock%20Award%20Plans%20and%20Stock-Based%20Compensation) This note outlines the company's stock award plans, available shares for issuance, and the impact of stock-based compensation on expenses - As of June 30, 2025, there were **636,974 shares** available for issuance under the 2018 Stock Option and Incentive Plan, which cumulatively increases by **4%** annually[79](index=79&type=chunk) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Cost of goods sold | $28,005 | $(10,591) | $69,723 | $12,796 | | Research and development | $43,942 | $8,719 | $122,097 | $32,964 | | Selling, clinical and marketing | $101,657 | $7,190 | $193,149 | $53,251 | | General and administrative | $221,285 | $(97,211) | $550,124 | $129,384 | | Total | $394,889 | $(91,893) | $935,093 | $228,395 | - Unrecognized compensation cost for unvested restricted stock units was approximately **$4,972,300** as of June 30, 2025, expected to be recognized over a weighted-average period of **2.65 years**[83](index=83&type=chunk) [Note 9 — Commitments and Contingencies](index=23&type=section&id=Note%209%20%E2%80%94%20Commitments%20and%20Contingencies) This note addresses the company's legal status, lease obligations for its headquarters, and other financial commitments - There are no material claims, assessments, or litigation against the company as of June 30, 2025[84](index=84&type=chunk) - The company entered into a new lease agreement for its corporate headquarters and manufacturing facility in Burlington, Massachusetts, with a term of **88 months** starting May 11, 2025[85](index=85&type=chunk)[87](index=87&type=chunk) | Metric | June 30, 2025 | | :-------------------------- | :-------------- | | Total operating lease liabilities | $8,430,467 | | Current operating lease liabilities | $460,351 | | Non-current operating lease liabilities | $7,970,116 | | Lease Expense | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total lease expense | $348,348 | $89,443 | $751,879 | $178,939 | - Supplier finance obligations for the D&O insurance policy had a balance of **$453,588** as of June 30, 2025[90](index=90&type=chunk) [Note 11 — Segment Reporting and Major Customers](index=26&type=section&id=Note%2011%20%E2%80%94%20Segment%20Reporting%20and%20Major%20Customers) This note clarifies the company's single operating segment and identifies major customers, including CMS and Medicare Advantage plans - The company operates in one operating segment, selling versions of the MyoPro product line[91](index=91&type=chunk) | Customer | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | CMS (revenue) | 56% | 47% | 58% | 35% | | Medicare Advantage insurance plans (revenue) | 20% | 26% | 19% | 30% | - As of June 30, 2025, CMS accounted for approximately **67%** of accounts receivable, and a U.S. commercial insurer and its affiliates accounted for approximately **9%**[94](index=94&type=chunk) [Note 12 — Subsequent Events](index=28&type=section&id=Note%2012%20%E2%80%94%20Subsequent%20Events) This note confirms that no subsequent events requiring recognition or disclosure were identified through the financial statement issuance date - The company evaluated subsequent events through the financial statement issuance date and determined no events required recognition or disclosure[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, covering business overview, equity offerings, operating results, and liquidity [Overview](index=29&type=section&id=Overview) This section introduces Myomo Inc. as a wearable medical robotics company, its MyoPro product line, sales channels, and key regulatory milestones - Myomo Inc. is a wearable medical robotics company that develops and markets the MyoPro product line, myoelectric-controlled upper limb braces for individuals with neuromuscular disorders[98](index=98&type=chunk) - The company utilizes direct-to-consumer advertising, telehealth, and O&P providers for patient evaluation, custom fabrication, and direct billing to insurance companies or Medicare[99](index=99&type=chunk) - Key milestones include the introduction of MyoPro (2012), MyoPro Motion W/G (2015), IPO (2017), CE Mark (2017), CMS HCPCS codes (2018), transition to direct provider (2019), Medicare provider accreditation (2021), MyoPro 2+ (2022), and MyoPro 2X (April 2025)[101](index=101&type=chunk)[102](index=102&type=chunk)[109](index=109&type=chunk) - CMS reclassified MyoPro to a brace benefit (effective January 1, 2024) and published final payment determinations for L8701 (**$34,300**) and L8702 (**$67,500**), effective January 1, 2025[109](index=109&type=chunk) [Equity Offerings](index=31&type=section&id=Equity%20Offerings) This section details the company's recent public and registered direct equity offerings and the intended use of the net proceeds - In December 2024, the company completed a public offering, selling **3,450,000 shares** of common stock for approximately **$15.8 million** in net proceeds[103](index=103&type=chunk) - In January 2024, a registered direct equity offering generated approximately **$5.4 million** in net proceeds from the sale of common stock and pre-funded warrants[103](index=103&type=chunk) - Proceeds are intended to grow direct billing, increase R&D spending, support the O&P channel, and fund working capital and general corporate purposes[103](index=103&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenues, cost of revenue, gross margin, operating expenses, and other income/expense [Revenues](index=31&type=section&id=Revenues) This section analyzes the company's revenue growth, driven by increased unit sales and average sales price, particularly in the direct bill channel | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Revenue | $9,652,234 | $7,520,767 | $2,131,467 | 28% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Revenue | $19,484,048 | $11,275,156 | $8,208,892 | 73% | - Revenue increases were driven by a higher number of revenue units and a higher average sales price, particularly in the direct bill channel, which accounted for **77%** and **78%** of revenues for the three and six months ended June 30, 2025, respectively[107](index=107&type=chunk) [Cost of Revenue and Gross Margin](index=31&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Margin) This section examines the changes in cost of revenue and gross margin, attributing decreases primarily to higher material and manufacturing overhead costs | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :--------- | | Gross margin | 62.7% | 70.8% | -8.1% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :--------- | | Gross margin | 65.0% | 67.6% | -2.7% | - The decrease in gross margin was primarily due to higher material costs and increased manufacturing overhead spending, including payroll and lease costs for the new headquarters and manufacturing facility, partially offset by a higher average selling price[111](index=111&type=chunk) [Operating Expenses](index=33&type=section&id=Operating%20Expenses) This section analyzes the changes in the company's operating expenses, including research and development, selling, clinical, marketing, and general and administrative costs [Research and development](index=33&type=section&id=Research%20and%20development) This section details the increase in R&D expenses, primarily due to higher payroll and outside engineering services for product development | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | R&D expenses | $2,001,331 | $1,007,224 | $994,107 | 99% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | R&D expenses | $3,791,355 | $1,963,438 | $1,827,917 | 93% | - Increases were primarily due to higher costs for payroll and outside engineering services as the company adds headcount to accelerate sustaining engineering and product development efforts[115](index=115&type=chunk) [Selling, clinical and marketing](index=33&type=section&id=Selling%2C%20clinical%20and%20marketing) This section explains the rise in selling, clinical, and marketing expenses, driven by increased headcount and higher advertising costs for lead generation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | SC&M expenses | $5,233,885 | $2,777,135 | $2,456,750 | 88% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | SC&M expenses | $9,629,689 | $5,138,980 | $4,490,709 | 87% | - Increases were primarily due to higher payroll costs from increased headcount in clinical functions to support expected sales volume and increased advertising expense to address lead generation challenges[117](index=117&type=chunk) [General and administrative](index=33&type=section&id=General%20and%20administrative) This section attributes the increase in general and administrative expenses to higher payroll costs in reimbursement functions and stock-based compensation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | G&A expenses | $3,407,277 | $2,656,217 | $751,060 | 28% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | G&A expenses | $7,351,332 | $5,525,968 | $1,825,364 | 33% | - Increases were primarily due to increased payroll costs from higher headcount in reimbursement functions and higher stock-based compensation expense[119](index=119&type=chunk) [Other (income), net](index=35&type=section&id=Other%20(income)%2C%20net) This section discusses the changes in other income, net, primarily driven by fluctuations in interest income from investment balances | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Interest income, net | $(106,549) | $(107,242) | $693 | (1)% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Interest income, net | $(298,540) | $(242,535) | $(56,005) | 23% | - The increase in other (income), net for the six months ended June 30, 2025, was primarily due to higher interest income resulting from a higher average investment balance[121](index=121&type=chunk) [Income tax expense](index=35&type=section&id=Income%20tax%20expense) This section explains the increase in income tax expense, primarily due to higher taxable income from the company's German subsidiary | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Income tax expense | $148,201 | $113,785 | $34,416 | 30% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Income tax expense | $284,996 | $195,943 | $89,053 | 45% | - Income tax expense increased due to higher taxable income from the company's wholly-owned subsidiary, Myomo Europe GmbH[122](index=122&type=chunk) [Adjusted EBITDA](index=35&type=section&id=Adjusted%20EBITDA) This section defines Adjusted EBITDA as a non-GAAP measure and presents its values for evaluating operating performance - Adjusted EBITDA is a non-GAAP financial measure used to evaluate operating performance, defined as earnings before interest, taxes, depreciation, and amortization, adjusted for stock-based compensation and other unusual items[123](index=123&type=chunk)[124](index=124&type=chunk) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Adjusted EBITDA | $(4,004,633) | $(1,170,978) | $(2,833,655) | 242% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :----------- | :--------- | | Adjusted EBITDA | $(6,826,241) | $(4,709,773) | $(2,116,468) | 45% | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial liquidity, capital resources, cash flow activities, and critical accounting policies [Liquidity](index=37&type=section&id=Liquidity) This section provides an overview of the company's cash, investments, working capital, and recent financing activities to support operations | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :------------------ | | Cash and cash equivalents | $14,240,432 | $24,372,373 | | Short-term investments | $1,241,515 | $492,990 | | Total | $15,481,947 | $24,865,363 | | Working capital | $16,290,040 | $22,618,158 | - The company used approximately **$11.5 million** in cash for operating activities during the six months ended June 30, 2025, partly due to a **$1.5 million** payment hold from a Medicare contractor[129](index=129&type=chunk) - Recent financing activities include a **$15.8 million** public equity offering (Dec 2024), a **$5.4 million** registered direct equity offering (Jan 2024), and borrowings of **$2.5 million** under a line of credit and **$1.5 million** under a term loan facility (3M 2025)[130](index=130&type=chunk) - Management believes existing cash, cash equivalents, and short-term investments are sufficient to fund operations for the next **12 months**[129](index=129&type=chunk) [Cash Flows](index=37&type=section&id=Cash%20Flows) This section analyzes the company's cash flows from operating, investing, and financing activities for the interim periods | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(11,542,175) | $(5,161,488) | | Net cash used in investing activities | $(2,653,446) | $(1,211,930) | | Net cash provided by financing activities | $3,963,494 | $5,361,909 | - Cash used in operating activities for the six months ended June 30, 2025, was primarily due to a net loss of **$8.1 million** and **$5.3 million** used by changes in operating assets and liabilities (increases in accounts receivable, inventory, prepaid expenses, and a decrease in accounts payable)[133](index=133&type=chunk) - Cash used in investing activities for the six months ended June 30, 2025, was mainly for purchases of short-term investments and equipment, including improvements to the new headquarters and MARK2 demo units[135](index=135&type=chunk) - Cash generated from financing activities for the six months ended June 30, 2025, resulted from borrowings under the line of credit and term loan facility[136](index=136&type=chunk) [Critical Accounting Policies and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the significant accounting estimates and assumptions made in preparing the financial statements, such as deferred tax valuation and stock-based compensation - The preparation of financial statements requires management to make estimates and assumptions, which are reviewed on an ongoing basis[137](index=137&type=chunk) - Significant estimates include deferred tax valuation allowances, valuation of stock-based compensation, warranty obligations, and reserves for credit losses and slow-moving inventory[137](index=137&type=chunk) - There have been no material changes to critical accounting policies from those described in the Annual Report on Form 10-K for the year ended December 31, 2024[138](index=138&type=chunk) [Other](index=38&type=section&id=Other) This section confirms no material changes to critical accounting policies since the prior annual report - No material changes to critical accounting policies from those described in the Annual Report on Form 10-K for the year ended December 31, 2024[138](index=138&type=chunk) [Recent Accounting Standards](index=38&type=section&id=Recent%20Accounting%20Standards) This section refers to Note 3 for information regarding newly adopted accounting standards - Information regarding new accounting standards is included in Note 3 to the unaudited condensed consolidated financial statements[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company as it qualifies as a smaller reporting company - This item is not applicable to the company as it is a smaller reporting company[140](index=140&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective due to a material weakness in IT general controls, with remediation efforts underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2025[143](index=143&type=chunk) - A **material weakness** was identified related to the lack of design and maintenance of effective information technology general controls, including privileged access rights, user provisioning, periodic user access review, and change management for the financial reporting system[145](index=145&type=chunk) - Despite the material weakness, management concluded that the condensed consolidated financial statements fairly present the company's financial condition, results of operations, and cash flows[146](index=146&type=chunk) - Remediation efforts include formalizing processes for user provisioning, assigning access rights to an individual outside finance, formalizing change management, and reviewing key third-party service provider SOC reports[148](index=148&type=chunk) - New and modified controls around access rights and change management processes have been implemented as of June 30, 2025, with ongoing refinement[149](index=149&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, other information, exhibits, and signatures [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, claims, or assessments requiring disclosure - There is no material litigation against the company at this time that is required to be disclosed[157](index=157&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section updates the company's risk factors, highlighting operating losses, reimbursement challenges, advertising algorithm impacts, and capital needs - The company has a history of operating losses, with net losses of **$4.6 million** (3M 2025) and **$8.1 million** (6M 2025), and an accumulated deficit of approximately **$111.2 million** as of June 30, 2025[159](index=159&type=chunk) - Revenues from Medicare Advantage insurance plans have been negatively impacted by reduced authorizations since the second half of 2024, representing **20%** of revenues for the three months ended June 30, 2025[161](index=161&type=chunk) - Changes in direct-to-consumer advertising algorithms, such as those experienced in Q1 2025, can adversely affect lead generation and increase advertising cost per pipeline addition[162](index=162&type=chunk)[164](index=164&type=chunk) - The company's ability to grow and achieve cash flow breakeven is dependent on generating sufficient cash flows or raising additional capital, with existing cash and investments believed to be sufficient for the next **12 months**[160](index=160&type=chunk)[168](index=168&type=chunk) - CMS reclassified MyoPro to the brace benefit category (effective Jan 1, 2024) and published final payment determinations for L8701 (**$34,300**) and L8702 (**$67,500**), effective Jan 1, 2025, but claims can still be reviewed on a case-by-case basis[173](index=173&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20from%20Registered%20Securities) There were no unregistered sales of equity securities or use of proceeds from registered securities to report for the period - None to report for unregistered sales of equity securities and use of proceeds from registered securities[175](index=175&type=chunk) [Item 5 Other Information](index=46&type=section&id=Item%205%20Other%20Information) No other information is required to be reported for the period - None to report for other information[176](index=176&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents and certifications - Exhibits include corporate governance documents (e.g., Certificate of Incorporation, Bylaws), certifications from the Chief Executive Officer and Chief Financial Officer (pursuant to Sarbanes-Oxley Act), and Inline XBRL documents[178](index=178&type=chunk) [Signatures](index=48&type=section&id=Signatures) The report was officially signed on behalf of Myomo, Inc. by David A. Henry, Chief Financial Officer, on August 11, 2025 - The report was signed by David A. Henry, Chief Financial Officer, on August 11, 2025[182](index=182&type=chunk)

Financial Targets and Performance - Myomo aims to reach $100 million in annual revenue by 2028[18, 476] - The company targets a gross margin of 70-72% and an EBITDA margin of 15-20% in the long term[469] - Operating cash flow breakeven is projected at a revenue level of approximately $17 million to $18 million per quarter[469, 476] Revenue Channels - Direct billing accounted for 79% of Myomo's Q1 2025 revenue[16] - The O&P channel is targeted to contribute 20% of the total revenue by 2028[476] - International revenue constituted 13% of the company's Q1 2025 revenue[16] International Business (Germany) - In Germany, 10% of funding requests result in direct approval for MyoPro fitting, while 65% are routed through a 6-month trial[363, 364] - The conversion rate after a 6-month trial in Germany averages 35%[365, 369] - International revenue is projected to grow to $15 million by 2028[384] Cost Reduction and Efficiency - The company is targeting 200 bps of gross margin improvement on a quarterly basis by the end of 2026 through labor optimization and lean manufacturing implementation[339] - Myomo plans to insource core subassemblies, targeting a 15% cost reduction for FE & SP Joint by Q4 2025 and for Grasp and Elbow Motor Assembly by Q1 2026[341] Medicare Advantage (MAO) - Medicare Advantage Organizations (MAO) authorization rate in Q1 2025 is at a certain level, with industry-wide denial rates increasing[163] - Myomo has a 58% win rate for Administrative Law Judge (ALJ) hearings YTD[179]

Myomo (MYO) 2025 Investor Day Summary Company Overview - Myomo is focused on developing assistive technology for individuals with paralysis, particularly through their product, MyoPro, which is a myoelectric orthosis designed to help users regain movement in paralyzed arms [7][8][10]. Key Industry Insights - The company operates in the medical device industry, specifically within the orthotics and prosthetics sector, addressing a significant unmet need for patients with chronic arm paralysis [7][8]. - Myomo has established a direct provider business model, which allows them to bring their products directly to patients, enhancing accessibility and support [8][9]. Financial Performance and Goals - Myomo aims to achieve $100 million in revenue by 2028, building on a decade of consistent revenue growth [10]. - The company reported a gross margin of 70%, with potential for improvement as they scale operations [8]. Market Position and Strategy - Myomo has a first-mover advantage in the myoelectric orthosis market, particularly after receiving CMS reimbursement, which opens the market to Medicare-age patients in the U.S. [8][9]. - The revenue breakdown for Q1 indicates that 79% of revenue came from direct billing, 3% from the VA, and 13% from international sales, with plans to grow the O&P clinical channel [9][10]. Marketing and Lead Generation - The marketing strategy includes TV advertising, digital marketing, and clinical referrals, with a focus on reducing the cost per pipeline acquisition [31][32]. - The company utilizes a call center in Fort Worth, Texas, to handle inbound and outbound calls, aiming to efficiently convert leads into patients [56][60]. Patient Journey and Fulfillment Process - The patient journey begins with lead generation, followed by telehealth screenings to assess eligibility, and then moves to the fulfillment stage where custom devices are fabricated [19][25][94]. - The fulfillment process is complex, requiring precise measurements and customization for each patient, which is critical for the effectiveness of the MyoPro device [97][98]. Challenges and Considerations - The company faces challenges related to patient eligibility, as not all patients qualify for the MyoPro due to varying clinical conditions [69][70]. - There is a need for continuous education and awareness among patients, therapists, and physicians to ensure proper understanding and utilization of the MyoPro [22][23]. Leadership and Team Structure - The leadership team includes experienced professionals from various backgrounds, emphasizing a commitment to patient care and innovative solutions [11][12]. - The company is structured to allow for efficient scaling of operations, particularly in the intake and telehealth screening processes [63][66]. Conclusion - Myomo is well-positioned to capitalize on the growing demand for assistive technologies for individuals with paralysis, with a clear strategy for growth and a strong focus on patient outcomes and satisfaction [7][10].

Company Performance - Myomo, Inc. reported a quarterly loss of $0.08 per share, which aligns with the Zacks Consensus Estimate, an improvement from a loss of $0.10 per share a year ago [1] - The company posted revenues of $9.83 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 6.29%, compared to revenues of $3.75 million in the same quarter last year [2] - Over the last four quarters, Myomo has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2][3] Stock Outlook - Myomo shares have declined approximately 25.9% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $10.35 million, and for the current fiscal year, it is -$0.07 on revenues of $50.95 million [7] Industry Context - The Medical - Products industry, to which Myomo belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Myomo's stock performance [5][6]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $9,800,000, representing a 162% increase year over year, driven by a higher number of revenue units and an increased average selling price (ASP) [20][21] - The company delivered 182 MyoPro revenue units in Q1, up 100% from the previous year, with ASP increasing by approximately 31% to around $54,000 [11][21] - Gross margin for Q1 2025 was 67.2%, compared to 61.2% in the prior year, primarily due to a higher ASP and better fixed cost absorption [26] - Operating loss for Q1 2025 was $3,500,000, a 9% improvement from a loss of $3,900,000 in Q1 2024 [27][28] Business Line Data and Key Metrics Changes - The O and P revenue was $475,000 in Q1, up 87% year over year, but down sequentially due to seasonality [14] - The international business, primarily in Germany, generated over $1,300,000 in revenue, representing a 42% year-over-year increase [11][22] Market Data and Key Metrics Changes - Medicare Part B patients accounted for 60% of total revenue in Q1, up from 57% in the previous quarter, indicating strong growth in this segment [11][21] - Medicare Advantage revenue represented 17% of Q1 revenue, reflecting an 18% year-over-year increase, although growth is lagging due to high denial rates [21][22] Company Strategy and Development Direction - The company is focused on continuous innovation, having launched the MyoPro 2X and the Mark II clinical unit, aimed at enhancing patient independence and expanding the O and P distribution channel [6][7] - Plans for further expansion include increasing manufacturing capacity and enhancing marketing efforts to drive lead generation and patient engagement [12][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in lead generation due to changes in social media advertising policies but reported a rebound in lead generation in March and April [10][32] - The company expects Q2 revenue to be slightly lower than Q1 but reaffirms its financial targets for the year, projecting full-year revenue between $50,000,000 and $53,000,000, representing growth of 54% to 66% over 2024 [30][31] Other Important Information - The company has signed contracts covering approximately 25,000,000 lives, including several new state Blue Cross Blue Shield plans, and is negotiating with national health insurance plans [18][64] - The company is actively working to improve insurance access and reduce denial rates through advocacy and legal engagement [17][65] Q&A Session Summary Question: Can you elaborate on the workaround around the Meta issue affecting advertising efficiency? - Management indicated that changes in Meta's algorithms impacted ad targeting, but adjustments made with their agency have led to a record number of leads in April, suggesting sustainability in improvements [37][38] Question: What is the expected cost per pipeline add moving forward? - The cost per lead in April was approximately half of that in January and February, with expectations to maintain efficiency around $1,400 to $1,500 for the year [39][40] Question: How does the authorization rate for the pipeline look? - The authorization rate was affected by backend loading of pipeline adds and high denial rates from Medicare Advantage plans, which are currently around 30% [51][52] Question: What is the outlook for gross margins going forward? - Management expects slightly lower gross margins in Q2 due to lower volume but anticipates approaching 70% gross margins in the second half of the year [53] Question: What is the confidence level in achieving the full-year guidance? - Management reiterated confidence in achieving full-year guidance, citing historical revenue patterns and increased advertising efforts to fill the pipeline [56]