Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $10.1 million, a 10% increase year-over-year, driven by a higher number of revenue units despite a lower average selling price (ASP) [16][4] - The company delivered 186 MyoPro revenue units, up 16%, with 57% of those units from authorizations and orders received in Q3 [16] - ASP decreased by 5% year-over-year to approximately $54,300, but normalized for accounting changes, ASP increased by 3% [16][17] - Gross margin for Q3 2025 was 63.8%, down from 75.4% in the prior year, impacted by higher payroll, lease expenses, and material costs [20][21] - Operating loss for Q3 2025 was $3.5 million, compared to a loss of $1 million in the prior year [23] Business Line Data and Key Metrics Changes - International revenue reached a record $1.8 million, up 63%, primarily from Germany, representing 18% of total revenue [18] - Revenue from the O&P channel was a record $900,000, up 154% year-over-year, representing 9% of total revenue [18] - The pipeline stood at 1,669 patients, a 32% increase year-over-year, with 826 patients added in Q3 [19] Market Data and Key Metrics Changes - Medicare Part B patients represented 54% of revenue in Q3, while Medicare Advantage revenue was 18%, down 18% year-over-year due to high pre-authorization denials [17] - The company signed an additional contract with a payer, increasing covered lives to 35 million among private payers [12] Company Strategy and Development Direction - The company aims to diversify revenue streams, focusing less on advertising-driven revenues and more on the MyoPro Connect platform and O&P channel penetration [26] - Key initiatives include improving patient identification, expanding the MyoPro Connect program, and reducing operating costs [5][14] - The company is enhancing manufacturing processes to improve gross margin and operating leverage as revenues grow [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the O&P channel and the MyoPro Connect program, expecting to see more patient pipeline adds through these channels [40] - The company reiterated its full-year 2025 revenue guidance of $40-$42 million, representing over 23% growth from the previous year [14][26] Other Important Information - The company entered into a loan agreement providing a term loan facility of $17.5 million to support growth and operational needs [25] - Cash balance as of September 30, 2025, was $20.1 million after the loan funding [25] Q&A Session Summary Question: Scale of U.S. O&P business - The company shipped approximately $900,000 worth of units, roughly 30 units, in the O&P channel during Q3 [31] Question: Customer acquisition cost improvements - The new head of marketing is reviewing the effectiveness of various advertising channels to generate more leads at a lower cost [32] Question: Backlog drop drivers - About 40% of the backlog drop was attributed to Germany, with some cleanup in the backlog during Q3 [34] Question: Future operating expenses - Operating expenses are expected to grow, but the company aims to manage them to generate operating leverage [36] Question: Pipeline adds and market saturation - Management believes there is still significant market opportunity and expects growth through innovative patient outreach [40] Question: Q4 growth expectations - Growth in Q4 is anticipated from fill units and authorizations/orders received within the quarter [42] Question: Debt decision rationale - The company believes it can manage the debt and expects to be closer to breakeven within 18 months [46] Question: O&P clinics training progress - Several hundred clinicians have undergone training, with goals to expand the number actively placing orders [54] Question: International business performance - Germany's success is attributed to a network of O&P partners and favorable reimbursement conditions [62]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $10,090,699, representing a 10% increase from $9,207,586 in the same period of 2024[116] - Revenue for the nine months ended September 30, 2025, was $29,574,746, a 44% increase from $20,482,742 in the same period of 2024[116] - Direct billing channel revenues were approximately $7.4 million and $22.6 million for the three and nine months ended September 30, 2025, accounting for 73% and 76% of total revenues, respectively[118] Expenses and Losses - Gross margin decreased to 63.8% for the three months and 64.6% for the nine months ended September 30, 2025, down from 75.4% and 71.1% in the same periods of 2024[122] - Research and development expenses increased by approximately $278,790 (22%) for the three months and $2,106,706 (66%) for the nine months ended September 30, 2025, compared to the same periods in 2024[126] - Selling, clinical, and marketing expenses rose by approximately $1,853,064 (54%) for the three months and $6,343,775 (74%) for the nine months ended September 30, 2025, compared to the same periods in 2024[128] - For the nine months ended September 30, 2025, the company reported a net loss of approximately $11.8 million, compared to a net loss of approximately $5.9 million for the same period in 2024[138][154] - Adjusted EBITDA for the nine months ended September 30, 2025 was approximately $(9.5) million, compared to $(5.3) million for the same period in 2024, indicating a decline in operational performance[138] Cash and Working Capital - Cash and cash equivalents decreased to approximately $12.6 million as of September 30, 2025, down from $24.4 million at the end of 2024[139] - The company used approximately $13.4 million in cash for operating activities during the nine months ended September 30, 2025, compared to $6.7 million in the same period of 2024[139][152] - The company had working capital of approximately $13.7 million as of September 30, 2025, down from $22.6 million at the end of 2024[139] Financing Activities - The company completed a public offering on December 6, 2024, selling 3,450,000 shares at $5.00 per share, generating net proceeds of approximately $15.8 million[113] - The company completed a public equity offering in December 2024, generating net proceeds of approximately $15.8 million from the sale of 3,450,000 shares at $5.00 per share[140] - The company entered into a Loan and Security Agreement on November 4, 2025, providing for committed term loans of up to $17.5 million[142] Regulatory and Market Developments - The Centers for Medicare and Medicaid Services (CMS) published final payment determinations for MyoPro products, with fees set at approximately $34,300 for the Motion W and $67,500 for the Motion G, effective January 1, 2025[120] - The MyoPro product line has been approved by the Veterans Administration, with over 130 VA facilities ordering devices for their patients[109] Accounting and Financial Reporting - Management's significant estimates include deferred tax valuation allowances, stock-based compensation valuation, warranty obligations, and reserves for credit losses and slow-moving inventory[157] - 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[158] - Information regarding new accounting standards is included in Note 3 of the Quarterly Report on Form 10-Q[159] - Item regarding quantitative and qualitative disclosures about market risk is not applicable as the company is a smaller reporting company[160] Other Financial Information - Total other expense (income), net for the three months ended September 30, 2025 was an expense of approximately $10,000, compared to income of approximately $76,000 for the same period in 2024[132] - The company reported net cash used in investing activities of approximately $2.5 million for the nine months ended September 30, 2025, compared to cash provided of approximately $1.6 million in the same period of 2024[155] - The company is subject to financial covenants requiring it to maintain at least $2.5 million in unrestricted cash and achieve at least 75% of its trailing three-month projected revenue[146]

Loan Facility Agreement - The loan facility agreement is dated November 4, 2025, involving Myomo, Inc. as the borrower and Avenue Capital Management II, L.P. as the administrative agent[1] - The total principal amount of the loan facility will not exceed the Commitment, which is not a revolving credit commitment[5] - Each loan will be evidenced by a separate note payable to each lender, with repayments made in U.S. Dollars[6] - Basic interest on the outstanding principal balance will accrue daily at the designated rate from the borrowing date[10] - A late charge of 5% will be applied if any scheduled payment is late by more than five days, with a minimum charge of $50[15] - Borrower grants security interests in all collateral to secure timely payment and performance of all obligations[18] Borrower's Representations and Warranties - Borrower represents that its financial statements fairly reflect its financial condition in accordance with GAAP[28] - As of the closing date, Borrower is not a majority owner of any other business entity except for Myomo Germany[29] - No default or event of default has occurred and is continuing as of the closing date[30] - Borrower has valid rights to the Collateral, which is genuine and subject to no Liens[32] - As of the Closing Date, Borrower's chief executive office and Inventory with a value exceeding $250,000 are located at specified addresses[34] - Borrower owns or has rights to all necessary intellectual property for its business operations without known conflicts[36] - Borrower has complied with ERISA funding requirements for employee benefit plans, with no events likely to incur material liabilities[39] - Borrower is not required to register as an "investment company" under the Investment Company Act of 1940[39] Financial Reporting Requirements - Monthly financial statements must be delivered within 30 days after each month-end, attested by a responsible financial officer[60] - Quarterly cash flow statements are required within 30 days after each quarter-end, also attested by a responsible financial officer[61] - Year-end financial statements must be audited and delivered within 90 days after the fiscal year-end, certified by a satisfactory accounting firm[62] Covenants and Compliance - Borrower must notify Agent of any litigation or claims exceeding $250,000 that could have a material adverse effect[56] - Borrower must provide notice of any substantial disputes with governmental authorities that could reasonably be expected to have a material adverse effect[59] - Borrower must maintain minimum unrestricted cash and cash equivalents of at least $2,500,000 at all times[82] - Borrower is required to achieve minimum L3M revenue of at least 75% of its projected L3M revenue as per the Board Approved Budget, tested monthly[83] - Cash burn for the trailing six months must not exceed 150% of the projected T6M cash burn set forth in the Board Approved Budget until December 31, 2026[84] - Beginning January 1, 2027, T6M cash burn must not exceed the greater of 150% of the projected T6M cash burn or negative $2,000,000[85] - Borrower must deliver unaudited financial statements if the Board does not require audited statements for a particular reporting year[64] - Compliance certificates must be provided simultaneously with the delivery of financial statements, detailing any defaults[64] - Borrower is obligated to maintain adequate books and records in accordance with GAAP[73] - Borrower must comply with all applicable laws and regulations, including environmental laws[74] - All required tax returns must be filed timely, and all indebtedness must be paid when due[75] Restrictions and Limitations - Borrower is prohibited from incurring additional indebtedness beyond permitted indebtedness[86] - Borrower may enter into a Change of Control transaction if the Surviving Entity assumes all obligations and guarantees them by a controlling entity[89] - Borrower is permitted to sell or transfer assets, including non-exclusive licenses of Intellectual Property, as long as it does not result in a legal transfer of title[90] - Transfers of assets not otherwise permitted are limited to a value not exceeding $250,000 if no Event of Default has occurred[91] - Borrower is restricted from making loans or investments outside of Permitted Investments[92] - Transactions with Related Persons must be on terms no more favorable than those obtainable in an arms' length transaction[93] - Borrower is not allowed to engage in any material line of business other than its current operations[94] - Borrower must maintain a perfected security interest in collateral and comply with Agent's requests for documentation[95] - Borrower cannot prepay or redeem any Indebtedness prior to its scheduled repayment, except for certain permitted conversions[99] - Borrower is restricted from maintaining cash or assets exceeding $2,500,000 in Myomo Germany at any time[103] - Borrower must not create any obligations for Personal Property Leases exceeding $200,000 in any calendar year[104] Default and Remedies - Borrower shall be in default if any monetary liability exceeds the Threshold Amount[111] - Any governmental or regulatory action unresolved within thirty days may have a Material Adverse Effect[112] - Any judgment against Borrower exceeding $500,000 that remains unsatisfied for thirty days constitutes a default[114] - Borrower must perform covenants in the Agreement, or breaches must be cured within ten days[116] - Agent may sell Collateral at public or private sales if an Event of Default occurs[118] - Agent may license or sublicense any Copyrights, Patents, or Trademarks included in the Collateral[119] - Borrower must assemble and make available the Collateral upon Agent's request after an Event of Default[123] - Agent may compromise with obligors regarding Rights to Payment during an Event of Default[124] - Agent has the authority to perform Borrower's obligations if they are not performed in a timely manner[126] - The power of attorney granted to Agent is irrevocable until the repayment of all Obligations[128] - The Agent may apply for the appointment of a receiver to operate the Borrower's business upon an Event of Default[131] - Proceeds from the disposition of Collateral will be applied first to cover costs and expenses incurred by the Agent[133] - If the Proceeds are insufficient to cover all costs and Obligations, the Borrower will be liable for any deficiency[134] - The Agent is required to use reasonable care in the custody and preservation of any Collateral[136] - Upon full payment of Obligations, the security interest will automatically terminate, and all rights to the Collateral will revert to the Borrower[140] Legal and Administrative Provisions - The Loan Documents are binding upon Borrower, Lenders, and Agent, with restrictions on Borrower's ability to assign rights[143] - Any waiver of default must be in writing and does not constitute a waiver of future defaults[145] - Borrower must indemnify the Agent and Lenders against claims arising from the Agreement or any Loan Documents[149] - Borrower is responsible for reimbursing Lenders and Agent for reasonable documented out-of-pocket costs and expenses[150] - The Loan Documents may be executed in counterparts and by electronic signatures, which are deemed to have the same legal effect as manual signatures[152] - Any amendment or modification to the Loan Agreement requires written consent from the Borrower, Agent, and Required Lenders, particularly if it affects a Lender's Commitment[153] - The Loan Documents represent the entire agreement between the parties, superseding all prior agreements[154] - The governing law for the Agreement and Loan Documents is the internal laws of the State of California[155] - Each party waives its right to a jury trial for any claims related to the Agreement or Loan Documents[157] - Confidential information received by the Agent and Lenders must be kept confidential, with specific exceptions for legal and regulatory disclosures[158] Agent's Role and Responsibilities - The Agent is appointed to act on behalf of each Lender under the Loan Documents[160] - Each Lender agrees to indemnify the Agent for liabilities incurred in connection with the Agreement[161] - The Agent is not responsible for verifying the validity of statements or documents provided under the Loan Agreement[162] - The Agent may rely on documents it believes to be genuine and properly signed, providing protection against liability in the absence of gross negligence[163] - The Agent acts as the collateral agent under the Loan Documents, authorized to acquire, hold, and enforce all Liens on Collateral granted by Borrowers[165] - Each Lender irrevocably appoints the Agent to act on their behalf for the benefit of Lenders, with all powers and rights exercised solely by the Agent at the direction of the Required Lenders[165] - The Agent may resign with thirty (30) days' notice, and if no successor agent is appointed within twenty (20) days, the Lenders will assume the Agent's duties[166] Financial Performance and Growth - The company reported a revenue increase of 15% year-over-year, reaching $1.2 billion in Q3 2023[1] - User data showed a growth of 25% in active users, totaling 5 million by the end of the quarter[2] - The company provided guidance for Q4 2023, expecting revenue between $1.3 billion and $1.4 billion, representing a growth of 10% to 15%[3] - New product launches contributed to a 30% increase in sales, with the latest product line accounting for $300 million in revenue[4] - The company invested $50 million in R&D for new technologies aimed at enhancing user experience[5] - Market expansion efforts led to a 20% increase in international sales, particularly in the European market[6] - The company announced a strategic acquisition of a tech startup for $100 million to bolster its product offerings[7] - A new marketing strategy was implemented, resulting in a 40% increase in customer engagement[8] - The company reduced operational costs by 10%, improving overall profit margins[9] - The total indebtedness of the company stands at $200 million, with a focus on reducing this by 15% over the next year[10]

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]