Myomo(MYO) - 2025 Q2 - Quarterly Report

Cautionary Statement Regarding Forward-Looking Statements 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] - 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][9] PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's analysis of financial condition and results Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements and detailed notes on business, liquidity, and accounting policies Condensed Consolidated Balance Sheets 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 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 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 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 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 These notes provide detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements Note 1 — Description of Business 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] - 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] Note 2 — Liquidity 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] - 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] - Management believes current cash, cash equivalents, and short-term investments will fund operations for at least the next twelve months[27] Note 3 — Summary of Significant Accounting Policies 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] - The company's significant estimates include deferred tax valuation allowances, valuation of stock-based compensation, warranty obligations, and reserves for slow-moving inventory[33] | 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] | 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 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 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][62] | 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 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 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] - 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] - 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] - 668,250 investor warrants expired unexercised during the six months ended June 30, 2025[69] Note 8 —Debt 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][72] - An amendment in February 2025 added a term loan facility of up to $3.0 million, available until February 28, 2026[74] - 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] - The company was in compliance with all loan covenants as of June 30, 2025[76] Note 9 — Stock Award Plans and Stock-Based Compensation 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] | 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] Note 9 — Commitments and Contingencies 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] - 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][87] | 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] Note 11 — Segment Reporting and Major Customers 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] | 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] Note 12 — Subsequent Events 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, covering business overview, equity offerings, operating results, and liquidity 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] - 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] - 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][102][109] - 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] Equity Offerings 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] - In January 2024, a registered direct equity offering generated approximately $5.4 million in net proceeds from the sale of common stock and pre-funded warrants[103] - Proceeds are intended to grow direct billing, increase R&D spending, support the O&P channel, and fund working capital and general corporate purposes[103] Results of Operations This section analyzes the company's financial performance, including revenues, cost of revenue, gross margin, operating expenses, and other income/expense Revenues This section analyzes the company's revenue growth, driven by increased unit sales and average sales price, particularly in the direct bill channel | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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 | $8,208,892 | 73% | - Revenue increases were driven by a higher number of revenue units and a higher average sales price, particularly in the direct bill channel, which accounted for 77% and 78% of revenues for the three and six months ended June 30, 2025, respectively[107] Cost of Revenue and Gross Margin This section examines the changes in cost of revenue and gross margin, attributing decreases primarily to higher material and manufacturing overhead costs | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :--------- | | Gross margin | 62.7% | 70.8% | -8.1% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :------------------- | :--------------------------- | :--------------------------- | :--------- | | Gross margin | 65.0% | 67.6% | -2.7% | - The decrease in gross margin was primarily due to higher material costs and increased manufacturing overhead spending, including payroll and lease costs for the new headquarters and manufacturing facility, partially offset by a higher average selling price[111] Operating Expenses This section analyzes the changes in the company's operating expenses, including research and development, selling, clinical, marketing, and general and administrative costs Research and development This section details the increase in R&D expenses, primarily due to higher payroll and outside engineering services for product development | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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 | $1,827,917 | 93% | - Increases were primarily due to higher costs for payroll and outside engineering services as the company adds headcount to accelerate sustaining engineering and product development efforts[115] Selling, clinical and marketing This section explains the rise in selling, clinical, and marketing expenses, driven by increased headcount and higher advertising costs for lead generation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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 | $4,490,709 | 87% | - Increases were primarily due to higher payroll costs from increased headcount in clinical functions to support expected sales volume and increased advertising expense to address lead generation challenges[117] General and administrative This section attributes the increase in general and administrative expenses to higher payroll costs in reimbursement functions and stock-based compensation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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 | $1,825,364 | 33% | - Increases were primarily due to increased payroll costs from higher headcount in reimbursement functions and higher stock-based compensation expense[119] Other (income), net This section discusses the changes in other income, net, primarily driven by fluctuations in interest income from investment balances | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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) | $(56,005) | 23% | - The increase in other (income), net for the six months ended June 30, 2025, was primarily due to higher interest income resulting from a higher average investment balance[121] Income tax expense This section explains the increase in income tax expense, primarily due to higher taxable income from the company's German subsidiary | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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 | $89,053 | 45% | - Income tax expense increased due to higher taxable income from the company's wholly-owned subsidiary, Myomo Europe GmbH[122] Adjusted EBITDA This section defines Adjusted EBITDA as a non-GAAP measure and presents its values for evaluating operating performance - Adjusted EBITDA is a non-GAAP financial measure used to evaluate operating performance, defined as earnings before interest, taxes, depreciation, and amortization, adjusted for stock-based compensation and other unusual items[123][124] | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | 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 This section discusses the company's financial liquidity, capital resources, cash flow activities, and critical accounting policies 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] - 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] - Management believes existing cash, cash equivalents, and short-term investments are sufficient to fund operations for the next 12 months[129] Cash Flows 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] - 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] - 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] Critical Accounting Policies and Estimates 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] - Significant estimates include deferred tax valuation allowances, valuation of stock-based compensation, warranty obligations, and reserves for credit losses and slow-moving inventory[137] - 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] 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] Recent Accounting Standards 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] Item 4. Controls and Procedures 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] - 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] - 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] - 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] - New and modified controls around access rights and change management processes have been implemented as of June 30, 2025, with ongoing refinement[149] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other information, exhibits, and signatures Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] - 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] - 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][164] - 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][168] - 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities 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] Item 5 Other Information No other information is required to be reported for the period - None to report for other information[176] Item 6. Exhibits 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] 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]