Myomo(MYO) - 2025 Q3 - Quarterly Results

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]