Myomo(MYO) - 2022 Q3 - Quarterly Report

Revenue Performance - Product revenue for the three months ended September 30, 2022, decreased by approximately $415,800 or 9% compared to the same period in 2021, while total revenue for the nine months increased by approximately $1,689,000 or 17%[102]. - The company reported a gross profit of $2,636,984 for the three months ended September 30, 2022, down from $3,273,753 in the same period of 2021, reflecting a decrease of $636,769 or 19%[99]. - The company received $1 million in licensing revenue from its joint venture partner in China during the nine months ended September 30, 2022[102]. Expenses - Gross margin for the three months ended September 30, 2022, was 66.5%, down from 74.7% in the same period of 2021, primarily due to higher component costs and increased warranty reserves[104]. - Research and development expenses increased by approximately $49,200 or 8% for the three months ended September 30, 2022, and by $213,100 or 12% for the nine months ended September 30, 2022, compared to the same periods in 2021[108]. - Total operating expenses for the three months ended September 30, 2022, were $5,455,625, an increase of $151,601 or 3% compared to the same period in 2021[106]. - Selling, general and administrative expenses (SG&A) increased by approximately $102,400 (2%) and $1,103,100 (8%) for the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021[112]. - Adjusted EBITDA for the three months ended September 30, 2022, was $(2,463,911), compared to $(1,691,598) for the same period in 2021, and for the nine months ended September 30, 2022, it was $(7,381,985) compared to $(6,636,050) in 2021[119]. Cash Flow and Capital - Cash and cash equivalents decreased to $7,420,020 as of September 30, 2022, from $15,524,378 as of December 31, 2021[120]. - The company used approximately $7.8 million in cash for operating activities during the nine months ended September 30, 2022[120]. - The net cash used in operating activities for the nine months ended September 30, 2022, was primarily to fund a net loss of approximately $8.6 million[126]. - The company expects that the available cash will fund operations into the third quarter of 2023, after which further capital will be needed[122]. - The company entered into a Common Stock Purchase Agreement with Keystone Capital Partners, establishing an equity line facility with a maximum amount of $5.0 million[121]. Strategic Initiatives - The company has been focusing on expanding sales and marketing efforts, particularly in the German and other international markets, and developing a pediatric version of the MyoPro, named MyoPal[98]. - The joint venture in China, established in August 2021, has a minimum purchase commitment of $10.75 million in MyoPro Control System units over the next ten years[96]. - The company expects to continue increasing R&D costs annually as it develops additional products and enhances existing ones[107]. Going Concern - The company recorded an income tax expense for the three and nine months ended September 30, 2022, due to higher taxable income driven by increased revenue[114]. - The company reported a loss on investment in minority interest of $49,860 for the nine months ended September 30, 2022[119]. - The company plans to mitigate concerns about its ability to continue as a going concern by raising additional capital and increasing patient pipeline[124].