Business Wire | Aug 9, 2021 04:06PM EDT

Myomo Second Quarter 2021 Financial Results Feature Significant Increases in Revenue and Gross Margin, Record Insurance Authorizations and Orders

Aug. 09, 2021

BOSTON--(BUSINESS WIRE)--Aug. 09, 2021--Myomo, Inc. (NYSE American: MYO) ("Myomo" or the "Company"), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper-limb paralysis, today announced financial results for the three and six months ended June 30, 2021.

Financial and operational highlights for the second quarter of 2021 include the following (all comparisons are with the second quarter of 2020, which was adversely impacted by the COVID-19 pandemic, unless otherwise noted):

* Revenue was $3.1 million, up 262% * Revenue units were 80, up 233% including a record 38 units where orders and insurance authorizations were received during the quarter * Gross margin was 71%, up 2,000 basis points * Backlog, which represents insurance authorizations and orders received but not yet converted to revenue, was 160 units as of June 30, 2021, a 36% increase compared with March 31, 2021 * Received orders and insurance authorizations for 138 patients to receive a MyoPro(r) * Growing number of health insurance plans covering the cost of a MyoPro, with over 20 new payers approving their first device, including several state Medicaid, Medicare Advantage, and commercial plans * Revenue from the direct billing channel represented 74% of total revenue, compared with 73% of total revenue in the first quarter of 2021 * The reimbursement pipeline as of June 30, 2021 consisted of 898 MyoPro units

Management Commentary

"We are pleased to be reporting sustained momentum with our efforts to expand the number of individuals who receive a MyoPro through our direct-to-consumer marketing and our own clinical services channel," stated Paul R. Gudonis, Myomo's chairman and chief executive officer. "A growing number of physicians are prescribing the MyoPro for their patients, and we obtained a record number of insurance authorizations and orders during the second quarter. We are also experiencing an acceleration of the revenue cycle as a growing number of units are regularly reimbursed by certain insurance plans."

Financial Results

For the Three Months Period-to-Period For the Six Months Ended Period-to-Period Ended June 30, Change June 30, Change

2021 2020 $ % 2021 2020 $ %

Revenue $ 3,104,294 $ 858,590 $ 2,245,704 262 % $ 5,440,783 $ 1,866,735 $ 3,574,048 191 %

Cost of 901,566 418,862 482,704 115 % 1,524,718 737,513 787,205 107 %revenue

Gross profit $ 2,202,728 $ 439,728 $ 1,763,000 401 % $ 3,916,065 $ 1,129,222 $ 2,786,843 247 %

Gross margin 71 % 51 % 20 % 72 % 60 % 12 %

Revenue for the second quarter of 2021 was $3.1 million, an increase of 262% compared with the second quarter of 2020. In addition to an increase in the number of revenue units during the second quarter of 2021, the Company also recorded higher average selling prices. Myomo recognized revenue on 80 units in the second quarter of 2021, an increase of 233% compared with the second quarter of 2020. Year-to-date revenue of $5.4 million was up 191% compared with the same period a year ago.

Gross margin for the second quarter of 2021 was 71%, compared with 51% for the second quarter of 2020. The margin expansion primarily reflects a higher average selling price and improved fixed cost coverage resulting from higher unit volume, partially offset by a greater number of deliveries to patients in the second quarter, which is when cost of goods sold is recognized. The Company delivered 86 units to patients in the second quarter. Year-to-date gross margin was 72%, compared with 60% in the year-ago period.

Operating expenses for the second quarter of 2021 were $4.8 million, an increase of 46% compared with the second quarter of 2020, which reflected various COVID-19 related expense reductions. Operating expenses for the first six months of 2021 were $9.4 million, an increase of 28% compared with the same period a year ago.

Operating loss for the second quarter of 2021 narrowed to $2.6 million from $2.8 million for the second quarter of 2020. Net loss for the second quarter of 2021 was $2.6 million, or $0.46 per share, compared with a net loss of $3.3 million, or $1.12 per share, for the second quarter of 2020. Net loss available to common stockholders for the first six months of 2021 was $5.6 million, or $1.03 per share, compared with $7.8 million, or $3.27 per share, for the comparable period in 2020. Net loss available to common stockholders in the first six months of 2020 included a deemed dividend of $0.7 million related to the repricing of certain warrants.

Adjusted EBITDA1 for the second quarter of 2021 was negative $2.2 million, compared with negative $2.7 million for the second quarter of 2020. Adjusted EBITDA for the first six months of 2021 was negative $4.9 million, compared with negative $6.0 million for the same period a year ago. A reconciliation of GAAP net loss to this non-GAAP financial measure appears below.

Business Outlook

"We expect to deliver another solid quarter of year-over-year revenue growth in the third quarter," said Mr. Gudonis. "Our plan is to build upon the successful strategies we implemented during the first half of the year, in particular increased direct-to-patient marketing. In addition, we will continue to focus on the direct billing channel as we look forward to a strong finish to 2021."

Liquidity

Cash and cash equivalents as of June 30, 2021 were $13.8 million. Cash used in operating activities was $3.4 million in the second quarter of 2021, which included the payment of 2020 incentive compensation. Cash used in operating activities is expected to decrease in the third quarter of 2021 due to a lower working capital requirement. The Company continues to believe its existing cash is sufficient to fund operations well into the second half of 2022.

Conference Call and Webcast Information

Myomo will hold a conference call today at 4:30 p.m. Eastern time to discuss these results and answer questions. Participants are encouraged to pre-register for the call at https://dpregister.com/sreg/10158505/eaf8cf4039. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Those without internet access or unable to pre-register may participate by dialing 1-844-707-6932 (U.S.) or 1-412-317-9250 (International). A webcast of the call will also be available at Myomo's Investor Relations page at http://ir.myomo.com/.

A replay of the webcast will be available beginning approximately one hour after the completion of the live conference call at http://ir.myomo.com/. A dial-in replay of the call will be available until August 23, 2021; please dial 1-877-344-7529 (U.S.) or 1-412-317-0088 (International) and provide the passcode 10158505.

Non-GAAP Financial Measures

Myomo is providing financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA. This non-GAAP financial measure is not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Myomo believes the use of this non-GAAP financial measure provides supplementary information for investors to use in evaluating operating performance and in comparing Myomo's financial measures with other companies in its industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss of extinguishment of debt. This non-GAAP financial measure is not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with GAAP financial measures. Investors are encouraged to review the reconciliation of this non-GAAP measure to its most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

About Myomo

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. Myomo develops and markets the MyoPro product line. MyoPro is a powered upper-limb orthosis designed to support the arm and restore function to the weakened or paralyzed arms of certain patients suffering from CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, ALS or other neuromuscular disease or injury. It is currently the only marketed device that, sensing a patient's own EMG signals through non-invasive sensors on the arm, can restore an individual's ability to perform activities of daily living, including feeding themselves, carrying objects and doing household tasks. Many are able to return to work, live independently and reduce their cost of care. Myomo is headquartered in Cambridge, Massachusetts, with sales and clinical professionals across the U.S. and representatives internationally. For more information, please visit www.myomo.com.

Forward-Looking Statements

This press release contains forward-looking statements regarding the Company's future business expectations, including expectations for revenues in the first quarter, its current authorization backlog and its cash runway and capital requirements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors.

These factors include, among other things:

* the direct and indirect impact of the novel coronavirus (COVID-19) on our business and operations, including fabrication and delivery, sales, patient consultations, supply chain, manufacturing, insurance reimbursements and employees; * our ability to continue normal operations and patient interactions in order to cast, deliver and fit our custom-fabricated device; * our marketing and commercialization efforts; * our ability to achieve reimbursement from third-party payers for our products; * our dependence upon external sources for the financing of our operations, to the extent that we do not achieve or maintain cash flow breakeven; * our ability to effectively execute our business plan and scale up our operations; * our expectations as to our product development programs, and; * general market, economic, environmental and social factors that may affect the evaluation, fitting, delivery and sale of our products to patients.

More information about these and other factors that potentially could affect our financial results is included in Myomo's filings with the Securities and Exchange Commission, including those contained in the risk factors section of the Company's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Although the forward-looking statements in this release of financial information are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended For the Six Months Ended June 30, June 30,

2021 2020 2021 2020

Revenue $ 3,104,294 $ 858,590 $ 5,440,783 $ 1,866,735

Cost of 901,566 418,862 1,524,718 737,513 revenue

Gross profit 2,202,728 439,728 3,916,065 1,129,222

Operatingexpenses:

Research and 600,116 397,811 1,126,083 904,764 development

Selling,general and 4,202,244 2,890,464 8,322,047 6,495,432 administrative

4,802,360 3,288,275 9,448,130 7,400,196

Loss from (2,599,632 ) (2,848,547 ) (5,532,065 ) (6,270,974 )operations

Other expense(income)

Change in fairvalue of - (39,717 ) - (121,818 )derivativeliabilities

Interest(income)expense and 6,018 88,915 6,137 224,124 other expense,net

Non-cashinterest - 40,025 - 206,668 expense, debtdiscount

Loss onextinguishment - 348,079 - 507,281 of debt

6,018 437,302 6,137 816,255

Loss before (2,605,650 ) (3,285,849 ) (5,538,202 ) (7,087,229 )income taxes

Income tax 15,665 1,085 43,907 1,698 expense

Net loss $ (2,621,315 ) $ (3,286,934 ) $ (5,582,109 ) $ (7,088,927 )

Deemed dividendon repricing of - - - (670,632 )warrants

Net lossattributable to $ (2,621,315 ) $ (3,286,934 ) $ (5,582,109 ) $ (7,759,559 )commonstockholders

Weighted average number of common sharesoutstanding:

Basic and 5,639,524 2,932,570 5,416,708 2,376,332 diluted

Net loss per share attributable to commonstockholders

Basic and $ (0.46 ) $ (1.12 ) $ (1.03 ) $ (3.27 )diluted

MYOMO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2021

2020

ASSETS

Current Assets:

Cash and cash equivalents

$

13,772,464

$

12,241,261

Accounts receivable, net

1,132,078

924,916

Inventories, net

728,638

707,114

Prepaid expenses and other current assets

999,027

572,684

Total Current Assets

16,632,207

14,445,975

Equipment, net

320,238

95,023

Operating lease assets with right of use

756,221

168,784

Total Assets

$

17,708,666

$

14,709,782

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable and accrued expenses

2,899,948

2,848,904

Current operating lease liability

319,624

18,289

Deferred revenue

-

2,512

Total Current Liabilities

3,219,572

2,869,705

Deferred revenue

1,495

1,495

Non-current operating lease liability

562,887

155,148

Other long-term liabilities

113,423

118,060

Total Liabilities

3,897,377

3,144,408

Commitments and Contingencies

Stockholders' Equity:

Preferred stock

-

-

Common stock

570

457

Additional paid-in capital

87,091,409

79,273,964

Accumulated other comprehensive loss

(2,224

)

(12,690

)

Accumulated deficit

(73,272,002

)

(67,689,893

)

Treasury stock, at cost

(6,464

)

(6,464

)

Total Stockholders' Equity

13,811,289

11,565,374

Total Liabilities and Stockholders' Equity

$

17,708,666

$

14,709,782

MYOMO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

2021 2020

ASSETS

Current Assets:

Cash and cash equivalents $ 13,772,464 $ 12,241,261

Accounts receivable, net 1,132,078 924,916

Inventories, net 728,638 707,114

Prepaid expenses and other current assets 999,027 572,684

Total Current Assets 16,632,207 14,445,975

Equipment, net 320,238 95,023

Operating lease assets with right of use 756,221 168,784

Total Assets $ 17,708,666 $ 14,709,782

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable and accrued expenses 2,899,948 2,848,904

Current operating lease liability 319,624 18,289

Deferred revenue - 2,512

Total Current Liabilities 3,219,572 2,869,705

Deferred revenue 1,495 1,495

Non-current operating lease liability 562,887 155,148

Other long-term liabilities 113,423 118,060

Total Liabilities 3,897,377 3,144,408

Commitments and Contingencies

Stockholders' Equity:

Preferred stock - -

Common stock 570 457

Additional paid-in capital 87,091,409 79,273,964

Accumulated other comprehensive loss (2,224 ) (12,690 )

Accumulated deficit (73,272,002 ) (67,689,893 )

Treasury stock, at cost (6,464 ) (6,464 )

Total Stockholders' Equity 13,811,289 11,565,374

Total Liabilities and Stockholders' Equity $ 17,708,666 $ 14,709,782

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(5,582,109

)

$

(7,088,927

)

Adjustments to reconcile net loss to net cash used in operations:

Depreciation

58,329

53,021

Stock-based compensation

529,283

229,490

Bad debt expense

-

45,839

Non-cash interest expense, debt discount

-

206,668

Amortization of original issue discount and debt restructuring fee

-

143,026

Amortization of right-of-use assets

66,653

-

Loss on extinguishment of debt

-

507,281

Change in fair value of derivative liabilities

-

(121,818

)

Loss on disposal of asset

202

177

Other non-cash charges

1,772

(2,980

)

Changes in operating assets and liabilities:

Accounts receivable

(194,455

)

67,931

Inventories

(28,200

)

(243,336

)

Prepaid expenses and other current assets

(426,749

)

(100,128

)

Other assets

-

57,987

Accounts payable and accrued expenses

17,926

51,292

Operating lease liabilities

54,983

-

Deferred revenue

(2,512

)

5,787

Other liabilities

(4,637

)

77,892

Net cash used in operating activities

(5,509,514

)

(6,110,798

)

CASH USED IN INVESTING ACTIVITIES

(247,644

)

(7,878

)

CASH PROVIDED BY FINANCING ACTIVITIES

7,289,483

12,386,663

Effect of foreign exchange rate changes on cash

(1,122

)

(23

)

Net increase in cash, cash equivalents and restricted cash

1,531,203

6,267,964

Cash, cash equivalents and restricted cash, beginning of period

12,241,261

4,540,455

Cash, cash equivalents and restricted cash, end of period

$

13,772,464

$

10,808,419

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Six Months Ended June 30, 2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss $ (5,582,109 ) $ (7,088,927 )

Adjustments to reconcile net loss to net cash used in operations:

Depreciation 58,329 53,021

Stock-based compensation 529,283 229,490

Bad debt expense - 45,839

Non-cash interest expense, debt discount - 206,668

Amortization of original issue discount and debt - 143,026 restructuring fee

Amortization of right-of-use assets 66,653 -

Loss on extinguishment of debt - 507,281

Change in fair value of derivative liabilities - (121,818 )

Loss on disposal of asset 202 177

Other non-cash charges 1,772 (2,980 )

Changes in operating assets and liabilities:

Accounts receivable (194,455 ) 67,931

Inventories (28,200 ) (243,336 )

Prepaid expenses and other current assets (426,749 ) (100,128 )

Other assets - 57,987

Accounts payable and accrued expenses 17,926 51,292

Operating lease liabilities 54,983 -

Deferred revenue (2,512 ) 5,787

Other liabilities (4,637 ) 77,892

Net cash used in operating activities (5,509,514 ) (6,110,798 )

CASH USED IN INVESTING ACTIVITIES (247,644 ) (7,878 )

CASH PROVIDED BY FINANCING ACTIVITIES 7,289,483 12,386,663

Effect of foreign exchange rate changes on (1,122 ) (23 )cash

Net increase in cash, cash equivalents and 1,531,203 6,267,964 restricted cash

Cash, cash equivalents and restricted cash, 12,241,261 4,540,455 beginning of period



Cash, cash equivalents and restricted cash, end $ 13,772,464 $ 10,808,419 of period

MYOMO, INC.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2021

2020

2021

2020

GAAP net loss

$

(2,621,315

)

$

(3,286,934

)

$

(5,582,109

)

$

(7,088,927

)

Adjustments to reconcile to Adjusted EBITDA:

Interest (income) expense and other expense, net

6,018

88,915

6,137

224,124

Non-cash interest expense, debt discount

-

40,025

-

206,668

Loss on extinguishment of debt

-

348,079

-

507,281

Depreciation expense

35,016

26,633

58,329

53,021

Stock-based compensation

363,312

106,281

529,283

229,490

Change in fair value of derivative liabilities

-

(39,717

)

-

(121,818

)

Income tax expense

15,665

1,085

43,907

1,698

Adjusted EBITDA

$

(2,201,304

)

$

(2,715,633

)

$

(4,944,453

)

$

(5,988,463

)

1 Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss on extinguishment of debt.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005675/en/

CONTACT: For Myomo: ir@myomo.com Investor Relations: Kim Sutton Golodetz LHA Investor Relations kgolodetz@lhai.com 212-838-3777