Market Overview

Myomo Reports First Quarter 2019 Results

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Reports 165% Year-over-Year Revenue Growth and Continued Expansion
of Reimbursement Pipeline

Myomo, Inc. (NYSE: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 its financial results for the first quarter ended March 31,
2019.

Recent Highlights and Accomplishments:

  • Revenues for the first quarter 2019 of $830,000 increased by 165%
    versus the comparable period of 2018. Gross profit for the quarter
    increased by 219% compared to the first quarter of 2018 and gross
    margin expanded to 79% from 65%.
  • The Company's reimbursement pipeline contained 354 MyoPro units as of
    March 31, 2019, up 16% from 306 units at the end of the fourth quarter
    2018. In the first quarter 2019, the Company sold 35 units.
  • The Company expanded its US distribution from 42 to all 50 of the top
    metro areas through the addition of O&P partners and entered into new
    agreements with O&P providers with multiple locations in Italy, Chile,
    and Australia.

"The strong growth in first quarter revenues in 2019 is the result of
our national rollout launched in 2018, which consisted of online
marketing and broader metro area coverage with O&P clinical partners,"
said Paul R. Gudonis, Chairman and CEO of Myomo. "Our reimbursement
pipeline continues to grow, which is expected to result in significant
revenue growth in 2019."

Financial Results

    Three months ended   Period-to-period
March 31, change
2019   2018 $     %
Revenue $ 830,066 $ 313,179 $ 516,887   165%
Cost of revenue   176,187   108,080   68,107 63%
Gross profit $ 653,879 $ 205,099 $ 448,780 219%
Gross margin%  

79

%   65 %   14%
 

Higher revenue for the three months ended March 31, 2019 reflects both
higher volume and a higher average unit selling price compared to the
three months ended March 31, 2018.

Gross margin was 79% for the three months ended March 31, 2019. Gross
margin increased compared to the 65% for the three months ended March
31, 2018, respectively due to higher average selling price on devices
directly sold to patients.

Operating expenses were $3,337,000, an increase of $729,000, or 28%,
during the three months ended March 31, 2019, versus the comparable
period of 2018. The increase in operating expenses primarily reflects
the addition of personnel in the second half of 2018 in support of the
Company's expansion of its sales, marketing and reimbursement functions.

The Company's net loss for the quarter ended March 31, 2019 was
$2,598,000, or ($0.17) per share, compared with a net loss of
$2,345,000, or ($0.20) per share for the corresponding period of 2018.

Adjusted EBITDA1 for the quarter ended March 31, 2019 was a
loss of $2,454,000, compared with a loss of $2,052,000 for the
corresponding period in 2018. A reconciliation of GAAP net loss to this
non-GAAP financial measure has been provided in the financial statement
tables included in this press release. An explanation of this measure is
also included below under the heading "Non-GAAP Financial Measures."

Liquidity

Cash on hand at March 31, 2019 was $9,234,000, compared to $6,541,000 at
December 31, 2018. On February 12, 2019, the Company successfully
completed a follow-on public offering of its common stock, generating
net proceeds of approximately $5,600,000, which the Company continues to
expect will provide sufficient liquidity to fund its operations through
2019.

Conference Call and Webcast Information

Myomo will hold a conference call today, Monday, May 13, 2019 at 8:30
a.m. EDT. To access the conference call, please dial 1-877-270-2148 from
the U.S. or 1-412-902-6510 internationally. Our webcast can also be
accessed through Myomo's Investor Relations page. Please allow extra
time prior to the call to visit the site and download any necessary
software to listen to the live broadcast.

A replay of the conference call will be available approximately one hour
after completion of the live conference call at the Investor Relations
page. A dial-in replay of the call will be available until May 27, 2019;
please dial 1-877-344-7529 from the U.S. or 1-412-317-0088
internationally and provide the passcode of 10130705.

About Myomo

Myomo, Inc. is a wearable medical robotics company that offers expanded
mobility 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 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. For more information, please visit www.myomo.com.

1   Adjusted EBITDA is earnings before interest, taxes, depreciation and
amortization adjusted for the impact of the write-off of unamortized
debt discount associated with conversion of convertible notes into
common stock and warrants, stock based-compensation, the impact of
the fair value revaluation of our derivative liabilities and the
loss on early extinguishment of debt.
 

Forward Looking Statements

This press release contains forward-looking statements regarding the
Company's future business expectations, including the receipt of
revenues from units being processed for insurance reimbursement, the
scale-up and expansion of commercial operations, our expectations for
revenues and our results of operations, and the potential benefits to
users of our products, our financial position and cash runway, 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:

  • our sales 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;
  • our ability to effectively execute our business plan; and
  • our expectations as to our clinical research program and clinical
    results.

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.

Non-GAAP Financial Measures

Myomo has provided in this release of 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 that
the use of this non-GAAP financial measures provides supplementary
information for investors to use in evaluating operating performance and
in comparing its financial measures with other companies in Myomo's
industry, many of which present similar non-GAAP financial measures.
Adjusted EBITDA is EBITDA adjusted for the impact of the write-off of
unamortized debt discount associated with conversion of convertible
notes into common stock and warrants, stock based-compensation, the
impact of the fair value revaluation of our derivative liabilities and
the loss on early extinguishment of debt. Non-GAAP financial measures
that Myomo uses may differ from measures that other companies may use.
This non-GAAP financial measure disclosed by Myomo 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.

   

MYOMO, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)

 
Three months ended
March 31,
  2019     2018
Revenue $ 830,066   $ 313,179
 
Cost of revenue   176,187   108,080
 
Gross margin   653,879   205,099
 
Operating expenses:
Research and development 535,254 372,359
Selling, general and administrative   2,801,420   2,235,637
 
Total operating expenses   3,336,674   2,607,996
 
Loss from operations (2,682,795) (2,402,897)
 
Other expense (income)
Change in fair value of derivative liabilities (41,970) (15,307)
Interest income and other expense, net   (42,765)   (42,188)
Total other expense (income)   (84,735)   (57,495)
 
Net loss $ (2,598,060) $ (2,345,402)
 
Weighted average number of common shares outstanding:
Basic and diluted   14,941,518   11,899,456
 
Net loss per share
Basic and diluted $ (0.17) $ (0.20)
 
     

MYOMO, INC.
CONDENSED BALANCE SHEETS

 

March 31,
2019

December 31,
2018

ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 9,233,559 $ 6,540,794
Accounts receivable, net 399,895 382,258
Inventories, net 301,277 256,149
Prepaid expenses and other 784,720   695,276
Total Current Assets 10,719,451 7,874,477
Restricted cash 75,000 75,000
Deferred offering costs 131,976 144,582
Equipment, net 173,078 187,513
Total Assets $ 11,099,505 $ 8,281,572
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued expenses $ 1,310,429 $ 1,743,427
Derivative liabilities 157,927 3,661
Deferred revenue 25,840 1,990
Customer advance payments 84,117 106,609
Total Current Liabilities 1,578,313 1,855,687
Total Liabilities 1,578,313 1,855,687
 
Commitments and Contingencies
 
Stockholders' Equity
Common stock 1,710 1,245
Additional paid-in capital 57,536,979 51,720,630
Accumulated deficit (48,011,033) (45,289,526)
Treasury stock (6,464) (6,464)
Total Stockholders' Equity 9,521,192 6,425,885
Total Liabilities and Stockholders' Equity $ 11,099,505 $ 8,281,572
 
       

MYOMO, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)

 
For the three months ended March 31, 2019 2018
 
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (2,598,060) $ (2,345,402)
 
Adjustments to reconcile net loss to net cash used in operations:
Depreciation 21,627 14,599
Stock-based compensation 207,605 336,355
Bad debt expense 16,275
Excess and obsolete inventory reserve (645)
Change in fair value of derivative liabilities (41,970) (15,307)
Loss on disposal of asset 320
Changes in operating assets and liabilities:
Accounts receivable (33,912) 145,594
Inventories (131,871) (63,923)
Prepaid expenses and other (128,256) 15,182
Accounts payable and other accrued expenses (432,998) (327,390)
Deferred revenue 23,850 (24,423)
Other current liabilities   (22,492)  
 
NET CASH USED IN OPERATING ACTIVITIES (3,119,882) (2,265,360)
 
NET CASH USED IN INVESTING ACTIVITIES (5,404) (64,924)
 
NET CASH PROVIDED BY FINANCING ACTIVITIES   5,818,051   3,487,341
Net increase in cash, cash equivalents, and restricted cash 2,692,765 1,157,057
Cash, cash equivalents, and restricted cash, beginning of period   6,615,794   13,011,373
Cash, cash equivalents, and restricted cash, end of period $ 9,308,559 $ 14,168,430
 
   

MYOMO, INC.
RECONCILIATION OF GAAP NET LOSS TO
ADJUSTED EBITDA

(unaudited)

 
Three months ended
March 31,
2019     2018
GAAP net loss $ (2,598,060) $ (2,345,402)
Adjustments to reconcile to Adjusted EBITDA:
Interest (income) expense (42,765) (42,188)
Depreciation expense 21,627 14,599
Stock-based compensation 207,605 36,355
Change in fair value of derivative liabilities (41,970) (15,307)
Adjusted EBITDA $ (2,453,563) $ (2,051,943)

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