Achieved Revenue Growth of 106%
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 reports its financial results for the
second quarter ended June 30, 2018.
Recent Highlights and Accomplishments:
- Achieved total revenue in the second
quarter 2018 of $632,000, an increase of 106%, versus the
comparable period of 2017.
- Announced agreements with leading
orthotics and prosthetics (O&P) practices to bring MyoPro®
availability to 16 new U.S. locations. Myomo currently has 80 U.S.
locations offering the MyoPro line of powered orthosis.
- Announced the introduction of MyoPro
myoelectric arm orthosis (powered brace) for adolescent patients
with paralyzed or weakened arms.
- Received a favorable preliminary
decision from the Centers for Medicare & Medicaid
Services (“CMS”) regarding the Company’s application for
Healthcare Common Procedure Coding System (HCPCS) “L”.
- Appointed Micah Mitchell as Chief
Commercial Officer.
Paul R. Gudonis, Chairman & CEO of Myomo, stated: “We are
pleased to report quarterly revenues growth of 106% year over year.
We have opened new sales regions, added new O&P locations, and
launched digital marketing campaigns to reach the many individuals
in the US with upper limb paralysis. With growing interest from
patients and O&P providers, we continue to expect increased
revenue for the year.”
Financial Results
Three months ended
Period-to-period Six months ended
Period-to-period June 30, change June
30, change 2018 2017 $
% 2018 2017 $
% Revenue $ 632,369 $ 306,683 $ 325,686
106 % $ 945,548 $ 522,914 $ 422,634 81 % Cost of revenue
200,446 98,641 101,805 103 % 308,526
177,210 131,316 74 % Gross margin $ 431,923 $ 208,042
$ 223,881 108 % $ 637,022 $ 345,704 $ 291,318 84 % Gross margin% 68
% 68 % - % 67 % 66 % 1 %
Total revenue in the second quarter 2018 was $632,000, an
increase of 106%, versus the comparable period of 2017. Total
revenue for the six months ended June 30, 2018 was $946,000, an
increase of 81%, versus the comparable period of 2017. Our results
for the three and six months ended June 30, 2018, included
increases in units, as well as a higher average selling price
primarily due direct sales.
Gross margin was 68% for the quarter ended June 30, 2018 and
2017. Gross margin was 67% and 66% for the six months ended June
30, 2018 and 2017, respectively.
Operating expenses were $3,114,000, an increase of $973,000, or
45%, during the three months ended June 30, 2018, versus the
comparable period of 2017. Operating expenses were $5,722,000, an
increase of $2,079,000, or 57%, during the six months ended June
30, 2018, as compared to the six months ended June 30, 2017. The
increases in our operating expenses primarily reflect higher
compensation costs associated with the addition of personnel, the
expansion of our sales, marketing and product development efforts,
and increased spending to secure reimbursement, as well as
increased administrative costs to support our growing business and
public company compliance requirements.
During the three months ended June 30, 2018 the company
generated interest income of $50,000, as compared to incurring
interest expense of $146,250 in the same period of 2017. We did not
incur interest expense during the three months ended June 30, 2018
due to the payoff of our outstanding debt and our convertible
promissory notes being converted into common stock upon the closing
of our IPO on June 9, 2017.
The Company’s net loss for the quarter ended June 30, 2018
amounted to $2,630,000, compared with a net loss of $7,382,000 for
the corresponding period of 2017. Net loss for the quarter ended
June 30, 2017 includes a $5,172,000 charge for debt discount on
convertible notes. Net loss available to common stockholders for
the quarter ended June 30, 2018 was $2,630,000 or ($0.21) per
share, compared with a net loss available to common stockholders of
$7,755,000, or ($3.35) per share, for the corresponding year ago
period.
Adjusted EBITDA1 for the quarter ended June 30, 2018 was a loss
of $2,512,000, compared with a loss of $1,656,000 for the
corresponding 2017 period. Adjusted EBITDA for the six months ended
June 30, 2018 was a loss of $4,564,000, compared with a loss of
$2,997,000 for the corresponding 2017 period. 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 June 30, 2018 was $11,684,000, compared to
$12,959,000 at December 31, 2017.
Conference Call and Webcast InformationMyomo will hold a
conference call today, August 7, 2018 at 4:30 p.m. EDT. To access
the conference call, please dial 1-877-270-2148 from the U.S. or
1-412-902-6510 internationally. Please instruct the operator to
join you into Myomo’s earnings conference call. A webcast and
accompanying slides 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 August 21, 2018; please
dial 1-877-344-7529 from the U.S. or 1-412-317-0088 internationally
and provide the passcode of 10122822.
(Tables follow)
About MyomoMyomo, 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 StatementsThis press release contains
forward-looking statements regarding the Company's future business
expectations, including the scale-up and expansion of commercial
operations, projected users of MyoPro, our expectations for
revenues and our results of operations, and the potential benefits
to users of our products, 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, subsequent 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 MeasuresMyomo 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
Six months ended
June 30,
June 30,
2018 2017 2018
2017 Revenue $ 632,369 $ 306,683 945,548 $
522,914
Cost of revenue 200,446 98,641
308,526 177,210
Gross margin 431,923
208,042 637,022 345,704
Operating
expenses: Research and development 486,982 708,622 859,341
1,065,507 Selling, general and administrative 2,627,005
1,432,862 4,862,642 2,577,328
Total
operating expenses 3,113,987 2,141,484 5,721,983
3,642,835
Loss from operations (2,682,064)
(1,933,442) (5,084,961) (3,297,131)
Other expense
(income) Change in fair value of derivative liabilities (2,661)
130,162 (17,968) 155,008 Debt discount on convertible notes —
5,172,000 — 5,172,000 Interest and other expense, net
(49,842) 146,250 (92,030) 314,115
Total other
expense (income) (52,503) 5,448,412 (109,998)
5,641,123
Net loss (2,629,561)
(7,381,854) (4,974,963) (8,938,254) Deemed discount – accreted
preferred stock discount — (246,827) — (274,011) Cumulative
dividend to Series B-1 preferred stockholders — (125,903) —
(287,779)
Net loss available to common stockholders
$ (2,629,561) $ (7,754,584) (4,974,963) $ (9,500,044)
Weighted average number of common shares outstanding: Basic
and diluted 12,407,526 2,312,649 12,155,600
1,722,168
Net loss per share available to common
stockholders: Basic and diluted
$ (0.21) $ (3.35) (0.41)
$ (5.52)
MYOMO, INC.
CONDENSED BALANCE SHEETS June 30, 2018
December 31, 2017 ASSETS (Unaudited)
Current Assets: Cash and cash equivalents
$
11,683,729
$ 12,959,373 Accounts receivable 384,951 297,039
Inventories, net 247,624 201,155 Prepaid expenses and other 462,782
388,275
Total Current Assets 12,779,086
13,845,842 Restricted cash 75,000 52,000 Deferred offering costs
49,042 — Equipment, net 163,849 77,150
Total Assets $ 13,066,977 $ 13,974,992
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities: Accounts payable and other accrued
expenses $ 1,399,335 $ 1,277,236 Derivative liabilities 21,962
39,930 Deferred revenue 149,086 168,006
Total
Current Liabilities 1,570,383 1,485,172 Deferred revenue, net
of current portion 45,496 44,042
Total
Liabilities 1,615,879 1,529,214
Commitments and Contingencies — —
Stockholders'
Equity (Deficiency) Common stock 1,241 1,114 Undesignated
preferred stock — — Additional paid-in capital 51,404,071
47,423,915 Accumulated deficit (39,947,750 ) (34,972,787 ) Treasury
stock (6,464 ) (6,464 )
Total Stockholders' Equity
(Deficiency) 11,451,098 12,445,778
Total Liabilities and Stockholders’ Equity (Deficiency)
$ 13,066,977 $ 13,974,992
MYOMO, INC.CONDENSED STATEMENTS
OF CASH FLOWS(unaudited)
For the six months ended June 30, 2018
2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $
(4,974,963 ) $ (8,938,254 ) Adjustments to reconcile net loss to
net cash used in operations: Depreciation 28,900 4,546 Stock-based
compensation 492,080 295,418 Amortization of debt discount — 17,765
Debt discount on convertible notes — 5,172,000 Excess and obsolete
inventory reserve 28,887 36,028 Common stock issued for services —
30,000 Change in fair value of derivative liabilities (17,968 )
155,008 Changes in operating assets and liabilities: Accounts
receivable (87,912 ) (139,525 ) Inventories (109,498 ) (76,621 )
Prepaid expenses and other (74,507 ) (121,633 ) Accounts payable
and other accrued expenses 122,099 594,339 Accrued interest —
209,627 Deferred revenue (17,466 ) 14,297 Net cash used in
operating activities (4,610,348 ) (2,747,005 )
CASH FLOWS FROM
INVESTING ACTIVITIES Purchases of equipment (81,457 ) (4,987 )
Net cash used in investing activities (81,457 ) (4,987 )
CASH
FLOWS FROM FINANCING ACTIVITIES Payments of issuance costs
(49,042 ) — Net settlement of vested restricted stock units to fund
relatedemployee statutory tax withholding (68,190 ) — Proceeds from
exercise of stock options 2 2,982 Proceeds from exercise of
warrants 3,556,391 — Proceeds from IPO, net of offering costs (1) —
4,423,315 Proceeds from private placement, net of offering costs —
2,922,885 Proceeds from convertible promissory notes, net —
1,770,000 Repayment of note payable, MLSC — (54,123 ) Net
cash provided by financing activities 3,439,161 9,065,059
Net (decrease) increase in cash, cash equivalents and
restricted cash (1,252,644 ) 6,313,067 Cash, cash
equivalents and restricted cash, beginning of period 13,011,373
849,174 Cash, cash equivalents and
restricted cash, end of period $ 11,758,729 $ 7,162,241
SUPPLEMENTAL DISCLOSURE CASH FLOW INFORMATION Cash
paid during the period for interest $ — $ 59,536
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTINGAND FINANCING
ACTIVITIES Inventory capitalized as sales demo equipment $ 34,142 $
— Exchange of 2015 convertible promissory notes for 2016convertible
promissory notes $ — $ 430,000 Accretion of convertible preferred
stock to redemption value $ — $ 274,011 Conversion of accrued
interest to principal $ — $ 21,916 Conversion of convertible
preferred stock into common stock $ — $ 12,946,252 Conversion of
convertible promissory notes and accrued interestinto common stock
$ — $ 5,467,389 Issuance of selling agent warrants in connection
with IPO $ — $ 156,725 Deferred offering costs to additional
paid-in capital upon IPO closing (1) $ — $ 438,237 IPO issuance
costs included in accounts payable and accrued expense $ — $ 31,930
(1) IPO gross proceeds of $4,991,236 are reduced by $567,921 of
IPO offering costs that were incurred in 2017. Another $438,237 of
IPO deferred offering costs were paid for in 2016.
MYOMO, INC.RECONCILIATION OF
GAAP NET LOSS TO ADJUSTED EBITDA
(unaudited)
Three months ended Six
months ended June 30, June 30, 2018
2017 2018 2017 GAAP net loss $ (2,629,561) $
(7,381,854) $ (4,974,963) $ (8,938,254) Adjustments to reconcile to
Adjusted EBITDA: Interest (income) expense (49,842) 146,057
(92,030) 286,928 Other expense — 193 — 27,187 Depreciation expense
14,301 2,377 28,900 4,546 Stock-based compensation 155,724 275,279
492,080 295,418 Change in fair value of derivative liabilities
(2,661) 130,162 (17,968) 155,008 Debt discount on convertible notes
— 5,172,000 — 5,172,000 Adjusted EBITDA
$ (2,512,039) $ (1,655,786) $ (4,563,981) $ (2,997,167)
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For Myomo:ir@myomo.comorInvestor Relations:PCG
AdvisoryVivian Cervantes,
646-863-6274vivian@pcgadvisory.comorPublic
Relations:GreenoughRachel Robbins,
617-275-6521rrobbins@greenough.biz
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