UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2018

 

 

Myomo, Inc.

(Exact Name of Company as Specified in Charter)

 

 

 

Delaware		001-38109		47-0944526
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

One Broadway, 14th Floor Cambridge, MA		02142
(Address of Principal Executive Offices)		(Zip Code)

Company’s telephone number, including area code: (617) 996-9058

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 2.02. Results of Operations and Financial Condition.

On August 7, 2018, Myomo, Inc. announced its financial results for the three and six months ended June 30, 2018. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

The following exhibits shall be deemed to be furnished, and not filed:

 

Exhibit No.		Description
99.1		Press Release dated August 7, 2018.

 

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				MYOMO, INC.
Date: August 7, 2018				By:		/s/ Paul R. Gudonis
						Paul R. Gudonis
						Chairman, Chief Executive Officer and President

 

3

Exhibit 99.1

 

Myomo Announces Second Quarter 2018 Financial Results

Achieved Revenue Growth of 106%

CAMBRIDGE, Mass., August 7, 2018 – 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 June 30,								Period-to-Period Change								Six Months Ended June 30,								Period-to-Period 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 Information

Myomo 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 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 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 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.

For Myomo:

[email protected]

Investor Relations:

Vivian Cervantes

PCG Advisory

646-863-6274

[email protected]

Public Relations:

Rachel Robbins

Greenough

617-275-6521

[email protected]

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
			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 income and other expense, net			(49,842	)			146,250				(92,030	)			314,115
			(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 dividend – accreted preferred stock			—				(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
		(unaudited)
ASSETS
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
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:
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			11,451,098				12,445,778
Total Liabilities and Stockholders’ Equity		$	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 related employee 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 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

 

(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 June 30,								Six Months Ended 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	)