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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-38109

MYOMO, INC.

(Exact name of Registrant as Specified in its Charter)


Delaware		47-0944526
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

45 Blue Sky Drive, Suite 101, Burlington, Massachusetts		01803
(Address of principal executive offices)		(Zip Code)

(617) 996-9058

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	MYO	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

At November 3, 2025, the registrant has 38,435,524 shares of common stock, par value $0.0001 per share, outstanding.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” or the negatives of these terms or other comparable terminology.

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Quarterly Report on Form 10-Q, including in “Risk Factors” and those contained in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on March 10, 2025 and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

•

our ability to achieve or obtain sufficient reimbursement from third-party payers for our products;

•

our dependence upon external sources for the financing of our operations;

•

our ability to scale the business to return to positive cash flow from operations;

•

our revenue concentration with patients who have Medicare Part B insurance coverage;

•

our ability to continue normal operations and patient interactions without supply chain disruption in order to deliver and fit our custom-fabricated devices;

•

our marketing and commercialization efforts;

•

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 obtain and maintain our strategic collaborations and to realize the intended benefits of such collaborations;

•

our ability to effectively execute our business plan and scale up our operations;

•

our ability to remediate the material weakness in our internal control over financial reporting;

•

our expectations as our product development programs, including improving our existing products and developing new products;

•

our ability to maintain and grow our reputation and to achieve and maintain the market acceptance of our products;

•

our expectations as to our clinical research program and clinical results;

•

our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others;

•

our ability to gain and maintain regulatory approvals;

•

our ability to compete and succeed in a highly competitive and evolving industry;

•

general market, economic, environmental and social factors that may affect the evaluation, fitting, delivery and sale of the products to patients; and

•

other risks and uncertainties, including those listed under the captain “Risk Factors” in this Quarterly Report on Form 10-Q.

Although the forward-looking statements in this Quarterly Report on Form 10-Q and those contained in our Annual Report on Form 10-K for the year ended December 31, 2024, 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. We undertake no obligation, other than as may be required by law, to re-issue this Quarterly Report on Form 10-Q, or otherwise make public statements updating our forward-looking statements.

TABLE of CONTENTS


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (interim periods unaudited)			1

Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024			1

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024			2

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2025 and 2024			3

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024			4

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024			5

Notes to Unaudited Condensed Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19

Item 3. Quantitative and Qualitative Disclosures About Market Risk			25

Item 4. Controls and Procedures			26

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			28

Item 1A. Risk Factors			28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities			31

Item 5 Other Information			31

Item 6. Exhibits			32

Signatures			33

Part 1. FINANCIAL INFORMATION

Item 1. Financial statements

MYOMO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


	September 30,			December 31,
	2025			2024

ASSETS
Current Assets:
Cash and cash equivalents	$	12,553,558		$	24,372,373
Short-term investments		—			492,990
Accounts receivable, net		5,292,520			3,825,291
Inventories		3,645,314			3,165,965
Prepaid expenses and other current assets		1,457,595			933,377
Total Current Assets		22,948,987			32,789,996
Restricted cash		375,000			375,000
Operating lease assets with right of use, net		6,870,283			7,584,663
Equipment, net		3,714,810			1,330,008
Other assets		168,350			164,412
Total Assets	$	34,077,430		$	42,244,079
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses		6,668,162			9,021,817
Current operating lease liability		464,239			748,021
Income taxes payable		351,974			318,885
Deferred revenue		134,750			83,115
Current portion long-term debt		583,333			—
Revolving credit line		1,000,000			—
Total Current Liabilities		9,202,458			10,171,838
Non-current operating lease liability		7,832,722			7,358,184
Long-term debt		2,416,667			—
Total Liabilities		19,451,847			17,530,022
Commitments and Contingencies		—			—
Stockholders’ Equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock par value $0.0001 per share, 65,000,000 shares authorized; 38,433,287 and 34,378,297 shares issued as of September 30, 2025 and December 31, 2024, respectively; and 38,433,260 and 34,278,270 shares outstanding at September 30, 2025 and December 31, 2024, respectively		3,843			3,439
Additional paid-in capital		129,365,034			127,846,026
Accumulated other comprehensive income (loss)		137,653			(14,406	)
Accumulated deficit		(114,874,483	)		(103,114,538	)
Treasury stock, 27 shares at cost		(6,464	)		(6,464	)
Total Stockholders’ Equity		14,625,583			24,714,057
Total Liabilities and Stockholders’ Equity	$	34,077,430		$	42,244,079

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


	For the Three Months ended						For the Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenue	$	10,090,699		$	9,207,586		$	29,574,746		$	20,482,742

Cost of revenue		3,648,451			2,262,031			10,470,696			5,912,632
Gross profit		6,442,248			6,945,555			19,104,050			14,570,110
Operating expenses:
Research and development		1,527,660			1,248,870			5,319,015			3,212,309
Selling, clinical and marketing		5,254,246			3,401,182			14,883,936			8,540,161
General and administrative		3,177,856			3,253,056			10,529,188			8,779,024
		9,959,762			7,903,108			30,732,139			20,531,494

Loss from operations		(3,517,514	)		(957,553	)		(11,628,089	)		(5,961,384	)

Other expense (income), net
Interest expense (income), net		9,743			(76,020	)		(288,797	)		(318,555	)
		9,743			(76,020	)		(288,797	)		(318,555	)
Loss before income taxes		(3,527,257	)		(881,533	)		(11,339,292	)		(5,642,829	)
Income tax expense		135,658			84,876			420,654			280,819
Net loss	$	(3,662,915	)	$	(966,409	)	$	(11,759,946	)	$	(5,923,648	)

Weighted average number of common shares outstanding:
Basic and diluted		42,168,120			37,950,515			41,737,724			37,359,366
Net loss per share attributable to common stockholders
Basic and diluted	$	(0.09	)	$	(0.03	)	$	(0.28	)	$	(0.16	)

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Net loss	$	(3,662,915	)	$	(966,409	)	$	(11,759,946	)	$	(5,923,648	)
Other comprehensive income, net of tax:
Foreign currency translation adjustments		89,319			256,846			152,059			312,065
Other comprehensive income		89,319			256,846			152,059			312,065
Comprehensive loss	$	(3,573,596	)	$	(709,563	)	$	(11,607,887	)	$	(5,611,583	)

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited)


	For the Three and Nine Months Ended September 30, 2025 and 2024
	Common stock		Additional Paid-in	Accumulated Comprehensive	Accumulated	Treasury Stock		Total Stockholders’
	Shares	Amount	Capital	Income (Loss)	Deficit	Shares	Amount	Equity
Balance, December 31, 2024	34,378,297	$3,439	$127,846,026	$(14,406)	$(103,114,538)	27	$(6,464)	$24,714,057
Common stock issued upon vesting of restricted stock units	59,031	7	(7)	—	—	—	—	—
Common stock issued upon vesting of incentive stock options	708	—	—	—	—	—	—	—
Stock-based compensation	—	—	540,204	—	—	—	—	540,204
Other comprehensive loss	—	—	—	(102,139)	—	—	—	(102,139)
Net loss	—	—	—	—	(3,465,058)	—	—	(3,465,058)
Balance, March 31, 2025	34,438,036	$3,446	$128,386,223	$(116,545)	$(106,579,596)	27	$(6,464)	$21,687,064
Common stock issued upon vesting of restricted stock units	644,149	64	(64)	—	—	—	—	—
Stock-based compensation			394,889	—	—	—	—	394,889
Common stock issued upon vesting of incentive stock options	20	—	—	—	—	—	—	—
Exercise of pre-funded warrants	2,698,105	268	—	—	—	—	—	268
Other comprehensive income	—	—	—	164,879	—	—	—	164,879
Net loss	—	—	—		(4,631,972)	—	—	(4,631,972)
Balance, June 30, 2025	37,780,310	$3,778	$128,781,048	$48,334	$(111,211,568)	27	$(6,464)	$17,615,128
Common stock issued upon vesting of restricted stock units	52,821	5	(5)	—	—	—	—	—
Stock-based compensation	—	—	583,991	—	—	—	—	583,991
Exercise of pre-funded warrants	600,156	60	—	—	—	—	—	60
Other comprehensive income	—	—	—	89,319	—	—	—	89,319
Net loss	—	—	—	—	(3,662,915)	—	—	(3,662,915)
Balance, September 30, 2025	38,433,287	$3,843	$129,365,034	$137,653	$(114,874,483)	27	$(6,464)	$14,625,583

Balance, December 31, 2023	27,135,061	$2,715	$105,840,239	$83,669	$(96,930,809)	27	$(6,464)	$8,989,350
Proceeds from sale of common stock in registered direct offering, net of offering costs of $547,257	1,354,218	135	4,598,636	—	—	—	—	4,598,771
Proceeds from sale of 224,730 pre-funded warrants in registered direct offering, net of offering costs of $90,814	—	—	763,138	—	—	—	—	763,138
Common stock issued upon vesting of restricted stock units	300,544	31	(31)	—	—	—	—	—
Stock-based compensation	—	—	320,288	—	—	—	—	320,288
Other comprehensive income	—	—	—	63,842	—	—	—	63,842
Net loss	—	—	—	—	(3,835,632)	—	—	(3,835,632)
Balance, March 31, 2024	28,789,823	$2,881	$111,522,270	$147,511	$(100,766,441)	27	$(6,464)	$10,899,757
Common stock issued upon vesting of restricted stock units	636,801	63	(63)	—	—	—	—	—
Stock-based compensation	—	—	(91,893)	—	—	—	—	(91,893)
Exercise of pre-funded warrants	774,730	77	—	—	—	—	—	77
Other comprehensive loss	—	—	—	(8,623)	—	—	—	(8,623)
Net loss	—	—	—	—	(1,121,607)	—	—	(1,121,607)
Balance, June 30, 2024	30,201,354	$3,021	$111,430,314	$138,888	$(101,888,048)	27	$(6,464)	$9,677,711
Common stock issued upon vesting of restricted stock units	42,828	4	(4)	—	—	—	—	—
Stock-based compensation	—	—	324,185	—	—	—	—	324,185
Other comprehensive income	—	—	—	256,846	—	—	—	256,846
Net loss	—	—	—	—	(966,409)	—	—	(966,409)
Balance, September 30, 2024	30,244,182	$3,025	$111,754,495	$395,734	$(102,854,457)	27	$(6,464)	$9,292,334

The accompanying notes are an integral part of the consolidated unaudited financial statements.

MYOMO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)


For the Nine Months Ended September 30,	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(11,759,946	)	$	(5,923,648	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		596,091			114,346
Stock-based compensation		1,519,083			552,580
Accretion of discount on short-term investments		(24,708	)		(118,520	)
Credit losses		155,422			5,257
Inventory reserves		32,558			—
Amortization of deferred offering costs		91,051			—
Amortization of right-of-use assets		714,379			196,592
Other non-cash charges		49,924			84,180
Changes in operating assets and liabilities:
Accounts receivable		(1,111,217	)		(1,116,352	)
Inventories		(1,018,876	)		(1,573,193	)
Prepaid expenses and other current assets		(956,856	)		(614,951	)
Other assets		6,514			(16,640	)
Accounts payable and accrued expenses		(1,899,337	)		1,895,795
Income taxes payable		(7,429	)		202,137
Operating lease liabilities		190,756			(366,675	)
Deferred revenue		51,636			23,460
Net cash used in operating activities		(13,370,955	)		(6,655,632	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of short-term investments		(1,225,410	)		(5,482,757	)
Maturities of short-term investments		1,742,554			7,595,814
Purchases of equipment		(2,980,892	)		(499,877	)
Net cash (used in) provided by investing activities		(2,463,748	)		1,613,180
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from common stock offering		—			4,598,771
Proceeds from sale of pre-funded warrants, net of offering costs		—			763,138
Deferred offering costs		(86,506	)		(199,500	)
Proceeds from issuance of debt, revolving credit line		1,000,000			—
Proceeds from issuance of debt, term loan		3,000,000			—
Net cash provided by financing activities		3,913,494			5,162,409

Effect of foreign exchange rate changes on cash		102,394			6,412

Net (decrease) increase in cash, cash equivalents and restricted cash		(11,818,815	)		126,369

Cash, cash equivalents and restricted cash, beginning of period		24,747,373			6,871,306

Cash, cash equivalents and restricted cash, end of period	$	12,928,558		$	6,997,675

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Unrealized (gain) loss from mark to market on short-term investments	$	555		$	126

The accompanying notes are an integral part of the condensed consolidated unaudited financial statements.

MYOMO, INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

Note 1 — Description of Business

Myomo Inc. (“Myomo” or the Company”) is a wearable medical robotics company that develops, designs, and produces myoelectric orthotics for people with neuromuscular disorders. The MyoPro ® myoelectric upper limb orthosis product is registered with the U.S. Food and Drug Administration as a Class II medical device. The Company sells its products directly to patients, to Orthotics and Prosthetics ("O&P") providers around the world, the Veterans Health Administration, and distributors in Europe and Australia. The Company was incorporated in the State of Delaware on September 1, 2004 and is headquartered in Burlington, Massachusetts.

Note 2 — Liquidity

The Company had cash, cash equivalents, and short term investments of approximately $12,553,600 as of September 30, 2025. The Company incurred net losses of approximately $11,759,900 and $5,923,600 during the nine months ended September 30, 2025 and 2024, respectively, and has an accumulated deficit of approximately $114,874,500 and $103,114,500 at September 30, 2025 and December 31, 2024, respectively. Cash used in operating activities was approximately $13,371,000 and $6,655,600 for the nine months ended September 30, 2025 and 2024, respectively.

The Company has historically funded its operations through financing activities, including issuing equity and debt. On December 6, 2024, the Company completed a public offering, selling 3,450,000 shares of common stock at $5.00 per share, generating net proceeds after taxes and fees of approximately $15.8 million. On January 19, 2024, the Company completed a registered direct equity offering, selling 1,354,218 shares of common stock and 224,730 pre-funded warrants to purchase common stock at $3.80 per share, or $3.7999 per pre-funded warrant, generating net proceeds after fees and expenses of approximately $5.4 million. See Note 7 - Common Stock and Warrants for further discussion. On July 11, 2024, the Company entered into a Loan and Security Agreement with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“Silicon Valley Bank”), which provides the Company the ability to borrow up to $4.0 million against eligible accounts receivable. In February 2025, the Company entered into an amendment to the Loan and Security Agreement, which among other changes, provides for a $3.0 million term loan facility which is available to be drawn at any time before February 28, 2026. On June 30, 2025, the Company drew $2.5 million on its line of credit and $1.5 million under its term loan facility. On July 15, 2025 the Company paid down $1.5 million on its line of credit and drew $1.5 million under its term loan facility. As of September 30, 2025 the Company has an outstanding balance of $1.0 million under its line of credit and $3.0 million under its term loan facility (See Note 8 - Debt for further discussion.) Financing activities, such as the December 2024 public offering, have enabled the Company to sustain its operations.

On November 4, 2025, the Company entered into a Loan and Security Agreement with Avenue Capital Management II, L.P. as administrative agent and collateral agent and Avenue Venture Opportunities Fund II, L.P., as a lender, which provided the Company $17.5 million of committed capital, of which $12.5 million was funded at closing on November 4, 2025. See Note 12 - Subsequent Events for further discussion.

Based upon its current cash, and cash equivalents, as well as the future expected cash flows, the Company believes that its available current cash, cash equivalents, and short-term investments will fund its operations for at least the next twelve months from the issuance date of these financial statements.

Note 3 — Summary of Significant Accounting Policies

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information pursuant to Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) that are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the fiscal year ending December 31, 2024, or any other period. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and related disclosures of the Company as of December 31, 2024 and 2023 and for the years then ended, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Myomo Europe GmbH. All significant intercompany balances and transactions are eliminated.

Comprehensive Income (Loss)

Comprehensive loss includes all changes in equity during a period, except those resulting from investments by stockholders and distributions to stockholders. The Company's comprehensive loss includes changes in foreign currency translation adjustments and unrealized gains and losses on short term investments. There were a reclassifications, which management does not consider to be material, out of accumulated other comprehensive income (loss) to other (income) expense related to realized gains or losses on short-term investments in the three and nine months ended September 30, 2025, and 2024, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect certain reported amounts and disclosures. These estimates and assumptions are reviewed on an on-going basis and updated as appropriate. Actual results could differ from these estimates. The Company’s significant estimates include deferred tax valuation allowances, valuation of stock-based compensation, warranty obligations and reserves for slow-moving inventory.

Cash, Cash Equivalents and Short-Term Investments

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist principally of deposit accounts and money market accounts at September 30, 2025 and December 31, 2024.

The Company considers all investments with an original maturity of greater than three months but less than one year to be short-term investments. Short-term investments as of December 31, 2024 consist of U.S. Treasury Bills, which are classified as held-to-maturity, totaling approximately $493,000 as of December 31, 2024. The Company determines the appropriate balance sheet classification of its investments at the time of purchases and evaluates the classification at each balance sheet date. All of the Company's U.S. Treasury Bills mature within the subsequent twelve months from the date of purchase.

The Company's cash balances as of September 30, 2025, and December 31, 2024 consist of the following:


	September 30, 2025		December 31, 2024
Cash, cash equivalents, and restricted cash
Cash	$	1,884,867	$	662,999
Money market funds		10,668,691		23,334,374
Restricted Cash		375,000		375,000
	$	12,928,558	$	24,372,373
Short-term investments
US Treasury Bills	$	—	$	492,990
	$	—	$	492,990

Accounts Receivable and Allowance for Credit Losses

The Company reports accounts receivable at invoiced amounts less an allowance for credit losses. The Company evaluates its accounts receivable on a continuous basis and, if necessary, establishes an allowance for credit losses based on a number of factors, including current credit conditions and customer payment history. The Company does not require collateral or accrue interest on accounts receivable and credit terms are generally 30 days. At September 30, 2025 and December 31, 2024, the Company recorded an allowance for credit losses accounts of approximately $102,700 and $43,700, respectively.

Revenue Recognition

The Company accounts for revenue under ASC 606, “Revenue from Contracts with Customers” and all of the related amendments (Topic 606). Revenues under Topic 606 are required to be recognized either at a “point in time” or “over time,” depending on the facts and circumstances of the arrangement and are evaluated using a five-step model. Generally, the Company recognizes revenue at a point in time.

The Company recognizes revenue after applying the following five steps:

Identification of the contract, or contracts, with a customer,

Identification of the performance obligations in the contract, including whether they are distinct within the context of the contract,

Determination of the transaction price, including the constraint on variable consideration,

Allocation of the transaction price to the performance obligations in the contract, and

Recognition of revenue when, or as, performance obligations are satisfied.

Revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

Product Revenue

The Company derives the majority of its revenue from direct billing. The Company also derives revenue from the sale of its products to O&P providers in the United States and internationally and the Veterans Administration (“VA”). Under direct billing, the Company recognizes revenue when all of the following criteria are met:

(i)

The product has been delivered to the patient, including completion of initial instruction on its use,

(ii)

Collection is deemed probable and it has been determined that a significant reversal of the revenue to be recognized is not deemed probable when the uncertainty associated with the variable consideration is resolved. As an example, the Company will record revenue if it is notified that insurance intends to pay and a payment amount is provided, and

(iii)

The amount to be collected is estimable using the “expected value” estimation techniques, or the “most likely amount” as defined in ASC 606.

The transaction price associated with the MyoPro for direct to patient revenue is generally determined by the insurance payer. For patients with Medicare Part B, the transaction price is based on the published fees for our billing codes L8701 and L8702. Medicare pays 80% of the published fees, and less certain deductions. If a patient has insurance that supplements Medicare Part B with a payer for which sufficient payment history exists or is a non-employer-based plan, the Company estimates the transaction price based on receiving the remaining 20% of the Medicare allowable. For patients that do not carry Medicare Part B, the transaction price is based on either a contracted price or an estimated price based on previous collection history with the payer. Finally, if a patient has an insurance plan with a non-contracted payer or one where the Company does not have collection history, the transaction price is determined at the time of payment based on the amount paid. For U.S.and International O&P providers and the VA, the transaction price is an amount agreed in advance between the parties and evidenced by a purchase order or Myomo order form.

For revenue derived from patients under Medicare Part B, the Company recognizes revenue once it has obtained sufficient medical documentation to demonstrate medical necessity and when control of the device has passed to the patient. Patients with Medicare part B represented 74% and 68% of direct billing revenues for the three months ended September 30, 2025 and 2024, respectively and 74% and 58% of direct billing revenues for the nine months ended September 30, 2025 and 2024, respectively. For revenue derived from certain commercial insurance companies where the Company has demonstrated sufficient payment history or has obtained payer contracts, the Company recognizes revenues when it receives a pre-authorization from the insurance company and control passes to the patient upon delivery of the device in the amount that reflects the consideration the Company expects to receive in exchange for the device. These insurers represented 14% and 25% of direct billing channel revenue during the three months ended September 30, 2025, and 2024, respectively. These insurers represented 15% and 30% of direct billing channel revenue in the nine months ended September 30, 2025, and 2024, respectively. In cases where the Company is the direct provider and it does not have sufficient collection history with the payer, the Company recognizes revenue when payment is received, as then all the revenue recognition criteria have been met.

Depending on the timing of product deliveries to customers, which is when cost of revenue must be recorded, and when the Company meets the criteria to record revenue, there may be fluctuations in gross margin. During the three months ended September 30, 2025 and 2024, the Company recognized revenue of approximately $706,800 and $2,440,900, respectively, and during the nine months ended September 30, 2025 and 2024, the Company recognized revenue of approximately $1,246,200 and $2,185,300, respectively, from third-party payers for which costs related to the completion of the Company’s performance obligations were not recorded in the current period.

For revenues derived from O&P providers and the VA, the Company recognizes revenue when control passes to the customer in an amount that reflects the consideration the Company expects to receive in exchange for those services. Revenues may be recognized upon shipment or upon delivery, depending on the terms of the arrangement, provided that persuasive evidence of an arrangement exists, there are no uncertainties regarding customer acceptance and collectability is deemed probable.

The Company has elected to record taxes collected from customers on a net basis and does not include tax amounts in revenue or cost of revenue.

Contract Balances

The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. The Company had approximately $134,800 and $83,100 of deferred revenue as of September 30, 2025 and December 31, 2024, respectively. The outstanding deferred revenue is expected to be recognized by the end of the fourth quarter of 2025.

Disaggregated Revenue from Contracts with Customers

The following table presents revenue by major source:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2025		2024		2025		2024
Direct to patient	$	7,321,531	$	7,431,751	$	22,550,212	$	15,491,584
Clinical/Medical providers		2,769,168		1,775,835	$	7,024,534	$	4,991,158
Total revenue from contracts with customers	$	10,090,699	$	9,207,586	$	29,574,746	$	20,482,742

Geographic Data

The Company generated 82% of its total revenue from the United States and 17% from Germany and less then 1% of its total revenue from other international locations for the three months ended September 30, 2025. The Company generated 88% of its total revenue from the United States, and 12% from Germany for the three months ended September 30, 2024.

During the nine months ended September 30, 2025, the Company generated 84% of its total revenues from the United States, 15% from Germany and 1% from other international locations. During the nine months ended September 30, 2024, the Company generated 85% of its total revenues from the United States, 14% from Germany, and 1% from other international locations.

Cost of Revenue

In conjunction with the adoption of ASC 606, there are certain cases in which the Company will expense costs when incurred as required by ASC 340-40-25. In certain cases, the Company ships the MyoPro device to O&P providers, or provides the device directly to patients, pending reimbursement from third-party payers, after which revenue is recognized. For the three and nine months ended September 30, 2025, the Company recorded cost of goods sold of approximately $97,500 and $132,600, respectively, without corresponding revenue. For the three and nine months ended September 30, 2024, the Company recorded cost of goods sold of $107,200 and $140,800, respectively, without corresponding revenue. Direct billing fees paid to O&P providers for services they provide in conjunction with patient evaluations are expensed as incurred as required by ASC 340-40-25, as a cost of obtaining a contract. These costs are recorded as sales and marketing expense. Internal costs incurred and fees paid to O&P providers to measure, fit and deliver the device to patients are expensed to cost of revenue.

Advertising

The Company charges the costs of advertising to operating expenses as incurred. Advertising expense amounted to approximately $2,138,500 and $1,043,700 for the three months ended September 30, 2025 and 2024, respectively, and approximately $5,978,100 and $2,680,600 during the nine months ended September 30, 2024 and 2023, respectively.

Foreign Currency Translation

The functional currency of the Company’s foreign subsidiary, Myomo Europe GmbH, is the Euro. Foreign exchange translation gains and losses from the Euro to U.S. dollars are included in other comprehensive loss. The Company recorded a gain of approximately $89,300 and a loss of approximately $256,800 during the three months ended September 30, 2025 and 2024, respectively, and a gain of approximately $152,100 and $312,100 during the nine months ended September 30, 2025 and 2024, respectively, which are included in accumulated other comprehensive income in the condensed consolidated balance sheet. Transaction and translation foreign exchange gains and losses from a foreign currency to the functional currency are included in cost of goods sold in the consolidated statements of operations. Such amounts were immaterial for the three and nine months ended September 30, 2025 and 2024, respectively. The balance sheet is translated using the spot rate on the day of reporting and the statement of operations is translated monthly using the average rate for the month.

Net Loss per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus potentially dilutive common shares. Restricted stock, restricted stock units, stock options and warrants are excluded from the diluted net loss per share calculation when their impact is antidilutive. The Company reported a net loss for the three months ended September 30, 2025 and 2024, and as a result, all potentially dilutive common shares are considered antidilutive for these periods.

Potential dilutive common shares issuable consist of the following at:


	September 30,
	2025		2024
Stock options		21,952		23,246
Restricted stock units		1,744,620		1,234,357
Other warrants		—		668,250
Total		1,766,572		1,925,853

Due to their nominal exercise price of $0.0001 per share, a total of 3,763,258 and 7,721,519 outstanding pre-funded warrants as of September 30, 2025 and 2024, respectively are considered common stock equivalents and are included in basic weighted average shares outstanding in the accompanying condensed consolidated statements of operations as of the closing dates of the Company's public equity offerings in January 2023, August 2023, and January 2024, respectively.

Income Taxes

The Company reported a net loss for the three and nine months ended September 30, 2025 and 2024, however records income tax expense. The nature of this income tax expense is the difference between the effective tax rate and statutory rate due to tax provision for a its wholly-owned foreign Myomo Europe, GmbH.

On July 4, 2025, President Donald Trump signed into law the reconciliation tax bill, commonly referred to as the “One Big Beautiful
Bill Act” (OBBBA), which constitutes the enactment date under U.S. GAAP. Key corporate tax provisions of the OBBBA include the
restoration of 100% bonus depreciation, the introduction of the new Section 174A permitting immediate expensing of domestic
research and experimental (R&E) expenditures, modifications to Section 163(j) interest expense limitations, updates to the rules
governing global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII), amendments to energy credit
provisions, and the expansion of Section 162(m) aggregation requirements.

Under U.S. GAAP, the effects of changes in tax laws are recognized in the period in which the new law is enacted. Accordingly, the
impact of the OBBBA is reflected in the Company’s financial statements for the quarter ended September 30, 2025. The OBBBA did
not have a material impact on the Company’s reported results, cash flows, or financial position during the period ended September 30,
2025

Recently Adopted Accounting Standards

In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements, Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative”, that adds 14 of the 27 identified disclosure or presentation requirements to the Codification, each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation from its existing regulations by June 30, 2027. The Company currently complies with these disclosure requirements as applicable under Regulation S-X or Regulation S-K and will adopt these new standards depending on timing of when they become effective, which is not expected to have a material impact on its financial position and results of operations.

In December 2023, the FASB issued ASU 2023-09, “Accounting Standards Update, Income Taxes (Topic 740: Improvements to Income Tax Disclosures”. ASU 2023-09 focuses on income tax disclosures around effective tax rates and cash income taxes paid. This amendment in the ASU will become effective for public companies as of December 15, 2024 and effective to all other companies as of December 15, 2025. The Company will adopt these new standards when they become effective, which is not expected to have a material impact on its financial position and results of operations.

Note 4 — Inventories

Inventories consist of the following at:


	September 30, 2025		December 31, 2024
Finished goods	$	1,191,718	$	1,289,368
Work in process		111,334		60,731
Parts and subassemblies		2,342,262		1,815,866
Inventories, net	$	3,645,314	$	3,165,965

Note 5 — Fair Value of Financial Instruments

The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820, “Fair Value Measurement” (“ASC 820”), which defines fair value, establishes a framework for measuring fair value, and establishes disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

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Level 1 — Quoted prices available in active markets for identical assets or liabilities.

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Level 2 — Observable inputs other than quoted prices included in Level 1, such as quotable prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

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Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar valuation techniques that use significant unobservable inputs.

The carrying amounts of the Company’s financial instruments such as cash and cash equivalents, accounts receivable and accounts payable, approximate fair value due to the short-term nature of these instruments. Cash equivalents consist of money market funds that limit their investments to only short-term U.S. Treasury Securities and repurchase agreements related to these securities. Short-term investments primarily consists of commercial paper and U.S. Treasury Bills and are carried on the condensed consolidated balance sheets at amortized cost which approximates fair value.

Cash equivalents measured at fair value on a recurring basis at September 30, 2025 were as follows:


	In Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Money market funds	$	10,668,691	$	—	$	—	$	10,668,691

Cash equivalents and short-term investments measured at fair value on a recurring basis at December 31, 2024 were as follows:


	In Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Money market funds	$	23,334,374		—		—	$	23,334,374
Short-term investments		—	$	492,990		—	$	492,990

Note 6 — Accounts Payable and Other Accrued Expenses

Accounts Payable and Other Accrued Expenses consists of the following at:


	September 30, 2025		December 31, 2024
Trade payables	$	1,624,684	$	1,169,901
Accrued compensation and benefits		2,244,372		5,009,385
Accrued professional services		73,838		54,257
Accrued insurance		380,712		128,556
Warranty reserve		145,461		129,615
Customer deposits		2,137,465		2,194,804
Other		61,630		335,299
	$	6,668,162	$	9,021,817

Note 7 — Debt

Line of Credit

On July 11, 2024 (the “Effective Date”), the Company, entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank.

The Loan Agreement provides for a revolving line of credit whereby the Company may borrow up to $4,000,000 (the “Revolving Line”), which Revolving Line may be increased to $5,500,000 available until July 10, 2026, at Silicon Valley Bank’s sole discretion upon the occurrence of certain events. Amounts advanced by Silicon Valley Bank are based on 80% of “eligible accounts”, which includes all receivables in the United States, reduced by aged amounts and customers and insurance payers with concentrations in excess of defined limits, among other deductions. The outstanding principal amount of any advance shall accrue interest at a floating rate per annum equal to the greater of (i) 8.50% and (ii) the “prime rate” as published in The Wall Street Journal for the relevant period plus one-half percent (0.50%). The Revolving Line is secured on a first priority basis by all of Company’s assets other than intellectual property and certain customary exceptions. Any newly formed or acquired subsidiary of the Company or any guarantor under the Loan Agreement, will either join the Loan Agreement as a co-borrower or become a guarantor under the Loan Agreement, as determined by Silicon Valley Bank in its sole discretion. The Company is using the Revolving Line for working capital and general business purposes.

The Revolving Line terminates, and any outstanding principal amount of all advances made thereunder, and any accrued and unpaid interest thereon, become immediately due and payable on the two year anniversary of the Effective Date. The Company must also pay Silicon Valley Bank (i) a commitment fee of $20,000, (ii) an “Anniversary Fee” of 0.50% of the Revolving Line and (iii) an “Unused Revolving Line Facility Fee” of 0.50% per annum of the average unused portion of the Revolving Line. In addition, upon termination of the Loan Agreement or the Revolving Line prior to the two year anniversary of the Effective Date, the Company must pay a termination fee of 1.00% of the Revolving Line, subject to certain exceptions.

Term Loan Facility

On February 18, 2025, the Company entered into a First Amendment (the “Amendment”) to the Loan Agreement. The Amendment provides for, among other things, a new term loan facility (the “Term Loan”) to the Company of up to $3,000,000, available to the Company until February 28, 2026. Advances under the Term Loan (collectively, the “Term Loan Advances”) will be payable in 36 equal monthly installments of principal plus interest, commencing on March 1, 2026, and to the extent not paid, all remaining obligations will become due and payable on February 1, 2029. Term Loan Advances shall accrue interest at a floating rate per annum equal to the greater of (a) 5.0% or (b) the “prime rate,” as published from time to time in the money rates section of the Wall Street Journal, minus 1.0%. At the Company’s option, the Company may prepay all outstanding borrowings under the Term Loan, plus accrued and unpaid interest thereon, subject to a prepayment

premium ranging from 1.0% to 3.0%, depending on the year of prepayment. The Term Loan also provides for an end of term charge equal to 2.50% of the aggregate principal amount of any loans prepaid or repaid, as applicable.

The Amendment also makes certain changes to the Company’s revolving line of credit under the Loan Agreement, including (i) increasing the defined limit for concentration of Medicare receivables that may be included as “eligible accounts” under the Loan Agreement, and (ii) increasing the permitted aggregate maximum balance that may be maintained in the Company’s German subsidiary.

Borrowings under both facilities are subject to compliance with various covenants. The Company is in compliance with these covenants as of September 30, 2025.

The Company recorded approximately $199,500 in debt origination costs during the year ended December 31, 2024 in conjunction with entering into the Loan Agreement, which includes the commitment fee and the Anniversary Fee. The Company capitalized the debt origination costs and is amortizing them into interest expense using the interest rate method, which approximates straight-line amortization over the term of the Loan Agreement. As of September 30, 2025, the balance of debt origination costs was approximately $103,400, which is included in other long-term assets on the condensed consolidated balance sheet. The Company amortized approximately $31,000 and $91,000 of debt origination costs to interest expense during the three and nine months ended September 30, 2025, respectively.

As of September 30, 2025 the Company had borrowings of $1,000,000 under the Revolving Line and $3,000,000 under the Term Loan facility.

Note 8 — Common Stock and Warrants

On December 6, 2024, the Company completed a public equity offering, selling 3,450,000 shares of common stock at $5.00 per share, generating net proceeds after fees and expenses of approximately $15.8 million.

On January 19, 2024, the Company completed a registered direct equity offering, selling 1,354,218 shares of common stock and 224,730 pre-funded warrants at $3.80 per share, or at $3.7999 per pre-funded warrant, generating proceeds after fees and expenses of approximately $5.4 million. Each pre-funded warrant is exercisable for one share of the Company’s common stock at a nominal exercise price of $0.0001 per share. All of these pre-funded warrants were exercised during the nine months ended September 30, 2024.

As of September 30, 2025 there were 3,763,258 pre-funded warrants outstanding.

During the three and nine months ended September 30, 2025 600,156 and 3,298,261 pre-funded warrants were exercised, respectively.

During the nine months ended September 30, 2025, 668,250 investor warrants issued in the Company’s public offering in February 2020 expired unexercised.

728 shares of common stock were issued through the exercise of stock options during the nine months ended September 30, 2025. There were no shares of common stock issued upon the exercises of stock options during the nine months ended September 30, 2024. During the three and nine months ended September 30, 2025, 52,821 and 756,001 restricted stock units vested, respectively. During the three and nine months ended September 30, 2024, 42,828 and 980,173 restricted stock units vested, respectively.

Note 9 — Stock Award Plans and Stock-Based Compensation

As of September 30, 2025, there were 575,896 shares available for issuance under the Myomo, Inc. 2018 Stock Option and Incentive Plan (the “2018 Plan”). On January 1 of each year, the number of shares of common stock reserved and available for issuance under the 2018 Plan will cumulatively increase by 4% of the number shares of common stock outstanding on the immediately preceding December 31 or such lesser number of shares of common stock determined by management in consultation with members of the Board of Directors, including the compensation committee of the Board of Directors. On January 1, 2025, 1,375,130 shares were added to the share reserve under the 2018 Plan.

Recipients of awards of restricted stock units typically sell shares in the open market to cover their individual tax liabilities and remit the proceeds to the Company, which offsets withholding taxes paid by the Company. In certain circumstances, stock awards may be net share settled upon vesting to cover the required employee statutory withholding taxes and the remaining amount is converted into shares based upon their share-value on the date the award vests. In such instances, these payments of employee withholding taxes are presented in the statements of cash flows as a financing activity. There were no stock awards that were net share settled during the three and nine months ended September 30, 2025.

Share-Based Compensation Expense

The Company accounts for stock awards to employees and non-employees based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award.

The Company attributes the value of stock-based compensation to operations on the straight-line method such that the expense associated with awards is evenly recognized over the vesting period.

The Company recognized stock-based compensation expense related to the issuance of stock option awards and restricted stock units to employees, non-employees and directors in the statements of operations as follows:


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Cost of goods sold	$	38,623	$	22,805	$	108,347	$	35,601
Research and development		58,951		30,599		181,048		63,562
Selling, clinical and marketing		119,642		41,925		312,791		95,237
General and administrative		366,775		228,856		916,897		358,180
Total	$	583,991	$	324,185	$	1,519,083	$	552,580

As of September 30, 2025, there was approximately $400 of unrecognized compensation cost related to unvested stock options that is expected to be recognized over a weighted-average period of 0.29 years.

As of September 30, 2025, there was approximately $4,554,100 of unrecognized compensation expense related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 2.33 years.

Note 10 — Commitments and Contingencies

Litigation

The Company may be involved from time to time in legal proceedings, claims and assessments arising from the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no material claims, assessments, or litigation against the Company as of September 30, 2025.

Operating Leases

The Company had a lease agreement for its corporate headquarters in Boston, Massachusetts, which expired in January 2025 and has a lease agreement for office space in Fort Worth, TX. which expires in December 2025. In August 2024, the Company entered into a lease agreement for a new corporate headquarters and manufacturing facility in Burlington, Massachusetts. The Company began relocating operations in December 2024 and completed the move in January 2025. The term of the lease is 88 months following the rent commencement date, which was May 11, 2025. The Company has the option to extend the new lease for an additional five years, subject to certain conditions being satisfied. Under the new lease, the Company provided a security deposit to the landlord in the form of a letter of credit for $375,000. The Company has collateralized the letter of credit with cash in a separate bank account, which is accounted for as long-term restricted cash on the condensed consolidated balance sheet. Termination options are either not included, or have expired, for the Company’s other existing operating leases. Certain arrangements have discounted rent periods or escalating rent payment provisions. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets. We recognize rent expense on a straight-line basis over the lease term.

As of September 30, 2025, operating lease assets were approximately $6,870,300. The amount and the maturity of the Company’s operating lease liabilities as of September 30, 2025, are as follows:


	September 30, 2025
2025	$	303,615
2026		1,197,919
2027		1,525,416
2028		1,592,125
Thereafter		6,523,473
Total future minimum lease payments		11,142,548
Less imputed interest		2,845,587
Total operating lease liabilities	$	8,296,961
Included in the condensed consolidated balance sheet:
Current operating lease liabilities	$	464,239
Non-current operating lease liabilities		7,832,722
Total operating lease liabilities	$	8,296,961

For the three and nine months ended September 30, 2025 and 2024, the total lease cost is comprised of the following amounts:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2025		2024		2025		2024
Operating lease expense	$	357,890	$	87,836	$	1,107,510	$	263,506
Short-term lease expense		1,347		1,615		3,606		4,884
Total lease expense	$	359,237	$	89,451	$	1,111,116	$	268,390

The following summarizes additional information related to operating leases:


	September 30, 2025			December 31, 2024
Weighted-average remaining lease term (in years)		6.97			7.80
Weighted-average discount rate		8.6	%		8.6	%

Supplier Finance Program Obligations

The Company finances its directors and officers insurance policy, which requires the Company to make a down payment, followed by equal payments over a defined term. During the year ended December 31, 2023, the Company entered into a policy covering the twelve-month period ending June 2024. Under this financing arrangement, the Company made nine equal monthly payments of approximately $27,000, starting in July 2023. During the six months ended June 30, 2024, the Company completed its payment obligation associated with its 2023-2024 policy and entered into a new policy covering the twelve-month period ending in June 2025. Under this financing arrangement, the Company made a down payment of approximately $39,000 during the three months ended June 30, 2024, and made nine equal monthly payments of approximately $39,000, starting in July 2024. During the three months ended June 30, 2025, the Company entered into a new financing arrangement for its 2025-2026 policy covering the twelve month period ending in June 2026. The Company made a down payment of $68,400 and will make 10 equal monthly payments of approximately $40,300, starting in July 2025.

The Company also finances its property and casualty insurance policies, which required the Company to make a down payment, followed by equal payments over a defined term. During the three months ended September 30, 2025, the Company entered in a new financing arrangement for its 2025-2026 policy covering the twelve months ended July 2025. The Company made a down payment of $55,400 and will make 8 equal payments of approximately $24,300, starting in August 2025.

Changes in the Company's supplier finance obligations were as follows and included in prepaid and accrued expenses on the consolidated balance sheet statement:



For the Nine Months Ended September 30,	2025			2024
Balance January 1	$	181,256		$	142,217
Increase		—			—
Expensed		(98,508	)		(80,109	)
Balance March 31,	$	82,748		$	62,108
Increase		456,000			349,909
Expensed		(85,160	)		(78,593	)
Balance June 30,	$	453,588		$	333,424
Increase		194,488			63,478
Expensed		(177,858	)		(121,512	)
Balance September 30,	$	470,218		$	275,390

No assets are pledged as security under this arrangement.

Note 11 — Segment Reporting and Major Customers

Segment Reporting

ACS 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about products, business segments, and major customers in financial statements. The Company conducts its business in one operating segment, and sells products in one family, which are versions of the MyoPro. While the Company has several sales channels and operates in different geographies, the Chief Executive Officer, who is the Company's chief operating decision-maker, and is responsible for allocating resources and assessing the performance of the Company, manages the Company's business on a consolidated basis, focusing on revenue, gross margin, certain operating expenses, loss from operations, other expenses (income), income tax, and net loss. The Chief Executive Officer reviews the consolidated balance sheet with relation to consolidated Assets. The Chief Executive Officer does not review any additional or more disaggregated level.


	For the Three Months Ended						For The Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Revenue
Revenue	$	10,090,699		$	9,207,586		$	29,574,746		$	20,482,742

Cost of revenue		3,648,451			2,262,031			10,470,696			5,912,632
Gross profit		6,442,248			6,945,555			19,104,050			14,570,110
Gross margin		63.8	%		75.4	%		64.6	%		71.1	%
Operating expenses:
Payroll and benefits expense		6,831,844			5,925,165			21,273,114			14,988,845
Advertising		2,138,514			1,043,725			5,978,142			2,680,584
All other segment operating expenses		2,517,297			2,124,940			8,333,503			5,687,827
Payroll and benefits expense in cost of revenue		(1,527,893	)		(1,190,722	)		(4,852,620	)		(2,825,762	)
		9,959,762			7,903,108			30,732,139			20,531,494
Loss from operations	$	(3,517,514	)	$	(957,553	)	$	(11,628,089	)	$	(5,961,384	)
Other expense (income)		9,743			(76,020	)		(288,797	)		(318,555	)
Income Tax Expense		135,658			84,876			420,654			280,819
Net Loss	$	(3,662,915	)	$	(966,409	)	$	(11,759,946	)	$	(5,923,648	)

Major Customers

For the three and nine months ended September 30, 2025 and 2024, there were no customers which accounted for more than 10% of product revenues. For the three and nine months ended September 30, 2025, patients with Medicare Part B coverage represented 54% and 56% of revenues, respectively. For the three and nine months ended September 30, 2025, approximately 18% and 18% of the Company's revenues, respectively, were derived from patients with Medicare Advantage insurance plans.

For the three and nine months ended September 30, 2024, patients with Medicare Part B coverage represented 55% and 44% of revenues, respectively. For the three and nine months ended September 30, 2024, approximately 24% and 27% of the Company's revenues were derived from patients with Medicare advantage plans, respectively. For the three and nine months ended September 30, 2024, a U.S. insurance payer represented 19% and 22% of product revenues, respectively.

Note 12 —Subsequent Events

Term Loan with Avenue Capital

On November 4, 2025 (the “Closing Date”), the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”), with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the “Agent”) and Avenue Venture Opportunities Fund II, L.P., as a lender (the “Lender”). Also on November 4, 2025, the Company entered into a Supplement to the Loan and Security Agreement (the “Supplement” and together with the Loan and Security Agreement, the “Loan Agreement”) with the Agent and the Lender.

The Loan Agreement provides for committed term loans in an aggregate principal amount of up to $17.5 million with (a) $12.5 million funded on the Closing Date (“Tranche 1”) and (b) up to $5.0 million to be funded at any time at the Company's discretion between November 4, 2026 and May 4, 2027, so long as no default or event of default has occurred and is continuing. Upon the mutual agreement of the Company and the Lender, the Lender may make additional term loans of up to an additional $10.0 million (the “Discretionary Tranche 3” and collectively with Tranche 1 and Tranche 2, the “Loans”), to be funded between January 1, 2027 and December 31, 2027, as the Company and the Lenders may mutually agree. The Loans bear interest at an annual rate equal to the sum of 4.75% and the prime rate as reported in The Wall Street Journal, subject to a prime floor equal to The Wall Street Journal prime rate on Closing Date. The maturity date of the Loans is June 1, 2029 (the “Maturity Date”).

The Company will make interest only payments on the Loans until the 18-month anniversary of the Closing Date, subject to a 6-month extension if the funding of Tranche 2 has occurred. The Loan principal is repayable in equal monthly installments from the end of interest only period to the Maturity Date.

The Company may, at its option at any time, prepay the Loans in their entirety by paying the then outstanding principal balance and all accrued and unpaid interest on the Loans, subject to a prepayment fee equal to(i) 3.0% of the principal amount outstanding if the prepayment occurs on or prior to the first anniversary following the Closing Date, (ii) 2.0% of the principal amount outstanding if the prepayment occurs after the first anniversary following the Closing Date, but on or prior to the second anniversary following the Closing Date, and (iii) 1.0% of the principal amount outstanding if the prepayment occurs after the second anniversary following the Closing Date. A final payment fee of 3.25% of the principal amount of the Loans (subject to certain reductions), is also due upon the Maturity Date or earlier date of prepayment of the Loans. The Loan is secured by a lien upon and security interest in all of the Company’s assets, including intellectual property, in which the Agent is granted senior secured lien.

Pursuant to the Loan Agreement, the Company is subject to certain financial covenants requiring the Company to (i) maintain at all times $2.5 million in unrestricted cash, (ii) achieve at least 75% of its trailing three-month projected revenue and (iii) achieve cash burn for the trailing six months of no more than the greater of 150% of its projected cash burn or $2.0 million. The Loan Agreement contains customary representations, warranties and covenants and provides for events of default customary for term loans of this type.

Pursuant to the Loan Agreement, the Lender also has the right to convert up to $3.0 million of the outstanding principal of Tranche 1 and up to $1.0 million of the outstanding principal of Tranche 2 into shares of Company common stock (the “Conversion Securities”) at a price per share equal to 120% of the exercise price of the Warrant (further discussed below) at any time while the Loans are outstanding, subject to certain terms and conditions, including ownership limitations.

In addition, subject to applicable law, the Lender may participate in certain equity financing transactions of the Company in an aggregate amount of up to $1.0 million on the same terms, conditions and pricing offered by the Company to other investors participating in such financing transaction (such right, the “Participation Right”). The Participation Right terminates upon the earlier of the Maturity Date and the repayment in full of all of the obligations under the Loan Agreement.

Warrant

On the Closing Date and pursuant to the funding of Tranche 1 under the Loan Agreement, the Company issued to the Lender a warrant to purchase up to $1,312,500 worth of shares of the Company’s common stock (the “Warrant”). The Warrant expires on November 4, 2030 (the “Expiration Date”) and has an exercise price per share equal to the lesser of (i) $0.96 and (ii) the price per share of the Company’s next bona fide round of equity financing before June 30, 2026 for the purposes of raising capital. In addition, upon a change of control, the Lender is entitled to receive the shares of common stock underlying the Warrant without payment of the exercise price.

The Lender may exercise the Warrant at any time, or from time to time up to and including the Expiration Date, by making a cash payment equal to the exercise price multiplied by the quantity of shares. The Lender may also exercise the Warrant on a cashless basis by receiving a net number of shares calculated pursuant to the formula set forth in the Warrant. The Warrant is subject to anti-dilution adjustments for stock dividends, stock splits, and reverse stock splits.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes contained elsewhere in this Quarterly Report on Form 10-Q and in our other Securities and Exchange Commission filings. The following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors”, “Cautionary Statement Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q and those described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2024. These risks could cause our actual results to differ materially from any future performance suggested below.

Overview

We are a wearable medical robotics company, specializing in myoelectric braces, or orthotics, for people with neuromuscular disorders. We develop and market the MyoPro product line, which is a myoelectric-controlled upper limb brace, or orthosis. The orthosis is a rigid brace used for the purpose of supporting a patient’s weak or deformed arm to enable and improve functional activities of daily living (“ADLs”), in the home and community. It is custom constructed by a trained professional during a custom fabrication process for each individual user to meet their specific needs. Our products are designed to help regain function in individuals with neuromuscular conditions due to brachial plexus injury, stroke, traumatic brain injury, spinal cord injury and other neurological disorders.

We utilize digital ads on various platforms as well as television ads to reach patients who are potential candidates for our product. Once the prospective patient contacts us or is referred to us under our MyoConnect program, either our trained clinical staff or a trained Orthotics and Prosthetics (“O&P”) provider will evaluate the patient for their suitability as a candidate. Initial evaluations by our trained clinical staff are often conducted using telehealth techniques, followed by an in-person clinical evaluation of the candidate. Prior to obtaining authorizations from commercial insurance companies, the patient’s medical records are collected and reviewed to make sure the device is appropriate for their condition and a prescription is always obtained from a physician. Once these documents are obtained, a pre-authorization request is submitted to the patient’s insurer. If we receive a pre-authorization, we proceed to measure the patient’s arm. If the patient is covered by Medicare Part B, no pre-authorization is required and we can move directly to taking measurements of the patient's arm. This is done either in person, or in some cases using a digital measurement kit supplied to the patient. We then use those measurements to 3D print orthotic parts, which are used to fabricate the MyoPro, and then deliver it to the patient. Since we are directly providing the device to the patient and then billing insurance ourselves, we refer to this process as direct billing. We also call on O&P practices in the United States, Europe and Australia that provide our products to their patients as well as generate indirect sales. The MyoPro product line has been approved by the Veterans Administration (“VA”) for impaired veterans, and over 130 VA facilities have ordered devices for their patients.

Our myoelectric orthoses have been clinically shown in peer reviewed published research studies to help regain the ability to complete functional tasks by supporting the affected joint and enabling individuals to self-initiate and control movement of their partially paralyzed limbs by using their own muscle signals. Our technology was originally developed at MIT in collaboration with medical experts affiliated with Harvard Medical School. Myomo was incorporated in 2004.

Other historical milestones include:

•

In 2012, we introduced the MyoPro. The primary business focus shifted from developing devices that were designed for rehabilitation therapy and sold to hospitals to providing an assistive device through O&P providers to patients who are otherwise impaired for use at home, work, and in the community that facilitates ADLs.

•

During 2015, we extended our basic MyoPro for the elbow with the introduction of the MyoPro Motion W, a multi-articulated non-powered wrist and the MyoPro Motion G, which includes a powered grasp. The MyoPro Motion W allows the user to use their sound arm to adjust the device and then, for instance, open a refrigerator door, carry a shopping bag, hold a cell phone, or stabilize themselves to avoid a fall and potential injury. The MyoPro Motion G model allows users with severely weakened or clenched hands, such as seen in certain stroke survivors, to open and close their hands and perform a large number of ADLs.

•

On June 9, 2017, we completed our initial public offering (“IPO”) and a private offering concurrent with the IPO, generating net proceeds of $6.9 million in the aggregate.

•

On July 31, 2017, we met the criteria to apply the CE Mark for the MyoPro. This has enabled us to sell the MyoPro to individuals in the European Union (the “EU”).

•

In November 2018, we announced that the Centers for Medicare and Medicaid Services (“CMS”) had published two new codes (L8701, L8702) pursuant to our application for Healthcare Common Procedure Coding System (“HCPCS”) codes which become effective in early 2019. The assignment of unique L-Codes, if followed by appropriate payment terms, offers greater access to the MyoPro for Medicare beneficiaries.

•

In 2019, we transitioned our business to become a direct provider of the MyoPro to patients and bill insurance companies directly.

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In July 2021, we became accredited as a Medicare provider.

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In January 2022, we introduced MyoPro 2+ and began in-house fabrication of the device.

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On November 1, 2023, CMS issued a final rule that resulted in a change in the benefit category associated with the products billed under the HCPCS codes for our products from durable medical equipment rental to a brace, which would permit reimbursement of MyoPro sales on a lump sum basis. The rule became effective on January 1, 2024.

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On February 29. 2024, CMS published final payment determinations for the HCPCS codes describing our products which are L8701, for the MyoPro Motion W, and L8702, for the MyoPro Motion G, which became effective on April 1, 2024. These fees were subsequently updated to approximately $34,300 for the Motion W and approximately $67,500 for the Motion G, effective January 1, 2025. These fees are subject to annual inflationary adjustments.

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On April 30, 2025, we introduced an enhanced version of our flagship product, now known as the MyoPro 2x in the United States.

Equity Offerings

On December 6, 2024, we completed a public offering, selling 3,450,000 shares of common stock at $5.00 per share, generating net proceeds after fees and expenses of approximately $15.8 million. Net proceeds from the offering are expected to be used to grow revenues in our direct billing channel through additional advertising spending and the addition of clinical, reimbursement and manufacturing headcount to support expected increasing demand, to increase R&D spending in order to accelerate the completion of sustaining and new product development activities, to fund systems and headcount to support growth in the O&P channel, to fund associated working capital requirements and general corporate purposes. On January 19, 2024 we completed a registered direct equity offering, selling 1,354,218 shares of common stock and 224,730 pre-funded warrants at $3.80 per share, or $3.7999 per pre-funded warrant, generating net proceeds after fees and expenses of approximately $5.4 million. Each pre-funded warrant in the above offering entitles the holder to one share of common stock upon exercise at a nominal exercise price of $0.0001 per share. See section titled “Liquidity” for further discussion.

Results of Operations

We have been growing revenues while incurring net losses and negative cash flows from operations since inception and anticipate this to continue for all of 2025. Our plan for the remainder of 2025 is to invest in increasing demand through paid advertising, the U.S. O&P channel and referral sources, while minimizing expenditures in order to reduce the cash burn.

The following table sets forth our revenue, cost of revenue, gross profit and gross margin for each of the periods presented.


	For the Three Months Ended September 30,		Period- to-Period Change		For the Nine Months Ended September 30,		Period- to-Period Change
	2025	2024	$	%	2025	2024	$	%
Revenue	$10,090,699	$9,207,586	$883,113	10%	$29,574,746	$20,482,742	$9,092,004	44%
Cost of revenue	3,648,451	2,262,031	1,386,420	61%	10,470,696	5,912,632	4,558,064	77%
Gross profit	$6,442,248	$6,945,555	$(503,307)	(7)%	$19,104,050	$14,570,110	$4,533,940	31%
Gross margin %	63.8%	75.4%		-11.6%	64.6%	71.1%		-6.5%

Revenues

We derive revenue primarily from providing devices directly to patients and billing insurance companies or Medicare directly. We also sell our products to O&P providers in the United States, Europe and Australia, to the VA, and to rehabilitation hospitals. Though we increasingly provide devices directly to patients, we sometimes utilize the clinical services of O&P providers for which they are paid a fee.

Revenue increased by approximately $0.9 million and $9.1 million, or 10% and 44%, for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. Revenue increased due to a higher number of revenue units, driven by deliveries to Medicare Part B patients and O&P practices in the U.S. and Germany, and for the year-to-date period, a higher average selling price. Revenues generated through the direct billing channel were approximately $7.4 million and $22.6 million, or 73% and 76% of revenues in the three and nine months ended September 30, 2025, respectively, compared to approximately $7.4 million and $15.5 million or 81% and 76%, of revenues in the three and nine months ended September 30, 2024, respectively.

Cost of Revenue and Gross Margin

Cost of revenue consists of direct costs for the manufacturing, printing of orthotic parts, fabrication and fitting of our products, changes in inventory and warranty reserves, and costs for our quality and fulfillment organizations.

Gross margin was 63.8% and 64.6% for the three and nine months ended September 30, 2025 respectively, compared to 75.4% and 71.1% for the three and nine months ended September 30, 2024, respectively. The decreases in gross margin during the three and nine months ended September 30, 2025 were due primarily due to higher material costs, increased manufacturing overhead spending, including payroll and lease costs for our new headquarters and manufacturing facility, unfavorable changes in the amount of capitalized overhead to inventory in the periods and higher average selling price in the prior year due to timing of supplemental insurance payments.

Operating expenses

The following table sets forth our operating expenses for each of the periods presented.


	For the Three Months Ended September 30,		Period-to-Period Change		For the Nine Months Ended September 30,		Period-to-Period Change
	2025	2024	$	%	2025	2024	$	%
Research and development	$1,527,660	$1,248,870	$278,790	22%	$5,319,015	$3,212,309	$2,106,706	66%
Selling, clinical and marketing	5,254,246	3,401,182	1,853,064	54%	14,883,936	8,540,161	6,343,775	74%
General and administrative	3,177,856	3,253,056	(75,200)	(2)%	10,529,188	8,779,024	1,750,164	20%
Total operating expenses	$9,959,762	$7,903,108	$2,056,654	26%	$30,732,139	$20,531,494	$10,200,645	50%

Research and development

Research and development (“R&D”) expenses consist of costs for our R&D personnel, including salaries, benefits, bonuses and stock-based compensation, product development costs, clinical studies, and the cost of certain third-party contractors and travel expense. R&D costs are expensed as they are incurred. We intend to invest in enhancing our existing products in 2025 and expect R&D costs to increase on an annual basis, but at a lower rate of growth in the second half of the year as we focus on limiting the growth in operating expenses in general, while funding a randomized control trial to add to the existing body of research demonstrating the efficacy of the MyoPro for patients suffering from upper extremity impairment.

R&D expenses increased by approximately $0.3 million and $2.1 million, or 22% and 66%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases were primarily due to higher costs for payroll and outside engineering services as we are investing in order to accelerate our sustaining engineering and product development efforts.

Selling, clinical and marketing

Selling, clinical, and marketing (“SC&M”) expenses consist of costs for our field clinical staff, clinical training organization, and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and other variable compensation, costs of advertising, marketing and promotional events, corporate communications, product marketing and travel expenses. Variable compensation for personnel engaged in sales and marketing activities is generally earned and recorded as expense in the period in which the measurable work is performed. We expect SC&M expenses to increase in 2025 as we increase our advertising spending and clinical capacity to grow our revenues.

SC&M expenses increased by approximately $1.9 million and $6.3 million or 54% and 74%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The increases were primarily due to higher payroll costs due to increased headcount in our clinical functions to support higher expected sales volume in 2025 and increases in advertising expense in an effort to overcome challenges in lead generation and lead quality during the first half of 2025 and to support future revenue growth. Going forward, we intend to implement alternative sources for lead generation, such as referrals under our MyoConnect program.

General and administrative

General and administrative (“G&A”) expenses consist primarily of costs for administrative, reimbursement, and finance personnel, including salaries, benefits, bonuses and stock-based compensation, professional fees associated with legal matters, consulting expenses, costs for pursuing insurance reimbursements for our products and costs required to comply with the regulatory requirements of the SEC, as well as costs associated with accounting systems, insurance premiums and other corporate expenses. We expect that G&A expenses will increase in 2025 as a result of increasing our reimbursement capacity in order to grow revenue in the direct billing channel, however the rate of growth in G&A expenses is expected to be lower in the second half of the year as we focus on limiting the growth of operating expenses in general.

G&A decreased by approximately $0.1 and increased by approximately $1.8 million, representing a decrease of 2% and an increase of 20%, during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The decrease in the three

months ended September 30, 2025 was due primarily to a reduction in the incentive compensation accrual, and the increase in the nine months ended September 30, 2025 was primarily due to increased payroll costs for additional headcount, as well as higher expense related to stock-based compensation.

Other (income), net

The following table sets forth our other income, net for each of the periods presented:


	For the Three Months Ended September 30,					Period-to-Period Change					For the Nine Months Ended September 30,						Period-to-Period Change
	2025		2024			$		%			2025			2024			$		%
Interest expense (income), net	$	9,743	$	(76,020	)	$	85,763		(113	)%	$	(288,797	)	$	(318,555	)	$	29,758		(9	)%
Total other expense (income), net	$	9,743	$	(76,020	)	$	85,763		(113	)%	$	(288,797	)	$	(318,554	)	$	29,758		(9	)%

Other expense (income), net was an expense of approximately $10,000 and income of approximately $288,800 for the three and nine months ended September 30, 2025 respectively, compared to other income of approximately $76,000 and $318,600 for the same periods in 2024, respectively. The decreases in other (expense) income, net during the three and nine months ended September 30, 2025 were due to interest expense on our revolving credit line and term loan, offset by higher interest income, related to a higher average investment balances compared to the prior year period.

Income tax expense

Income tax expense recorded during the three and nine months ended September 30, 2025 and 2024 represents the provision for income taxes for our wholly-owned subsidiary, Myomo Europe GmbH. Income tax expense increased in the three and nine months ended September 30, 2025 as a result of higher taxable income compared to the same periods in 2024.

Adjusted EBITDA

We believe that the presentation of Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional information about our financial results. Adjusted EBITDA is an important supplemental measure used by our board of directors and management to evaluate our operating performance from period-to-period on a consistent basis and as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations.

We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization adjusted for, stock-based compensation and other unusual items.

Adjusted EBITDA is not in accordance with, or an alternative to, measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. As a non-GAAP measure, Adjusted EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. In particular:

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Adjusted EBITDA does not reflect the amounts we paid in taxes or other components of our tax provision;

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Adjusted EBITDA does not include interest income;

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Adjusted EBITDA does not include depreciation expense from fixed assets;

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Adjusted EBITDA does not include the impact of stock-based compensation;

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures including net income (loss) and our financial results presented in accordance with U.S. GAAP.

The following table provides a reconciliation of net loss to Adjusted EBITDA for each of the periods indicated:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2025			2024			2025			2024
GAAP net loss	$	(3,662,915	)	$	(966,409	)	$	(11,759,946	)	$	(5,923,648	)
Adjustments to reconcile to Adjusted EBITDA:
Interest income		9,743			(76,020	)		(288,797	)		(318,555	)
Depreciation expense		246,850			48,682			596,091			114,346
Stock-based compensation		583,991			324,185			1,519,083			552,580
Income tax expense		135,658			84,876			420,654			280,819
Adjusted EBITDA	$	(2,686,673	)	$	(584,686	)	$	(9,512,915	)	$	(5,294,458	)

Liquidity and Capital Resources

Liquidity

We measure our liquidity in a number of ways, including the following:


	September 30, 2025		December 31, 2024
Cash and cash equivalents	$	12,553,558	$	24,372,373
Short-term investments		-		492,990
Total		12,553,558		24,865,363
Working capital	$	13,746,529	$	22,618,158

As of September 30, 2025, we had working capital of approximately $13.7 million and stockholders’ equity of approximately $14.6 million. We used approximately $13.4 million in cash for operating activities during the nine months ended September 30, 2025. Considering our current cash, and cash equivalents, and our operating plans discussed below, we believe there is sufficient cash, cash equivalents, and short-term investments to fund our operations and capital expenditures for the next 12 months from the date of this report.

We have historically funded our operations through financing activities, including raising equity and debt capital. In December 2024, we completed a public equity offering, pursuant to which we sold 3,450,000 shares of common stock at $5.00 per share, generating net proceeds after fees and expenses of approximately $15.8 million. In January 2024, we completed a registered direct equity offering, pursuant to which we sold 1,354,218 shares of common stock and 224,730 pre-funded warrants at $3.80 per share, or $3.7999 per pre-funded warrant, generating net proceeds after fees and expenses of approximately $5.4 million. In July 2024, we entered into a Loan and Security Agreement with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, which provides us the ability to borrow up to $4.0 million against eligible accounts receivable. We amended the Loan and Security Agreement in February 2025 to provide for, among other changes, a $3.0 million term loan facility, which is available to be drawn at any time until February 28, 2026. As of September 30, 2025, we had outstanding borrowings under the revolving credit line and term loan facilities of $1.0 million and $3.0 million, respectively. Our ability to borrow under these facilities is subject to various covenants. We are in compliance with these covenants as of September 30, 2025.

On November 4, 2025 (the “Closing Date”), we entered into a Loan and Security Agreement (the “Loan and Security Agreement”), with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the “Agent”) and Avenue Venture Opportunities Fund II, L.P., as a lender (the “Lender”). Also on November 4, 2025, we entered into a Supplement to the Loan and Security Agreement (the “Supplement” and together with the Loan and Security Agreement, the “Loan Agreement”) with the Agent and the Lender.

The Loan Agreement provides for committed term loans in an aggregate principal amount of up to $17.5 million with (a) $12.5 million funded on the Closing Date (“Tranche 1”) and (b) up to $5.0 million to be funded at any time at our discretion between November 4, 2026 and May 4, 2027, so long as no default or event of default has occurred and is continuing. Upon the mutual agreement of us and the Lender, the Lender may make additional term loans of up to an additional $10.0 million (the “Discretionary Tranche 3” and collectively with Tranche 1 and Tranche 2, the “Loans”), to be funded between January 1, 2027 and December 31, 2027, as we and the Lenders may mutually agree. The Loans bear interest at an annual rate equal to the sum of 4.75% and the prime rate as reported in The Wall Street Journal, subject to a prime floor equal to The Wall Street Journal prime rate on Closing Date. The maturity date of the Loans is June 1, 2029 (the “Maturity Date”).

We will make interest only payments on the Loans until the 18-month anniversary of the Closing Date, subject to a 6-month extension if the funding of Tranche 2 has occurred. The Loan principal is repayable in equal monthly installments from the end of interest only period to the Maturity Date.

We may, at our option at any time, prepay the Loans in their entirety by paying the then outstanding principal balance and all accrued and unpaid interest on the Loans, subject to a prepayment fee equal to(i) 3.0% of the principal amount outstanding if the prepayment occurs on or prior to the first anniversary following the Closing Date, (ii) 2.0% of the principal amount outstanding if the prepayment occurs after the first anniversary following the Closing Date, but on or prior to the second anniversary following the Closing Date, and (iii) 1.0% of the principal amount outstanding if the prepayment occurs after the second anniversary following the Closing Date. A final payment fee of 3.25% of the principal amount of the Loans (subject to certain reductions), is also due upon the Maturity Date or earlier date of prepayment of the Loans. The Loan is secured by a lien upon and security interest in all of our assets, including intellectual property, in which the Agent is granted senior secured lien.

Pursuant to the Loan Agreement, we are subject to certain financial covenants requiring us to (i) maintain at all times $2.5 million in unrestricted cash, (ii) achieve at least 75% of its trailing three-month projected revenue and (iii) achieve cash burn for the trailing six months of no more than the greater of 150% of its projected cash burn or $2.0 million. The Loan Agreement contains customary representations, warranties and covenants and provides for events of default customary for term loans of this type.

Pursuant to the Loan Agreement, the Lender also has the right to convert up to $3.0 million of the outstanding principal of Tranche 1 and up to $1.0 million of the outstanding principal of Tranche 2 into shares of our common stock (the “Conversion Securities”) at a price per share equal to 120% of the exercise price of the Warrant (further discussed below) at any time while the Loans are outstanding, subject to certain terms and conditions, including ownership limitations.

In addition, subject to applicable law, the Lender may participate in certain of our equity financing transactions in an aggregate amount of up to $1.0 million on the same terms, conditions and pricing offered by the Company to other investors participating in such financing transaction (such right, the “Participation Right”). The Participation Right terminates upon the earlier of the Maturity Date and the repayment in full of all of the obligations under the Loan Agreement.

On the Closing Date and pursuant to the funding of Tranche 1 under the Loan Agreement, we issued to the Lender a warrant to purchase up to $1,312,500 worth of shares of our common stock (the “Warrant”). The Warrant expires on November 4, 2030 (the “Expiration Date”) and has an exercise price per share equal to the lesser of (i) $0.96 and (ii) the price per share of our next bona fide round of equity financing before June 30, 2026 for the purposes of raising capital. In addition, upon a change of control, the Lender is entitled to receive the shares of common stock underlying the Warrant without payment of the exercise price.

Our business is dependent upon reimbursement of our products by insurance companies and government-controlled health care plans such as Medicare and Medicaid in the United States and by statutory health insurance plans in Germany, which could prevent our revenues from growing to the level necessary to return to cash flow breakeven and remain that way on a sustaining basis. We believe that we have access to capital resources, if necessary, through potential public or private equity offerings, debt financings, or other means. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms. We may also explore strategic alternatives for the purpose of maximizing stockholder value. There can be no assurance we will be successful in implementing our plans to sustain our operations and continue to conduct our business.

MYOMO, INC. 10-Q