Full Press Release Details
Inc. Reports Second Quarter 2017 Results
Mass., August 14, 2017 - Myomo, Inc. (NYSE American: MYO) ("Myomo" or the "Company"), a commercial
stage medical robotics company, today reports its financial results for the three and six months ended June 30, 2017.
and Achievements in the Second Quarter 2017 and Year To-date:
Company completed its initial public offering under SEC Regulation A+ on June 9, 2017 for total gross proceeds of
approximately $8 million, including $5 million through the sale of shares and nearly $3 million in a concurrent private
placement of units which include one share of common stock and one warrant. With growth capital raised during the
quarter, 2Q and YTD 2017 results reflect business operations under a controlled product launch. Total revenue
for the second quarter of 2017 grew 21% year over year to $307,000, compared to $254,000 for the second quarter of 2016. In
addition to raising capital, Myomo accelerated its commercial activities:
R. Gudonis, Chairman & CEO of Myomo, commented: "We are very pleased to have successfully completed our IPO on June
9th, the first JOBS Act / Regulation A+ offering to trade on a national exchange, NYSE American, formerly NYSE MKT.
With the IPO funding, we expanded our sales and marketing initiatives to bring our proprietary technology to a large, underserved
market. MyoPro is the only commercially available upper limb product line to restore or to improve functionality for patients
with stroke, brachial plexus injury, traumatic brain injury, spinal cord injury, MS, and ALS. In the U.S., MyoPro is currently
available to veterans at Veterans Administration hospitals across the country and in over 30 O&P practice locations. After
recently achieving the CE Mark, we now look forward to launching outside the U.S. The initial introduction of MyoPro is planned
for Germany through our distributor partner, Ottobock, a well-established German-based technical O&P global leader."
Results for the Second Quarter Ended June 30, 2017
| Three months ended | Period-to-period | Six months ended | Period-to-period | |||||||||||||||||||||||||||||
| June 30, | change | June 30, | change | |||||||||||||||||||||||||||||
| 2017 | 2016 | $ | % | 2017 | 2016 | $ | % | |||||||||||||||||||||||||
| Revenue | $ | 306,683 | $ | 254,070 | $ | 52,613 | 21 | % | $ | 522,914 | $ | 470,990 | $ | 51,924 | 11 | % | ||||||||||||||||
| Cost of revenue | 98,641 | 50,186 | 48,455 | 97 | % | 177,210 | 109,252 | 67,958 | 62 | % | ||||||||||||||||||||||
| Gross margin | $ | 208,042 | $ | 203,884 | $ | 4,158 | 2 | % | $ | 345,704 | $ | 361,738 | $ | (16,034 | ) | (4 | )% | |||||||||||||||
| Gross margin% | 68 | % | 80 | % | (12 | )% | 66 | % | 77 | % | (11 | )% |
revenue was $307,000 for the quarter ended June 30, 2017; an increase of $53,000, or 21%, as compared to the three months ended
June 30, 2016. The increase was primarily due to $64,000 of grant revenue for new product development recognized during the three
months ended June 30, 2017, which was partially offset by a $12,000 decrease in product revenue due to a higher proportion of
distributor sales which have lower average selling prices.
margin was 68% for the quarter ended June 30, 2017, as compared to 80% for the three months ended June 30, 2016. The decrease
was due to distributor sales having lower average selling price than direct sales to customers and inventory and warranty provisions
recorded as a result of our introduction of the next version of our MyoPro products.
and development expenses were $709,000, an increase of $450,000, or 174%, during the three months ended June 30, 2017, as compared
to the three months ended June 31, 2016, primarily due to an incentive bonus of $300,000 to an engineering executive, increased
expenses relating to the development of the next version of our MyoPro products, and higher engineering, testing, tooling, set-up
and prototype costs.
general and administrative costs of $1,433,000 increased $799,000, or 126%, during the three months ended June 30, 2017, as compared
to the three months ended June 30, 2016, primarily due to employee compensation, which primarily includes stock-based compensation
expense, professional fees, travel expenses and an increase in clinical research to support reimbursement efforts for our products.
and other expense, net of $5,448,000 increased $5,377,000 during the three months ended June 30, 2017, as compared to the three
months ended June 30, 2016. The increase was primarily due to the non-recurring non-cash
write off of $5,172,000 of unamortized debt discount associated with the conversion of the 2015 and 2016 convertible
promissory notes into common stock and warrants.
Company's net loss for the quarter ended June 30, 2017 amounted to $7,382,000, compared with a net loss of $760,000 for
the corresponding 2016 period. Net loss available to common stockholders for the quarter ended June 30, 2017 was $7,755,000 or
($3.35) per share, compared with a net loss of $950,745, or ($0.94) per share, for the corresponding year ago period. The
increase was primarily due to the non-recurring non-cash write off of $5,172,000 of unamortized
debt discount associated with the conversion of the 2015 and 2016 convertible promissory notes into common stock and warrants.
EBITDA(1) for the quarter ended June 30, 2017 was a loss of $1,656,000, compared with a loss of $670,000 for the corresponding
2016 period. A reconciliation of GAAP to this non-GAAP financial measure has been provided in the financial statement tables included
in this press release. An explanation of this measure is also included below under the heading "Non-GAAP Financial Measures."
on hand at June 30, 2017 was $7,110,000, compared to $797,000 at December 31, 2016. For the six months ended June 30, 2017, the
Company used $2,747,000 of cash in operations, compared to $984,000 for the six months ended June 30, 2016. The increase in cash
reflects the net proceeds from our IPO, and concurrent private placement, in addition to $1,770,000 of additional convertible
notes issued since year-end, partially offset by the $2.7 million of net cash used in operating activities.
Call and Webcast Information
will hold a conference call today, August 14, 2017 at 4:30 p.m. EDT. To access the conference call, please dial 1-866-807-9684
from the U.S. or 1-412-317-5415 internationally. Please instruct to be joined into Myomo's earnings conference call.
replay of the conference call will be available approximately one hour after completion of the live conference call at the Investor
Relations page. A dial-in replay of the call will be available until August 28, 2017; please dial 1-877-344-7529 from the
U.S. or 1-412-317-0088 internationally and provide the passcode of 10111308.
Inc. is a commercial stage medical robotics Company that offers expanded mobility for those suffering from neurological disorders
and upper limb paralysis. Based on patented technology developed at MIT and the Company, Myomo develops and markets the MyoPro
product line of lightweight, non-invasive, powered arm braces to restore function in the paralyzed or weakened arms and hands
of individuals that have suffered a stroke, spinal cord or nerve injury such as brachial plexus injury, or other neuromuscular
disability such as amyotrophic lateral sclerosis (ALS) or multiple sclerosis (MS). It is provided through clinical relationships
with VA medical centers, leading rehabilitation hospitals, and Orthotics and Prosthetics ("O&P") practices. Several
hundred have been successfully used by patients. It is the only device that, sensing a patient's own neurological signals
through non-invasive sensors on the arm, can restore their ability to use their arms and hands so that they can return to work,
live independently and reduce their cost of care. Myomo is headquartered in Cambridge, Massachusetts, with sales and clinical
professionals across the U.S. For more information, please visit www.myomo.com.
press release contains forward-looking statements regarding the Company's future business expectations, which are subject to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions
and may differ materially from actual results due to a variety of factors. These factors include, among other things:
information about factors that potentially could affect our financial results is included in Myomo's filings with the Securities
and Exchange Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which
speak only as of the date made. Although the forward-looking statements in this release of financial information are based on
our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee
future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the
expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and
adverse. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances
after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
has provided in this release of financial information that has not been prepared in accordance with generally accepted accounting
principles in the United States, or GAAP. This information includes Adjusted EBITDA. This non-GAAP financial measure is not in
accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies.
Myomo believes that the use of this non-GAAP financial measures provides supplementary information for investors to use in evaluating
operating performance and in comparing its financial measures with other companies in Myomo's industry, many of which present
similar non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for the impact of the write off of unamortized debt discount
associated with conversion of convertible notes into common stock and warrants, stock based-compensation and the impact of the
fair value revaluation of our derivative liabilities. Non-GAAP financial measures that Myomo uses may differ from measures that
other companies may use. This non-GAAP financial measure disclosed by Myomo is not meant to be considered superior to or a substitute
for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with, GAAP financial measures.
Investors are encouraged to review the reconciliation of this non-GAAP measure to its most directly comparable GAAP financial
measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this
STATEMENTS OF OPERATIONS
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue | $ | 306,683 | $ | 254,070 | $ | 522,914 | $ | 470,990 | ||||||||
| Cost of revenue | 98,641 | 50,186 | 177,210 | 109,252 | ||||||||||||
| Gross margin | 208,042 | 203,884 | 345,704 | 361,738 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 708,622 | 258,282 | 1,065,507 | 471,366 | ||||||||||||
| Selling, general and administrative | 1,432,862 | 634,180 | 2,577,328 | 1,137,067 | ||||||||||||
| 2,141,484 | 892,462 | 3,642,835 | 1,608,433 | |||||||||||||
| Loss from operations | (1,933,442 | ) | (688,578 | ) | (3,297,131 | ) | (1,246,695 | ) | ||||||||
| Other expense (income) | ||||||||||||||||
| Change in fair value of derivative liabilities | 130,162 | - | 155,008 | - | ||||||||||||
| Debt discount on convertible notes | 5,172,000 | - | 5,172,000 | - | ||||||||||||
| Interest and other expense, net | 146,250 | 71,311 | 314,115 | 140,765 | ||||||||||||
| 5,448,412 | 71,311 | 5,641,123 | 140,765 | |||||||||||||
| Net loss | (7,381,854 | ) | (759,889 | ) | (8,938,254 | ) | (1,387,460 | ) | ||||||||
| Deemed discount - accreted preferred stock discount | (246,827 | ) | (27,182 | ) | (274,011 | ) | (54,367 | ) | ||||||||
| Cumulative dividend to Series B-1 preferred stockholders | (125,903 | ) | (163,674 | ) | (287,779 | ) | (327,348 | ) | ||||||||
| Net loss available to common stockholders | $ | (7,754,584 | ) | $ | (950,745 | ) | $ | (9,500,044 | ) | $ | (1,769,175 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 2,312,649 | 1,016,644 | 1,722,168 | 1,007,642 | ||||||||||||
| Net loss per share available to common stockholders: | ||||||||||||||||
| Basic and diluted | $ | (3.35 | ) | $ | (0.94 | ) | $ | (5.52 | ) | $ | (1.76 | ) |
| June 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| ASSETS | (unaudited) | (revised) | ||||||
| Current Assets: | ||||||||
| Cash | $ | 7,110,241 | $ | 797,174 | ||||
| Accounts receivable | 254,031 | 114,506 | ||||||
| Inventories | 123,028 | 82,435 | ||||||
| Prepaid expenses and other | 273,970 | 152,337 | ||||||
| Total Current Assets | 7,761,270 | 1,146,452 | ||||||
| Restricted cash | 52,000 | 52,000 | ||||||
| Deferred offering costs | - | 438,237 | ||||||
| Equipment (net) | 22,004 | 21,563 | ||||||
| Total Assets | $ | 7,835,274 | $ | 1,658,252 | ||||
| LIABILITIES, REDEEMABLE AND CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||||||||
| Current liabilities: | ||||||||
| Notes payable, shareholder, current | $ | - | $ | 876,458 | ||||
| Notes payable, MLSC, current | 586,742 | 1,193,984 | ||||||
| Accounts payable and other accrued expenses | 1,308,349 | 714,010 | ||||||
| Accrued interest, current | 5,247 | 149,580 | ||||||
| Deferred revenue | 81,560 | 67,263 | ||||||
| Total Current Liabilities | 1,981,898 | 3,001,295 | ||||||
| Notes Payable, shareholder, net of current portion | 876,458 | - | ||||||
| Notes Payable, MLSC, net of current portion | 575,035 | - | ||||||
| Convertible promissory notes, net of debt discount | - | 2,204,235 | ||||||
| Convertible promissory notes, related party | - | 1,180,000 | ||||||
| Accrued interest, net of current portion | 167,592 | 130,937 | ||||||
| Derivative liabilities | 311,733 | - | ||||||
| Total Liabilities | 3,912,716 | 6,516,467 | ||||||
| Redeemable and Convertible Preferred Stock: | ||||||||
| Series B-1 convertible preferred stock | - | 8,174,693 | ||||||
| Series A-1 convertible preferred stock | - | 4,497,548 | ||||||
| Total Redeemable and Convertible Preferred Stock | - | 12,672,241 | ||||||
| Commitments and Contingencies | - | - | ||||||
| Stockholders' Equity (Deficiency) | ||||||||
| Common stock | 604 | 112 | ||||||
| Undesignated preferred stock | - | - | ||||||
| Additional paid-in capital | 35,741,980 | 5,351,204 | ||||||
| Accumulated deficit | (31,813,562 | ) | (22,875,308 | ) | ||||
| Treasury stock | (6,464 | ) | (6,464 | ) | ||||
| Total Stockholders' Equity (Deficiency) | 3,922,558 | (17,530,456 | ) | |||||
| Total Redeemable and Convertible Preferred Stock and Stockholders' Equity (Deficiency) | 3,922, 558 | (4,858,215 | ) | |||||
| Total Liabilities, Redeemable and Convertible Preferred Stock and Stockholders' Equity (Deficiency) | $ | 7,835,274 | $ | 1,658,252 |
STATEMENTS OF CASH FLOWS
| For the six months ended June 30, | 2017 | 2016 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (8,938,254 | ) | $ | (1,387,460 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: | ||||||||
| Depreciation | 4,546 | 3,996 | ||||||
| Stock-based compensation | 295,418 | 27,688 | ||||||
| Amortization of debt discount | 17,765 | 2,329 | ||||||
| Debt discount on convertible notes | 5,172,000 | - | ||||||
| Excess and obsolete inventory reserve | 36,028 | - | ||||||
| Common stock issued for services | 30,000 | - | ||||||
| Change in fair value of derivative liabilities | 155,008 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (139,525 | ) | (119,598 | ) | ||||
| Inventories | (76,621 | ) | 49,545 | |||||
| Prepaid expenses and other | (121,633 | ) | 15,819 | |||||
| Accounts payable and other accrued expenses | 594,339 | 193,450 | ||||||
| Accrued interest | 209,627 | 138,528 | ||||||
| Deferred revenue | 14,297 | 91,210 | ||||||
| Net cash used in operating activities | (2,747,005 | ) | (984,493 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of equipment | (4,987 | ) | - | |||||
| Net cash used in investing activities | (4,987 | ) | - | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from IPO, net of offering costs | 4,423,315 | - | ||||||
| Proceeds from private placement, net of offering costs | 2,922,885 | - | ||||||
| Proceeds from convertible promissory notes, net | 1,770,000 | 585,903 | ||||||
| Repayment of note payable, MLSC | (54,123 | ) | - | |||||
| Proceeds from exercise of stock options | 2,982 | 132 | ||||||
| Net cash provided by financing activities | 9,065,059 | 586,035 | ||||||
| Net increase (decrease) in cash | 6,313,067 | (398,458 | ) | |||||
| Cash, beginning of period | 797,174 | 1,042,618 | ||||||
| Cash, end of period | $ | 7,110,241 | $ | 644,160 |
OF GAAP NET LOSS TO ADJUSTED EBITDA
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| GAAP net loss | $ | (7,381,854 | ) | $ | (759,889 | ) | $ | (8,938,254 | ) | $ | (1,387,460 | ) | ||||
| Adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
| Interest expense | 146,057 | 71,417 | 286,928 | 140,857 | ||||||||||||
| Other (income) expense | 193 | (106 | ) | 27,187 | (92 | ) | ||||||||||
| Depreciation expense | 2,377 | 1,972 | 4,546 | 3,996 | ||||||||||||
| Stock-based compensation | 275,279 | 16,559 | 295,418 | 27,688 | ||||||||||||
| Debt discount on convertible notes | 5,172,000 | - | 5,172,000 | - | ||||||||||||
| Change in fair value of derivative liabilities | 130,162 | - | 155,008 | - | ||||||||||||
| Adjusted EBITDA | $ | (1,655,786 | ) | $ | (670,047 | ) | $ | (2,997,167 | ) | $ | (1,215,011 | ) |