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 andnine 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:

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 approxima tely $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 approxim ately $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:

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 locationsfor the three months ended September 30, 2025. The Company generated 88% of its total revenue from the United States, and 12% from Germanyfor 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 approxima tely $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:

Due to their nominal exercise price of $0.0001 per share, a totalof 3,763,258 and 7,721,519 outs tanding 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,

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:

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:

•

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

•

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.

•

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:

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

Note 6— Accounts Payable and Other Accrued Expenses

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

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 approxima tely $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 approxim ately $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, 2025600,156 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 wereno 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:

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:

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

The following summarizes additional information related to operating leases:

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 asfollows and included in prepaid and accrued expenses on the consolidated balance sheet statement:

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.

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.