MYOMO, INC.

Previous wording

We advertise on television and through social media. In addition, we perform in-services for therapists and physicians to generate referrals under a new program we refer to as MyoConnect, and we directly educate and inform those individuals who are potential candidates for our products. Once the prospective patient contacts us or is referred to us through our MyoConnect program, either our trained clinical staff or a trained O&P provider will evaluate the patient for their suitability as a candidate. Initial evaluations by our trained clinical staff are often initially conducted using telehealth techniques, followed by an in-person clinical evaluation of the candidate. Prior to obtaining authorizations from commercial insurance companies or delivering to a patient with Medicare Part B, the patient’s medical records are collected and reviewed to make sure the device is medically necessary for their condition and a prescription is always obtained from a physician. Once these documents are obtained, if the patient has Medicare Advantage or other commercial insurance, 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, a process we call “shape capture”. In many cases, shape capture is done using a remote measurement kit supplied to the patient. 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. 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 hospitals and 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 VA system for impaired veterans, and over 130 VA facilities have ordered devices for their patients.

Current wording

We advertise on television and through social media. In addition, we conduct in-services for therapists and physicians to generate referrals under a new program we refer to as MyoConnect, and we directly educate and inform those individuals who are potential candidates for our products. Once the prospective patient contacts us or is referred to us through our MyoConnect program, either our trained clinical staff or a trained O&P provider will evaluate the patient for their suitability as a candidate. Initial screenings by our trained clinical staff are often initially conducted using telehealth techniques, followed by an in-person clinical evaluation of the candidate. Prior to obtaining authorizations from commercial insurance companies or delivering to a patient with Medicare Part B, the patient’s medical records are collected and reviewed to make sure the device is medically necessary for their condition and a prescription is always obtained from a physician. Once these documents are obtained, if the patient has Medicare Advantage or other commercial insurance, 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, a process we call “shape capture”. In many cases, shape capture is done using a remote measurement kit supplied to the patient. If the patient is covered by Medicare Part B, no pre-authorization is currently required for coverage, and we can move directly to taking measurements of the patient's arm. 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 hospitals and 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 VA system for impaired veterans, and over 130 VA facilities have ordered devices for their patients.

Previous wording

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 the unique L-Codes, if followed by appropriate payment terms, should have the effect of offering greater access to the MyoPro for Medicare beneficiaries.

Current wording

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.

Previous wording

On March 23, 2026, we introduced a mobile application to be used with the MyoPro, replacing the use of an external laptop.

Current wording

On March 23, 2026, we introduced a mobile application to be used with the MyoPro, replacing the use of external laptop.

Previous wording

In November 2025, we were notified that Ryzur Medical filed for bankruptcy in China and is in the process of being liquidated. As a result, the operations of the JV Company are now severely limited. Efforts to find another lead investor have not materialized. As a result, we notified the parties on July 24, 2026 that we are terminating the joint venture. We do not expect to receive any proceeds from liquidation of the JV Company and there is no impact to our financial statements from the termination of the joint venture for the three and six months ended June 30, 2026.

Current wording

In November 2025, we were notified that Ryzur Medical filed for bankruptcy in China and is in the process of being liquidated. As a result, the operations of the JV Company are now severely limited. Efforts to find another lead investor have not materialized. As a result, we notified the parties on July 24, 2026 that we are terminating the joint venture. We do not expect to receive any proceeds from liquidation of the JV Company and there is no impact to our financial statements from the termination of the joint venture for the three and nine months ended September 30, 2026.

Previous wording

We have been growing revenues while incurring net losses and negative cash flows from operations since inception and anticipate this to continue in 2026. Our financial performance in 2025 reflected our ability to be reimbursed by Medicare for providing the MyoPro to their beneficiaries, as well as challenges around marketing efficiency and patient acquisition which increased cost per pipeline add. Our plan for 2026 is to begin to pivot away from relying on direct to patient advertising to generate revenues and invest in generating revenues from recurring patient sources, including the MyoConnect referral program and from O&P providers in the U.S. and Germany, while implementing marketing initiatives to reduce cost per pipeline add in the direct billing channel and minimizing the growth of fixed expenses.

Current wording

We have been growing revenues while incurring net losses and negative cash flows from operations since inception and anticipate this to continue in 2026. Our financial performance in 2025 reflected our ability to be reimbursed by Medicare for providing the MyoPro to their beneficiaries, as well as challenges around marketing efficiency and patient acquisition which increased cost per pipeline add. Our plan for 2026 is to begin to pivot away from relying on direct to patient advertising to generate revenues and invest in generating revenues from recurring patient sources, including the MyoConnect referral program and from O&P providers in the U.S. and Germany, while improving gross margin through cost reductions and limiting the annual growth in operating expenses to no more than half of the annual growth in revenue.

Previous wording

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 U.S., 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.

Current wording

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.

Previous wording

Total revenue increased by approximately $2.1 million and $2.3 million, or 21% and 12%, for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Higher revenues in the three and six months ended June 30, 2026 were due to a higher number of revenue units and a higher average sales price. Revenues by channel for the three and six months ended June 30, 2026 and 2025 were as follows:

Current wording

Total revenue increased by approximately $2.2 million and $4.6 million, or 22% and 15%, for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in 2025. Higher revenues in the three and nine months ended September 30, 2026 were due to a higher number of revenue units and a higher average sales price. Revenues by channel for the three and nine months ended September 30, 2026 and 2025 were as follows:

Previous wording

Gross margin was 72.1% and 70.3% for the three and six months ended June 30, 2026, respectively, compared to 62.7% and 65.0% for the three and six months ended June 30, 2025, respectively. The increases in gross margin were primarily due to a higher average selling price and manufacturing cost reductions, partially offset by higher clinical costs allocated to cost of sales.

Current wording

Gross margin was 71.3% and 70.7% for the three and nine months ended September 30, 2026, respectively, compared to 63.8% and 64.6% for the three and nine months ended September 30, 2025, respectively. The increases in gross margin were primarily due to manufacturing cost reductions and a higher average selling price, partially offset by higher clinical costs allocated to cost of sales.

Previous wording

Research and development (“R&D”) expenses consist of costs for our engineering and 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 manage R&D expenses in 2026, while maintaining the pace of our R&D efforts as cash flows allow, as well as to fund a randomized controlled trial being conducted by the University of Utah.

Current wording

Research and development (“R&D”) expenses consist of costs for our engineering and 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 manage R&D expenses in 2026, while maintaining the pace of our R&D efforts as cash flows allow, as well as to fund a randomized controlled trial being conducted by the University of Utah (the "Utah Study").

Previous wording

R&D expenses decreased by approximately $0.3 million and $0.4 million, or 14% and 12%, during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The decreases were primarily due to lower labor expense in project management, engineering, and research.

Current wording

R&D expenses increased by approximately $0.3 million or 18% during the three months ended September 30, 2026, and decreased by $0.2 million during the nine months ended September 30, 2026, as compared to the same periods in 2025. The increase in the three-month period was primarily due to increased research spending related to the Utah Study . The decrease in the nine-month period was primarily due to lower labor expense in project management, engineering, and research partially offset with spending on the Utah Study.

Previous wording

SC&M expenses increased by less than $0.1 million and $0.5 million or 1% and 5%, during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The increases were primarily due to expenses associated with our new clinical sales personnel and higher incentive compensation, partially offset by higher clinical costs allocated to cost of revenues, and in the second quarter of 2026, lower advertising expense.

Current wording

SC&M expenses decreased by $0.1 million or 3% during the three months ended September 30, 2026, and increased by $0.3 million or 2% during the nine months ended September 30, 2026, as compared to the same periods in 2025. The decrease in the three-month period was related to slightly lower travel related expenses offset by higher labor. The increase in the nine-month period was primarily due to expenses associated with our new clinical sales personnel, higher incentive compensation and higher advertising expenses, partially offset by higher clinical costs allocated to cost of revenues.

Previous wording

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

Current wording

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

Previous wording

Other expense (income), net was $1.7 million and $1.4 million for the three and six months ended June 30, 2026, respectively, compared to income of $0.1 million and $0.3 million for the same periods in 2025, respectively. The increase in other expense was due to the change in fair value of derivative liabilities related to our term loan with Avenue, driven primarily by an increase in our stock price and market volatility. This was offset higher interest expense due to our term loan with Avenue entered into in November 2025.

Current wording

Other expense (income), net was $2.4 million and $3.8 million for the three and nine months ended September 30, 2026, respectively, compared to expense/(income) of less than $0.1 million for the three-month period and income of approximately $0.3 million for the nine-month period in 2025. The increase in other expense was due to the change in fair value of derivative liabilities related to our term loan with Avenue, driven primarily by an increase in our stock price and market volatility, as well as higher interest expense due to our term loan with Avenue entered into in November 2025.

Previous wording

Income tax expense recorded during the three and six months ended June 30, 2026 and 2025 represents the provision for income taxes for our wholly-owned subsidiary, Myomo Europe GmbH. Income tax expense decreased by $0.1 million and $0.1 million in the three and six months ended June 30, 2026, respectively, as compared with the same periods in 2025 due to lower taxable income in each period.

Current wording

Income tax expense recorded during the three and nine months ended September 30, 2026 and 2025 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, 2026 as a result of higher taxable income compared to the same periods in 2025.

Previous wording

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

Current wording

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

Previous wording

As of June 30, 2026, we had working capital of approximately $13.9 million and stockholders’ equity of approximately $5.8 million. We used approximately $4.4 million in cash for operating activities during the six months ended June 30, 2026.

Current wording

As of September 30, 2026, we had working capital of approximately $11.2 million and stockholders’ equity of approximately $2.8 million. We used approximately $5.4 million in cash for operating activities during the nine months ended September 30, 2026. 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.

Previous wording

Operating Activities. The net cash used in operating activities for the six months ended June 30, 2026 was primarily used to fund a net loss of approximately $7.0 million, adjusted for non-cash expenses in the aggregate amount of approximately $3.6 million and by approximately $0.7 million of cash used by net changes in the levels of operating assets and liabilities, primarily related to increases in prepaid expenses and accounts receivable, partially offset by an increase in accounts payable and accrued expenses, due primarily to an increase in incentive compensation during the six months ended June 30, 2026.

Current wording

Operating Activities. The net cash used in operating activities for the nine months ended September 30, 2026 was primarily used to fund a net loss of approximately $11.3 million, adjusted for non-cash expenses in the aggregate amount of approximately $7.4 million and by approximately $1.6 million of cash used by net changes in the levels of operating assets and liabilities, primarily related to increases in accounts receivable and prepaid expenses and other current assets, offset by an increase in accounts payable and accrued expenses.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2025 was primarily used to fund a net loss of approximately $8.1 million, adjusted for non-cash expenses in the aggregate amount of approximately $1.8 million and by approximately $5.3 million of cash used by net changes in the levels of operating assets and liabilities, primarily related to increases in accounts receivable due primarily to a payment hold by CMS, increases in inventory and prepaid expenses and other current assets, and a decrease in accounts payable and accrued expenses, due primarily to the payment of incentive compensation during the three months ended June 30, 2025.

Current wording

The net cash used in operating activities for the nine months ended September 30, 2025 was primarily used to fund a net loss of approximately $11.8 million, adjusted for non-cash expenses in the aggregate amount of approximately $3.1 million and by approximately $4.7 million of cash used by net changes in the levels of operating assets and liabilities, primarily related to increases in accounts receivable, inventory, prepaid expenses and other current assets and a decrease in accounts payable and accrued expenses.

Previous wording

Financing Activities. There was approximately $244,000 of cash used for financing activities in the six months ended June 30, 2026 to satisfy employees' statutory tax withholding obligations related to the sale of restricted stock units. There was $4.0 million in cash generated from financing activities during the six months ended June 30, 2025. Cash generated in the six months ended June 30, 2025 was due to borrowings under our previous line of credit and term loan facility with Silicon Valley Bank.

Current wording

Financing Activities. There was $0.4 million in cash used for financing activities in the nine months ended September 30, 2026 to pay employees' statutory tax withholding obligations related to the net share settlement of restricted stock units to satisfy statutory withholding taxes. There was $3.9 million in cash generated from financing activities during the nine months ended September 30, 2025, representing borrowings under our credit facilities.

Previous wording

The timing and amount of revenue recognized is determined based on certain estimates. For revenue derived from patients with Medicare Part B, we determined we had sufficient payment history in order to determine transaction price and recognize revenue upon delivery of the device to the patient based on the published fees by CMS. With respect to patients with Medicare Advantage or other commercial insurance, except for a small number of payers, we do not have contracts to establish pricing or provide evidence of an arrangement, however we are able to rely on a history of payments after receiving an insurance authorization, delivery of the device and submission of a claim as evidence of an arrangement. For these payers, payment history is also used to estimate how much we expect to be paid upon delivery of our device and submission of an insurance claim, which determines how much revenue we recognize. The transaction pricing for these providers is based on the expected value method, based on previous history. For the majority of Medicare Advantage and other commercial insurance payers, we have determined that we do not have sufficient collection history with the payer to assert evidence of an arrangement and collectability. For these payers, revenue is recognized at payment, which is when we can determine how much we will be paid for the device.

Current wording

The timing and amount of revenue recognized is determined based on certain estimates. For revenue derived from patients with Medicare Part B, we determined we had sufficient payment history in order to determine transaction price and recognize revenue upon delivery of the device to the patient based on the published fees by CMS. With respect to patients with Medicare Advantage or other commercial insurance, except for a small number of payers, we do not have contracts to establish pricing or provide evidence of an arrangement, however we are able to rely on a history of payments after receiving an insurance authorization, delivery of the device and submission of a claim as evidence of an arrangement. For these payers, payment history is also used to estimate how much we expect to be paid upon delivery of our device and submission of an insurance claim, which determines how much revenue we recognize. The transaction pricing for these providers is based on the expected value method, based on previous history. For some of Medicare Advantage and other commercial insurance payers, we have determined that we do not have any collection history with the payer to assert evidence of an arrangement and collectability. For these payers, revenue is recognized at payment, which is when we can determine how much we will be paid for the device.