# Myomo, Inc.: Form 10-Q for the period ended Jun 30, 2026

- Company: [Myomo, Inc.](/companies/myo.md) (CIK 1369290)
- Form: 10-Q
- Filed: 2026-08-05
- Accepted by EDGAR: Aug 5, 2026, 16:15 ET
- Period: 2026-06-30
- Accession: 0001193125-26-335149
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1369290/000119312526335149/myo-20260630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1369290/000119312526335149/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-04-01 to 2026-06-30 | $11.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2026-01-01 to 2026-06-30 | $21.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-04-01 to 2026-06-30 | $3.3m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2026-01-01 to 2026-06-30 | $6.5m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2026-04-01 to 2026-06-30 | $8.4m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2026-01-01 to 2026-06-30 | $15.3m | us-gaap:GrossProfit |
| Research and development | 3 months, 2026-04-01 to 2026-06-30 | $1.7m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2026-01-01 to 2026-06-30 | $3.3m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2026-04-01 to 2026-06-30 | −$2.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2026-01-01 to 2026-06-30 | −$5.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-04-01 to 2026-06-30 | $31.4k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2026-01-01 to 2026-06-30 | $218.1k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-04-01 to 2026-06-30 | −$4.0m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2026-01-01 to 2026-06-30 | −$7.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-04-01 to 2026-06-30 | −$0.09 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2026-01-01 to 2026-06-30 | −$0.17 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-04-01 to 2026-06-30 | −$0.09 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2026-01-01 to 2026-06-30 | −$0.17 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-04-01 to 2026-06-30 | 42,697,319 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2026-01-01 to 2026-06-30 | 42,484,409 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2026-01-01 to 2026-06-30 | −$4.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2026-01-01 to 2026-06-30 | $360.2k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-06-30 | $11.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-06-30 | $24.5m | us-gaap:AssetsCurrent |
| Total assets | at 2026-06-30 | $35.3m | us-gaap:Assets |
| Current liabilities | at 2026-06-30 | $10.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-06-30 | $29.5m | us-gaap:Liabilities |
| Long-term debt | at 2026-06-30 | $11.5m | us-gaap:LongTermDebt |
| Current portion of debt | at 2026-06-30 | $447.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2026-06-30 | $5.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 31,008 characters.

*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, 2025. These risks could cause our actual results to differ materially from any future performance suggested below.*

### Overview

We are a wearable medical robotics platform 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 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.

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 the unique L-Codes, if followed by appropriate payment terms, should have the effect of offering 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.
- In July 2021, we became accredited as a Medicare provider.
- In January 2022, we introduced MyoPro 2+ and began in-house fabrication of the device.
- 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
- 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 $34,970 for the Motion W and approximately $68,800 for the Motion G, effective January 1, 2026. These fees are subject to annual inflationary adjustments.
- On April 30, 2025, we introduced an enhanced version of our flagship product, now known as the MyoPro 2X in the United States.
- On March 23, 2026, we introduced a mobile application to be used with the MyoPro, replacing the use of an external laptop.

### Recent Developments

### Term Loan Facility

On November 4, 2025 (“the Closing Date”), we 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 (together "Avenue"), which provides us $17.5 million in committed funding under two tranches. The first tranche of $12.5 million was funded on the Closing Date. The remaining $5.0 million becomes available at our discretion between 12 and 18 months from the Closing Date, subject to maintaining compliance with covenants. We are paying interest only on the term loan for a period of 18 months from the Closing Date, which could be extended to 24 months if we borrowed under the second tranche. After the expiration of the interest-only period, we will re-pay the principal balance in 24 equal monthly installments. The term loan matures on June 1, 2029. Proceeds from this loan were used to repay the outstanding borrowings under the credit facility with Silicon Valley Bank and to pay fees and expenses, with the remainder being used for general corporate purposes.

### China Joint Venture

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.

### 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 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.

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 June 30, 2026 | 2025 | Period- to-Period Change $% |  | For the Six Months Ended June 30, 2026 | 2025 | Period- to-Period Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | $11,704,565 | $9,652,234 | $2,052,331 | 21% | $21,817,853 | $19,484,048 | 2,333,805 | 12% |
| Cost of revenue | 3,262,017 | 3,600,061 | (338,044) | (9)% | 6,473,698 | 6,822,246 | (348,548) | (5)% |
| Gross profit | $8,442,548 | $6,052,173 | $2,390,375 | 39% | $15,344,155 | $12,661,802 | $2,682,353 | 21% |
| Gross margin % | 72.1% | 62.7% |  | 9.4% | 70.3% | 65.0% |  | 5.3% |

20

### 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 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.

We expect that our revenues will continue to grow in 2026, primarily as a result of investments to grow revenues from recurring patient sources, including generating patient referrals under our MyoConnect program, as well as from O&P practices in the U.S. and Germany, which we expect to increase operating leverage and reduce our dependence on advertising-driven direct-to-patient revenues.

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:

|  | Three Months Ended June 30, 2026 | 2025 | Six Months Ended June 30, 2026 | 2025 |
| --- | ---: | ---: | ---: | ---: |
| Direct billing | $8,175,345 | $7,420,904 | $15,343,823 | $15,228,681 |
| International | 1,955,707 | 1,479,783 | 3,962,569 | 2,792,549 |
| U.S. O&P | 1,224,283 | 531,472 | 2,066,666 | 1,003,192 |
| VA | 349,230 | 220,075 | 444,795 | 459,626 |
| Total revenue | $11,704,565 | $9,652,234 | $21,817,853 | $19,484,048 |

### 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 overhead costs allocated to cost of revenue.

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.

### Operating Expenses

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

|  | For the Three Months Ended June 30, 2026 | 2025 | Period-to-Period Change $% |  | For the Six Months Ended June 30, 2026 | 2025 | Period-to-Period Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Research and development | $1,720,463 | $2,001,331 | $(280,868) | (14)% | $3,343,623 | $3,791,355 | $(447,732) | (12)% |
| Selling, clinical and marketing | 5,264,090 | 5,233,885 | 30,205 | 1% | 10,080,849 | 9,629,689 | $451,160 | 5% |
| General and administrative | 3,712,481 | 3,407,277 | 305,204 | 9% | 7,331,221 | 7,351,332 | (20,111) | 0% |
| Total operating expenses | $10,697,034 | $10,642,493 | $54,541 | 1% | $20,755,693 | $20,772,376 | $(16,683) | 0% |

### Research and development

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.

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.

### Selling, clinical and marketing

Selling, clinical, and marketing (“SC&M”) expenses consist of costs for our business development, customer experience, field sales and clinical staff, clinical training organization, and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and sales commissions, 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 when the product is delivered. We expect the growth rate in selling, clinical and marketing expenses to be lower in 2026. In addition to gaining leverage on our 2025 investments, we intend to make investments in our MyoConnect referral program, including clinical sales personnel, our international operations and support for the O&P channel, as we execute our strategy to reduce our dependence on advertising-driven direct billing revenues.

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.

### 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 and Medicare accreditation, as well as costs associated with accounting systems, insurance premiums and other corporate expenses. We intend to reduce the growth rate in general and administrative expenses in 2026.

G&A increased by $0.3 million, or 9% in the second quarter of 2026 compared to the same period in 2025 due primarily to higher legal expenses. G&A expenses for the six months ended June 30, 2026 were flat compared with the same period in 2025.

### Other expense (income), net

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

|  | For the Three Months Ended June 30, 2026 | 2025 | Period-to-Period Change $% |  | For the Six Months Ended June 30, 2026 | 2025 | Period-to-Period Change $% |  |
| --- | ---: | ---: | ---: | --- | ---: | ---: | ---: | --- |
| Interest expense (income), net | $535,744 | $(106,549) | $642,293 | N/M | 1,040,440 | (298,540) | 1,338,980 | N/M |
| Change in fair value of derivative liabilities | 1,199,726 | - | 1,199,726 | N/M | 360,662 | - | 360,662 | N/M |
| Total other income, net | $1,735,470 | $(106,549) | $1,842,019 | N/M | $1,401,102 | $(298,540) | $1,699,642 | N/M |

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.

### Income tax expense

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.

### 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:

- Adjusted EBITDA does not reflect the amounts we paid in taxes or other components of our tax provision;
- Adjusted EBITDA does not include interest income;
- Adjusted EBITDA does not include depreciation expense from fixed assets;
- Adjusted EBITDA does not include the impact of stock-based compensation; and
- Adjusted EBITDA does not include the impact of the change in fair value of derivative liabilities.

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 June 30, 2026 | 2025 | For the Six Months Ended June 30, 2026 | 2025 |
| --- | ---: | ---: | ---: | ---: |
| GAAP net loss | $(4,021,360) | $(4,631,972) | $(7,030,759) | $(8,097,030) |
| Adjustments to reconcile to Adjusted EBITDA: |  |  |  |  |
| Interest expense (income), net | 535,744 | (106,549) | 1,040,440 | (298,540) |
| Depreciation expense | 384,539 | 190,798 | 676,129 | 349,240 |
| Stock-based compensation | 1,042,665 | 394,889 | 1,639,913 | 935,093 |
| Change in fair value of derivative liabilities | 1,199,726 | — | 360,662 | — |
| Income tax expense | 31,404 | 148,201 | 218,119 | 284,996 |
| Adjusted EBITDA | $(827,282) | $(4,004,633) | $(3,095,496) | $(6,826,241) |

### Liquidity and Capital Resources

### Liquidity

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

|  | June 30, 2026 | December 31, 2025 |
| --- | ---: | ---: |
| Cash and cash equivalents | $11,219,217 | $14,132,027 |
| Short-term investments | 2,233,141 | 4,261,782 |
| Total | 13,452,358 | 18,393,809 |
| Working capital | $13,915,560 | $19,211,756 |

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.

We have historically funded our operations through financing activities, including raising equity and debt capital. On November 4, 2025, we entered into a Loan and Security Agreement with Avenue, which provides us $17.5 million in committed funding under two tranches. The first tranche of $12.5 million was funded on the Closing Date. The remaining $5.0 million becomes available at our discretion between 12 and 18 months from the Closing Date, subject to maintaining compliance with covenants. We are paying interest only on the term loan for a period of 18 months from the Closing Date, which could be extended to 24 months if we borrowed under the second tranche. After the expiration of the interest-only period, we will re-pay the principal balance in 24 equal monthly installments. The term loan matures on June 1, 2029. We have to meet certain debt covenants under the loan, including (i) a minimum cash balance of $2,500,000; (ii) minimum trailing three months revenue equal to 75% of budgeted revenues for such months, measured monthly; and (iii) maximum trailing six months cash burn equal to the greater of 150% of the budgeted cash burn for such months, or $2,000,000, measured quarterly. Non-compliance with covenants may impact access to liquidity. Proceeds from this loan were used to repay the outstanding borrowings under the credit facility with Silicon Valley Bank and to pay fees and expenses, with the remainder being used for general corporate purposes. Considering our cash balance, our debt service and our operating plans discussed below, we believe there will be sufficient cash to fund our operations and capital expenditures for the next 12 months from the date of this report.

Our operating plans are primarily focused on growing revenues from recurring sources, including expanding our MyoConnect program to generate referrals in rehab clinics and stroke centers around the country, continued growth in revenues in the U.S. O&P channel, as well as International operations, while reducing the cost of patient acquisition (measured as cost per pipeline add) in the direct billing channel and minimizing the growth in fixed expenses.

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 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.

|  | Six Months Ended June 30, 2026 | 2025 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(4,141,768) | $(11,542,175) |
| Net cash provided by/(used in) investing activities | 1,528,080 | (2,653,446) |
| Net cash (used in)/provided by financing activities | (243,709) | 3,963,494 |
| Effect of foreign change rate changes on cash | (55,413) | 100,186 |
| Net (decrease) in cash, cash equivalents and restricted cash | $(2,912,810) | $(10,131,941) |

*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.

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.

*Investing Activities*. During the six months ended June 30, 2026, cash provided by investing activities of $1.5 million was primarily related to maturities of our short-term investments partially offset by purchases of equipment. During the six months ended June 30, 2025, cash used in investing activities of $2.7 million was primary related to purchases related to software development and purchases of short-term investments.

*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.

### Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. These estimates and assumptions are reviewed on an on-going basis and updated as appropriate. Materially different results can occur if circumstances change and additional information becomes known. Actual results may differ from these estimates. Refer to *Note 3 - Summary of Significant Accounting Policies.* Our most critical accounting estimates include the timing and amount of revenue recognition based on assertions, revenue recognition based on transaction pricing estimated from payments from certain insurance payers and valuation of derivative liabilities

### Timing and Amount of Revenue Recognition

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.

### Valuation of Derivative Liabilities

Our derivative liabilities are recorded at fair value on the basis of both observable and unobservable inputs. With respect to the derivative liability for the warrant issued to Avenue, these inputs include our stock price, expected volatility of our stock price, remaining term of the warrant and assumptions around the probability of an equity financing resulting in an adjustment to the warrant exercise price. Our derivative liability for the compound derivative feature in the term loan with Avenue is based on similar assumptions, but also including the credit spread and remaining term of the debt.

### Recent Accounting Standards

Information regarding new accounting standards is included in Note 3 — *Recently Adopted Accounting Standards* to our unaudited condensed consolidated financial statements contained in Item 1 of this Quarterly Report on Form 10-Q.

## Controls and procedures

As filed, 2,998 characters.

### Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer, our principal executive officer, and our Chief Financial Officer, our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026, the end of the period covered by this Quarterly Report on Form 10-Q.

Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2026, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of such date at the reasonable assurance level.

### Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2026. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessment, we believe that as of June 30, 2026, our internal control over financial reporting was effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control that occurred during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 6,036 characters.

Except as set forth below, there have been no material changes to our risk factors from those disclosed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025.

***Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.***

We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations and U.S. customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control and the U.S. Department of State. Export controls and trade sanctions laws and regulations may restrict or prohibit altogether the provision, sale, or supply of our products to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo. While it has not had a material impact on our business to date, we sell our products in countries throughout the world and import materials into the United States. Significant political, trade, or regulatory developments in the jurisdictions in which we may sell our products are difficult to predict and may have a material adverse effect on us. These developments may include export controls, tariffs or changes in reimbursement policies for Medicaid and Medicare. For example, the United States has imposed tariffs on certain imports from China and other countries, and these tariffs may continue to escalate, depending on the status of trade negotiations. Historically, tariffs have led to increased trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Though the United States has reached trade agreements with certain countries and the U.S. Supreme Court has struck down the legal basis for some of the implemented tariffs, significant uncertainty around future tariff policies remains. The United States is conducting investigations and renegotiating the U.S.-Mexico-Canada Agreement, which could result in higher or modified tariffs. While we estimate that tariffs assessed on our imports are expected to have less than a 100 basis point (1%) impact on gross margin in 2026, we cannot provide any assurance that the final tariffs actually imposed, changes in political, trade, regulatory, and economic conditions, including U.S. trade policies, will not have a material adverse effect on our financial condition or results of operations.

***If we fail to properly manage our anticipated growth, including in O&P channel and international markets, our business could suffer.***

As we grow our revenues from Medicare Part B patients and expand the number of locations which provide the MyoPro products, including O&P practices in the United States, and future planned international distribution, we expect that it will place significant strain on our management team and on our financial resources. Failure to manage our growth effectively could cause us to mis-allocate management or financial resources and result in losses or weaknesses in our infrastructure, systems, processes and controls, which could materially adversely affect our business. Additionally, our anticipated growth will increase the demands placed on our suppliers, resulting in an increased need for us to manage our suppliers and monitor for quality assurance.

Moreover, there are significant costs and risks inherent in selling our products, particularly in international markets, including: (a) time and difficulty in building a widespread network of distribution partners; (b) increased shipping and distribution costs, which could increase our expenses and reduce our margins; (c) potentially lower margins in some regions; (d) longer collection cycles in some regions; (e) compliance with foreign laws and regulations; (f) compliance with anti-bribery, anti-corruption, sanctions, export controls, import and customs, and anti-money laundering laws, such as the Foreign Corrupt Practices Act and the Office of Foreign Assets Control regulations, by us, our employees, and our business partners; (g) currency exchange rate fluctuations and related effects on our results of operations; (h) economic weakness, including inflation, or political instability in foreign economies and markets; (i) compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; (j) workforce uncertainty in countries where labor unrest is more common than in the United States; (k) business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters, including earthquakes, typhoons, floods and fires; and (l) other costs and risks of doing business internationally, such as new tariffs which may be imposed. These and other factors could harm our ability to implement planned growth in international operations and, consequently, harm our business, results of operations, and financial condition. Further, we may incur significant operating expenses as a result of our planned expansion activities, and they may not be successful. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets. We may also encounter difficulty growing the O&P channel while simultaneously being a direct provider to patients in the United States. and expanding into international markets because of limited brand recognition. These factors may lead to delayed or limited acceptance of our products by patients in these markets. Accordingly, if we are unable to expand O&P channel revenues in the United States, expand internationally or manage our international operations successfully, we may not achieve the expected benefits of this expansion and our financial condition and results of operations could be harmed.

Filed Aug 5, 2026.
Source: SEC EDGAR, the filing index for accession 0001193125-26-335149. Last ingested by Listed: Nov 10, 2026, 02:38 ET. No prices; not investment advice.