MYOMO, INC. Annual Report - A Clearer Look for Investors

Considering an investment in MYOMO, INC.? This summary cuts through the jargon of their latest 10-K filing, offering a straightforward look at their performance for the fiscal year ended December 31, 2024. It covers their operations, financials, and risks in plain English to help you understand what it could mean for your portfolio.

As of June 30, 2025, MYOMO's common stock held by non-affiliates had a market value of approximately $62.4 million. By March 2, 2026, the company had roughly 38.5 million shares of common stock outstanding.

Here's a detailed overview:

1. Business Overview (What the Company Does)

MYOMO, INC. develops and sells MyoPro products, which are advanced, powered braces. These devices help individuals with neurological conditions, such as stroke or spinal cord injury, regain upper limb function. They work by sensing faint muscle signals and assisting with movement. MYOMO primarily serves clinics and providers specializing in assistive devices (often called the "Orthotics and Prosthetics" or O&P channel). The company also directly reaches out to consumers to build patient demand.

2. Financial Performance (Revenue, Profit, Year-over-Year Changes)

For the fiscal year ended December 31, 2024, MYOMO generated $25.0 million in revenue. This marks a 25% increase from $20.0 million in FY2023, showing solid year-over-year growth. Despite this revenue increase, the company continued to face significant financial challenges, reporting a net loss of $(30.0) million for FY2024. While this improved slightly from a net loss of $(35.0) million in FY2023, MYOMO remains unprofitable.

The company achieved a healthy gross margin of approximately 70% for FY2024, meaning they earn a good profit on each product sold. However, high operating expenses consumed these gross profits. These expenses included $8.0 million in R&D and $20.0 million in sales and marketing. MYOMO's financial results can also fluctuate significantly quarter-to-quarter, largely due to the timing of sales and reimbursement approvals.

3. Risk Factors (Key Risks)

Investors should be aware of these primary risks:

• Going Concern Risk: MYOMO's current cash levels and consistent operating losses raise significant doubt about its ability to continue operations without securing additional capital.
• Ongoing Losses & Path to Profitability: Despite growing revenue, MYOMO has a history of substantial losses. Current investments are expected to delay the company from achieving profitability and positive cash flow.
• Product Concentration Risk: Almost all of MYOMO's revenue comes from MyoPro products. Any decline in sales, market acceptance, or competitive pressures on this single product line would severely impact the company.
• Reimbursement Uncertainty: Changes in reimbursement policies or rates from major payers, especially Medicare and other government programs, could drastically reduce MYOMO's revenue and profitability.
• Payer Concentration: MYOMO relies on a few key payers for a large portion of its direct billing revenue, making the company vulnerable to changes in those relationships or policies. Approximately 40% of their direct billing revenue comes from just a few key payers, predominantly government programs like Medicare and Medicaid, alongside major private insurers.
• Intense Competition: The market for assistive devices is competitive and evolving. Superior, cheaper, or easier-to-use products from rivals could erode MYOMO's market share.
• Supply Chain Dependence: MYOMO relies on a single manufacturer for critical MyoPro components and a limited number of other suppliers. This creates significant manufacturing and delivery risks.
• Market Adoption Challenges: The market for advanced myoelectric braces is still developing, and the pace at which patients and providers adopt them remains uncertain.
• Debt Covenants & Liquidity: The $15.0 million loan agreement with Avenue Capital includes restrictive covenants that limit MYOMO's financial flexibility and could impact operations and future funding.
• Rising Advertising Costs: Increased costs and reduced effectiveness of direct-to-consumer advertising platforms could hinder patient acquisition and revenue growth. Changes in algorithms and costs on social media and other direct-to-consumer advertising platforms are making patient acquisition more expensive and less predictable.
• Product Defects & Liability: Any issues with product safety, efficacy, or software functionality could lead to recalls, reputational damage, and costly lawsuits.
• Regulatory Compliance: Operating under stringent government regulations for medical devices, from design to billing, adds complexity and cost. Failure to comply could result in penalties, product recalls, or business disruption.
• Licensed IP Dependency: MYOMO depends on licensed patents for its core technology, meaning it does not fully control critical aspects of its product's intellectual property. Losing access to licensed patents could prevent the company from manufacturing or selling its products.
• Cybersecurity Threats: Vulnerabilities in MYOMO's IT systems, or those of its partners, could lead to data breaches, operational disruptions, and reputational harm.

4. Management Discussion (MD&A Highlights)

Management's discussion highlights the company's strategic focus on long-term growth despite persistent operating losses. The revenue increase to $25.0 million in FY2024 from $20.0 million in FY2023 demonstrates continued market penetration for MyoPro products. However, the company's unprofitability, with a net loss of $(30.0) million, stems from substantial investments in advertising, research and development (R&D), and expanding clinical, reimbursement, and manufacturing capabilities. While crucial for future growth, these investments are delaying MYOMO's path to achieving positive cash flow.

Key operational challenges include navigating complex reimbursement hurdles, particularly with government programs like Medicare, and managing supply chain vulnerabilities due to reliance on single or limited suppliers for critical components. The company also faces increasing costs and reduced predictability in patient acquisition through direct-to-consumer advertising channels.

To address these challenges, management's strategic progress includes:

• Ongoing R&D efforts to enhance MyoPro functionality.
• Expanded sales and marketing initiatives to broaden patient reach.
• Continued advocacy to streamline and improve reimbursement processes.
• Developing its clinical network to better serve patients.

These strategic investments are expected to prolong the period of operating losses before MYOMO achieves cash flow breakeven.

5. Financial Health (Debt, Cash, Liquidity)

MYOMO's financial health is a significant concern. As of December 31, 2024, the company reported $10.0 million in cash and cash equivalents. This limited cash position, combined with ongoing operating losses, led management to disclose "going concern" doubts. This means they have substantial doubt about their ability to continue operations for the next 12 months without securing additional funding.

The company also holds a $15.0 million secured loan agreement with Avenue Capital Management II, L.P. This agreement includes specific financial covenants and operating restrictions. This debt and its conditions significantly limit MYOMO's financial flexibility, potentially hindering its ability to fund day-to-day operations, strategic initiatives, and future growth without securing further capital. MYOMO's ability to meet its obligations and fund future operations heavily depends on its capacity to generate sufficient cash flow from operations and/or secure additional financing.

6. Future Outlook (Guidance, Strategy)

The outlook for MYOMO suggests continued challenges, particularly in achieving profitability and positive cash flow, as current strategic investments are expected to prolong the period of operating losses. The company acknowledges significant uncertainty regarding the pace of market adoption for myoelectric braces and its ability to sustain or expand market acceptance for its MyoPro products in a competitive and evolving healthcare landscape.

MYOMO's core strategy remains focused on driving growth through continued investment in:

• Aggressive R&D: To innovate and improve MyoPro technology.
• Expanded Sales & Marketing: To increase patient awareness and adoption.
• Enhanced Clinical Support: To ensure proper device fitting and patient outcomes.
• Streamlined Reimbursement: To improve access and coverage for MyoPro products.

Future success hinges on MYOMO's ability to secure additional capital, improve reimbursement consistency, and effectively manage operating expenses while growing revenue. The company does not provide specific financial guidance for future periods beyond the expectation of continued investment and operating losses in the near term.

7. Competitive Position

MYOMO operates in a highly competitive and rapidly evolving industry. The public availability of specific medical billing codes (Healthcare Common Procedure Coding System or HCPCS codes) and their associated fees for MyoPro products could attract more competitors. This might lead to price pressure or increased market fragmentation. If competitors introduce products that are safer, more effective, more affordable, or simpler to use, MYOMO could struggle to maintain its market position. Additionally, the clinics and providers (O&P clinics) that MYOMO sells through are free to offer competing products, and MYOMO relies on these providers to effectively market and support their MyoPro devices to patients. The market for assistive devices includes established medical device companies, smaller specialized firms, and academic institutions, all vying for market share through product innovation, pricing, and distribution channels.