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Description of Business
9 Months Ended
Sep. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Description of Business

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, the Veterans Health Administration, rehabilitation hospitals, and through distributors. When we provide devices directly to patients and bill their insurance companies directly, we may evaluate, cast and fit the MyoPro devices using our own clinical staff or utilize the clinical consulting services of O&P professionals for which they are paid a fee. The Company was incorporated in the State of Delaware on September 1, 2004 and is headquartered in Cambridge, Massachusetts.

Amended and Restated Certificate of Incorporation and Reverse Stock Split

On January 30, 2020, the Company filed with the State of Delaware an amendment to its Eighth Amended and Restated Certificate of Incorporation for a one-for-thirty reverse stock split of the Company’s common stock.  All share and per share information has been restated retroactively, giving effect to the reverse stock split for all periods presented.  There was no change to reported net loss in any period presented.

Liquidity and Impact of COVID-19

The Company incurred net losses of approximately $9.9 million and $8.0 million during the nine months ended September 30, 2020 and 2019, respectively, and has an accumulated deficit of approximately $66.0 million and $56.1 million at September 30, 2020 and December 31, 2019, respectively. Cash used in operating activities was approximately $7.9 million and $7.7 million for the nine months ended September 30, 2020 and 2019, respectively.  The Company has historically funded its operations through financing activities, including raising equity and debt capital.

The outbreak of the novel coronavirus, SARS-CoV-2, which causes coronavirus disease 2019 (“COVID-19”), has evolved into a global pandemic. COVID-19 has spread to many regions of the world, including the United States and Europe.  In response to the pandemic, the Company has implemented a work from home policy, with many employees continuing their work outside of the Company’s offices.  While the Company was able to continue with certain parts of its business, such as lead generation and patient evaluations, public health and societal restrictions in place during the second quarter of 2020 adversely impacted other aspects of the Company’s business.   For example, the Company provides a custom-fabricated device to each patient and in-person contact is required as part of the fabrication and delivery process.  As a result of COVID-19-related public health restrictions on travel and personal interaction, fabrication and delivery processes were suspended during the majority of the second quarter of 2020.  As a result of these restrictions, the Company’s ability to deliver its products to patients and to generate revenues was negatively affected.    Similarly, the impairment in the ability for patient consultation and fittings is expected to delay the launch of MyoPal, its new product for pediatric patients, for an extended period of time. While the Company continued in-person interactions with, and deliveries to, patients during the third quarter of 2020, incidences of the virus are increasing in certain parts of the United States and the world.  Public health restrictions may be reinstated in these and other areas in the future.  While insurance reimbursement practices of government and third-party payers are so far largely unaffected by the pandemic, the Company can provide no assurance that will continue in the future.  Similarly, it is unclear to what extent an extended period of significant unemployment will reduce the number of prospective candidates due to loss of health insurance.  The Company has sufficient inventory of subassemblies available, and its contract manufacturing partners have either continued to operate or have resumed operations.  While the Company has experienced some minor extensions of lead times in its supply chain, the Company believes it has sufficient inventories of all critical components.  

During the second quarter of 2020, the Company eliminated certain positions, furloughed other employees and reduced certain expenses in response to the adverse impact of the pandemic on its business.  Almost all furloughed employees returned to work during the third quarter of 2020.  The Company has a growing backlog of patients authorized by insurance companies to receive a MyoPro.  In addition, the Company utilized its At-Market Sales Facility (“ATM facility”) during the third quarter to raise additional capital (see Note 6).  The remaining capacity under the Company’s shelf registration statement on Form S-3 totals approximately $9.8 million. However, due to the Company’s public float, the amount of securities the Company may sell from time to time under such registration statement is subject to the limitations imposed by General Instruction I.B.6 of Form S-3. As a result, the Company believes that its existing cash is sufficient to sustain its operations for a period of twelve months from the filing date of this Quarterly Report on Form 10-Q.    However, if public health restrictions on travel and patient interaction are broadly reinstated, the Company may need to raise additional capital to sustain its operations during the second half of 2021.

The Company’s operating plans are primarily focused on growing the number of MyoPro units provided to patients, increasing the proportion of patients carrying commercial health insurance with payers that have historically reimbursed for the Company’s products, executing on its plans to complete development of its pediatric product when public health conditions allow and continued work with the Centers for Medicare and Medicaid Services, or CMS, and their administrative contractors regarding reimbursement of its products. In addition, the Company believes that it has access to capital resources through possible public or private equity offerings, including usage of its ATM facility, exercises of outstanding warrants, additional debt financings, or other means.  Additional debt financing may require the Company to pledge other assets not currently pledged and enter into covenants that could restrict certain business activities or its ability to incur further indebtedness; and may contain other terms that are not favorable to the Company or its stockholders.