Myomo Inc.

Good day and welcome to the Miami Incorporated Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. If you need assistance, please say no to conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I'll now like to turn the conference over to Ms. Kim Golodets. Please go ahead.

Thank you, operator, and good afternoon, everyone. This is Kim Golodets with LHA. Welcome to the MIOMO Third Quarter 2021 Financial Results Conference Call. Earlier today, MIOMO issued a news release announcing financial results for the three and nine months, and it's September 30th, 2021. If you would like to be added to the company's email distribution list to receive future announcements, please register on the company's website at myoma.com or call LHA in New York at 212-838-3777 and speak with Carolyn Curran. With me on today's call from myoma are Paul Godones, Chief Executive Officer, and Dave Henry, Chief Financial Officer. Before we begin, I'd like to caution listeners that statements made during this conference call by management other than historical facts, are forward-looking statements. The words anticipate, believe, estimate, expect, intend, guidance, outlook, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect myeloma's business, financial condition, and operating results. including the impact of the ongoing COVID-19 pandemic. These and additional risks, uncertainties, and other factors are discussed in the risk factors and other qualifications contained in my illness filings with the Securities and Exchange Commission, including the Form 10-Q for the quarter ended September 30, 2021, which was filed earlier this afternoon. Actual outcomes and results may differ materially from what's expressed in or implied by these forward-looking statements, Except as required by law, MyOMO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. It is now my pleasure to turn the call over to MyOMO CEO, Paul Godana. Paul, please go ahead.

Thank you, Kim. Good afternoon, everyone, and thanks for joining us. After I provide a business update, Dave will review our third quarter financial results and discuss our financial outlook. Then, following the financial update, I'll give some closing remarks, then we'll take your questions. I'm pleased to report that myOMO achieved record revenue of $4.4 million during the third quarter. This represents a significant gain of 128% over last year's third quarter and 159% increase year-to-date. Of course, 2020 was negatively impacted by COVID-19 and the ongoing pandemic. has led to some labor and supply chain issues across the broader economy. Yet importantly, we believe we're successfully navigating through these effects, and I'll discuss that with you shortly, but by and large, business has been very good. Clearly, we're benefiting from the groundwork that we laid during the past two years as we migrated our marketing approach to go directly to patients and their caregivers, to establish our own clinical staff, and to interact directly with their insurance companies. Fully 85% of our revenue during Q3 was derived from the direct billing channel, which is up from 75% of revenue last quarter. This has led to a higher average selling price and improved operating margins. I can't stress enough that our overarching goal as a company is to improve the lives of people with upper limb paralysis. To see an example of one of our newer MyoPro clients, please check out the Let's Talk Stroke program on YouTube. I participated in an interview with Liz Hayes and how the MyoPro has restored her ability to function with her affected arm. I'll be on the next program with another user tomorrow morning, which will then become available on a YouTube channel. At the same time, our focus is on increasing MyoPro sales and benefiting from operating leverage as we scale the business toward cash flow breakeven and profitability. Our three-pronged approach to growth includes our own direct billing operations, where we bill insurers directly and provision the MyoPro with our own clinical staff. Second, we also support orthotics and prosthetics providers in the U.S. and international markets who source their own MyoPro candidates and are responsible for provisioning and billing. And third, we're focused on domestic VA medical centers for veterans and their care. We earned revenue on 102 units during the third quarter, That's double the number of units during last year's Q3 and is a result of the growth in our candidate pipeline and an increased number of insurance authorizations from IOPRO. The number of authorizations and orders in the quarter was 133, valued at more than $5 million in potential revenue, which will be recorded as these orders are fulfilled and insurance payments are received. Of these, 37 units received insurance authorizations and were delivered in the same quarter. Our backlog is defined as myopros that have been authorized by payers but are either in the process of being delivered to users or are awaiting payment to us, and it stood at a record 177 units as of September 30, 2021. This is up 11% from June 30, 2021, and reflects the larger number of insurance authorizations received during the quarter. Our pipeline is robust, and at quarter end, it stood at a record 900 units with 331 additions to the pipeline during Q3. This is a direct result of success with our digital strategy, which has adapted to the new privacy features implemented by Apple for iPhone users. While there was an initial impact on lead generation earlier in the second quarter, we successfully navigated these challenges with our advertising agency and also increased our ad spending. Our weekly lead generation is now higher than it was in the second quarter, which is leading to the growth in the number of new candidates interested and medically qualified for MyoPro. Our pipeline statistics are an important indicator of future revenue, since it can take six to 12 months to convert a prospect into an insurance authorization, deliver the custom MyoPro, and then receive payment. Having HCPCS codes for our devices has proven very helpful, especially for Medicare Advantage plans, which account for approximately 40% of seniors. yet each approval course is based on individual consideration by the payer. Thanks to the efforts of our chief medical officer working closely with the patient's doctor, we've seen a year-over-year increase in authorizations from health insurance plans. During our last quarterly call, I had reported that we had over 20 insurance plans cover their first MyoPro, so we've concentrated our marketing efforts in geographies served by these payers while also continuing to add a few more new payers to the roster in this past quarter. With a record pipeline and backlog at this point in the calendar year, we expect to enter 2022 in the strongest position in MiOMA's history. However, we're unlikely to clear as much backlog during the fourth quarter of this year as we anticipated. This is due to a temporary labor shortage at one of our subcontractors that constrained capacity and deliveries in the early part of this quarter. Capacity at that subcontractor has returned nearly to normal now, but it will be difficult to make up all the delayed shipments by the end of the year. Therefore, these orders may remain in backlog, and the effect of deliveries and associated revenue may be realized in early 2022. Like many companies, we're taking steps to have more control over our supply chain, as well as implementing operational improvements to the fabrication process for the MyoPro. Our goals are to streamline the process, accelerate cycle time, and improve margins. We expect to have an announcement on this by the end of the year. Our international business has continued to grow as well and accounted for approximately 10% of third quarter revenue. As I mentioned, international is a key target for growth. And Germany has been a very good market for us where more statutory health insurance payers are covering the cost of the MyoPro. We now have case-by-case coverage for over 40% of the population. We're excited about our joint venture in China with Reiser Medical Investment Company, which is in the process of being funded. The granting of patents around the MyoPro in China and Hong Kong was a key step toward finalizing the JV, with these patents being licensed by Myomo to the newly formed JV. The next step is to execute a technology license agreement between Myomo and the JV, which is expected to occur once certain operational and financial milestones by Riser and the JV are met. At that point, Myomo will receive an upfront license fee of $2 million, and the JV will enter into an escalating purchase commitment for a minimum of $10.75 million in MyoPro control system units over the next 10 years, subject to receipt of regulatory approvals necessary to permit sales of the product in greater China. Riser Medical and its partners have committed to invest a minimum of $8 million and up to $20 million in the JV over five years. We believe the JV company and Riser remain on track to complete their milestones to allow us to finalize this agreement by the end of the year. As you know, China represents an enormous market with a population of 1.4 billion people and an estimated 1.14 million people with chronic arm paralysis and an estimated 2.5 million strokes each year. Our shareholders will hold a 19.9% interest in the joint venture company, which can result in significant value creation over time. Well, now I'll turn the call over to Dave Henry to review our financial results in more detail. Then I'll come back and provide some additional updates and comment on our plans for the rest of the year. Dave? Thank you, Paul.