Myomo Inc.

Good day and welcome to my almost second quarter 2025 financial results conference call all Participants will be in listen only mode should you need assistance? Please signal a conference specialist by pressing star key followed by zero after today's presentation There will be an opportunity to ask question to ask a question You may press star then one on a touch-tone phone to withdraw your question. Please rest are then to Note this event is being recorded. I would now like to turn the conference over to Patel Alliance advisors IR, please go ahead

Thank you operator and good afternoon everyone, this is Terff Patel with Alliance advisors IR Welcome to the my almost second quarter 2025 conference call with me on today's call our my almost chief executive officer Paul Godon is and chief financial officer Dave Henry before we begin I'd like to caution listeners that statements made during this 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 Risks uncertainties and other factors that may affect my almost business financial condition and operating results These risks uncertainties and other factors are discussed in my almost filings with the Securities and Exchange Commission Actual outcomes and results may differ materially from what's expressed in or implied by these forward-looking statements Furthermore except as required by law my Omo undertakes no obligation to revise or update any forward-looking Statements to reflect events or circumstances after the date of this call today August 11th 2025 it's now my pleasure to turn the call over to my almost CEO Paul Godon us Paul. Please go ahead

Thanks Terff good afternoon and thank you all for joining us today As you've seen our press release issued earlier today our second quarter revenues were slightly ahead of our expectations While several operating metrics were below our plans those metrics and trends will impact our near-term performance We've made a number of adjustments in marketing operations and we're already seeing initial signs of success But before we review our quarterly results, I'd like to briefly address some understandable shareholder concerns We recognize that our recent stock price performance has been disappointing We appreciate your candid feedback Iomo remains committed to market leadership with our proven myopropriceline adjusting our plans to grow the business and managing our financials to sustainable cash flow positive operations on Today's call will dive into this with a transparent discussion of the challenges we face I like tangible progress for making and outline our plan forward through these achieve these goals of sustainable growth and profitability Appreciate your continued trust and look forward to demonstrating meaningful results Let me begin with an overview of the dynamics of generating leads and converting qualified leads into our pipeline We called it in the first quarter meta changed its Facebook algorithm in response to privacy concerns around using someone's health information or browsing history as a means to target advertising as I discussed during our last call Despite stepping up our advertising spend the number of new leads did not increase in January and February So we engaged a new digital ad agency to help us with the workaround and lead flow started increasing significantly in March and April We were pleased with those results and knowing we need to rapidly add more pipeline ads We allocated more dollars to digital media in the second quarter and it worked We had a record level of leads in June with four times as many leads generated as in January earlier this year And in addition to generating a higher number of leads our cost per lead returned to historical levels Consistent with generating a record number of new leads we expected an even greater number of pipeline ads To add a perspective patient to our pipeline means we've engaged with the lead on the phone Review their health insurance status and completed a telehealth screening or in-person evaluation To verify that they're medically qualified candidate for the myopro There are three factors that prevented the record number of leads generated in the second quarter from turning into pipeline ads at the historical rates or levels First is that the lead quality particularly the Facebook leads were not as good as what we've seen in the past The reasons for that vary but the fact is the leads were just of poor quality Second as we analyze past data about our pipeline ads we discovered that there is a cycle time effect More specifically about half of our pipeline ads come from leads generated within the past 30 days Well, most of the rest come from patients who contacted us six or twelve months ago even longer At our recent investor day. We reviewed the patient decision-making process During which stroke survivors will want to get more information Talk to family members and clinicians and even go back for more rehab therapy before committing themselves to obtaining a myopro Last year there was a large number of Medicare Part B Patients who had been interested in a myoprobe and they were able to access the device beginning in April 2024 when Medicare coverage began Currently we have a large cohort of Part B leads that have expressed interest since the beginning of the year And based on history many of them are expected to take the next steps somewhere over the next six to twelve months Third factor impacting pipeline ads is a patient's clinical presentation We qualify for a pipeline a patient must meet our inclusion and exclusion criteria During a telehealth screening or an in-person evaluation by one of our clinicians We typically exclude over half of the patients that approach us this year. We've seen that percentage increase somewhat Appropriation selection is necessary to improve long-term clinical outcomes. It is critical for maintaining reimbursement We're going forward. Our assumption is that that percentage of patients we exclude will stabilize Now discuss how we plan to offset this in a bit The result of these factors and despite achieving a record 816 pipeline additions in the second quarter Costs per pipeline ad increased to approximately twenty nine hundred dollars Although this is up from about fifteen hundred dollars in recent quarters It's down from nearly five thousand dollars a pipeline ad after Apple's privacy changes a few years ago To improve our top of the funnel metrics and generate more qualified leads We've redirected advertising dollars from social media to television Our experience shows that a higher proportion of leads generated by the TV ads engage with us right away We pass the telehealth screening and move forward into the pipeline a Cost per lead in the third quarter is expected increase with a higher mix of television advertising Oh, we expect that the cost per pipeline ad will decrease Early indication so far and indicate that this shift has increased pipeline ads reflecting better patient engagement Since we increased our ad spend we reduced costs elsewhere in the organization In July we undertook a headcount reduction that impacted about 8% of our US workforce We also cut back on outside services spending and are limiting new hires until we see a significant uptick in our revenue growth These actions are expected to save us at least two million dollars in operating expenses and capital expenditures over the next 12 months And we will continue to be disciplined in our spending emphasizing those areas that produce revenue and increase our competitive position In addition to the challenges in converting leads to pipeline ads We've been experiencing a lower conversion rate from pipeline ads to authorizations, which is impacting backlog growth To address this we're expanding our clinical referral program by increasing education activity at rehab hospitals with our field clinical staff Expansion this program is expected to result in more high quality patients entering our pipeline To date we've trained over 1500 occupational therapists on the myoprobe all across the country And now that Medicare and coverage in place is in place We believe that they will be referring more patients to us and to our own P channel partners number of qualified patients from clinical referrals doubled over the last year and we are organizing screening days at facilities to accelerate this momentum We're creating what amounts to a new sourcing channel for our direct provider business and own P partners participate with us in these clinical events For example, I recently attended a patient evaluation training date But one of our own P partners in Virginia that is becoming my almost certified After our training these clinicians have now fit their first patient with the myoprobe We're eager to introduce the myoprobe to rehab hospitals in the area where they have strong working relationships Which our clinical team participated in just this past week We're actively certifying own P clinics by having them evaluate and fit several patients until they meet our standards and are self-sufficient To provide the devices to their clients We're seeing a growing pipeline of own P patients in the reimbursement process In fact, the number of own P orders doubled from q1 to q2 of this year We're expecting continued order growth from this channel going forward Another factor in impacting the conversion from pipeline ads to authorizations is the behavior of the Medicare Advantage plans Since just over half of seniors are covered by Medicare Advantage plans We are taking steps increase the number of authorizations from these payers We're appealing more denials and taking more appeals all the way to the administrative law judge or ALJ hearing And I'm pleased to report that we're winning a larger percentage of appeals Reflecting the standards we set for patient inclusion and the strength of our legal position as Discussed during our June investor day event We plan to double the number of ALJ hearings in the second half of the year in order to generate more authorizations and put more pressure on these plants This environment the only way to grow Medicare Advantage revenue is to put more shots on goal Since these patients are being unfairly denied access to a myoprobe in violation of the Code of Federal Regulations we intend to escalate our concerns through formal appeals and direct engagement with planned administrators and regulators Reinforcing that Medicare Advantage plans are obligated to follow national Medicare policy As I mentioned a moment ago Medicare Part B patients are critical to our growth plans And we'd like to see more of them in our funnel All we don't control the insurance coverage of prospective patients We proactively engage with those covered by Medicare Part B and their health care providers to accelerate the path to a myopro And roughly half of our fill units in the second quarter represented Medicare Part B patients We're also starting to see more Authorizations for patients covered by the contracts we entered into over the past year and we have additional negotiations underway Increase patient access to the myoprobe We've expanded our contracting to now cover 35 million lives with signed or pending agreements So in summary we're moving as quickly as possible to improve our results in the direct only channel our international and Olympique channels also continue to grow complementing our direct only channel and diversifying our revenue streams a strategy for expanding access Approving conversion efficiency and managing costs position those swell for the second half of 2025 and beyond I'll expect 2025 to be another year of revenue growth Reflecting the number of leads pipeline ads and insurance authorizations here to date in the direct billing channel We are updating our expectations for revenue growth to 23 to 29 percent in 2025 as Dave will discuss With all those who followed myoma over the past several years You've seen us pivot strategically when necessary develop new opportunities such as Medicare coverage and Adjust our operations to support our 10 plus year track record of volume and revenue growth With that overview of our performance and actions. I'll turn the call over to our CFO Dave Henry provide more of the financial details