Good morning everyone, and thank you for joining us at the 28th Annual H.C. Wainwright Global Investment Conference. My name is Sean Lee. I am a Senior Biotech Analyst at the bank. Joining me for today's fireside chat is Mr. Paul Gudonis, the CEO of Myomo, and Mr. David Henry, the CFO of the company. Myomo is a leader in the development of robotic prosthetics for stroke patients. Without further ado, please welcome Paul and David to this fireside. Good day Paul and David, and glad to see you joining us. To start us off, and for the benefit of the audience who may not be familiar with Myomo, could you provide us with a high level overview of the company and your business? Sure. Glad to. Good morning everyone. Let me start with a question. Do you know 100 people? Then you probably know someone with a paralyzed arm, because it is a 1% prevalence. Someone who has had a stroke, a spinal cord injury, brachial plexus injury from a motorcycle accident, or a veteran might have been injured, is individuals, and it is over 1% prevalence to over 3 million people just in the United States with chronic arm paralysis. They have suffered a stroke, and there are 800,000 strokes a year in the United States. About 20% to 30% unfortunately dies a result of the stroke and complications. The other half million go through rehab to try to restore function because a stroke has damaged the motor cortex due to its blood clot or hemorrhage. They will go over here in New York to NYU Langone Health or up to Burke Rehabilitation Hospital and try to restore that function. It works for about half of the individuals, but the other half, 250,000 a year are basically told, "Get used to it, you will never use that arm and hand again for the rest of your life." We are showing that that conventionalism does not hold anymore. We are a commercial stage company doing about $45 million of revenue. Came out of MIT about 20 years ago. We have got an exclusive patent portfolio, and we have a powered arm brace that you wear as you think about moving your arm. It basically reads your brain signals through your muscles. It is non-invasive sensors, enables you to pick up a cup, feed yourself, to cook your food, walk around the house, or go back to work. This MyoPro myoelectric orthosis is in the market. We have got almost 4,000 people using it, primarily here and in Germany. Doing about 80 to 100 units a month, traded on the NYSE American. That is kind of an overview of the company. Thank you, Paul. For the first part of our discussion, I would like to focus on the company's current business and commercial execution. A big shift we have seen for the better part of the last two years has seen the company switch from almost 100% direct- to- consumer marketing to a mix of DTC marketing and recurring patient sources. My question is, what drove this big shift, and have you seen any difference in the type of patients that you are attracting through the different channels? Well, two years ago, we finally got Medicare coverage for our device, and that was really an inflection point, and our revenues have more than doubled over those two years. As a result of getting more secure reimbursements, we now have therapists, physicians willing to recommend the product to their patients. Because if there is uncertainty about our reimbursement, there is a reluctance to do so. But now that we have got that Medicare coverage, we have also signed contracts where we are in network with Elevance, with a number of other payers. We are both the manufacturer of the device, but we are also forward integrated. We are a Medicare accredited provider. We have our own clinicians in the field, which will provide the devices to patients. We initially started marketing to that prevalence population of those 3 million people, but they are not in the rehab hospital. Their neurologist told them 10 years ago, "Can't do anything for you." We reached out to them via social media, Facebook, television advertising. We have a call center in Texas, get a couple thousand leads every month, which we then marketed as a direct- to- consumer. We would then evaluate those patients, get their insurance information, get an authorization, and then deliver. However, now that we have got Medicare coverage, we are going into these rehab hospitals. We have a field clinical team that does in-services, meets with the physicians, with the therapists that see these patients, and we are getting these patients in this, what I will call that incidence population, that 250,000 of people that are left with chronic paralysis after 6 to 12 months of rehab. At that point, what we find is, your question was, they are better patients. They are just 6 to 12 months out from their stroke instead of 10 or 20 years, so they are more motivated, they have less contraindications. As a result, by getting these patients from the therapist, we find that they are higher quality patients in terms of they meet our medical criteria. They have got insurance that more likely will pay for it because we give the therapists, okay, here is the list of insurance plans that are likely to cover this. Therefore, our conversion rate of what we call a pipeline add is much higher from these referrals. That is why we did this evolution last year, and where we went from 25% of our revenue being what I call recurring patient sources, it is over 50% now. Just in 12 months, over 300 rehab hospitals around the country and more in Germany referring patients. I expect in a couple of years we'll have 1,000 of these locations referring patients to us on a regular basis. A couple of data points around that too, just to illustrate the benefit of marketing more towards that incidence population. First, under direct to patient advertising, about one to one and a half patients out of every 100 leads we might generate may qualify for a MyoPro because they have these contraindications that Paul had referred to. But with the program that we call MyoConnect, which is the referral ecosystem that we're trying to build, we're finding that the hit rate is about 10 x that. It's helping us in terms of being able to generate operating leverage and to get closer to our cash flow breakeven point, which is around, on a free cash flow basis, around $15 million of revenue per quarter. Secondly, as part of these efforts, Paul mentioned that we're working with these clinics in terms of which types of patients to refer to us. We find under direct-to-patient advertising, about 25% of the leads we generate are Medicare. But under the MyoConnect referral program, we're finding that of the pipeline ads we get, about half of them are Medicare, where reimbursement is more certain. So those are tangible benefits to what we're doing, and this is why we're seeing some of the results we're seeing. Great. Thank you for that. You mentioned that the company now has over 300 referral sites, most of them added over the last three to six months even. Do you have a goal in mind in how many referral sites you want to hit? What percentage of these sites have started multiple referrals, I guess? There are several thousand of these rehab clinics around the country. They are at major facilities like a Kessler Institute for Rehabilitation in New Jersey, and they also have many outpatient facilities in suburban areas. When you add it all up, it is several thousand. We target to get to 1,000 of these referral sources in the next several years. What we see is, and I will use a model called same store sales growth is, while they are not purchasing the device from us, by getting these referrals, I look at almost like a model of more stores referring to us, but then also same store sales growing. What we are seeing is the typical process is you go and do the clinical education, have a patient evaluation day, you get that first patient referral, they get their device, they go back to that facility for rehab training to learn how to use our device. Then the therapists, doctors will refer the next several patients. We have already seen 15%-20% of these facilities referring a second or third patient and so on. I see two growth factors here, more locations and then more units per year per location. That is why we think we will see accelerated growth going forward here. Great to hear that. In addition to the referral sites, I know the U.S. O&P channel, even though it is only a small portion of the overall revenues right now, is also one of the fastest growing, increasing by over 100% over the last year. Yeah. My question is, what is driving this growth? I know you guys also signed a deal with Ottobock recently. What milestones can investors use to judge this rollout and this growth? Are there any differences in the economics between the O&P channel versus your direct billing channels? Well, I'll let Dave talk to the economics. We just came back from the National Orthotics and Prosthetics Association meeting last week, where we met with our major customers. There are about 3,000 of these O&P clinics around the country. You normally wouldn't run into them unless you were an amputee because they fit prosthetics, or you needed a specialized brace. They're now being consolidated. Hanger Clinic, which is one of our customers, they have over 900 clinics in the U.S. As you mentioned, Ottobock, big prosthetics company out of Germany. They've bought about 80 to 90 locations in the U.S. Össur integrated forward. They have now their ForMotion clinics. We met with the senior executives of all of these organizations, and now that we introduced the new product, the MyoPro 2X, last year, plus with the Medicare reimbursement, plus we see all the clinical research supporting the device, now they're beginning to adopt this. They grow over 100% year- over- year off of small base. But they see all these stroke patients every year because stroke patients, when you have this condition called hemiparesis, it impacts not just the arm, but also the leg. It's a condition called foot drop, where you can't pick up your toe and you'll trip. They provision what's called an ankle foot orthosis or AFO to these patients already. We have a campaign we call Look Up, because 82% of those patients who've had a stroke that get an AFO for their foot also have arm impairments. Encouraging them to look, and it's a very attractive economics for them, as Dave can discuss here. Yeah, the ASP for our device as the fee for Medicare is a little over $68,000. The O&P channel, when we provide a device through that, we'll probably split the fee with them because they're taking on the reimbursement risk. We just in that situation are just a manufacturer. It's a very high contribution margin percentage business when we're selling through the O&P channel. It's a win-win for both because it's one of the highest revenue value per unit opportunities that are in the O&P channel today, which is the MyoPro. Got it. Thank you for the clarity. As the company pivots to more recurring patient sources, how does it affect your average cost per pipeline ad, which I know is a metric that you've previously used to see the effectiveness of your marketing? Under the direct-to-patient advertising, our advertising cost per pipeline ad has been around $2,500 per patient or per pipeline ad. Overall, when you yield it off, because not every pipeline ad becomes a revenue unit, it is $10,000 + per patient. That is still when the ASP is $68,000, it is still a very good contribution margin activity. As we move forward here and we start to rely more on referring sources and less on direct-to-patient advertising, the expectation would be that that cost would come down. The cost will change because we now have a sales and clinical force that we need to add into that equation, but that is offset by a lower advertising cost. The combination of that combined with same store sales, if you will, that Paul mentioned earlier, should drive that cost down. I see. Looking at the gross margin, which also improved significantly over the last year from 63% to 72%. What was the primary driver behind this? Is it just increasing volume or manufacturability? Also, where do you see the long-term margin to reach? In the second quarter, as Sean mentioned, gross margin was 940 basis points higher year- over- year. About 200 basis points of that was a higher average selling price. Most of that we could attribute to the CMS price increase that went into effect at the beginning of 2026. It was around 2%. Roughly, I am going to say 70 to 80 basis points of that increase came from material cost savings. For example, we now have an app that is replacing a laptop that we used to provide for every patient. That laptop will cost about $500 per patient, so we are no longer providing that. There are other cost reduction activities that will reduce material cost later this year and into 2027. That includes insourcing the 3D printing of the orthotic shells that are on the brace, so we will insource that activity. More material cost savings are coming, and the rest of the gross margin improvement was really driven by a combination of lower overhead spend year-over-year, combined with a 19% increase in volume year-over-year. As long as the volume continues to accelerate, we would expect that there would be continued fixed cost absorption opportunity. Great. Certainly looking forward to that. Now focusing on the company's growth and future directions. Recently, you announced a hand-only device in Germany rather than the hand plus arm MyoPro. What is the anticipated launch timeline for this device? What is the reimbursement pathway, and are there any plans to bring this device to the U.S. as well? I was in Leipzig, Germany for the European Orthotics Prosthetics Conference back in May, where, as you mentioned, we announced the development of a hand-only device. Because our current device moves the elbow, we can adjust the wrist and the hand, but about 60% of the patients can move their elbow, but they cannot open and close their hand as a result of their stroke. We are taking our existing product, modifying it to just have a hand-only version, and we are introducing it in Germany because there is reimbursement for a hand-only device already in Germany. It is a faster path to commercialization. We expect in mid-2027 that product will be clinically tested in manufacturing, and that will open up more revenue out of Germany. I mean, that is already 18% of our revenue and growing 30%-40% a year. Then we will bring that to the U.S., and the U.S. will have to go through the traditional CMS process to get a new reimbursement code for a hand only. But with the research we have, the existing code, that might be a one to two year process to get that reimbursed. We could introduce it to the large number of people that only need the hand. Also in our CRM database, we have got 100,000 patients, reach back to them and say, "Hey, you were ineligible for the device because you need just the hand. By the way, I might be able to serve you now. Got it. Understood. The company also recently announced the development of MyoPro 3.0, which is the next generation flagship product. What are the improvements that we expect to see in this, and what milestones do you need to hit before MyoPro 3.0 is ready for the market? Well, we significantly increased the size of our engineering staff last couple of years, and the next generation product we call the MyoPro 3.0. Currently, it is the MyoPro 2.0 that is in the marketplace. Total redesign of the product, making it lighter weight, smaller profile, more functional, different motor capabilities, adjustability, new processor, so it will be AI enabled as well. That is in development. In fact, next week we have several patients coming in to do testing on the final design work. Then we will have to put that together with our own clinical validation on a number of patients in the first half of 2027. Then move it into manufacturing, and it is already covered under the existing reimbursement code. It is just the next generation of the product. That gives us a platform for a hand-only device, also the ability to scale it down for pediatrics. Before COVID, we were working on a product called the MyoPal, because there are 150,000 kids in the U.S. under the age of 18 with a paralyzed arm. It might have been a birth brachial plexus injury, where the shoulder got damaged in the birth canal, stroke in utero, cerebral palsy, spinal muscular atrophy. We had to postpone that development because of COVID. No one was vaccinated and so on. Now with the MyoPro 3.0, we will be able to scale it down and be able to provide a device for the kids, and that is a wonderful thing to see a five-year-old girl who grew up without being able to move her arm, she moved her arm for the first time in her life. We think that is another bigger market opportunity for us. Sounds exciting, and certainly looking for more news to it in the future. I know the company is also running a randomized control study at the University of Utah. Could you provide us with an overview of this study and what you hope to learn from it? We already have a bolus of research out there, patient registry, clinical trials and so on. That's what convinced the Medicare medical directors to provide coverage for the device. But we still have some recalcitrant Medicare Advantage plans. Our approach is, okay, we've talked to medical directors, reimbursement consultants who said, "Oh, we should do a large scale RCT." We have contracted with the University of Utah Rehabilitation Hospital, a leader in this whole area of myoelectrics, an N of 50. 25 patients will be the control group, the standard occupational therapy after their stroke. The other 25 will get a MyoPro in the therapy and training. We'll follow them for 6-12 months in terms of outcome measures like functional tasks, to be able to conduct certain activities, patient evaluations, Fugl-Meyer scores, and then we'll publish that in 2027. I expect a very positive outcome because we know these patients with therapy only are not going to recover, and yet they will be able to function with a MyoPro. We expect that will lead to either an LCD or NCD with CMS or help us make the case to Medicare Advantage medical directors that they should be covering this just like standard Medicare does for patients. Got it. That's very helpful. Final question is a bit of a high-level one, I guess. Looking into 2027 and beyond, we've discussed there's a bunch of growth drivers behind your expected growth. There's the referral site expansions, the increasing referrals per site, the increasing payer coverage, the O&P channel partnerships, as well as new products and growth into international markets. Which one of these do you think will be the most important near-term growth drivers that investors should really watch for? I would say keep an eye out on MyoConnect and the referral program and building that ecosystem because that's going to enable us to continue down the pathway of generating the operating leverage we need. The good news is that that activity is organic. In 2025, we took people that were providing post-delivery support to patients and converted them and have them started generating referrals. So there was no incremental cost to generating these referrals. In 2027, the intention is to scale down the advertising dollars, put that savings into hiring more people to put out in the field. So that activity should increase the number of referrals and with a better hit rate, lead to better growth. Then, of course, you have things like the O&P channel should continue to grow as more and more clinics provide the device to their patients and the new product in Germany. So the expectation is for $45 million-$47 million of revenue this year, we would expect revenues to grow, obviously, and continue that growth into 2027. Thank you, David. Finally, to close us off, what's the company's cash position looking like? What's your cash burn rate, and what's the expected runway? Yeah, we have a little over $13 million of cash at the end of the second quarter. Our guidance for the rest of this year is to burn only $2 million for the entire second half of the year. So when you combine that with about a $5 million burn in the first half, that was about a $7 million burn for the year. By comparison, we burned $18 million in 2025. So the burn rate is coming down, driven by these activities that we're talking about. We have more revenue this year on a lower head count. Doing that, AI is enabling that, but just being more productive and watching our costs, that's going to be the driver to continue that operating leverage into 2027. Great. Thank you again, Paul and David, for joining me for this great chat, and I hope it has been very helpful for our audience as well. Thank you, Sean. Thank you.