Myomo Inc. H.C. Wainwright 28th Annual Global Investment Conference

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 U.S. with chronic arm paralysis. They have suffered a stroke, and there are 800,000 strokes a year in the U.S. 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 Massachusetts Institute of Technology 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.

Well, 2 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 2 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 quarter million 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 1 to 1.5 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 times 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.

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.