8-K
MYOMO, INC. (MYO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 10, 2021
Myomo, Inc.
(Exact Name of Company as Specified in Charter)
| Delaware | 001-38109 | 47-0944526 |
|---|---|---|
| (State or Other Jurisdiction<br> <br>of Incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 137 Portland St., 4^th^ Floor<br> <br>Boston, MA | 02114 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Company’s telephone number, including area code: (617) 996-9058
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, $0.0001 par value per share | MYO | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
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On November 10, 2021, the Company announced its financial results for the quarter ended September 30, 2021. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Form 8-K (including Exhibit 99.1) is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01. |
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(d) Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press release issued by Myomo, Inc. on November 10, 2021, furnished herewith. |
| 104 | The cover page from the Company’s Form 8-K dated November 10, 2021, formatted in Inline XBRL |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 10, 2021 | MYOMO, INC. | |
|---|---|---|
| By: | /s/ David A. Henry | |
| Name: | David A. Henry | |
| Title: | Chief Financial Officer |
EX-99.1
Exhibit 99.1
Myomo Third Quarter 2021 FinancialResults Feature Record Revenue
Revenue of $4.4 million up 128% over prior year, up 159% year-to-date
Gross margin of 75% up 1,900 basis points over prior year
Backlog increased to 177 units
Conference call begins at 4:30 p.m. Eastern time today
BOSTON, Mass. (November 10, 2021) – Myomo, Inc. (NYSE American: MYO) (“Myomo” or the “Company”), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper-limb paralysis, today announced financial results for the three and nine months ended September 30, 2021.
Financial and operational highlights for the third quarter of 2021 include the following (all comparisons are with the third quarter of 2020, unless otherwise noted):
| • | Revenue was $4.4 million, up 128% and representing the highest quarterly revenue in the Company’s<br>history |
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| • | Revenue from the direct billing channel was a record 85% of total revenue, up from 74% in the second quarter of<br>2021 |
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| • | Revenue units were 102, up 100% including 37 units where orders and insurance authorizations were received during<br>the quarter |
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| • | Gross margin was 75%, up 1,900 basis points |
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| • | Backlog, which represents insurance authorizations and orders received but not yet converted to revenue, was a<br>record 177 units as of September 30, 2021, up 11% from June 30, 2021 |
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| • | Orders and insurance authorizations were for 133 patients to receive a MyoPro^®^ |
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| • | The reimbursement pipeline as of September 30, 2021 consisted of 920 MyoPro candidates, including 331<br>additions to the pipeline during the third quarter |
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Management Commentary
“We are proud to be reporting both the highest quarterly revenue and the highest direct billing channel revenue in the Company’s history. These achievements demonstrate the continued success of our transition to being a direct provider of the MyoPro to our patients,” stated Paul R. Gudonis, Myomo’s chairman and chief executive officer. “Our focus is on growing the pipeline and backlog to position the Company for a strong start to 2022, while remaining ever mindful of our mission to improve the lives of people with upper-limb paralysis.”
Financial Results
| For the Three MonthsEnded September 30, | Period-to-PeriodChange | For the Nine Months EndedSeptember 30, | Period-to-PeriodChange | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | % | 2021 | 2020 | % | |||||||||||||||
| Revenue | $ | 4,383,957 | $ | 1,926,660 | 128 | % | $ | 9,824,740 | $ | 3,793,395 | 159 | % | ||||||||
| Cost of revenue | 1,110,204 | 855,338 | 30 | % | 2,634,922 | 1,592,851 | 65 | % | ||||||||||||
| Gross profit | $ | 3,273,753 | $ | 1,071,322 | 206 | % | $ | 7,189,818 | $ | 2,200,544 | 227 | % | ||||||||
| Gross margin | 75 | % | 56 | % | 19 | % | 73 | % | 58 | % | 16 | % |
All values are in US Dollars.
Revenue for the third quarter of 2021 was $4.4 million, an increase of 128% compared with the third quarter of 2020. Growth was driven by an increase in the number of revenue units and a higher average selling price. Myomo recognized revenue on 102 units in the third quarter of 2021, an increase of 100% compared with the third quarter of 2020. Year-to-date revenue of $9.8 million was up 159% compared with the same period a year ago.
Gross margin for the third quarter of 2021 was 75%, compared with 56% for the third quarter of 2020. Margin expansion primarily reflects a higher average selling price and improved fixed cost coverage resulting from higher unit volume. The Company delivered 108 units to patients in the third quarter. Year-to-date gross margin was 73%, compared with 58% in the year-ago period.
Operating expenses for the third quarter of 2021 were $5.3 million, an increase of 47% compared with the third quarter of 2020. This increase was driven by higher clinical and reimbursement headcount and higher advertising costs to generate more leads and additions to the pipeline. Operating expenses for the first nine months of 2021 were $14.8 million, an increase of 34% compared with the same period a year ago.
Operating loss for the third quarter of 2021 decreased to $2.0 million from $2.5 million for the third quarter of 2020. Net loss for the third quarter of 2021 was $2.1 million, or $0.36 per share, compared with a net loss of $2.8 million, or $0.70 per share, for the third quarter of 2020. Net loss available to common stockholders for the first nine months of 2021 was $7.6 million, or $1.38 per share, compared with $10.5 million, or $3.63 per share, for the comparable period in 2020. Net loss available to common stockholders for the first nine months of 2020 included a deemed dividend of $0.7 million related to the repricing of certain warrants.
Adjusted EBITDA^1^ for the third quarter of 2021 was negative $1.7 million, compared with negative $2.3 million for the third quarter of 2020. Adjusted EBITDA for the first nine months of 2021 was negative $6.7 million, compared with negative $8.3 million for the same period a year ago. A reconciliation of GAAP net loss to this non-GAAP financial measure appears below.
Liquidity
Cash and cash equivalents as of September 30, 2021 were $12.6 million. Cash used in operating activities was $2.2 million in the third quarter of 2021. The Company continues to believe its existing cash is sufficient to fund operations for at least the next 12 months.
Business Outlook
“While we expect to report strong year-over-year revenue growth for 2021, we face some short-term challenges in the fourth quarter. Although there are a record number of units in backlog, a temporary labor shortage at one of our subcontractors constrained capacity and deliveries in the early part of the quarter,” said Mr. Gudonis. “Capacity at that subcontractor has returned to nearly normal, but it will be difficult to make up all the delayed shipments by the end of the year. Therefore, those deliveries and associated revenue may be realized in early 2022. In addition, we are appealing a number of recent claim denials after receipt of a pre-authorization and delivery to the patient. As a result of these factors, it is difficult to forecast revenue for the fourth quarter.”
| ^1^ | Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for stock-based<br>compensation expense, the impact of the fair value revaluation of derivative liabilities and loss on extinguishment of debt. |
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Conference Call and Webcast Information
Myomo will hold a conference call today at 4:30 p.m. Eastern time to discuss these results and answer questions. Participants are encouraged to pre-register for the call here. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the start of the call. Those without internet access or unable to pre-register may participate by dialing 844-707-6932 (U.S.) or 412-317-9250 (International). A webcast of the call will also be available at Myomo’s Investor Relations page at http://ir.myomo.com/.
A replay of the webcast will be available beginning approximately one hour after the completion of the live conference call at http://ir.myomo.com/. A dial-in replay of the call will be available until November 24, 2021; please dial 877-344-7529 (U.S.) or 412-317-0088 (International) and provide the passcode 1016253.
Non-GAAP Financial Measures
Myomo is providing financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA. This non-GAAP financial measure is not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Myomo believes the use of this non-GAAP financial measure provides supplementary information for investors to use in evaluating operating performance and in comparing Myomo’s financial measures with other companies in its industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss of extinguishment of debt. This non-GAAP financial measure is not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with GAAP financial measures. Investors are encouraged to review the reconciliation of this non-GAAP measure to its most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
About Myomo
Myomo, Inc. is a wearable medical robotics company that offers improved arm and hand function for those suffering from neurological disorders and upper-limb paralysis. Myomo develops and markets the MyoPro product line. MyoPro is a powered upper-limb orthosis designed to support the arm and restore function to the weakened or paralyzed arms of certain patients suffering from CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, ALS or other neuromuscular disease or injury. It is currently the only marketed device that, sensing a patient’s own EMG signals through non-invasive sensors on the arm, can restore an individual’s ability to perform activities of daily living, including feeding themselves, carrying objects and doing household tasks. Many are able to return to work, live independently and reduce their cost of care. Myomo is headquartered in Boston, Massachusetts, with sales and clinical professionals across the U.S. and representatives internationally. For more information, please visit www.myomo.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding the Company’s future business expectations, including expectations for revenues in the first quarter, its current authorization backlog and its cash runway and capital requirements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors.
These factors include, among other things:
| • | the direct and indirect impact of the novel coronavirus (COVID-19) on our<br>business and operations, including fabrication and delivery, sales, patient consultations, supply chain, manufacturing, insurance reimbursements and employees; |
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| • | our ability to continue normal operations and patient interactions in order to cast, deliver and fit our<br>custom-fabricated device; |
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| • | our marketing and commercialization efforts; |
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| • | our ability to achieve reimbursement from third-party payers for our products; |
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| • | our dependence upon external sources for the financing of our operations, to the extent that we do not achieve or<br>maintain cash flow breakeven; |
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| • | our ability to effectively execute our business plan and scale up our operations; |
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| • | our expectations as to our product development programs, and; |
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| • | general market, economic, environmental and social factors that may affect the evaluation, fitting, delivery and<br>sale of our products to patients. |
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More information about these and other factors that potentially could affect our financial results is included in Myomo’s filings with the Securities and Exchange Commission, including those contained in the risk factors section of the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Although the forward-looking statements in this release of financial information are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Contacts:
For Myomo:
ir@myomo.com
Investor Relations:
Kim Sutton Golodetz
LHA Investor Relations
kgolodetz@lhai.com
212-838-3777
(Tables to follow)
MYOMO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months EndedSeptember 30, | For the Nine Months EndedSeptember 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenue | $ | 4,383,957 | $ | 1,926,660 | $ | 9,824,740 | $ | 3,793,395 | ||||
| Cost of revenue | 1,110,204 | 855,338 | 2,634,922 | 1,592,851 | ||||||||
| Gross profit | 3,273,753 | 1,071,322 | 7,189,818 | 2,200,544 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 641,228 | 345,666 | 1,769,739 | 1,250,430 | ||||||||
| Selling, general and administrative | 4,662,796 | 3,270,757 | 12,982,413 | 9,766,189 | ||||||||
| 5,304,024 | 3,616,423 | 14,752,152 | 11,016,619 | |||||||||
| Loss from operations | (2,030,271 | ) | (2,545,101 | ) | (7,562,334 | ) | (8,816,075 | ) | ||||
| Other expense (income) | ||||||||||||
| Change in fair value of derivative liabilities | — | (888 | ) | — | (122,706 | ) | ||||||
| Interest (income) expense and other expense, net | 4,055 | 29,915 | 10,193 | 254,039 | ||||||||
| Non-cash interest expense, debt discount | — | 12,135 | — | 218,803 | ||||||||
| Loss on extinguishment of debt | — | 189,155 | — | 696,436 | ||||||||
| 4,055 | 230,317 | 10,193 | 1,046,572 | |||||||||
| Loss before income taxes | (2,034,326 | ) | (2,775,418 | ) | (7,572,527 | ) | (9,862,647 | ) | ||||
| Income tax expense | 22,696 | 1,153 | 66,604 | 2,851 | ||||||||
| Net loss | $ | (2,057,022 | ) | $ | (2,776,571 | ) | $ | (7,639,131 | ) | $ | (9,865,498 | ) |
| Deemed dividend on repricing of warrants (2019 revised) | — | — | — | (670,632 | ) | |||||||
| Net loss attributable to common stockholders | $ | (2,057,022 | ) | $ | (2,776,571 | ) | $ | (7,639,131 | ) | $ | (10,536,130 | ) |
| Weighted average number of common shares outstanding: | ||||||||||||
| Basic and diluted | 5,681,121 | 3,940,113 | 5,530,259 | 2,901,398 | ||||||||
| Net loss per share attributable to common stockholders | ||||||||||||
| Basic and diluted | $ | (0.36 | ) | $ | (0.70 | ) | $ | (1.38 | ) | $ | (3.63 | ) |
MYOMO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30,2021 | December 31,2020 | |||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash and cash equivalents | $ | 12,606,758 | $ | 12,241,261 | ||
| Accounts receivable, net | 2,215,696 | 924,916 | ||||
| Inventories, net | 644,138 | 707,114 | ||||
| Prepaid expenses and other current assets | 994,137 | 572,684 | ||||
| Total Current Assets | 16,460,729 | 14,445,975 | ||||
| Equipment, net | 302,110 | 95,023 | ||||
| Operating lease assets with right of use | 696,345 | 168,784 | ||||
| Total Assets | $ | 17,459,184 | $ | 14,709,782 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current Liabilities: | ||||||
| Accounts payable and accrued expenses | 3,420,654 | 2,848,904 | ||||
| Current operating lease liability | 301,878 | 18,289 | ||||
| Deferred revenue | — | 2,512 | ||||
| Total Current Liabilities | 3,722,532 | 2,869,705 | ||||
| Deferred revenue | 1,495 | 1,495 | ||||
| Non-current operating lease liability | 474,188 | 155,148 | ||||
| Other long-term liabilities | 113,423 | 118,060 | ||||
| Total Liabilities | 4,311,638 | 3,144,408 | ||||
| Commitments and Contingencies | ||||||
| Stockholders’ Equity: | ||||||
| Preferred stock | — | — | ||||
| Common stock | 584 | 457 | ||||
| Additional paid-in capital | 88,492,959 | 79,273,964 | ||||
| Accumulated other comprehensive loss | (10,509 | ) | (12,690 | ) | ||
| Accumulated deficit | (75,329,024 | ) | (67,689,893 | ) | ||
| Treasury stock, at cost | (6,464 | ) | (6,464 | ) | ||
| Total Stockholders’ Equity | 13,147,546 | 11,565,374 | ||||
| Total Liabilities and Stockholders’ Equity | $ | 17,459,184 | $ | 14,709,782 |
MYOMO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Nine Months Ended September 30, | 2021 | 2020 | ||||
|---|---|---|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net loss | $ | (7,639,131 | ) | $ | (9,865,498 | ) |
| Adjustments to reconcile net loss to net cash used in operations: | ||||||
| Depreciation | 95,238 | 79,729 | ||||
| Stock-based compensation | 831,046 | 411,192 | ||||
| Bad debt expense | — | 29,839 | ||||
| Non-cash interest expense, debt discount | — | 218,803 | ||||
| Amortization of original issue discount and debt restructuring fee | — | 161,869 | ||||
| Amortization of<br>right-of-use assets | 126,529 | — | ||||
| Loss on extinguishment of debt | — | 696,436 | ||||
| Change in fair value of derivative liabilities | — | (122,706 | ) | |||
| Loss on disposal of asset | 202 | 177 | ||||
| Other non-cash charges | 463 | (2,326 | ) | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (1,281,989 | ) | 85,925 | |||
| Inventories | 52,734 | (324,234 | ) | |||
| Prepaid expenses and other current assets | (422,881 | ) | 30,020 | |||
| Other assets | — | 57,987 | ||||
| Accounts payable and accrued expenses | 577,238 | 494,311 | ||||
| Operating lease liabilities | (51,462 | ) | — | |||
| Deferred revenue | (2,512 | ) | 3,771 | |||
| Other liabilities | (4,637 | ) | 165,889 | |||
| Net cash used in operating activities | (7,719,162 | ) | (7,878,816 | ) | ||
| CASH USED IN INVESTING ACTIVITIES | (302,527 | ) | (30,294 | ) | ||
| CASH PROVIDED BY FINANCING ACTIVITIES | 8,388,076 | 16,761,653 | ||||
| Effect of foreign exchange rate changes on cash | (890 | ) | (417 | ) | ||
| Net increase in cash, cash equivalents and restricted cash | 365,497 | 8,852,126 | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 12,241,261 | 4,540,455 | ||||
| Cash, cash equivalents and restricted cash, end of period | $ | 12,606,758 | $ | 13,392,581 |
MYOMO, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(unaudited)
| For the Three Months EndedSeptember 30, | For the Nine Months EndedSeptember 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| GAAP net loss | $ | (2,057,022 | ) | $ | (2,776,571 | ) | $ | (7,639,131 | ) | $ | (9,865,498 | ) |
| Adjustments to reconcile to Adjusted EBITDA: | ||||||||||||
| Interest (income) expense and other expense, net | 4,055 | 29,915 | 10,193 | 254,039 | ||||||||
| Non-cash interest expense, debt discount | — | 12,135 | — | 218,803 | ||||||||
| Loss on extinguishment of debt | — | 189,155 | — | 696,436 | ||||||||
| Depreciation expense | 36,910 | 26,707 | 95,238 | 79,729 | ||||||||
| Stock-based compensation | 301,763 | 181,702 | 831,046 | 411,192 | ||||||||
| Change in fair value of derivative liabilities | — | (888 | ) | — | (122,706 | ) | ||||||
| Income tax expense | 22,696 | 1,153 | 66,604 | 2,851 | ||||||||
| Adjusted EBITDA | $ | (1,691,598 | ) | $ | (2,336,692 | ) | $ | (6,636,050 | ) | $ | (8,325,154 | ) |
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