10-K: Monogram Technologies Inc. Reports 2024 Results, Awaits FDA Decision on Robotic System

Monogram Technologies Inc. files its 10-K, detailing 2024 financials and progress on its robotic surgical system, awaiting FDA clearance.

Summary

• Monogram Technologies Inc., an AI-driven robotics company focused on orthopedic surgery, filed its 10-K report for the year ended December 31, 2024.
• The company is developing an autonomous surgical robot for patient-optimized orthopedic implants.
• Monogram has submitted a 510(k) application to the FDA for its surgical robot, which is currently under review.
• The company reported a net loss of $16.3 million for 2024, compared to a net loss of $13.7 million in 2023.
• Revenue of $364,999 was recognized during the year ended December 31, 2023 from the sale of a single unit of robotic surgical equipment.
• As of December 31, 2024, Monogram had approximately $15.7 million in cash.
• The company is pursuing additional capital through equity and debt offerings.
• Monogram is collaborating with Shalby Limited in India to conduct a clinical trial for its second-generation TKA system, expected to begin in 2025.
• The company estimates $1.5 million to be a reasonable estimate of its contingent obligation in the Mount Sinai settlement matter and has recorded a liability for this amount.
• The company has installed a 352 square foot cadaver lab in its Austin facility to support its research and development initiatives.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there's progress on regulatory submissions and collaborations, the company is still operating at a loss and faces significant risks. The future is uncertain, hinging on FDA approval and successful fundraising.

Positives

• Monogram has submitted its formal response to the FDA regarding the Additional Information Request (AIR) on February 25, 2025.
• The company is collaborating with Shalby Limited to conduct a clinical trial in India for its second-generation TKA system, anticipated to begin in 2025.
• Monogram has approximately $15.7 million in cash as of December 31, 2024.
• The company has installed a 352 square foot cadaver lab in its Austin facility to support its research and development initiatives.
• The company has sold 2,072,790 shares of Common Stock for total gross proceeds of $5.3 million in the At-The-Market Offering.

Negatives

• Monogram reported a net loss of $16.3 million for 2024.
• The company estimates $1.5 million to be a reasonable estimate of its contingent obligation in the Mount Sinai settlement matter and has recorded a liability for this amount.
• The company has recorded losses since inception and, as of December 31, 2024, had working capital of approximately $14.8 million and total stockholders equity of $14.5 million.

Risks

• The company's ability to generate material revenues depends heavily on successful completion of one or more development programs leading to submission of an acceptable 510(k) medical device clearance application to FDA.
• The FDA may require clinical data to obtain clearance for the company's product candidates, which could significantly increase the time and cost needed to prepare the premarket application.
• The company may need to raise substantial additional capital in the future to fund its operations, and it may be unable to raise such funds when needed and on acceptable terms.
• The company operates in a highly competitive industry dominated by several large, well-capitalized market leaders.
• The company's use of artificial intelligence (AI) and machine learning (ML) technologies is subject to significant regulatory oversight, and changes in regulations or guidance could impact its ability to develop and commercialize AI-driven solutions.
• The company may have to reduce its headcount if it is unable to raise sufficient funds.
• The company may fail to meet the Sarbanes-Oxley regulations and may lack the financial controls and safeguards required of public companies.

Future Outlook

The Company plans to continue to try to raise additional capital through available financing options to the Company, including, but not limited to, registered or exempt equity and/or debt offerings, as well as straight or convertible debt financings.

Industry Context

The orthopaedic devices market is highly concentrated, with the top seven market participants accounting for 66% of total sales as of 2023. Monogram's primary target market, the joint reconstruction market, is even more concentrated, with the top four market participants accounting for approximately 70% of total market sales.

Comparison to Industry Standards

• According to Orthopaedic Network News (Vol 35, No 3, September 2024), Stryker's share of robotic joint replacement procedures was 88% in 2023, with the Zimmer Rosa at 9%, DePuy Synthes at 3%, and Smith & Nephew Navio systems accounting for less than 1%.
• The Stryker Mako robot is currently the only system that uses a CT-based planning approach combined with a navigated multi-joint cutting arm featuring an integrated sagittal cutter.
• According to Orthopaedic Network News (Vol 35, No 3, September 2024), approximately 13% of total primary knee replacements are robotic, and 8% of hip replacements are prepared robotically.

Legal Proceedings

• Following our listing on Nasdaq, a former investor filed suit against the Company and its Transfer Agent in July 2023 in New York County Supreme Court.
• Both the Company and our Transfer Agent believe the claim is without merit and are seeking dismissal of the action, most recently filing a Reply Memorandum of Law in Support of Renewed Motion to Dismiss on February 13, 2024.

Related Party Transactions

• The Company entered into a supply agreement with Pro-Dex, Inc., where Rick Van Kirk, a member of the Company's Board of Directors, is the Chief Executive Officer.
• The Company has been in discussions with Mount Sinai as to whether becoming publicly traded on Nasdaq in May 2023 without undertaking a traditional initial public offering constituted a Significant Transaction under the Licensing Agreement.

Stakeholder Impact

• Shareholders face potential dilution from future equity offerings.
• Employees' job security could be affected by the company's ability to raise capital.
• Customers (surgeons and hospitals) are awaiting the commercial availability of the robotic system, which depends on FDA clearance.
• Suppliers and creditors are subject to the company's financial stability and ability to meet its obligations.

Next Steps

• The company awaits a clearance decision from the FDA for its mBs Total Knee Arthroplasty (TKA) System.
• Monogram anticipates initiating the clinical trial in India in 2025.
• The company plans to continue to try to raise additional capital through available financing options.

Key Dates