UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from ______________ to _____________

Commission file number: 001-41707

Monogram Orthopaedics Inc.

(Exact name of registrant as specified in its charter)

3913 Todd Lane,

Austin, TX

78744

(Address of principal executive offices)

(Zip Code)

(512) 399-2656

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		MGRM		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2024, there were 31,670,375 shares of Common Stock, par value $0.001 per share, of the registrant issued and outstanding.


		Page
PART I	FINANCIAL INFORMATION	2

Item 1.	Financial Statements	2
	Condensed Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	2
	Condensed Statements of Operations for the three months ended March 31, 2024 and March 31, 2023 (Unaudited)	3
	Condensed Statements of Stockholders’ Equity for the three months ended March 31, 2024 and March 31, 2023 (Unaudited)	4
	Condensed Statements of Cash Flows for the three months ended March 31, 2024 and March 31, 2023 (Unaudited)	5
	Notes to Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	17

PART II.	OTHER INFORMATION	18

Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	20
	Signatures	22


	March 31,		December 31,
	2024		2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	10,077,573	$	13,589,028
Account receivable		—		364,999
Prepaid expenses and other current assets		629,751		664,262
Total current assets		10,707,324		14,618,289
Equipment, net of accumulated depreciation		903,011		945,020
Intangible assets, net		496,250		548,750
Operating lease right-of-use assets		435,116		466,949
Total assets	$	12,541,701	$	16,579,008
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,321,313	$	2,462,268
Accrued liabilities		531,239		227,684
Operating lease liabilities, current		131,081		128,266
Total current liabilities		1,983,633		2,818,218
Operating lease liabilities, non-current		330,561		363,724
Total liabilities		2,314,194		3,181,942
Commitments and contingencies		—		—
Stockholders' equity:
Common stock, $.001 par value; 90,000,000 shares authorized, 31,633,995 and 31,338,391 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		31,634		31,338
Additional paid-in capital		65,211,241		64,874,392
Accumulated deficit		(55,015,368)		(51,508,664)
Total stockholders' equity		10,227,507		13,397,066
Total liabilities and stockholders' equity	$	12,541,701	$	16,579,008


	Three months ended
	March 31,
	2024		2023
Product revenue	$	—	$	—
Cost of goods sold		—		—
Gross profit		—		—
Operating expenses:
Research and development		2,406,754		1,939,551
Marketing and advertising		119,694		1,132,625
General and administrative		1,083,711		822,889
Total operating expenses		3,610,159		3,895,065
Loss from operations		(3,610,159)		(3,895,065)
Other income:
Change in fair value of warrant liability		—		2,523
Interest income and other, net		103,455		34,820
Total other income		103,455		37,343
Net loss before taxes		(3,506,704)		(3,857,722)
Income taxes		—		—
Net loss	$	(3,506,704)	$	(3,857,722)
Basic and diluted loss per common share	$	(0.11)	$	(0.40)
Weighted-average number of basic and diluted shares outstanding		31,535,795		9,673,870


								Total
	Common Stock			Additional		Accumulated		Stockholders'
	Shares	Amount		Paid-in Capital		Deficit		Equity
Balance as of December 31, 2023	31,338,391	$	31,338	$	64,874,392	$	(51,508,664)	$	13,397,066
Vesting of Common Stock from services performed	—		—		37,500		—		37,500
Issuance of Common Stock for cash, net of issuance costs	49,146		49		4,696		—		4,746
Issuance of Common Stock upon cashless warrant exercise	246,458		246		(246)		—		—
Stock-based compensation	—		—		294,899		—		294,899
Net loss	—		—		—		(3,506,704)		(3,506,704)
Balance as of March 31, 2024	31,633,995	$	31,633	$	65,211,241	$	(55,015,368)	$	10,227,507


	Series A			Series B			Series C										Total
	Preferred Stock			Preferred Stock			Preferred Stock			Common Stock			Additional		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Paid-in Capital		Deficit		Equity
Balance as of December 31, 2022	4,897,553	$	4,898	3,195,599	$	3,196	438,367	$	438	9,673,870	$	9,674	$	41,894,417	$	(37,763,447)	$	4,149,176
Issuances of Class C Preferred Stock, net of issuance costs	—		—	—		—	21,088		21	—		—		147,021		—		147,042
Stock-based compensation	—		—	—		—	—		—	—		—		368,140		—		368,140
Net loss	—		—	—		—	—		—	—		—		—		(3,857,722)		(3,857,722)
Balance as of March 31, 2023	4,897,553	$	4,898	3,195,599	$	3,196	459,455	$	459	9,673,870	$	9,674	$	42,409,578	$	(41,621,169)	$	804,636


	Option	Weighted-Average		Weighted-Average
	Number of	Exercise		Remaining
	Shares	Price Per Share		Contractual Term
Options outstanding as of January 1, 2024	4,904,266	$	1.93	7.50
Granted	20,500		3.84	—
Exercised	—		—	—
Canceled	(39,377)		2.65	—
Options outstanding as of March 31, 2024	4,885,389	$	1.93	7.20
Options exercisable as of March 31, 2024	2,901,918	$	1.75	6.50


	For the three months ended
	March 31,
	2024		2023
Cash used in operating activities	$	(3,650,768)	$	(2,882,377)
Cash used in investing activities	$	(11,389)	$	(14,792)
Cash provided by financing activities	$	150,702	$	147,042


Exhibit No.		Description
3.1		Sixth Amended and Restated Certificate of Incorporation of the Company (incorporated by reference Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 15, 2024)
3.2		Amended and Restated Bylaws, effective as of March 12, 2024 (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 15, 2024)
4.1		Warrant Agreement dated December 20, 2018 between Monogram Orthopaedics Inc. and Pro-Dex, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
4.2		Warrant to Purchase Capital Stock dated February 7, 2019 between Monogram Orthopaedics, Inc. and ZB Capital Partners, LLC as Holder (incorporated by reference to Exhibit 4.2 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
4.3		Form of Warrant to be issued to StartEngine Primary, LLC (incorporated by reference to Exhibit 4.3 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
4.4		Description of Securities (incorporated by reference to exhibit 4.4 to the Company's Annual Report on Form 10 - K for the fiscal year ended December 31, 2023 filed with the SEC on March 14, 2024)
10.1		Consulting agreement dated April 5, 2021 between Monogram Orthopaedics, Inc. and Doug Unis (incorporated by reference to Exhibit 10.1 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.2		Amended Employment Agreement dated April 29, 2018 between Monogram Orthopaedics, Inc. and Benjamin Sexson (incorporated by reference to Exhibit 10.2 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.3		April 30, 2019 Amendment to Employment Agreement dated April 29, 2018 between Monogram Orthopaedics, Inc. and Benjamin Sexson (incorporated by reference to Exhibit 10.3 to the Company’s Form S-1 filed with the SEC on July 27, 2023).
10.4		May 31, 2020 Amendment to Employment Agreement dated April 29, 2018 between Monogram Orthopaedics, Inc. and Benjamin Sexson (incorporated by reference to Exhibit 10.4 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.5		Exclusive Licensing Agreement dated October 3, 2017 between Monogram Orthopaedics, Inc. as Licensee and Icahn School of Medicine at Mount Sinai as Licensor (incorporated by reference to Exhibit 10.5 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.6		Option Agreement dated March 18, 2019 between Monogram Orthopaedics, Inc. and Icahn School of Medicine at Mount Sinai (incorporated by reference to Exhibit 10.6 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.7		Amendment No. 2 to the Exclusive Licensing Agreement dated June 28, 2019 between Monogram Orthopaedics, Inc. as Licensee and Icahn School of Medicine at Mount Sinai (incorporated by reference to Exhibit 10.7 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.8		Amendment No. 3 to the Exclusive Licensing Agreement dated September 17, 2020 between Monogram Orthopaedics, Inc. as Licensee and Icahn School of Medicine at Mount Sinai (incorporated by reference to Exhibit 10.8 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.9		Amendment No. 4 to the Exclusive Licensing Agreement dated May 17, 2023 between Monogram Orthopaedics, Inc. as Licensee and Icahn School of Medicine at Mount Sinai (incorporated by reference to Exhibit 10.9 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.10		Stock Issuance Agreement between Monogram Orthopaedics, Inc. and Icahn School of Medicine at Mount Sinai (incorporated by reference to Exhibit 10.10 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.11		Development and Supply Agreement dated December 20, 2018 between Monogram Orthopaedics Inc. and Pro-Dex, Inc. (incorporated by reference to Exhibit 10.11 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.12		Amended and Restated 2019 Stock Option and Grant Plan (incorporated by reference to Exhibit 10.12 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.13		Noel Knape Offer Letter (incorporated by reference to Exhibit 10.13 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.14		Form of Indemnification Agreement with Executive Officers and Directors of the Company (incorporated by reference to Exhibit 10.14 to the Company’s Form S-1 filed with the SEC on July 27, 2023)

10.15		Common Stock Purchase Agreement, dated July 19, 2023 by and between Monogram Orthopaedics, Inc. and B. Riley Principal Capital II, LLC (incorporated by reference to Exhibit 10.15 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.16		Registration Rights Agreement, dated July 19, 2023 by and between Monogram Orthopaedics, Inc. and B. Riley Principal Capital II, LLC (incorporated by reference to Exhibit 10.16 to the Company’s Form S-1 filed with the SEC on July 27, 2023)
10.17 †		Supply Agreement dated October 3, 2023 between Monogram Orthopaedics, Inc. and Pro-Dex, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2023)
10.18		Warrant Exercise Side Letter dated October 2, 2023 between Monogram Orthopaedics, Inc. and Pro-Dex, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2023)
10.19		November 3, 2023 Amendment to Warrant Exercise Side Letter dated October 2, 2023 between Monogram Orthopaedics, Inc. and Pro-Dex, Inc. (incorporated by reference to exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 filed with the SEC on November 8, 2023)
10.20		Kamran Shamaei Offer Letter dated February 11, 2021 (incorporated by reference to exhibit 10.20 to the Company's Annual Report on Form 10 - K for the fiscal year ended December 31, 2023 filed with the SEC on March 14, 2024)
10.21		Consulting agreement dated July 28, 2023 between Monogram Orthopaedics Inc. and Colleen Gray (incorporated by reference to Exhibit 10.21 to the Company's Form POS - AM filed with the SEC on April 18, 2024)
10.22		Consulting agreement dated September 19, 2022 between Monogram Orthopaedics Inc. and Paul Riss (incorporated by reference to Exhibit 10.22 to the Company's Form POS - AM filed with the SEC on April 18, 2024)
10.23*†		Clinical Research Services Master Agreement between the Company and the CRO dated May 8, 2024.
31.1*		Certification of the principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase
104		Cover Page Interactive Data File—the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


By	/s/ Benjamin Sexson
Benjamin Sexson, Chief Executive Officer
Monogram Orthopaedics, Inc.

The following persons in the capacities and on the dates indicated have signed this offering statement.

/s/ Benjamin Sexson
Benjamin Sexson, Chief Executive Officer, Director
Date: May 13, 2024

/s/ Noel Knape
Noel Knape, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer
Date: May 13, 2024

SEC Form 10-Q filed by Monogram Orthopaedics Inc.