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Monogram Technologies Inc. (MGRM)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 reflected material investment ahead of commercialization: net loss widened to $5.0M as marketing expense surged to support an upsized $13M preferred raise; cash rose to $16.6M, extending runway to fund near‑term milestones .
  • FDA 510(k) process advanced but encountered a standard Additional Information Request; management plans a December Q‑submission meeting and targets an FDA response by Q2 2025 if testing strategy is accepted .
  • OUS clinical trial (India) for the fully autonomous system is prepared with Shalby; cost estimated at ~$1.2–$1.3M and expected to initiate in 2025 pending local regulatory clearance .
  • No Wall Street consensus estimates were available from S&P Global during this session; estimate comparisons are therefore not provided (S&P Global access unavailable).
  • Near‑term stock catalysts: December FDA Q‑sub meeting; OUS trial clearance/training progress; clarity on FDA testing acceptance and potential 510(k) timeline .

What Went Well and What Went Wrong

What Went Well

  • Closed an upsized and oversubscribed $13M public offering to fund near-term milestones; cash increased to $16.6M by quarter-end, bolstering liquidity .
  • Progressed FDA pathway: 510(k) submission in July passed administrative review; management characterized the AIR and Q‑sub approach as expected and constructive .
  • Strategic OUS plan: secured Shalby collaboration for multicenter trial (102 subjects, primary endpoint at 6 weeks; secondary at 12 weeks) aiming to accelerate international commercialization for the fully autonomous system .

Management quotes:

  • “Funds from the offering are expected to provide the cash runway to meet near-term commercialization milestones...” — CEO Ben Sexson .
  • “We have prepared a [~40‑page] response to those 15 [FDA] questions... a very thoughtful document.” — CEO Ben Sexson .
  • “We expect our first live inpatient surgeries and... that clinical trial to move very quickly.” — CEO Ben Sexson .

What Went Wrong

  • Net loss expanded sharply vs prior year ($5.0M vs $1.0M), driven primarily by marketing costs for the capital raise and absence of the prior‑year non‑cash warrant liability gain .
  • No product revenue; operating losses persisted as the company remains pre‑commercial .
  • S&P Global consensus estimates were unavailable, limiting assessment versus Street expectations (S&P Global access unavailable).

Financial Results

MetricQ3 2023Q1 2024Q2 2024Q3 2024
Product Revenue ($USD)$0 $0 $0 $0
Research & Development ($USD)$2,664,542 $2,406,754 $2,425,629 $2,214,729
Marketing & Advertising ($USD)$32,220 $119,694 $91,715 $1,838,937
General & Administrative ($USD)$1,060,270 $1,083,711 $1,116,179 $1,093,456
Total Operating Expenses ($USD)$3,757,032 $3,610,159 $3,633,523 $5,147,122
Loss from Operations ($USD)$(3,757,032) $(3,610,159) $(3,633,523) $(5,147,122)
Change in Fair Value of Warrant Liability ($USD)$2,646,399 $0 $439,611 $0
Interest & Other, net ($USD)$114,973 $103,455 $96,066 $112,621
Net Loss ($USD)$(995,660) $(3,506,704) $(3,537,457) $(5,034,501)
Basic/Diluted EPS ($USD)$(0.03) $(0.11) $(0.11) $(0.16)
Cash & Equivalents (end of period) ($USD)N/A$10,077,573 $7,306,069 $16,565,142

Notes:

  • Q3 2024 marketing expense increased to support awareness for the Series D preferred offering, which closed upsized at $13M .
  • Prior-year quarter benefited from a non‑cash warrant liability fair value gain, no longer present in 2024 .

KPIs and Operating Metrics

KPIQ3 2023Q1 2024Q2 2024Q3 2024
Operating Cash Flow YTD ($USD)N/AN/A$(6,477,911) $(10,967,238)
Employees (FT)N/AN/AN/A27
Financing Activities YTD ($USD)N/A$150,702 $206,341 $13,991,161
Preferred Raise Closed ($USD)N/AN/AN/A$13,000,000
OUS Trial Cost Estimate ($USD)N/AN/A~$1,300,000 ~$1,200,000

Estimate Comparison (S&P Global)

MetricQ3 2024 ActualQ3 2024 ConsensusSurprise
Primary EPS$(0.16) Unavailable (S&P Global)*N/A
Revenue$0 Unavailable (S&P Global)*N/A

*Estimates data was unavailable from S&P Global during this session.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FDA 510(k) – semi‑active mBôs TKA2H24 submissionSubmit in 2H 2024 AIR received 9/30; Q‑sub meeting targeted December; respond within 180 days; potential FDA decision by Q2 2025 if plan accepted Timeline clarified; process extended
OUS Clinical Trial (India) – fully autonomous2024 progressProgress toward OUS trials Clearance process ongoing; import approval for training received; expect live surgeries in 2025; cost ~$1.2–$1.3M Execution timeline articulated
Cash Burn RateNear‑termN/A~$1.2M/month run rate; sufficient access to capital for short‑term milestones New disclosure
Marketing & AdvertisingQ4 2024N/A“Materially reduced” post offering close Lowered
Cash Runway2024–2025N/ACash $16.6M at Q3-end; management expects runway for near‑term milestones Improved liquidity

No guidance provided on revenue, margins, OpEx ranges beyond disclosures above; no dividends disclosed.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2024)Trend
Regulatory/FDAPlan to submit 510(k) in 2H24; FDA feedback on verification plan and OUS protocol constructive 510(k) submitted 7/19; AIR on 9/30; Q‑sub meeting planned for December; response due within 180 days; target FDA decision by Q2 2025 if plan accepted Advancing with defined next steps; timeline elongated
OUS Clinical TrialEngaged CRO; intent to progress OUS live‑patient trials Shalby collaboration; 102 subjects; endpoints at 6 and 12 weeks; import approval for training; expect initiation in 2025 Moving from planning to pre‑execution
Capital & LiquidityATM and Series D announced; cash $7.3M at Q2-end Closed $13M preferred; cash $16.6M; burn ~$1.2M/month; financing activities YTD ~$14.0M Runway strengthened
Technology & AccuracyIntroduced mVision; verification/validation largely complete by Q2 Emphasis on aspiration for “most accurate system”; no tool change (cost/efficiency); personalized planning vs haptics Confidence and positioning rising
Market AdoptionGeneral opportunity articulated Robotic penetration forecast (1 in 2 by 2030); fellowship exposure to Mako ~70%; surgeon demographics shifting; positioning vs incumbents Adoption tailwinds emphasized

Management Commentary

  • “We believe this response [to AIR] provides more transparency for our path forward... We anticipate holding the issue-specific meeting with the FDA by December 2024.” — CEO Ben Sexson .
  • “We have an aspirational goal to have the most accurate system on the market... [to be] clinically validated.” — CEO Ben Sexson .
  • “Our operating cash flow year‑to‑date is $10.9 million [used]... puts us in a really good position going forward.” — CFO Noel Knape .
  • “We expect our first live inpatient surgeries... and that clinical trial to move very quickly.” — CEO Ben Sexson .

Q&A Highlights

  • OUS trial timing and revenue: Clearance process “on time”; import approval for training received; trial itself is all cost (no revenue), but success could lead to India clearance and rapid adoption with Shalby .
  • Marketing expense normalization: Elevated Q3 spend was offering‑related; “materially reduced” after close .
  • Runway and burn: ~$1.2M/month run rate; sufficient capital for short‑term milestones; potential to accelerate multi‑application development with additional capital .
  • Strategic interest and market positioning: Management underscores Mako dominance and Monogram’s next‑gen fully autonomous angle; believes demand will outstrip supply post‑commercialization .
  • FDA timeline clarification: AIR response due by March 29, 2025; if FDA accepts proposed testing, management expects feedback by Q2 2025; clinical data plan ready if requested .

Estimates Context

  • S&P Global consensus estimates for Q3 2024 EPS and revenue were unavailable during this session; as a result, beat/miss analysis versus the Street cannot be provided (S&P Global access unavailable).
  • Actual reported EPS was $(0.16); revenue was $0, reflecting pre‑commercial status .

Key Takeaways for Investors

  • FDA process is the dominant driver; December Q‑submission meeting outcome and acceptance of the testing plan are pivotal for a potential Q2 2025 decision on the semi‑active system .
  • Liquidity improved with $13M preferred raise; cash rose to $16.6M, supporting an ~$1.2M/month burn and funding OUS trial initiation and regulatory workstreams .
  • Operating loss widened in Q3 due to one‑time marketing expense; management indicated spending has normalized post offering .
  • OUS trial with Shalby offers a parallel path to commercialization and data generation for the fully autonomous system; trial design and endpoints are clear, with cost ~$1.2–$1.3M .
  • Non‑cash items affected YoY comparability: prior‑year quarter included a warrant liability fair value gain; absent in 2024, magnifying the apparent increase in net loss .
  • Competitive narrative stresses personalization and accuracy, potential cost/efficiency advantages (e.g., single blade per case, no tool change), and demographic tailwinds in orthopedic robotics adoption .
  • Near‑term trading setup: watch for FDA Q‑sub meeting read‑through, OUS clearance updates, and any disclosure on testing acceptance or timing; downside risks include extended FDA data requests and capital needs if timelines slip .