Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion And Analysis Of Financial Condition And Results Of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the accompanying notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as previously filed with the Commission. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs, involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Monogram Technologies Inc. (the "Company", "Monogram", "we," "us," "our") was originally incorporated under the laws of the State of Delaware on April 21, 2016, as "Monogram Arthroplasty Inc." On March 27, 2017, the Company changed its name to "Monogram Orthopedics Inc." On May 15, 2024, the Company changed its name from Monogram Orthopedics Inc. to "Monogram Technologies Inc." Monogram Technologies is an AI-driven robotics company focused on improving human health, with an initial focus on orthopedic surgery. The Company has developed a next-generation surgical robot to enable placement of orthopedic implants, aiming to leverage advanced machine vision, augmented reality and machine learning ("AI"). The Company's AI capabilities are largely developed internally using static datasets, while certain R&D efforts integrate externally sourced AI models to complement its internal development. The Company has a FDA cleared surgical robot that can execute specialized paths for high precision insertion of implants in simulated cadaveric surgeries. Monogram intends to produce and market robotic surgical equipment and related software, orthopaedic implants, tissue ablation tools, navigation consumables, and other miscellaneous instrumentation necessary for reconstructive joint replacement procedures. The Company has obtained 510(k) clearances for certain implants and has obtained 510(k) premarket clearance for the mBôs™ TKA System, the Company's first-generation robotic system for which its implants are designed for use.

Recent Developments

Mandatory Conversion of Series D Preferred Stock

On July 7, 2025 (the "Mandatory Conversion Notice Date") the Company electronically mailed to the holders of Series D Preferred Stock (the "Holders"), a Mandatory Conversion Notice (as defined in the Certificate of Designation) notifying the Holders that, in accordance with Section 6(a) of the Certificate of Designation, the closing price of the Common Stock closed at or above $2.8125 per share for ten (10) consecutive trading days ending and including the Mandatory Conversion Notice Date, thereby trigging a Mandatory Conversion pursuant to Section 6(a) of the Certificate of Designation. Such conversion shall be effective as of July 14, 2025.

Pending Merger with Zimmer Biomet

On July 11, 2025, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Zimmer Biomet Holdings, Inc. ("Zimmer Biomet"), a Delaware corporation, and Honey Badger Merger Sub, Inc. ("Merger Sub"), a Delaware corporation and wholly-owned subsidiary of Zimmer Biomet. Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into the Company (the "Merger"), with the Company continuing as the surviving corporation and a wholly-owned subsidiary Zimmer Biomet. Pursuant to the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each outstanding share of the our Common Stock, Series D Preferred Stock, and Series E Preferred Stock, other than shares owned by the Company, Zimmer Biomet, Merger Sub or any of their respective subsidiaries (which shares will be canceled) and shares with respect to which any appraisal rights are properly exercised and not withdrawn under Delaware law, will automatically be converted into the right to receive (A) in the case of each share of Common Stock, an amount equal to (i) $4.04 per share (the "Cash Amount") without interest and subject to applicable withholding taxes, plus (ii) one contractual contingent value right pursuant to the CVR Agreement (as described below, a "CVR" and, together with the Cash Amount, the "Merger Consideration"), (B) in the case of each share of Series D Preferred Stock, an amount equal to $2.25 per share, in cash, without interest and subject to applicable withholding taxes and (C) in the case of each share of Series E Preferred Stock, an amount equal to $100.00 per share, in cash, without interest and subject to applicable withholding taxes.

Each CVR represents the right to receive, subject to the achievement of certain milestone payment triggers, a cash payment of $1.04 per CVR for the First Milestone, $1.08 per CVR for the Second Milestone, up to $3.41 per CVR for the Third Milestone, up to $3.41 per CVR for the Fourth Milestone and up to $3.43 per CVR for the Fifth Milestone. The cash payment and milestone trigger for each of the foregoing Milestones is detailed in the CVR Agreement, with no payment being payable if the Milestone is not attained during the applicable period, provided, however, with regard to the each of the Third, Fourth, and Fifth Milestones partial payments of each

Milestone may be triggered based upon certain break points, with the break points and partial payment percentages set forth in the CVR Agreement.

The consummation of the Merger is subject to certain closing conditions, including (i) the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Company common stock, (ii) the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and (iii) the absence of any legal restraints that have the effect of preventing the consummation of the Merger.

Mount Sinai Termination Agreement

On July 9, 2025 the Company entered into a Termination and Release Agreement (the "Termination Agreement") with Icahn School of Medicine at Mount Sinai ("Mount Sinai") under which the parties agreed to terminate the Exclusive License Agreement, originally entered into on October 3, 2017 (the "License Agreement), and release each other from any and all claims that they had, have or may have arising out of or in connection with the License Agreement. As consideration for Mount Sinai's agreement to terminate the License Agreement, the Company paid $500,000 to Mount Sinai in July 2025 and agreed to issue 35,000 shares of its newly designated Series E Preferred Stock to Mount Sinai.

Series E Preferred Stock has a par value of $0.001 per share and a liquidation preference of $100 per share in the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company or a Deemed Liquidation Event. Any liquidation preference that may be payable to holders of Series E Preferred Stock ranks (i) senior to any distributions payable to holders of Common Stock, (ii) junior to any distributions payable to holders of future senior securities, and (iii) pari passu to any distributions payable to holders of Series D Preferred Stock. Given the expected closing of the Merger, the Company estimated the fair value of the Series E Preferred Stock issued to Mount Sinai approximated its liquidation value of $3.5 million.

Macroeconomic and Geopolitical Environment

During the first half 2025, the United States government announced new tariffs on goods imported from various countries, including China and European Union member states. In response, some governments have imposed or threatened reciprocal tariffs, and the U.S. is currently engaged in negotiations with certain trading partners. While our Company does not currently generate revenue from product sales, these developments could impact our future operations. Specifically, tariffs may lead to increased costs for components and materials sourced internationally, potentially affecting the production and pricing of our robotic surgical systems and orthopedic implants upon commercialization. Additionally, changes in trade policies, economic slowdowns, market volatility, and inflation could negatively influence demand for our products and disrupt supply chains. We continue to monitor these macroeconomic and geopolitical factors, recognizing that they pose risks that could materially affect our business and financial results. We also note rising geopolitical tensions in South Asia, particularly between India and Pakistan. Should this situation escalate into a broader conflict, it could materially impact our ability to conduct clinical trials in India, delay regulatory processes, and disrupt planned development activities in the region.

Regulatory Update

On March 17, 2025 the Company announced that the U.S. Food and Drug Administration ("FDA") has granted 510(k) clearance for its Monogram mBôs™ TKA System. This determination means that Monogram may market the device, subject to the general controls provisions of the Federal Food, Drug, and Cosmetic Act. Now that the Monogram mBôs™ TKA System has received FDA clearance, it opens significant opportunities for the Company both domestically and internationally. Over the coming months, Monogram will integrate recent upgrades to the cutting system and other system enhancements into the cleared mBôs™ TKA System to further strengthen its competitiveness. The Company is focused on initial placements with key surgeon KOLs in strategic geographies to establish clinical experience and demonstrate the system's advantages in real-world surgical settings.

Monogram remains committed to a disciplined, long-term commercialization strategy and will take a measured and strategic approach to market adoption. While the orthopedic robotics market operates on a long sales cycle, this milestone significantly de-risks the platform and validates the Company's technology, positioning Monogram for new strategic opportunities as it executes its growth strategy.

On April 29, 2025 the Company announced it has obtained regulatory approval from India's Central Drugs Standard Control Organization ("CDSCO") to import its Monogram TKA System (the planned successor to the mBôs™ TKA System) to conduct a 102-patient, multi-center clinical investigation evaluating the safety and effectiveness of the Monogram TKA System, the successor of the mBôs™ TKA system. The study will be conducted in collaboration with Shalby Limited (NSE: SHALBY) ("Shalby"), one of the world's largest orthopedic hospital groups. As previously announced, Monogram and Shalby are partnering to evaluate the safety and

effectiveness of the mBôs™ TKA System with the Consensus CKS implant, which is substantially equivalent to the Monogram mPress implants for regulatory purposes. The clinical trial will include 102 total knee replacement procedures, with a three-month clinical follow-up, conducted across multiple sites in India.

On July 28, 2025, Monogram announced that on July 26, 2025 it had completed the first ever fully autonomous saw-based robotic knee replacement procedure on a live patient, initiating the planned clinical trial. The clinical trial includes 102 total knee replacement procedures, with a three-month clinical follow-up, conducted across multiple sites in India.

General Market Update

The Company continues to see a significant and growing market opportunity for an active cutting robotic system that does not utilize haptic controls. Haptic controls may describe haptic control schemes such as admittance control, impedance control, or hybrid control, i.e., configurations where the device is not intended to move autonomously on its own. The Company believes the patent landscape for haptic control and the widespread adoption of products like the Mako Robotic - Arm Assisted Surgery System developed by Stryker Corporation could be favorable for next-generation active cutting robots like Monogram's mBôs™ TKA System, which is being designed to efficiently resect bone without utilizing haptic controls. Monogram has filed several patents around its active control scheme, which are currently under review. Monogram is not aware of any widely accepted products where the robot efficiently resects bone with a saw on the market today other than the Mako system.

Results of Operations for the Three & Six Months ended June 30, 2025 and 2024

Revenues

The Company did not have any product sales during the three and six months ended June 30, 2025 and 2024. On March 17, 2025, FDA granted 510(k) clearance for its Monogram mBôs™ TKA System and, as a result, the Company can now begin to market the device.

Operating Expenses

The following table sets forth our operating expenses for the period indicated (dollar amounts in thousands):

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Research and development ("R&D") expenses decreased by 7% during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024. In both periods the decreases were primarily due to the completion of the verification and validation phase of the development of the Monogram mBôs™ TKA System in 2024. The decrease in the first quarter of 2025 was partially offset by a $250,000 bonus triggered during the first quarter of 2025 from the grant of FDA 510(k) clearance for its Monogram mBôs™ TKA System.

The verification phase involved intensive testing to demonstrate the system is safe and effective and often requires optimization of the prototype design through an iterative process of design changes and material changes to achieve an optimum system. This led to increased costs in prototype material expenses, payroll and related expenses, and contractor expenses. The Company largely completed the verification and validation phases in the first half of 2024, resulting in a reduction of R&D expenses during the three and six months ended June 30, 2025, compared to the same period in 2024. R&D expenses in both periods were primarily comprised of payroll and related costs, contractor and prototype material expenses for the development of its novel robotic system. R&D efforts have continued

with the introduction of a novel registration and tracking system prototype named mVision as well as enhancements to the mBôs™ TKA System and ongoing development of the next-generation Monogram TKA System.

Marketing and advertising expenses decreased by 54% during the three months ended June 30, 2025 compared to the three months ended June 30, 2025 and by 59% during the six months ended June 30, 2025 compared to the six months ended June 30, 2025. During 2025, these expenses primarily related to payroll-related expenses for marketing employees. During 2024, these expenses primarily related to external costs related to marketing efforts intended to increase market awareness of Monogram for fund raising purposes. The Company had lower marketing and advertising expenditures of $50,000 during the three months ended June 30, 2025 and $125,000 for the six months ended June 30, 2025 due to marketing activity related to raising awareness of the Company's stock to help support the trading price of the Company's common stock listed on Nasdaq in the first half of 2024 that did not continue in 2025.

General and administrative expenses decreased by 31% during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 and by 18% during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. In both periods, general and administrative expenses were composed primarily of payroll-related expenses and required public company expenses including insurance expenses, regulatory expenses, and professional services. The decreases in both periods were primarily the result of the receipt $180,000 in Employee Retention Credits in Q2 2025, lower contractor expenses related to reduced FDA 510(k) application activity and reduced other ordinary expenses resulting from the lower overall activity.

Other Income (Expense)

The following table sets forth our other income and expenses for the period indicated (in thousands):

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Interest income and other during the three and six months ended June 30, 2025 and 2024 primarily relates to investment income earned by the Company on balances invested in a JP Morgan US Government Money Market Fund. Other expense during the three and six months ended June 30, 2025 resulted from the Termination Agreement entered into with Mount Sinai, under which the Company recorded a $2.5 million charge to reflect the difference between the final Termination Agreement liability of $4.0 million and the estimated $1.5 million contingent liability previously recorded at December 31, 2024 (reflecting the Company's estimate at the time of the cost to terminate its License Agreement with Mount Sinai).

Net Loss

As a result of the foregoing, the Company had a net loss of $5.4 million during the three months ended June 30, 2025 - a 54% increase compared to the $3.5 million net loss during the three months ended June 30, 2024 Additionally, the Company had a net loss of $8.6 million for six months ended June 30, 2025 - a 23% increase compared to the net loss of $7.0 million during the six months ended June 30, 2024. For both periods, the increase in net loss was driven primarily by the $2.5 million increase in the expense accrual related to terminating the Mt. Sinai License Agreement.

Liquidity and Capital Resources

As of June 30, 2025, the Company had approximately $12.8 million in cash. The Company has recorded losses since inception and, as of June 30, 2025, had working capital of approximately $7.2 million and total stockholders' equity of $8.6 million. Since inception, the Company has been primarily capitalized through securities offerings. On March 17, 2025, the FDA granted 510(k) clearance for the

Monogram mBôs™ TKA System and, as a result, the Company can now begin to market the device. The Company does not anticipate generating sufficient revenues to support its operations from sales of this device in the near future.

As disclosed elsewhere in this Quarterly Report, on July 11, 2025, we entered into the Merger Agreement with Zimmer Biomet, pursuant to which we have agreed to merge with a subsidiary of Zimmer Biomet, subject to the terms and conditions therein. Under the Merger Agreement, the Company is restricted from issuing equity or equity-linked securities, including convertible notes, options, warrants, or any other securities convertible into or exchangeable for equity, without the prior written consent of Zimmer Biomet. These restrictions will remain in effect until the earlier of the closing of the Merger or termination of the Merger Agreement.

We believe that our existing cash resources will be sufficient to fund our operations through the expected closing of the Merger. However, if the merger is not completed as anticipated during the period from December 1, 2025 to the End Date (as defined in the Merger Agreement), we may rely on the Loan Agreement, pursuant to which, among other things, at the Company's request, Zimmer Biomet will lend to the Company up to $15 million, which the Company believes would provide sufficient capital for at least six months following such an event.

Prior to entering into the Merger Agreement, the Company had available to it the following sources of financing. While these sources of financing will not be available to the Company while the merger is pending, in the event the merger is not consummated, the Company expects these sources of financing would again become available to the Company.

The Company's unaudited financial statements included in this Quarterly Report have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a business that has not yet generated profits, incurred a net loss during the six months ended June 30, 2025 of $8.6 million and has an accumulated deficit of $77.0 million as of June 30, 2025. The Company's ability to continue as a going concern in the next twelve months following the date the unaudited financial statements were issued is dependent upon its ability to produce revenues, raise capital, and/or obtain other financing sufficient to meet current and future obligations. Management has evaluated these conditions and believes its current cash balances, plus the additional capital available under the Purchase Agreement and Sales Agreement will be sufficient for the Company to satisfy its near-term capital needs and to continue as a going concern for a reasonable period.

For a discussion of our contractual obligations and commitments, refer to Note 7 to the financial statements in this Quarterly Report.

Issuances of Equity

During the six months ended June 30, 2025, the Company received a total of $900,000 from Pro-Dex, Inc. ("Pro-Dex") upon its exercise of warrants to purchase 298,122 shares of Series D Preferred Stock at an exercise price of $2.25 per share and 85,705 shares of Common Stock at an exercise price of $2.67 per share. Additionally, the Company received $282,000 from the exercise of other warrants to purchase 83,850 shares of Common Stock that were originally issued in connection with the Company's 2024 Series D Preferred Stock offering. On July 9, 2025, all outstanding warrants originally issued in connection with this offering expired. As a result, warrants covering an aggregate of 5,629,220 shares of the Company's Common Stock were canceled, and, following this expiration, no warrants to purchase shares of the Company's preferred or common stock remain outstanding.

The Company also received $883,000, net of issuance costs, during the quarter ended June 30, 2025 from the sale of 381,528 shares of Common Stock issued under the Sales Agreement.

Indebtedness

As of June 30, 2025, the Company had $6.4 million in total liabilities, primarily comprised of trade accounts payable of $1.3 million and accrued liabilities of $4.8 million, which included a $4.0 liability to Mount Sinai in connection with the Termination Agreement.

Cash Flows

The following table sets forth our cash flows for the periods indicated (in thousands):

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Operating Activities

For the six months ended June 30, 2025, the Company incurred a net loss of $8.6 million. From this, various non-cash adjustments resulted in $4.6 million of cash used in operating activities. These adjustments primarily included addbacks for non-cash items related to $583,000 of stock-based compensation expense and $257,000 of depreciation and amortization expense. In addition, cash used in operations was reduced by the $2.5 million increase in the liability to Mount Sinai in connection with the Termination Agreement and by a $539,000 increase in other accrued liabilities.

Investing Activities

For the six months ended June 30, 2025 and 2024, cash used in investing activities was comprised entirely of equipment purchases.

Financing Activities

Cash provided by financing activities during the six months ended June 30, 2025 primarily consisted of $1.2 million received from the exercise of warrants to purchase 298,122 shares of Series D Preferred Stock and 170,555 shares of Common Stock, $96,000 received from the exercise of stock options, and $883,000, net of issuance costs, from the sale of 381,528 shares of Common Stock issued under the Sales Agreement.

Cash provided by financing activities during the six months ended June 30, 2024 consisted entirely of $206,000 received from the sales of Common Stock pursuant to the Purchase Agreement.

Impact of inflation

While inflation may impact our capital and operating expenditures, we believe the effects of inflation, if any, on our results of operations and financial condition have not been significant. However, there can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future, including by heightened levels of inflation experienced globally as a consequence of the COVID-19 pandemic and recent geopolitical conflict.

Funding Requirements

We believe the Company's existing cash resources will be sufficient to fund our operations through the expected closing of the merger. However, should the merger not be consummated, we believe we would be able to continue to access funding pursuant to the Loan Agreement, as well as our financing deals with B. Riley Principal Capital II, LLC and B. Riley Securities, to meet anticipated cash requirements for at least 12 months from the date of this Quarterly Report. However, our forecast of the period of time through which our financial resources will be adequate to support operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend capital resources sooner than we expect.

Future capital requirements will depend on many factors, including:

Until such time, if ever, as we can generate substantial revenues to support our cost structure, we expect to finance cash needs through a combination of equity offerings, debt financings, commercial and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of stockholders will be, or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through commercial agreements, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies and/or future revenue streams, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our Common Stock. Also, our ability to raise necessary financing could be impacted by the COVID-19 pandemic, recent geopolitical events, and inflationary economic conditions and their effects on the market conditions. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our commercialization efforts or grant rights to develop and market other products even if we would otherwise prefer to develop and market these products ourselves or potentially discontinue operations.

Critical Accounting Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company's most significant estimates relate to the fair value of stock-based compensation and the income tax valuation allowance. On a continual basis, management reviews its estimates, utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Emerging Growth Company

As a Nasdaq listed public reporting company, we are required to publicly report on an ongoing basis as an "emerging growth company" (as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an "emerging growth company", we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not "emerging growth companies", including but not limited to:

We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We may remain an "emerging growth company" for up to five years, beginning January 26, 2022, although if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of June 30th, before that time, we would cease to be an "emerging growth company" as of the following December 31st.

In summary, we are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not "emerging growth companies" and therefore, our shareholders could receive less information than they might expect to receive from more mature public companies.

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