Annual Report for Fiscal Year Ending 12-31, 2024 (Form 10-K)

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 consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K. 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. You should review the section titled "Statement Regarding Forward-Looking Statements" for a discussion of forward-looking statements and Item 1A "Risk Factors" of this Form 10-K for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Annual Report on Form 10-K. 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 is developing a next-generation autonomous (also "active") surgical robot to enable placement of patient optimized 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 robot prototype that can autonomously 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 made 510(k) premarket notification submissions but has not yet obtained 510(k) premarket clearances for any of robotic products. U.S. Food and Drug Administration (FDA) 510(k) premarket clearance is required to market our robotic products, and the Company cannot estimate the timing, or assure our ability, to obtain such clearances.

Recent Developments

Regulatory Update

The 510(k) application for the Company's surgical robot was submitted on July 19, 2024, and passed the initial FDA Administrative Review. On September 30, 2024, Monogram received an Additional Information Request ("AIR") from the FDA. The FDA informed the Company that the FDA placed the Application on hold pending a complete response to the AIR. The FDA informed the Company that the Company had 180 days from the date of the AIR to provide a complete response to the AIR, or the FDA would consider the Application withdrawn.

On November 20, 2024 the Company submitted written responses, including planned remediations where applicable for all deficiencies noted in the AIR, and requested a Submission Issue Request (SIR) meeting with the FDA to review select responses. A critical focus for the Company has been whether the proposed nonclinical testing effectively mitigates FDA concerns that could necessitate clinical data. On December 11, 2024, the Company received a Submission Issue Request (SIR) review letter that provided preliminary written comments on particular topics of interest before the SIR meeting scheduled for December 17, 2024. On December 17, 2024, the Company conducted a Submission Issue Request (SIR) meeting with the FDA.

On February 25, 2025, the Company submitted its formal response to the U.S. Food and Drug Administration (FDA) regarding the AIR, which included the results of the Company's nonclinical testing performed by the Company, which the Company believes could make it less likely that the FDA will request clinical data from the Company in relation to its submission. The Company does not currently anticipate further requests for information from the agency. Assuming a favorable decision by the FDA following receipt of the AIR, the next communication from them is anticipated to be a clearance decision for the mBôs™ Total Knee Arthroplasty (TKA) System. If granted, that would enable commercialization and sales of the TKA system in the United States.

On August 12, 2024, the Company announced a strategic collaboration with Shalby Limited (NSE: SHALBY) ("Shalby"), a global muti-specialty hospital chain and one of India's leading orthopedic hospital groups, to conduct a multicenter clinical trial to demonstrate the safety and effectiveness of the Monogram TKA System. Under the collaboration, Shalby will enroll patients at various sites in India for surgeons to evaluate the safety and effectiveness of the second generation Monogram TKA System. Monogram received comments on the Clinical Investigational Plan during its February 2024 Presubmission Communications with the FDA and has incorporated feedback into its 510(k) application submitted to the FDA on July 19, 2024 and which passed the FDA Administrative Review. Notably, the strategic collaboration contemplates the post-trial transfer of a robot to the hospital system under certain conditions following the trial as the companies contemplate further collaboration. The Company anticipates initiating the clinical trial in 2025.

2024 Annual Meeting of Stockholders Results

On December 19, 2024, the Company held its Annual Meeting of Stockholders (the "Annual Meeting") to consider and vote upon the election of each of the nominated Class I directors to the Company's Board of Directors (the "Board") until the Company's 2027 annual meeting, the ratification of the appointment of Fruci & Associates II, PLLC as the Company's independent registered public accounting firm for the year ending December 31, 2024, the approval of the amendment to the Amended and Restated 2019 Stock Option and Grant Plan, and the approval, on an advisory basis, of the compensation of the Company's named executive officers. For more information about the proposals considered and voted upon at the Annual Meeting, please see the Company's Definitive Proxy Statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on November 8, 2024.

At the Annual Meeting, 60% of our Common Stock, par value $0.001 per share ("Common Stock") entitled to vote at the Annual Meeting were represented in person or by proxy at the Annual Meeting. Based on the results of the vote, and the stockholders voted to elect all of the Company's Class I director nominees, ratified the appointment of Fruci & Associates II, PLLC as the Company's independent registered public accounting firm for the year ending December 31, 2024, approved the amendment to the Amended and Restated 2019 Stock Option and Grant Plan and approved, on an advisory basis, the compensation of the Company's named executive officers.

The number of votes cast for or withheld from the election of each Class I director and the number of votes cast for or against or abstaining from the other matters voted upon is also set forth below. There were no broker non-votes in either proposal below. The voting results disclosed below are final.

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Closing of Series D Preferred Stock Offering

As previously reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 filed with the Commission on August 8, 2024, on July 9, 2024, the Company commenced a best efforts offering of up to 5,790,479 units at a price per unit of $2.25, with each unit consisting of (a) one share of our 8.00% Series D Convertible Cumulative Preferred Stock (the "Series D Preferred Stock") and (b) one Common Stock Purchase Warrant to purchase one share of our common stock, $0.001 par value per share (the "Common Stock") at an exercise price of $3.375 per share, for a total of 5,790,479 shares of our Series D Preferred Stock and warrants to purchase up to an aggregate of 5,790,479 shares of our Common Stock (and shares of Common Stock underlying shares of Series D Preferred Stock, PIK dividends on Series D Preferred Stock, and all such warrants), which we refer to as the "Series D Preferred Stock Offering".

On October 2, 2024, the Company announced the closing of its Series D Preferred Stock Offering. In total, the Company received gross proceeds of approximately $13 million from the sale of units consisting of 5,773,979 shares of the Company's Series D Preferred Stock and warrants to purchase an aggregate of 5,773,979shares of the Company's Common Stock in connection with the Series D Preferred Stock Offering.

At the Market Common Stock Offering

On July 22, 2024, the Company entered into an At Market Issuance Sales Agreement (the "Sales Agreement") with B. Riley Securities, Inc. to sell shares of our Common Stock from time to time through an "at-the-market" equity offering program under which B. Riley Securities, Inc. will act as our sales agent (the "Sales Agent").

Under the Sales Agreement, we may issue and sell from time-to-time shares of our Common Stock for aggregate proceeds of up to $25,000,000. Each time the Company wishes to issue and sell Common Stock under the Sales Agreement, the Company will notify the Sales Agent of the number or dollar value of shares to be issued, the time period during which such sales are requested to be made, any limitation on the number of shares that may be sold in one day, any minimum price below which sales may not be made and other sales parameters deemed appropriate. Once the Company has so instructed the Sales Agent, unless the Sales Agent declines to accept the terms of the notice, the Sales Agent has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares up to the amount specified on such terms. We have no obligation to sell any shares of our Common Stock under the Sales Agreement, and we may suspend solicitation and offers under the Sales Agreement for any reason in our sole discretion. We agreed to pay the Sales Agent a commission equal to up to 3.0% of the gross proceeds from the sales of shares of our Common Stock pursuant to the Sales Agreement or such lower amount as we and the Sales Agent may agree.

Any shares of our Common Stock sold under the Sales Agreement will be issued pursuant to our shelf registration statement on Form S-3 (File No. 333-279927) and the base prospectus included therein, originally filed with the Commission on June 4, 2024 and declared effective by the SEC on June 14, 2024. A prospectus supplement relating to the offering of shares of our Common Stock under the Sales Agreement was filed with the SEC on July 22, 2024.

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 Mako 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. Monogram is not aware of any widely accepted products where the robot efficiently resects bone with a saw on the market today other than Mako.

Results of Operations For The Years Ended December 31, 2024 and 2023

Revenues

The Company is currently focused on commercialization of its robotic products, including seeking 510(k) clearances from the FDA for those products. Revenue of $364,999 was recognized during the year ended December 31, 2023 from the sale of a single unit of robotic surgical equipment. The unit was sold outside of the United States as part of an effort to explore the possibility of conducting clinical trials in OUS markets. Since the Company originally expensed this equipment as research and development costs when it was built, no costs of goods sold were recognized when this equipment was sold in 2023. The Company did not have any product sales in 2024 and does not anticipate additional sales before obtaining the appropriate regulatory approvals.

Operating Expenses

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

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Research and development (R&D) expenses during 2023 were comprised primarily of expenses related to the development of our sagittal cutting systems and related platform software required to operate our active navigated robotic system, as well as the Company moving into the verification and validation phases of the development of its robot prototype. 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. 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 and associated implants. The Company largely completed the verification and validation phases in the first half of 2024, resulting in overall reduction of R&D expenses in 2024 compared to 2023. R&D efforts have continued with the introduction of a novel registration and tracking system prototype named mVision as well as protocol development and testing in response to the AIR for the FDA clearance application as well as next-generation development. R&D efforts for the second half of 2024 were focused on further refinement of this product offering and responding to inquiries from the FDA related to the submitted application for FDA clearance.

Marketing and advertising expenses in 2023 were comprised primarily by expenses related the Company's marketing campaign related to the Common Stock Offering that began in Q1 2023 and successfully culminated with a round closing in May of 2023 of more than $16 million. Marketing and advertising expenses in 2024 were comprised primarily by expenses related to the marketing campaign related to the Series D Preferred Stock Offering conducted primarily in Q3 2024 which resulted in an oversubscribed raise of approximately $13 million. The marketing and advertising expense in 2024 was 30% lower than the 2023 marketing and advertising expense, driven largely by market conditions that significantly influence the effectiveness of fundraising efforts, impacting both the cost of investor acquisition and the overall success of a crowdfunded capital raise.

General and administrative expenses increased by 9% in 2024 from 2023 primarily due to a full year of public company expenses primarily composed of insurance expenses, regulatory compliance expenses, and professional expenses offset by reductions in payroll and related expenses.

Other Income (Expense)

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

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During 2023, the change in the fair value of the warrant liability resulted in a loss of $3.1 million. This gain primarily resulted from a decrease in the value of the Company's Common Stock used to estimate the fair value of certain warrants that included anti-dilution protections. Because of these protections, when the Company issued additional shares of its capital stock in connection with its ongoing capital raising efforts, the number of shares issuable upon the exercise of these warrants increased proportionally. Changes in the fair value of the warrant liability primarily resulted from (i) increases to the number of shares issuable upon exercise of these warrants and (ii) changes in the underlying fair value of the Company's Common Stock into which the warrants were exercisable. During May and October 2023, these warrants were exercised by the holders. At December 31, 2024 and 2023, no warrants with anti-dilution protections remained outstanding.

Interest income and other during 2024 and 2023 primarily relates to investment income earned by the Company on balances invested in a JP Morgan US Government Money Market Fund, partially offset by losses of $45,000 and $44,000 in 2024 and 2023, respectively, relating to the change in the fair value of the Company's make-whole provision related to the Common Stock Purchase Agreement discussed below in "Liquidity and Capital Resources".

Net Loss

As a result of the foregoing, the Company had a net loss of $16.3 million during 2024 compared to $13.7 million during 2023.

Liquidity and Capital Resources

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As of December 31, 2024, the Company had approximately $15.7 million in cash. 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. Since inception, the Company has been primarily capitalized through securities offerings. 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, although there can be no assurance that we will be successful in these fundraising efforts. Absent additional capital, the Company may be forced to reduce expenses significantly and could become insolvent.

To provide additional flexibility to the Company ahead of generating sufficient revenues to support operations:

The Company's audited financial statements included in this Annual Report on Form 10-K 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 year ended December 31, 2024 of $16.3 million and has an accumulated deficit of $68.0 million as of December 31, 2024. The Company's ability to continue as a going concern in the next twelve months following the date the audited financial statements were available to be 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 11 to the financial statements in this Annual Report on Form 10-K.

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Issuances of Equity

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Year Ended December 31, 2024

In two transactions during January and February 2024, ZB Capital Partners LLC, holder of a warrant exercisable for 547,944 shares of Common Stock, executed a cashless exercise of its warrant under which the Company issued the holder a total of 246,458 shares of Common Stock and retained the remaining shares as settlement of the $1.83 per share exercise price of the warrant.

During 2024, the Company received gross proceeds of approximately $13 million from the sale of units consisting of 5,773,979 shares of the Company's Series D Preferred Stock and warrants to purchase an aggregate of 5,773,979 shares of the Company's Common Stock in connection with the Series D Preferred Stock Offering. The Company announced the closing of its Series D Preferred Stock Offering on October 2, 2024.

Pursuant to the Purchase Agreement with BRPC II, we sold 85,526 shares of Common Stock for gross proceeds of $235,000 during 2024. Additionally, we sold 2,072,790 shares of Common Stock for gross proceeds of $5.3 million during 2024 in sales of Common Stock made under the Sales Agreement.

The gross proceeds received by the Company's in its Series D Preferred Stock Offering and Common Stock offerings under the Purchase Agreement and Sales Agreement described elsewhere in this report during the period from April 1, 2024 to September 30, 2024 exceeded $5.0 million. Therefore, at December 31, 2024, the Company was obligated to issue Pro-Dex a warrant exercisable into 298,122 shares of Series D Preferred Stock at an exercise price of $2.25 per share and a warrant exercisable into 85,705 shares of Common Stock at an exercise price of $2.67.

Year Ended December 31, 2023

On March 1, 2023, the SEC qualified a Regulation A - Tier 2 offering of the Company's Common Stock, in which the Company sought to raise up to $30 million from investors (the "Common Stock Offering"). The Common Stock Offering closed on May 16, 2023, raising $15,287,860, net of issuance costs of $1,928,287, from the sale of 2,374,641 shares of Common Stock at a price of $7.25 per share. Subsequently, on May 17, 2023, the Company filed a Form 8-A in connection with the listing our Common Stock on Nasdaq, which was declared effective on the same date. At that time, each outstanding share of Series A, Series B, and Series C Preferred Stock was converted into two shares of Common Stock of the Company.

On May 18, 2023, a certain holder of warrants executed a cashless exercise of the warrants and received 78,837 shares of the Company's Common Stock, which represented the difference between the total warrant shares issuable at exercise and the 37,619 warrant shares withheld by the Company to satisfy the holder's exercise price obligation.

During May 2023, the Company entered into a consulting arrangement with a vendor under which the Company issued 20,689 shares of restricted Common Stock that vest on a monthly basis over a term of 12 months. The estimated fair value of these shares was $150,000 on the date of grant and is being recognized as a component of general and administrative expenses on a straight-line basis over the 12-month vesting term.

In August 2023, the Company issued 4,137 shares of Common Stock with a value of $30,000 to a vendor in exchange for legal services.

On October 2, 2023, Pro-Dex, Inc., a Colorado corporation ("Pro-Dex") exercised warrants for 1,828,551 shares of the Company's Common Stock at $0.68 per share, resulting in total proceeds to the Company of $1,250,000. The issuance of these shares upon exercise of these warrants was made by the Company pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder for transactions by an issuer not involving a public offering. As consideration for Pro-Dex agreeing to exercise these warrants, the Company agreed to the following:

Under the Purchase Agreement with BRPC II, we sold 207,200 shares of Common Stock for gross proceeds of $726,286 during 2023.

Indebtedness

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As of December 31, 2024, the Company had $1.7 million in total liabilities, primarily comprised of accounts payable of $1.2 million, which decreased from $2.5 million as of December 31, 2023. By reducing our R&D spend in 2024, our accounts payable was reduced as well. The remainder was comprised of accrued expenses and the present value of the Company's operating lease payment commitments.

Commitments and Contingencies

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Under the Company's licensing agreement with Mount Sinai, the Company has an obligation to make certain payments to Mount Sinai as a result of reaching certain milestones in the development and sales of the product, and for significant events related to the Company. One of these milestones requires, if at the time of completion of a "Significant Transaction" the Company has a valuation greater than $150 million, the Company to transfer to Mount Sinai consideration equal to 1% of the fair market value of Company at the time of completion of the Significant Transaction.

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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. It has been the Company's position that no Significant Transaction occurred, but there is no guarantee the Company and Mount Sinai will come to a consensus on this point and, if no agreement is reached, litigation could result. At December 31, 2024 and through the date of this Annual Report, the Company believes it is probable it will be obligated to transfer consideration to Mount Sinai to settle this matter and terminate the Licensing Agreement. Though discussions are still in their very early stages, the Company estimates $1.5 million to be a reasonable estimate of its contingent obligation in this matter and has recorded a liability for this amount, with a corresponding charge to other expenses, in its financial statements as of and for the year ended December 31, 2024.

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Cash Flows

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

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Operating Activities

For the year ended December 31, 2024, of the $16.3 million in net loss, there were various non-cash adjustments that were added back to the net loss to arrive at $14.0 million in cash used in operating activities. These primarily included adjustments for non-cash expenses and losses related to a $1.2 million charge for stock-based compensation, a $1.5 million accrual for the Mount Sinai contingent settlement liability, and a $430,000 charge for depreciation and amortization. In addition, cash used in operating activities was increased by a $1.3 million decrease in accounts payable, and partially offset by a $46,000 decrease in prepaid expenses and other current assets, and a reduction in accounts receivable of $365,000.

For the year ended December 31, 2023, of the $13.7 million in net loss, there were various non-cash adjustments that were added back to the net loss to arrive at $13.5 million in cash used in operating activities. These primarily included adjustments for non-cash expenses

and losses related to a $3.1 million increase in the fair value of the warrant liability, a $1.6 million charge for stock-based compensation, and a $412,000 charge for depreciation and amortization. In addition, cash used in operating activities was increased by a $1.8 million increase in accounts payable and $270,000 decrease in prepaid expenses and other current assets, partially offset by a $365,000 increase in accounts receivable and a $565,000 reduction in accrued liabilities.

Pro-Dex Supply Agreement

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On October 3, 2023, the Company entered into a supply agreement (the "Supply Agreement") with Pro-Dex, Inc., a Colorado corporation ("Pro-Dex").

As previously disclosed in the Company's Registration Statement on Form S-1 filed with the SEC on August 28, 2023 (and declared effective on September 7, 2023), on December 20, 2018, the Company entered into a development and supply agreement with Pro-Dex, whereby Pro-Dex and the Company agreed, subject to certain conditions, to negotiate and endeavor to enter into a future, definitive agreement through which Pro-Dex would develop and supply end-effectors, gearing, and saws, and other surgical products to Monogram. The Supply Agreement represents the definitive agreement between Pro-Dex and the Company as a result of these negotiations.

Pursuant to the Supply Agreement, the Company and Pro-Dex agreed that, during the term of the Supply Agreement, the Company will exclusively purchase from Pro-Dex, and Pro-Dex will manufacture and sell to the Company, supply end-effectors, gearing, and saws, and other surgical products at purchase prices set forth in the Supply Agreement.

The initial term of the Supply Agreement commences on October 3, 2023 and continues for an initial period of fifteen (15) years from the date of Pro-Dex's delivery to the Company of at least ten (10) production units of end effectors that are fully developed and validated as reasonably agreed to between the Company and Pro-Dex. Upon expiration of the initial term, the Supply Agreement will automatically renew for additional successive two (2) year terms unless either party has provided written notice of non-renewal to the other party at least two (2) years prior to the end of the then-current term.

Pro-Dex may terminate the Supply Agreement by providing written notice to the Company if the Company fails to pay any amount when due under the Supply Agreement and fails to cure such failure within 30 business days after the Company's receipt of written notice of such breach. Additionally, Pro-Dex may terminate the Supply Agreement at any time in Pro-Dex's sole and absolute discretion upon providing the Company at least 120 days advance written notice of termination.

The Company may terminate the Supply Agreement if any Purchase Order under the Supply Agreement remains unfulfilled by Pro-Dex for six (6) months after the requested delivery date, unless such delay is the result of factors reasonably outside of Pro-Dex's control. Additionally, the Company may terminate the Supply Agreement if during any consecutive twelve (12) month period Pro-Dex fails to fulfill more than three (3) separate purchase orders by the requested delivery date, unless such delay is the result of factors reasonably outside of Pro-Dex's control.

Either party may terminate the Supply Agreement if the other party (a) is in material breach of any representation or warranty under the Supply Agreement that cannot be cured or, if the breach can be cured, it is not cured by within a commercially reasonable period of time; (b) becomes insolvent or files for bankruptcy; (c) makes or seeks to make a general assignment for the benefit of its creditors; or (d) applies for or has appointed a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.

If the Supply Agreement is terminated, the Company will pay to Pro-Dex all amounts due to Pro-Dex for supplied products under the Supply Agreement, as well as any out-of-pocket costs and expenses (including raw materials, machinery and equipment purchases) incurred by Pro-Dex prior to the date such termination is effective that arise from or relate to the Supply Agreement.

Rick Van Kirk, a member of our Company's Board of Directors, is the Chief Executive Officer of Pro-Dex, Inc.

The Supply Agreement contains a number of other rights, representations and warranties that are customary for medical device supply agreements. The foregoing description of the Supply Agreement is qualified by reference to the Supply Agreement itself, a copy of which is filed an exhibit to this Form 10-K.

Investing Activities

For the year ended December 31, 2024 and 2023, cash used in investing activities was comprised entirely of equipment purchases.

Financing Activities

For the year ended December 31, 2024, cash from financing activities resulted primarily from net proceeds of $11.1 million from our Series D Preferred Stock offering and $5.2 million of net proceeds related to sales of Common Stock under our Purchase Agreement and Sales Agreement.

For the year ended December 31, 2023, nearly all of the Company's cash from financing activities resulted from $15.3 million of net proceeds related to the Company's May 2023 Common Stock Offering. In addition, the Company received net proceeds of $147,000 from its Regulation A - Tier 2 offering of Series C Preferred Stock and $1.3 million from the exercise of warrants.

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 our existing cash and cash equivalents, including proceeds still available under our financing deals with B. Riley Principal Capital II, LLC and B. Riley Securities, will be sufficient to meet anticipated cash requirements for at least 12 months from the date of this Annual 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 the warrant liability, valuations of stock-based compensation, the income tax valuation allowance, and the Mount Sinai settlement contingency. 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.

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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.