Executive Summary / Key Takeaways

• Monogram Technologies has achieved a critical milestone with FDA 510(k) clearance for its mBôs TKA System, positioning its autonomous saw-based robotic technology for entry into the orthopedic surgery market.
• The company is initiating a multi-center clinical trial in India for its next-generation system, aiming for the world's first autonomous saw-based robotic total knee surgeries on live patients, expected to commence within 90 business days of the April 29, 2025 announcement.
• Monogram's technology differentiates itself from the dominant haptic systems by offering potentially faster cutting times (nearly 300% increase in feed rate achieved in testing), high accuracy (1.1mm RMSE, <1 degree limb alignment in cadavers), minimal surgeon fatigue, and a streamlined workflow (one blade, no tool change).
• While not yet generating revenue and operating at a net loss ($3.2M in Q1 2025), Monogram holds $13.3M in cash (as of March 31, 2025) and available capital, sufficient for near-term needs and a forecast $1M monthly burn rate, but requires additional funding for accelerated commercial growth and multi-application expansion.
• The company faces intense competition from established players like Stryker and Zimmer Biomet , but believes shifting market dynamics towards robotics and its differentiated autonomous technology provide a significant opportunity to capture market share.

The Dawn of Autonomous Orthopedic Surgery

The landscape of orthopedic surgery is undergoing a profound transformation, driven by technological advancements and evolving surgeon and patient expectations. At the forefront of this shift is the increasing adoption of robotic-assisted systems, promising greater precision, personalization, and efficiency in procedures like total knee arthroplasty (TKA). Monogram Technologies Inc. is an AI-driven robotics company aiming to redefine this space with a next-generation approach: fully autonomous, saw-based bone cutting.

Monogram's journey began with a vision to improve human health through advanced robotics, initially focusing on orthopedic implants. Over time, this evolved into developing a sophisticated surgical robot designed to enable the precise placement of patient-optimized implants. The company's strategy centers on leveraging advanced machine vision, augmented reality, and machine learning AI to create a system that goes beyond assistance, moving towards autonomous execution of critical surgical steps. This strategic focus is a direct response to the current market dynamics, where robotic penetration, while growing, is dominated by systems that still rely heavily on the surgeon's hand for bone resection.

The orthopedic robotics market is highly consolidated, with Stryker Corporation and its Mako system holding a significant, dominant position. Mako has undeniably created substantial value by enabling patient-specific planning and providing haptic boundaries for safe, efficient bone cuts. Its widespread adoption, particularly in fellowship training programs (estimated 70% market share), is shaping the next generation of surgeons. However, the reliance on surgeon-initiated cutting within haptic constraints presents an opportunity for innovation. Monogram believes its autonomous saw-based cutting technology can address the same clinical needs while potentially offering further improvements in consistency, efficiency, and reducing the physical burden on the surgeon. This perceived gap in the market, coupled with demographic trends showing a large cohort of older surgeons nearing retirement and being replaced by a robotic-trained generation, forms the core of Monogram's investment thesis.

Technological Edge: Precision, Speed, and Autonomy

Monogram's mBôs TKA System and its planned successor are built upon a foundation of differentiated technology designed to challenge the status quo. The core innovation lies in its autonomous saw-based cutting end effector, a departure from the rotary tools or haptic-guided saws used by competitors. This technology is coupled with an AI-based preoperative planning pipeline that includes fully automated landmark identification, aiming to reduce reliance on operator skill and improve consistency. The system features a 7-joint arm, providing a high degree of freedom intended to offer scalability to multiple orthopedic applications beyond the knee, such as hips and shoulders.

The tangible benefits of this technology, as demonstrated in nonclinical testing, are compelling. The company has achieved significant enhancements to the cutting system, resulting in a nearly 300% increase in feed rate. This allows for bone and blade time of approximately 2 minutes and 47 seconds with an unconstrained saw, a speed management believes is competitive with manual surgery and a key driver for surgeon adoption. Accuracy in cadaveric testing has shown promising results, with approximately 1.1 millimeters RMSE in cut accuracy and less than one degree in limb alignment. Furthermore, the autonomous nature of the cutting is designed to require minimal surgeon skill and reduce fatigue, aiming for a "bulletproof" safety profile regardless of surgeon experience. The system's design also aims for efficiency by using a single blade per procedure, unlike some competitive systems that may require tool changes and multiple blades.

Monogram is also developing mVision technology, targeting fiducial-less tracking to eliminate the need for bone pins, a significant pain point in current robotic workflows. While this is a complex problem requiring substantial computational power and is still in development, it represents a potential future enhancement to further streamline the surgical process and reduce consumable costs. The strategic intent behind these technological developments is clear: to build a system that is not only clinically superior in key performance areas like accuracy and speed but also offers operational efficiencies and a faster learning curve, thereby creating a strong competitive moat and driving utilization in a razor/razor blade business model where consumables are key revenue drivers.

Milestones Achieved and the Path to Commercialization

Monogram has recently achieved critical milestones that validate its technology and pave the way for commercialization. On March 17, 2025, the company announced it received 510(k) clearance from the FDA for its Monogram mBôs TKA System. This clearance allows Monogram to market the device in the United States and represents the culmination of years of development and regulatory effort. The company is not resting on this achievement and is actively integrating recent upgrades, including the enhanced cutting system, into the cleared device, planning to launch with these improvements via a "letter to file" regulatory approach.

Following the FDA clearance, Monogram is focusing on initial pilot placements with key opinion leader surgeons in strategic U.S. geographies. This measured approach, anticipated to be a Q3 2025 story, is designed to establish real-world clinical experience, demonstrate the system's advantages, and build a foundation for broader commercial interest while ensuring a high level of service and system utilization.

In parallel, Monogram is pursuing international market entry and clinical validation. On April 29, 2025, the company received regulatory approval from India's CDSCO to import its Monogram TKA System (the planned successor to the mBôs system) to conduct a 102-patient, multi-center clinical investigation with Shalby Limited . This trial is significant as it is expected to be the world's first clinical investigation involving autonomous saw-based robotic total knee surgeries on live patients. Patient enrollment is anticipated to begin shortly, with the first surgeries expected within 90 business days of the April 29 announcement. This trial will provide crucial clinical data on the fully autonomous system, which can support future regulatory submissions and marketing efforts, while also potentially enabling faster commercial growth in the Indian market compared to the U.S.

Financial Health and Capital Needs

As a development-stage company focused on bringing a complex robotic system to market, Monogram has not yet generated product revenue. The company reported a net loss of $3.2 million for the three months ended March 31, 2025, contributing to an accumulated deficit of $71.4 million. Operating expenses saw a decrease in Q1 2025 compared to the prior year, primarily due to the winding down of the intensive verification and validation phase of development, partially offset by a bonus triggered by the FDA clearance. Marketing expenses also decreased significantly as fundraising efforts concluded, while general and administrative costs remained relatively stable.

Monogram ended the first quarter of 2025 with $13.3 million in cash and cash equivalents. The company's monthly cash burn rate decreased to approximately $0.8 million in Q1 2025, down from $1.1 million to $1.2 million previously, reflecting reduced variable costs post-V&V completion. Management forecasts a monthly cash burn of about $1 million going forward, including anticipated lumpy spend of approximately $1.2 million over the six to nine months of the clinical trial. The company believes its current cash position, supplemented by available capital under existing agreements like the B. Riley (RILY) Common Stock Purchase Agreement ($19 million remaining as of March 31, 2025) and the At Market Issuance Sales Agreement ($5.7 million raised of $25 million as of May 13, 2025), provides sufficient liquidity to meet near-term capital needs and continue as a going concern for at least 12 months from the 10-Q filing date.

However, management is clear that additional capital will be required to accelerate growth, particularly for an aggressive commercial launch and the expansion of the system to multi-application capabilities, which they view as high-return R&D. The company anticipates significant upcoming cash outlays for items like tooling for compliant panels and a second robot cart, with Q2 2025 expected to see a heavier burn due to testing for the India trial. While Monogram has no traditional debt, its ability to raise necessary financing is subject to market conditions and execution on key milestones.

Competitive Dynamics and Strategic Positioning

Monogram operates within a highly competitive orthopedic market dominated by large, well-established players like Stryker , Zimmer Biomet (ZBH), Johnson & Johnson (JNJ), and Medtronic (MDT). These companies possess extensive global distribution networks, deep financial resources, and established relationships with hospitals and surgeons. Stryker's (SYK) Mako system, in particular, sets a high bar in robotic-assisted TKA, benefiting from a significant first-mover advantage and strong market penetration.

Monogram's strategic positioning is centered on disrupting this landscape with a differentiated technology. While acknowledging the value created by haptic systems like Mako, Monogram believes its autonomous saw-based approach offers distinct advantages. The potential for faster cutting times, higher accuracy, reduced surgeon burden, and a more efficient workflow (e.g., single blade, no tool change) directly addresses perceived limitations of current systems. Furthermore, Monogram sees opportunities on the implant side, viewing Mako's implant platform as potentially less competitive than others on the market, leaving room for Monogram's patient-optimized implants to gain traction.

The company's strategy to gain market share involves a measured initial rollout focused on high utilization accounts with key opinion leaders. This contrasts with the broader distribution strategies of larger competitors but aims to build a strong clinical validation base. The India clinical trial with Shalby (SHALBY.NS) is a key part of this strategy, providing real-world data and a platform for faster OUS growth, which management expects to precede the pace of U.S. adoption initially. While Monogram lacks the scale and financial might of its large competitors, its focus on a potentially game-changing technology and a targeted commercialization approach represents its path to carving out a meaningful position in the evolving orthopedic robotics market.

Risks and Challenges

Despite recent successes, Monogram faces significant risks inherent in its stage of development and the competitive landscape. The company has a history of losses and requires substantial additional capital to fund its planned commercialization and growth initiatives. The ability to raise this capital depends on market conditions and achieving future milestones, and failure to do so could force significant expense reductions or even cessation of operations.

Regulatory risks persist, although the initial FDA clearance is a major de-risker. Future regulatory submissions, including for the fully autonomous system, may face delays or require clinical data. Geopolitical tensions, particularly in South Asia, could impact the India clinical trial. Proposed legislation in Texas regarding cadaver access poses a challenge for necessary testing and training within the state, requiring the company to seek alternatives.

Competition is intense, and larger players have the resources to potentially develop competing technologies or leverage their scale to limit Monogram's market penetration. The success of Monogram's technology in real-world clinical settings and its ability to demonstrate superior outcomes compared to established systems remain critical factors. Furthermore, a contingent liability of $1.5 million related to a licensing agreement with Mount Sinai, stemming from the company's public listing, presents a potential financial and legal risk if a consensus is not reached.

Conclusion

Monogram Technologies stands at a pivotal juncture, having successfully navigated the initial FDA clearance for its robotic system and secured a pathway for clinical validation of its autonomous technology in India. The core investment thesis hinges on the company's belief that its differentiated autonomous saw-based cutting robot offers compelling advantages in precision, speed, and efficiency that can disrupt the orthopedic robotics market, currently dominated by haptic systems.

While the company is pre-revenue and requires significant future funding for accelerated growth, the recent milestones provide tangible proof points of its technological capabilities. The successful execution of the India clinical trial and subsequent U.S. pilot placements will be critical in demonstrating the system's value proposition to surgeons and hospitals. The competitive landscape is formidable, but the underlying market shift towards robotics and the potential for Monogram's technology to address unmet needs position it as a compelling, albeit higher-risk, opportunity in the medical device sector. The ability to secure necessary capital and translate technological promise into commercial adoption and utilization will ultimately determine Monogram's success in carving out its niche in the future of orthopedic surgery.