Description
This is a time sensitive idea for a microcap name
Monogram Orthopaedics Inc. (“MGRM”) is an overvalued, pre-revenue stock that trades at 10x cash, has a going concern and was up 80% yesterday on a fluff press release which mentioned Nvidia. The stock is heavily shorted (cost to borrow ~40%) but we expect the stock to crash
(1) as the excitement over a really nothing press release abates and
(2) as the company issues shares (which will depress the stock price by adding more shares and reducing the squeeze).
Also, the company’s IR firm isn’t a firm that specializes in this field but rather a firm, MZ, which represents a lot of companies we have seen been hyped then crash. Furthermore, the company has no real institutional investors. The largest investors are:
- Prodex (6%) – a supplier to MGRM. Prodex has a board seat.
- 2 other Board members (30% combined)
- Mt Sinai hospital (9%) – licensed the technology to the company
The company has $13.6 millin of cash as of end of 2023, a majority of which it should burn this year, thus the need to raise equity. The company has a Common Stock Purchase Agreement with B. Riley which would enable to raise another $19 million. The 10k says Management believes its cash and cash equivalents, plus the additional capital available under the Purchase 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 (we added the bold).
The company is working to develop a product solution architecture with the long-term goal of enabling patient-optimized orthopedic implants at scale by linking 3D printing and robotics with advanced pre-operative imaging. The Company has a robotic system that can autonomously execute optimized paths for high-precision insertion of implants in synthetic bone specimens. Monogram intends to produce and market robotic surgical equipment and related software, orthopedic implants, tissue ablation tools, navigation consumables, and other miscellaneous instrumentation necessary for reconstructive joint replacement procedures.
The Company has not yet made 510(k) premarket notification submissions or obtained 510(k) clearances for its robotic products. FDA approval is required to market these products, and the Company has not obtained FDA approval for any of its robotic products, and it cannot estimate the timing or assure the ability, to obtain such clearances.
The bulls may point to following upcoming milestones but we believe do not have faith these milestones will be achieved and we believe the company will need to raise significant equity.
Upcoming 2024 Milestones
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Largely complete mBôs system verification and validation – H1 2024
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Submit semi-active modality 510(k) application to FDA – H2 2024
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Commence OUS live-patient surgery trials – H2 2024
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Anticipated FDA response & expand international relationships – H2 2024
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The press release that we believe helped hype the stock price today is :
https://finance.yahoo.com/news/monogram-accepted-nvidia-inception-program-172000549.html
I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.
Catalyst
Issuances of shares under b. riley deal and hype deflating