Microbot Medical Inc. — Q2 2022 Form 10-Q
Business context and reporting period. Microbot is a pre-clinical medical-device company developing robotic endoluminal surgery technologies. This unaudited report covers the three and six months ended June 30, 2022; financial amounts below are in U.S. dollars, thousands, unless stated otherwise. The company reported no operating revenue.
Financial performance and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Research and development expense | $2,193 | $1,389 | $3,899 | $2,508 |
| General and administrative expense | $1,370 | $1,087 | $2,840 | $2,360 |
| Operating loss | $3,563 | $2,476 | $6,739 | $4,868 |
| Net loss | $3,513 | $2,511 | $6,702 | $4,899 |
| Basic and diluted loss per share | $0.49 | $0.35 | $0.94 | $0.69 |
- Operating cash used was $6,131 for the first half of 2022, versus $4,291 in the comparable 2021 period. Investing cash used was $78, compared with $259 provided in 2021; there were no financing cash flows in either period. Cash, cash equivalents and restricted cash declined $6,209 to $7,371.
- At June 30, cash and cash equivalents were $7,294, marketable securities were $1,998, and restricted cash was $77. Unrestricted cash, cash equivalents and marketable securities totaled approximately $9,292. Net working capital was approximately $7,925, down from $13,895 at December 31, 2021.
- Total assets were $10,542 and total liabilities were $2,002. Liabilities included $573 of lease liabilities; the filing reports no other borrowing balance. Stockholders’ equity was $8,540. Shares outstanding remained 7,108,133.
- Gross margin and other operating margins are not meaningful because the company has not generated revenue. Losses increased year over year, principally as R&D and G&A expenses rose. Management attributed higher R&D spending to hiring, salary increases and initial preparation to transfer LIBERTY from R&D toward production; higher G&A reflected payroll, share-based compensation, D&O insurance and travel, partly offset by lower legal and consulting fees.
Material developments, outlook and risks
- Development and regulatory status: LIBERTY achieved design freeze in December 2021. The company filed an FDA pre-submission package on March 31, 2022 and completed the pre-submission process on July 22. FDA feedback recommended a clinical study and a human-factors validation study to support a 510(k) submission. The company continued feasibility animal trials; its Stryker collaboration’s development activities were expected to commence in the second half of 2022.
- Other programs: The company is seeking U.S. clinical input and investigators for a planned Self Cleaning Shunt early feasibility study; the next development milestone, including First In Human, was extended to December 2024. TipCAT remains in discovery, with assets to be maintained through December 2023.
- Funding and going concern: The company expects continuing losses and negative operating cash flow and states that it cannot fully implement its business plan without raising additional capital. Management estimated available net cash would fund operations for approximately seven months from June 30, 2022, based on projected burn and milestones; the risk-factor discussion describes substantial doubt about the ability to continue as a going concern beyond approximately eight months from the filing. Financing may come from debt, equity, registered offerings or the unused $10 million ATM facility, but availability and terms are not assured and equity issuance could dilute shareholders. The ATM had not been used as of the report.
- Litigation exposure: Empery and Hudson Bay seek rescission of the 2017 financing and return of $6.75 million. Discovery was ongoing; management said the outcome could not be estimated and no provision was recorded. The filing warns that an adverse result could materially affect the company and reduce the estimated cash runway to approximately one month. Separately, the company’s $484,614 judgment against Joseph Mona was on appeal, with related proceedings ongoing.
- Other risks and contingencies: COVID-19-related disruptions could delay studies, supplier access and development. The company’s Israeli Innovation Authority grants carry future-sales royalties of 3.0%–3.5% and restrictions on transferring grant-funded technology outside Israel without approval. Foreign-exchange movements and cash held above federally insured limits are additional exposures. Management reported effective disclosure controls and no material change in internal control over financial reporting.
Important facts for investors to verify
- Whether the company secured additional financing and how actual cash burn compares with the stated runway estimates.
- The status and cost of FDA-recommended LIBERTY clinical and human-factors studies, and whether the planned regulatory pathway remains viable.
- Developments, potential exposure and any cash impact in the $6.75 million financing-related litigation.
- Progress on Stryker collaboration plans and on obtaining clinical input for the Self Cleaning Shunt program.
- Any changes to share count, use of the ATM or other financing, and the resulting dilution or debt obligations.