Microbot Medical Inc. — Q2 2023 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2023. Unaudited financial figures are in U.S. dollars in thousands, except per-share data. Microbot is a pre-clinical medical-device company focused on robotic endoluminal surgery; it has not generated operating revenue.
Financial performance and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $1,365 | $2,193 | $2,982 | $3,899 |
| General and administrative expense | $959 | $1,370 | $2,261 | $2,840 |
| Operating loss | $2,324 | $3,563 | $5,243 | $6,379 |
| Net loss | $2,287 | $3,513 | $5,140 | $6,702 |
| Net loss per share, basic and diluted | $0.25 | $0.49 | $0.60 | $0.94 |
| Operating cash used | Not presented separately | Not presented separately | $5,057 | $6,131 |
As of June 30, 2023, cash and cash equivalents were $5,721 and marketable securities were $4,199; unrestricted cash, cash equivalents and marketable securities totaled approximately $9,920. Current assets were $10,339, current liabilities $1,324, and reported net working capital approximately $9,015. Total assets were $10,884 and stockholders’ equity $9,468. Lease liabilities totaled $317 ($225 current and $92 non-current); the balance sheet reports no other borrowing balance.
Six-month investing activities provided $1,588, including marketable-security sales and maturities, while financing activities provided $6,719 from stock and warrant offerings. Cash, cash equivalents and restricted cash increased $3,250 to $5,769. No meaningful revenue or profit margins are available because the company has no operating revenue and remains loss-making.
Changes versus the prior comparable period
- Q2 operating loss narrowed to $2,324 from $3,563; six-month operating loss narrowed to $5,243 from $6,379. Management attributed lower R&D and G&A costs mainly to a cost-reduction plan launched in May 2023.
- Six-month operating cash use decreased to $5,057 from $6,131. Financing cash inflow rose from zero to $6,719 following the 2023 offerings.
- Shares outstanding increased from 7,890,628 at December 31, 2022 to 11,707,317 at June 30, 2023, reflecting warrant exercises and equity offerings. The May and June offerings generated approximately $7.56 million gross proceeds; fees and expenses were approximately $1.1 million.
Outlook, developments and risks
- Going concern and funding: Management estimated available funds would support operations for approximately eight months from the filing date, through about April 2024, after cost reductions and May–June fundraising. The filing states that substantial doubt exists about the company’s ability to continue as a going concern. Additional capital will be needed; financing may not be available on acceptable terms and could dilute shareholders or constrain operations.
- Operating focus: The company is concentrating resources on its LIBERTY robotic surgical system. The plan prioritizes verification and validation, robotics build-up, first-in-human cases outside the U.S., a GLP study and an FDA IDE submission. The GLP study was postponed and later rescheduled for August 2023. Management said failure to raise additional capital or unfavorable study results could require further cuts or cessation of operations.
- Development evidence: The company reported a June pre-clinical study with a 100% success rate reaching intended targets and no observable on-site complications; it also reported more than 100 catheterizations in earlier studies with a 95% target-reaching rate. These are company-reported pre-clinical results, not regulatory clearance or evidence of commercial readiness. First-in-human cases in Brazil were being prepared, subject to completion of verification and validation and required approvals. FDA feedback had recommended clinical and human-factors validation studies.
- Portfolio and cost actions: The company suspended or ceased work outside LIBERTY, returned TipCAT intellectual property to TRDF in June and SCS (ViRob) intellectual property in July, and terminated its CardioSert agreement effective August 17, 2023, potentially allowing CardioSert to reacquire that technology for nominal consideration. Executive pay reductions, a hiring freeze, headcount reductions and suspension of independent director fees were also part of the cost plan.
- Litigation: Investors in the 2017 financing seek rescission and return of $6.75 million. The case was in discovery, with mediation being scheduled; management said it could not assess the likelihood of success. The filing warns an adverse outcome could jeopardize continued operations. Separately, in the Mona litigation, an August 4, 2023 magistrate recommendation favored dismissing Mona’s counterclaim; objections were due August 18, and other related matters remained pending.
- Other obligations and risks: IIA grants and assumed grant obligations carry future-sales royalties, generally 3%–5%, subject to applicable terms; TRDF licenses and the Nitiloop asset acquisition also carry royalties. Key risks include reliance on LIBERTY, regulatory and clinical uncertainty, additional financing needs, potential dilution, Nasdaq listing compliance, foreign-exchange exposure, operations in Israel, and dependence on third parties for manufacturing and development.
Important facts for investors to verify
- Whether new financing is secured in time to extend the stated runway beyond approximately April 2024, and the resulting dilution or financing terms.
- Progress and results of LIBERTY verification and validation, the GLP study, first-in-human cases, IDE submission and FDA pathway.
- Status and potential financial impact of the $6.75 million 2017-financing lawsuit and the related Mona proceedings.
- Exercise, expiration and potential dilution from outstanding warrants and preferred investment options, in addition to the reported share-count increase.
- The timing of the CardioSert termination: the filing reports an August 17, 2023 effective date but is signed August 14, 2023; confirm the chronology and subsequent disclosures.