Microbot Medical Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021; filed May 17, 2021. Amounts below are in U.S. dollars in thousands unless stated otherwise. Microbot is a pre-clinical medical-device company developing micro-robotics-assisted technologies. It reported no operating revenue to date.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Revenue | None generated | None generated |
| Research and development expense | $1,119 | $691 |
| General and administrative expense | $1,273 | $1,472 |
| Operating loss | $(2,392) | $(2,163) |
| Net loss | $(2,388) | $(2,205) |
| Basic and diluted loss per share | $(0.34) | $(0.31) |
| Net cash used in operating activities | $(1,994) | $(2,346) |
With no revenue, gross margin and operating margin are not meaningful. R&D rose $428 (62%), primarily from new hires and LIBERTY-related professional services, materials, and intellectual property costs. G&A fell $199 (14%), mainly due to lower CEO bonus and travel expense, partly offset by higher salaries. Financing income was $4 versus $42 of expense in Q1 2020, when litigation-related interest was paid.
At March 31, 2021, cash and cash equivalents were $17,924, marketable securities $4,998, and restricted cash $81; total current assets were $23,207 and current liabilities $1,275. Working capital was approximately $21,932, down from $23,908 at December 31, 2020. Total assets were $24,170, total liabilities $1,840, and shareholders’ equity $22,330. Liabilities were principally lease obligations; the filing reports no conventional borrowings. Lease liabilities totaled $738, including $173 current. Cash, cash equivalents, and restricted cash declined $1,729 during the quarter to $18,005.
Investing activities provided $265, including $270 proceeds from an investment sale; there were no financing cash flows in Q1 2021. The prior-year period included $2,521 in marketable-security proceeds and $3,375 repayment of shareholder investment. Outstanding common shares were 7,108,133 at March 31 and May 14, 2021.
Business developments, outlook, and risks
- Key programs include the ViRob-based Self Cleaning Shunt, TipCAT, and LIBERTY endovascular robotic system, incorporating CardioSert technology. The company described LIBERTY animal feasibility work as ongoing; a prior feasibility study met its endpoints with no intraoperative adverse events.
- Management’s stated LIBERTY milestones were design freeze in Q4 2021, FDA pre-submission in Q1 2022, clinical trials beginning in Q3 2022, and FDA submission in Q4 2022. These are forward-looking targets, not assurances.
- The company expects continued losses and increasing R&D spending as programs advance. The MD&A says existing net cash is expected to fund operations for at least 24 months, while the financial-statement note says unrestricted cash is sufficient for more than 12 months. The filing does not reconcile these runway statements.
- Management may seek additional grants and debt or equity financing, including through an existing shelf registration statement for up to $75 million. Financing may not be available on acceptable terms and could dilute shareholders or add debt obligations.
- COVID-19-related restrictions could delay studies, site monitoring, suppliers, or product development. Other stated exposures include foreign-exchange movements and cash balances above federally insured limits at financial institutions.
- Litigation: Empery and Hudson Bay seek rescission of a 2017 financing and return of $6,750; the company’s motion to dismiss was denied, and it appealed that denial on March 18, 2021. Management could not estimate the outcome and warned an adverse result could be material. Separately, a court entered a $484.6 judgment for Microbot against Joseph Mona on March 31, 2021. Mona appealed on April 27; Microbot pursued enforcement after quarter-end. Collection and appeal outcomes remain uncertain.
- The company received approximately $1,500 in Israeli Innovation Authority grants; royalties of 3%–3.5% of future sales are generally payable up to the grant amount if commercialization generates sales. The filing also describes royalty obligations under the TRDF license.
Most important facts for investors to verify
- Reconcile the stated cash runway estimates of more than 12 months and at least 24 months, and assess cash burn against development plans.
- Track the Empery/Hudson Bay appeal and potential $6,750 repayment exposure, and the status and collectability of the separate $484.6 judgment.
- Monitor LIBERTY development progress against the disclosed design-freeze, FDA, and clinical-trial milestones, including any COVID-related delays.
- Review future R&D spending, financing needs, possible dilution, and any new grants or debt.
- Confirm subsequent-period cash, securities, litigation developments, and any material changes to outstanding shares or lease obligations.