Microbot Medical Inc. — Q3 2021 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2021. Amounts below are in U.S. dollars; financial statement amounts are converted from thousands to millions unless otherwise noted.
Business context
Microbot is a pre-clinical medical-device company developing robotic technologies for minimally invasive procedures. It had generated no operating revenue through the filing date. Its programs include LIBERTY, a disposable endovascular robotic system, and the Self Cleaning Shunt (SCS), based on its ViRob platform.
Financial performance and liquidity
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | None reported | None reported | None reported | None reported |
| Research and development expense | $1.389m | $1.037m | $3.897m | $2.397m |
| General and administrative expense | $1.163m | $1.378m | $3.523m | $4.065m |
| Operating loss | $2.552m | $2.415m | $7.420m | $6.462m |
| Net loss | $2.555m | $2.472m | $7.454m | $6.532m |
| Basic and diluted loss per share | $0.36 | $0.35 | $1.05 | $0.92 |
Gross profit and margins are not applicable because the company reported no revenue. At September 30, 2021, cash and cash equivalents were $13.428m, marketable securities $4.999m, and restricted cash $0.084m. The company reported working capital of approximately $17.393m, total liabilities of $1.831m, including $0.703m in operating lease liabilities, and no reported interest-bearing debt.
For the first nine months, operating cash outflow was $6.467m, investing cash inflow $0.245m, and financing cash flow was zero; cash, cash equivalents and restricted cash decreased $6.222m. The filing states unrestricted cash, cash equivalents and marketable securities totaled $18.427m.
Changes versus prior comparable periods
- Q3 R&D expense increased $0.352m year over year; nine-month R&D expense increased $1.500m, mainly from hiring and higher professional-services, materials and intellectual-property costs related to LIBERTY.
- Q3 G&A expense fell $0.215m and nine-month G&A fell $0.542m, primarily due to lower CEO bonuses and share-based compensation, partly offset by higher salaries, insurance and professional services.
- Net loss widened by $0.083m in Q3 and $0.922m for the nine-month period. Operating cash use rose by $1.085m versus the first nine months of 2020.
- Cash and cash equivalents declined from $19.650m at December 31, 2020 to $13.428m at September 30, 2021; marketable securities were essentially unchanged.
Outlook, risks and unusual items
- Management expects continued losses and increased R&D spending as product development advances. It stated that available funds were expected to support operations for more than 12 months; the MD&A also said net cash was believed sufficient for at least 24 months, but that an adverse outcome in the Empery/Hudson Bay litigation could reduce runway to less than 24 months.
- Management outlined a LIBERTY design freeze in Q4 2021, FDA pre-submission in Q1 2022, clinical trials beginning in the second half of 2022, and FDA submission in the first half of 2023. These are forward-looking targets, not assurances.
- The company may raise capital through its $10m ATM offering and other offerings under an existing Form S-3 registration statement for up to $75m of securities. Equity issuance could dilute shareholders; debt financing could add repayment obligations and restrictive covenants.
- Empery and Hudson Bay seek rescission of a 2017 financing and return of $6.75m. The company said the outcome could not be estimated and an adverse result could materially affect its financial position. Separately, Microbot’s $0.485m judgment against Joseph Mona was on appeal; collection remained uncertain.
- COVID-19-related disruptions could delay studies, site monitoring, travel, or supplies. The company also cited development, regulatory, financing, foreign-exchange and supplier risks. IIA grants of approximately $1.5m carry future-sales royalties of 3.0%–3.5% up to the grant amount and restrictions on transferring grant-funded technology outside Israel without approval.
- At September 30, 2021, 7,108,133 common shares were outstanding. The filing reported effective disclosure controls and no material change in internal control over financial reporting during the quarter.
Investor verification priorities
- Check subsequent developments in the $6.75m financing litigation and assess potential cash impact and management’s runway assumptions.
- Track LIBERTY and SCS development milestones, FDA interactions, trial timing, and any COVID-19 or supply-related delays.
- Review actual ATM or other securities sales, dilution, and updated cash burn against the stated funding horizon.
- Confirm whether the Mona judgment is upheld and collected, and whether any proceeds are recognized in later filings.