Microbot Medical Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; balance-sheet comparisons are against December 31, 2023. Amounts below are U.S. dollars unless stated otherwise. Microbot is a preclinical medical-device company developing robotic endoluminal surgery systems, principally LIBERTY. It has not generated operating revenue.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | None reported | None reported |
| Research and development expense, net | $1.169 million | $1.617 million |
| General and administrative expense | $1.215 million | $1.302 million |
| Operating loss | $2.384 million | $2.919 million |
| Net loss | $2.371 million | $2.853 million |
| Basic and diluted loss per share | $0.17 | $0.36 |
| Operating cash used | $2.420 million | $3.203 million |
- Gross profit and operating margins are not meaningful because the company reports no revenue. Financing income, net, was $13,000, compared with $66,000 a year earlier.
- At March 31, cash and cash equivalents were $1.162 million, marketable securities $5.187 million, and restricted cash $48,000. Cash equivalents plus marketable securities totaled approximately $6.349 million, excluding restricted cash.
- Current assets were $7.000 million and current liabilities $1.183 million; management reported working capital of approximately $5.8 million, up from $4.1 million at year-end 2023.
- Total liabilities were $1.200 million, including lease liabilities; the filing reports no conventional debt balance. Total assets were $7.367 million and shareholders’ equity $6.167 million.
- Cash, cash equivalents and restricted cash decreased $1.307 million in the quarter. Investing activities used $1.284 million, largely reflecting purchases of marketable securities; financing activities provided $2.397 million net from an equity-and-warrant offering.
Material changes and unusual items
- Net loss narrowed by $482,000 year over year. R&D expense fell $448,000, attributed primarily to lower payroll, government grants and LIBERTY manufacturing outsourcing costs. G&A fell $87,000, mainly from lower travel and payroll, partly offset by higher share-based compensation and professional services.
- The company settled litigation related to its 2017 financing for $2.154 million: $1.100 million cash, covered by insurance, and 1,005,965 common shares. It received $1.335 million of insurance proceeds during Q1 and paid the cash settlement. The lawsuit was discontinued with prejudice in February.
- In January, warrant exercises and the issuance of new investment options generated approximately $2.730 million gross proceeds, less approximately $333,000 in fees and expenses. The company issued 1,685,682 shares in the transaction. Shares outstanding increased to 14,398,964 from 11,707,317 at year-end, including shares issued for the settlement.
- The Mona litigation judgment of approximately $485,000 remains subject to a purported appeal; the company says execution efforts continue and reports that a bond for the full judgment was posted by May 10, 2024.
Outlook, risks and contingencies
- Management expects continued losses as it develops LIBERTY and meets public-company costs. It estimates available funds will support operations for less than one year and states that substantial doubt exists about the company’s ability to continue as a going concern. Additional debt or equity financing, or grants, may be needed; availability and terms are uncertain, and equity financing could dilute shareholders.
- The company submitted an IDE application to the FDA on January 29, 2024, to begin a pivotal human clinical trial and reported continued interaction with the FDA. It anticipates FDA 510(k) clearance in the first half of 2025 and CE Mark approval in the second half of 2025; these are forward-looking targets, not assured outcomes.
- Israel-based operations may be affected by the ongoing military operation, including reduced activity among some suppliers and fewer international flights, potentially disrupting materials, device shipments and regulatory or clinical milestones. The company reported no material adverse effect to date but has no specific contingency plan for escalation.
- IIA grants and other government support carry conditional future-sales royalty obligations. The company also has royalty obligations under its LIBERTY-related technology arrangements. It expects to return CardioSert technology in Q2 2024 and says it does not expect to repay grants associated with that discontinued program.
- Bonuses approved for executives depend on future capital raises; no liability was recorded at quarter-end because management could not predict whether the funding thresholds would be met. The filing gives no financial revenue or earnings guidance.
Key facts for investors to verify
- Cash burn and financing runway: management’s estimate is less than one year, and continued operations depend on raising additional capital.
- FDA IDE progress and whether the anticipated 2025 regulatory milestones remain achievable.
- Potential dilution from outstanding and future warrants/options, additional fundraising, and settlement shares.
- Effects of the Israel conflict on suppliers, manufacturing, shipments and development milestones.
- Status of the Mona judgment collection and any remaining settlement-related registration obligations.