Microbot Medical(MBOT) - 2024 Q2 - Quarterly Report

Cash and Cash Equivalents - Cash and cash equivalents decreased slightly to $2.465 million as of June 30, 2024, compared to $2.468 million as of December 31, 2023[4] - The company's cash, cash equivalents, and restricted cash decreased by $4 thousand to $2,513 thousand as of June 30, 2024, from $2,517 thousand at the beginning of the period[9] - Cash, cash equivalents, and restricted cash decreased by $4,000 to $2.513 million as of June 30, 2024, from $2.517 million at the beginning of the period[9] - As of June 30, 2024, the company had cash and cash equivalents of $2.465 million, marketable securities of $3.997 million, and total current assets of $7.138 million[4] Marketable Securities - Marketable securities increased to $3.997 million as of June 30, 2024, up from $3.917 million as of December 31, 2023[4] - The company's financial assets, including money market mutual funds, are classified as Level 1 in the fair value hierarchy, with a total value of $3,997 thousand as of June 30, 2024[19] - Money market mutual funds as of June 30, 2024, totaled $3,997, classified as Level 1 fair value assets[19] - U.S. treasury securities as of December 31, 2023, amounted to $2,497, also classified as Level 1 fair value assets[20] Total Current Assets - Total current assets decreased to $7.138 million as of June 30, 2024, from $7.921 million as of December 31, 2023[4] - As of June 30, 2024, the company had cash and cash equivalents of $2.465 million, marketable securities of $3.997 million, and total current assets of $7.138 million[4] Net Loss - Net loss for the six months ended June 30, 2024, was $4.836 million, compared to $5.140 million for the same period in 2023[6] - Net loss for the six months ended June 30, 2024, was $4,836 thousand, compared to $5,140 thousand in the same period in 2023, showing a reduction in losses[9] - The company reported a net loss of $2.465 million for the three months ended June 30, 2024, and a net loss of $4.836 million for the six months ended June 30, 2024[6] - Net loss for the six months ended June 30, 2024, was $4.836 million, compared to $5.140 million for the same period in 2023[9] Shareholders' Equity - Total shareholders' equity increased to $6.055 million as of June 30, 2024, from $4.501 million as of December 31, 2023[5] - Total shareholders' equity as of June 30, 2024, was $6.055 million, compared to $4.848 million as of March 31, 2023[7] Research and Development Expenses - Research and development expenses decreased to $2.586 million for the six months ended June 30, 2024, from $2.982 million for the same period in 2023[6] General and Administrative Expenses - General and administrative expenses increased to $2.309 million for the six months ended June 30, 2024, from $2.261 million for the same period in 2023[6] Total Liabilities - Total liabilities decreased significantly to $1.379 million as of June 30, 2024, from $3.826 million as of December 31, 2023[5] Share Issuance and Warrants - The company issued 1,566,669 shares of common stock and warrants during the six months ended June 30, 2024, net of issuance costs[7] - The company issued common stock and warrants, net of issuance costs, totaling $4,471 thousand in the six months ended June 30, 2024, compared to $6,719 thousand in the same period in 2023[9] - The company issued common stock and warrants, net of issuance costs, raising $4.471 million in financing activities during the six months ended June 30, 2024[9] - In June 2024, the company issued 1,566,669 shares of common stock at $1.50 per share, generating aggregate gross proceeds of approximately $2.35 million before deducting placement agent fees and related offering expenses of approximately $328,000[52] - The company issued 1,005,965 shares of common stock as part of a settlement agreement[53] - From July 1, 2024, through August 9, 2024, the company issued 538,800 shares of common stock under the ATM Agreement for aggregate gross proceeds of approximately $584,000[57] Net Cash Flows - Net cash flows used in operating activities for the six months ended June 30, 2024, were $4,377 thousand, compared to $5,057 thousand in the same period in 2023[9] Government Grants and Royalties - Microbot Israel received government grants totaling approximately $1,878 from the Israeli Innovation Authority (IIA) for R&D projects, including $74 in Q1 2024[28] - The company is obligated to pay royalties of 3.0%-5.0% on future sales related to IIA grants, contingent on successful R&D and sales generation[29] - The company received a grant of NIS 300,000 ($83) from the Ministry of Economy, with $50 received as of June 30, 2024, and royalties of 3.0% on future sales of the LIBERTY system[30] - The company received $1,878 in government grants from the Israeli Innovation Authority (IIA) for R&D from 2013 through June 30, 2024[28] - A grant of approximately $83 from the Ministry of Economy was approved for the LIBERTY Endovascular Robotic Surgical System, with $50 received as of June 30, 2024[30] - The company is obligated to pay royalties of 3.0%-5.0% on future sales related to IIA grants[29] Litigation and Settlements - The company settled a lawsuit for $2,154, including $1,100 in cash and 1,005,965 shares of restricted common stock, with insurance covering $1,335 of the settlement[41][43] - The company recorded a contingent liability of $2,211 and an asset of $1,335 as of December 31, 2023, related to the settlement[43] - The company received a judgment of $485 against Joseph Mona, with collection efforts ongoing as of May 10, 2024[46][48] - The company settled a lawsuit by paying $2,154, including $1,100 in cash and 1,005,965 shares of restricted common stock[41] Executive Compensation - Microbot Israel's CEO is eligible for a contingent cash bonus of $298, tied to raising $3,000 by June 30, 2024, and $6,000 by September 30, 2024[49] - Other executives are entitled to a contingent bonus of approximately $61, payable upon raising at least $3,000 by September 30, 2024[50] - In July 2024, the company approved contingent bonus payments of approximately $149,000 to the CEO and $61,000 to the CFO and CTO[58] - The CEO is entitled to a contingent cash bonus of $298, payable upon raising $3,000 by June 30, 2024, and $6,000 by September 30, 2024[49] - The company approved contingent bonus payments of $149 to the CEO and $61 to the CFO and CTO in July 2024[58] Stock Options and Grants - In February 2024, the company granted fully vested options to purchase 130,000 shares of common stock at an exercise price of $1.2684 per share, and performance-based options to purchase 132,500 shares at $1.25 per share, recording a total expense of $8,000 in Q2 2024[55] - The company granted options to purchase 195,000 shares of common stock at $1.2684 per share with a three-year vesting period, and paid the CEO 25% of his 2023 annual bonus through the grant of fully vested options to purchase 79,567 shares at $1.25 per share[56] - The company granted 130,000 fully vested stock options at $1.2684 per share and 132,500 performance-based options at $1.25 per share[55] Technology and Asset Transfers - Microbot Israel terminated the CardioSert Agreement, resulting in a $300 cash payment and 6,738 shares of common stock ($74) for technology acquisition[33] - Microbot Israel transferred technology back to CardioSert, resulting in the transfer of a liability to repay CardioSert's IIA grants in the aggregate amount of approximately $530,000[59] - The company terminated the CardioSert Agreement in August 2023, resulting in a reacquisition of technology for nominal consideration[33] - The company transferred technology assets back to CardioSert, relieving a liability of $530 related to IIA grants[59] ATM Agreement - The company has an ATM agreement allowing it to sell up to $10,000 in common stock, but no shares were sold through June 30, 2024[34] - The company entered into an ATM agreement allowing the sale of up to $10,000 in common stock, but no shares were sold as of June 30, 2024[34] - From July 1, 2024, through August 9, 2024, the company issued 538,800 shares of common stock under the ATM Agreement for aggregate gross proceeds of approximately $584,000[57] Royalties and Licensing - Microbot Israel acquired Nitiloop's assets for royalties not exceeding $8,000, with rates of 3.0% on net revenue from device sales and 1.5% on integrated product commercialization[39] - The company signed a license agreement with TRDF, paying royalties of 1.5%-3.0% on net sales and sublicense income for the LIBERTY Endovascular Robotic Surgical System[31] - The company acquired Nitiloop's assets for royalties not exceeding $8,000, with rates of 3% and 1.5% on net revenue from device sales and technology commercialization, respectively[39] Financing Activities - The company received aggregate gross proceeds of approximately $2.73 million from the exercise of Existing Preferred Investment Options and the sale of Inducement Investment Options, before deducting placement agent fees and other offering expenses of approximately $333,000[51] - The company raised $2,730 from the exercise of preferred investment options and issued new series E options at $1.50 per share[51] - The company raised $2,350 from a registered direct offering of 1,566,669 shares at $1.50 per share and issued series F preferred options[52] Share-Based Compensation - Share-based compensation expense for the six months ended June 30, 2024, was $784 thousand, compared to $761 thousand in the same period in 2023[9] - Share-based compensation for the six months ended June 30, 2024, was $784,000, compared to $761,000 for the same period in 2023[9] Operational Risks and Future Outlook - The company is closely monitoring the impact of the military operation in Israel on its operations, including potential disruptions to supply chains and international flights[13][14] - The company expects to continue to incur additional losses for the foreseeable future due to ongoing research and development activities[12] - The company has not generated revenues from its operations and expects to continue incurring losses, raising substantial doubt about its ability to continue as a going concern[12] - The company's operations are primarily based in Israel, and it is monitoring risks related to the ongoing military operations in the region[13] - The company's ability to raise additional capital is dependent on market demand for its stock and other development and business risks[12] Technology Development - The company is focused on leveraging its micro-robotic technologies to develop next-generation robotic endoluminal surgery devices[10] Litigation and Legal Matters - The company is involved in litigation related to the 2017 financing, with plaintiffs seeking rescission of the SPA and a return of $6,750[40]