Press release·03/27/2025 07:48:43

Microbot’s Financial Performance: Navigating the Path to Surgical Innovation

Overview

Microbot is a clinical-stage medical device company that specializes in developing next-generation robotic endoluminal surgery devices. The company’s primary focus is on leveraging its LIBERTY® technological platform to redefine the surgical robotics landscape and improve patient outcomes.

Microbot’s flagship product, the LIBERTY® Endovascular Robotic Surgical System, is designed to maneuver guidewires and over-the-wire devices within the body’s vasculature, enabling remote delivery and manipulation of medical tools. This innovative system aims to eliminate the need for extensive capital equipment and dedicated staff, making minimally invasive procedures more accessible.

Financial Operations Overview

Microbot’s financial operations can be divided into two main categories:

1. Research and Development Expenses: These expenses primarily consist of salaries, benefits, and overhead for Microbot’s research, development, and engineering personnel, as well as costs related to prototype materials, research studies, and maintaining the company’s patent portfolio.

2. General and Administrative Expenses: These expenses include the costs associated with management salaries, benefits, professional fees for accounting, auditing, consulting, and legal services, as well as insurance expenses.

Microbot expects its general and administrative expenses to increase over the long term as it expands its operating activities and maintains compliance with exchange listing and SEC requirements.

Critical Accounting Policies and Significant Judgments

Microbot’s financial reporting is based on U.S. generally accepted accounting principles (GAAP) and requires the company to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. Some of the most critical accounting policies and judgments include:

1. Contingencies: Microbot records and discloses legal contingencies in accordance with Accounting Standards Codification (ASC) Topic 450, Contingencies. The company monitors the progress of its litigation matters to determine if any adjustments are required.

2. Common Stock Warrants: Microbot accounts for warrants issued to investors as either equity-classified or liability-classified instruments, based on an assessment of the warrant’s specific terms and the applicable authoritative guidance.

3. Fair Value of Financial Instruments: Microbot measures the fair value of certain of its financial instruments on a recurring basis, using a fair value hierarchy to rank the quality and reliability of the information used to determine fair values.

Results of Operations

Microbot’s results of operations for the years ended December 31, 2024, and 2023 are summarized in the following table:

Metric	2024	2023	Change
Research and development expenses, net	$6,630,000	$5,724,000	$906,000
General and administrative expenses, net	$4,995,000	$4,131,000	$864,000
Financing income, net	$182,000	$228,000	$(46,000)
Loss on legal settlement, net	$0	$1,111,000	$(1,111,000)

Research and Development Expenses, net The increase in research and development expenses of approximately $0.9 million in 2024 compared to 2023 was primarily due to increases in headcount, employee salaries and bonuses, as well as higher regulatory and clinical study costs associated with the LIBERTY® Endovascular Robotic Surgical System.

General and Administrative Expenses, net The increase in general and administrative expenses of approximately $0.9 million in 2024 compared to 2023 was primarily due to the relaxation of certain cost reduction plans that had been implemented in 2023, targeting employee salaries, bonuses, and board of director fees.

Financing Income, net The decrease in financing income in 2024 compared to 2023 was due to a decrease in market gains, partially offset by an increase in interest income and foreign exchange changes.

Loss on Legal Settlement, net The loss on legal settlement in 2023 was related to the issuance of restricted shares of Microbot’s common stock to settle a lawsuit.

Liquidity and Capital Resources

As of December 31, 2024, Microbot had a net working capital of approximately $3.4 million, consisting primarily of cash, cash equivalents, and marketable securities. This compares to net working capital of approximately $4.1 million as of December 31, 2023.

Microbot has funded its operations through the issuance of capital stock, grants from the Israeli Innovation Authority (IIA), and convertible debt. Since its inception in November 2010 through December 31, 2024, Microbot has raised cash proceeds of approximately $74.9 million and incurred a total cumulative loss of approximately $90.9 million.

Since January 1, 2025, Microbot has raised additional funds through the following sources:

• Approximately $1.1 million through its ATM Agreement, before fees and expenses
• Approximately $15.6 million from institutional investors, before fees and expenses
• Approximately $916,000 from the exercise of outstanding preferred investment options, before fees and expenses
• Approximately $13.0 million from institutional investors, before fees and expenses

Microbot Israel has also obtained grants from the IIA for participation in research and development activities from 2013 through December 31, 2024, totaling approximately $1.9 million. These grants are subject to royalty payments on future sales of the LIBERTY® Endovascular Robotic Surgical System.

Microbot anticipates that it will continue to incur net losses for the foreseeable future as it continues research and development efforts, ramps up commercialization of its primary product candidate, and incurs costs associated with being a public company. The company plans to continue raising capital through future public and private issuances of debt and/or equity securities to fund its commercial activities, working capital, and general business purposes.

Cash Flows

The following table provides a summary of Microbot’s net cash flow activity for the years ended December 31, 2024, and 2023:

Cash Flow Activity	2024	2023
Net cash flows used in operating activities	$8,827,000	$8,533,000
Net cash flows provided by investing activities	$1,537,000	$1,973,000
Net cash flows provided by financing activities	$7,936,000	$6,558,000
Net increase (decrease) in cash, cash equivalents, and restricted cash	$646,000	$(2,000)

The increase in net cash flows used in operating activities was primarily due to the increase in research and development expenses and general and administrative expenses. The decrease in net cash flows provided by investing activities was primarily due to a decrease in proceeds from maturities of marketable securities in 2024 compared to 2023. The increase in net cash flows provided by financing activities was due to increased issuances of common stock and warrants in 2024 compared to 2023.

Strengths and Weaknesses

Strengths:

• Innovative LIBERTY® Endovascular Robotic Surgical System that aims to redefine the surgical robotics landscape
• Robust research and development capabilities, as evidenced by the continued progress in the LIBERTY® system
• Successful capital raising efforts, including recent funding from institutional investors and the exercise of preferred investment options
• Ongoing support from the Israeli Innovation Authority through research and development grants

Weaknesses:

• Continued net losses and negative cash flows from operating activities, indicating the company’s reliance on external funding to sustain operations
• Increasing research and development and general and administrative expenses, which could put pressure on the company’s financial resources
• Lack of revenue generation, as the company is still in the clinical-stage and has not yet commercialized its primary product candidate

Outlook and Future Prospects

Microbot’s future prospects are closely tied to the successful development and commercialization of the LIBERTY® Endovascular Robotic Surgical System. The company’s ability to navigate the regulatory landscape, secure additional funding, and effectively manage its expenses will be crucial in determining its long-term success.

The recent capital raises and ongoing support from the IIA provide a positive outlook for Microbot’s ability to continue its research and development efforts and progress towards the commercialization of the LIBERTY® system. However, the company’s reliance on external funding and the increasing expenses associated with its operations remain areas of concern that will require careful management.

As Microbot continues to navigate the path to surgical innovation, it will need to maintain a strong focus on its core competencies, effectively allocate its resources, and explore strategic partnerships or collaborations that could enhance its market position and financial stability. With a clear vision, disciplined execution, and the ability to adapt to changing market conditions, Microbot has the potential to redefine the surgical robotics landscape and improve patient outcomes.