Microbot Medical Inc. (MBOT) is a pre-clinical medical device company that is at the forefront of developing next-generation robotic endoluminal surgery devices. The company's primary focus is on leveraging its innovative micro-robotic technologies to redefine the surgical robotics landscape and improve patient outcomes in the minimally invasive surgery space.

Business Overview and History

Microbot was incorporated in 1988 under the name Cellular Transplants, Inc. and has since undergone several name changes, including Cyto Therapeutics, Inc. in 1992 and StemCells, Inc. in 2000. In November 2016, the company consummated a transaction with Microbot Medical Ltd., a private medical device company based in Israel, and changed its name to Microbot Medical Inc.

The core of Microbot's technology is its LIBERTY Endovascular Robotic Surgical System, which the company believes is the world's first fully disposable robotic system for use in endovascular interventional procedures. Developed to address the limitations of traditional endovascular procedures, the LIBERTY system features a compact, mobile, and remotely controlled design that aims to reduce radiation exposure, physical strain on physicians, and the risk of cross-contamination.

Microbot Israel has received grants from the Israeli Innovation Authority (IIA) for participation in research and development since 2013 through September 2024, totaling approximately $1.88 million. This includes amounts received of approximately $378,000, which is a portion of an additional grant from the IIA in the amount of approximately NIS 1.62 million ($447,000) approved in June 2023, to further finance the development of the manufacturing process of the LIBERTY Endovascular Robotic Surgical System.

In January 2018, Microbot Israel entered into an agreement with CardioSert Ltd. to acquire certain of its patent-protected technology. However, as a result of its core-business focus program and cost reduction plan enacted in May 2023, the company terminated the CardioSert Agreement in August 2023. In July 2024, Microbot Israel transferred the technology back to CardioSert.

The company has expanded its technological portfolio through acquisitions. In October 2022, Microbot Israel purchased substantially all of the assets, including intellectual property, devices, components and product related materials, of Nitiloop Ltd., an Israeli limited liability company. This acquisition included intellectual property and technology in the field of intraluminal revascularization devices.

Microbot has faced some legal challenges over the years. In 2017, the company was named as a defendant in a lawsuit related to its June 2017 equity financing. The company entered into a settlement agreement in January 2024 to resolve the lawsuit. Additionally, in 2019 the company brought an action against Alliance Investment Management, Ltd. and Joseph Mona to compel them to disgorge short swing profits, which resulted in a judgment against Mona in 2021.

In August 2020, Microbot announced the successful conclusion of a feasibility animal study using the LIBERTY system, which met all of its endpoints with no intraoperative adverse events. This milestone supported the company's objective of enabling physicians to conduct catheter-based procedures from outside the catheterization laboratory, thereby avoiding radiation exposure, physical strain, and the risk of cross-contamination.

Microbot has continued to make significant progress with the LIBERTY system, reporting in May 2023 that it had surpassed 100 successful catheterizations during multiple preclinical studies, with a 95% success rate of reaching pre-determined vascular targets. In June 2023, the company announced the successful completion of a two-day preclinical study where leading key opinion leaders performed dozens of catheterizations, including the utilization of the LIBERTY system's remote operation capabilities, with a 100% success rate of reaching the intended targets without any observable complications.

In October 2023, Microbot reported the successful initial outcomes from its pivotal preclinical study with the LIBERTY system, where a total of 6 systems were used to reach 48 animal targets, all of which performed flawlessly with 100% usability and technical success, and no acute adverse events or complications observed.

Financial Overview

Microbot has not generated any revenue to date, as the company remains in the pre-clinical and clinical trial stages of development for its LIBERTY system. The company has been funding its operations through the issuance of capital stock, grants from the Israeli Innovation Authority, and convertible debt.

As of September 30, 2024, Microbot had a net working capital of approximately $3.6 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. The company's net loss for the nine months ended September 30, 2024 was $8.05 million, compared to a net loss of $7.59 million for the same period in 2023.

Microbot has funded its operations through the issuance of capital stock, grants from the Israeli Innovation Authority, and convertible debt. Since its inception in November 2010 through September 30, 2024, the company has raised cash proceeds of approximately $72.8 million and incurred a total cumulative loss of approximately $87.5 million.

For the most recent fiscal year, Microbot reported no annual revenue, an annual net loss of $10.74 million, annual operating cash flow of -$8.53 million, and annual free cash flow of -$8.57 million. In the most recent quarter, the company reported no revenue and a net loss of $3.22 million. The decrease in net income for the most recent quarter compared to the prior year's quarter was primarily due to an increase in research and development expenses and general and administrative expenses.

The company does not provide any geographic segment reporting, as it appears to operate primarily in the United States currently. There are no major scandals, short seller reports, or CEO departures to report for MBOT.

The medical device industry, particularly in the minimally invasive surgical space, is expected to grow at a compound annual growth rate of around 8-10% over the next 5 years. This growth is driven by factors such as the aging population, increasing prevalence of chronic diseases, and advancements in surgical technologies.

Liquidity and Capital Resources

As of the most recent reporting period, Microbot's financial position reflects the following key metrics:

• Debt-to-Equity ratio: 0.05 (Total Debt of $231,000 / Total Equity of $4.5 million)

• Cash and cash equivalents: $2.47 million
• Current ratio: 2.09 (Current Assets of $7.92 million / Current Liabilities of $3.79 million)
• Quick ratio: 2.09 (Current Assets less Inventories of $7.92 million / Current Liabilities of $3.79 million)

The company does not appear to have any disclosed credit facilities or credit lines available. Microbot's ability to continue as a going concern is dependent on its ability to raise additional capital through future public and private issuances of debt or equity securities.

Product Portfolio

Microbot's product portfolio consists of two main segments:

1. LIBERTY Endovascular Robotic Surgical System: This is the company's primary focus and is designed for use in endovascular interventional procedures such as cardiovascular, peripheral, and neurovascular interventions. The LIBERTY system is designed to maneuver guidewires and over-the-wire devices like microcatheters within the body's vasculature.

2. NovaCross Platform: Acquired from Nitiloop Ltd. in October 2022, this platform includes intraluminal revascularization devices with an anchoring mechanism and integrated microcatheter. Microbot plans to incorporate this technology into the "One Done" feature of the LIBERTY Endovascular Robotic Surgical System, which aims to combine the guidewire and microcatheter into a single device.

Regulatory Milestones and Commercialization Efforts

In December 2023, Microbot announced that the final histopathology and lab report from its pivotal preclinical study supported its previous findings, and that the results would support the company's Investigational Device Exemption (IDE) submission to the FDA to commence human clinical studies.

On January 29, 2024, Microbot submitted the IDE application with the FDA to initiate its pivotal clinical trial in humans. The company subsequently received FDA approval on June 3, 2024 to proceed with the pivotal human clinical trial for its LIBERTY system.

Microbot has made significant progress in preparing for the commercialization of the LIBERTY system. In October 2024, the company successfully completed enrollment and follow-up for all patients in its human clinical trial. The company also announced that it has successfully completed all biocompatibility tests as required by its IDE application and received full approval for the IDE study from the FDA.

Microbot currently anticipates filing its 510(k) submission with the FDA by the end of 2024 and receiving 510(k) clearance from the FDA in the first half of 2025. However, due to recent changes in the regulations governing the production and distribution of medical devices in Europe, the company now anticipates CE Mark approval in the second half of 2026.

Risks and Challenges

Microbot faces several risks and challenges that investors should be aware of. The company is a pre-clinical stage medical device company, which means it has not yet generated any revenue and is still working to obtain regulatory approvals for its LIBERTY system. The company's ability to successfully commercialize the LIBERTY system is dependent on its ability to obtain the necessary regulatory approvals, which may be delayed or denied.

Additionally, Microbot's operations are primarily based in Israel, which has recently experienced military conflicts that could adversely affect the company's ability to support its clinical and regulatory activities. The company also faces competition from other companies developing robotic endovascular systems, which could impact the commercialization and adoption of the LIBERTY system.

Conclusion

Microbot Medical is a promising pre-clinical stage medical device company that is developing a cutting-edge robotic endovascular system that could redefine the way endovascular procedures are performed. The company has made significant progress in its development and clinical trial efforts, and is positioning itself for potential regulatory approvals and commercialization in the coming years. While the company faces several risks and challenges, its innovative technology and dedication to improving patient outcomes make it a compelling investment opportunity for those willing to take on the inherent risks of a pre-clinical stage medical device company.