S-1/A: Microbot Medical Files Amendment to S-1 Registration for Resale of 3.2 Million Shares

Microbot Medical has filed an amendment to its S-1 registration statement, covering the resale of up to 3,211,671 shares of common stock by selling stockholders upon exercise of preferred investment options.

Summary

• Microbot Medical has filed an amendment to its S-1 registration statement related to the resale of up to 3,211,671 shares of its common stock.
• These shares are to be sold by selling stockholders upon the exercise of outstanding preferred investment options.
• The company will not receive any proceeds from the resale of these shares by the selling stockholders.
• Microbot Medical is a preclinical medical device company focused on developing robotic endoluminal surgery devices.
• Their lead product candidate is the LIBERTY Endovascular Robotic Surgical System, a fully disposable robot for minimally invasive surgery.
• The company recently received FDA approval to proceed with a pivotal human clinical trial for the LIBERTY system.
• Microbot has a limited operating history and has incurred significant operating losses since inception.
• The company will need additional funding to continue its product development and commercialization efforts.
• There is substantial doubt regarding the company's ability to continue as a going concern.
• The company is subject to various risks related to its financial position, product development, intellectual property, and operations in Israel.

Sentiment

Score: 4

Explanation: The document contains both positive developments (FDA approval for clinical trial) and significant negative factors (going concern warning, operating losses). The overall sentiment is cautiously negative due to the financial risks.

Positives

• FDA approval to proceed with pivotal human clinical trial for the LIBERTY Endovascular Robotic Surgical System.
• Successful completion of preclinical studies for the LIBERTY system.
• Focus on a core-business program to continue development of the LIBERTY Endovascular Robotic Surgical System.

Negatives

• Substantial doubt regarding the company's ability to continue as a going concern.
• Significant operating losses since inception and expected to continue for the foreseeable future.
• Dependence on the success of the LIBERTY Endovascular Robotic Surgical System.
• Uncertainty regarding the extent of clinical trial or data submissions required by the FDA.
• Loss of rights to the CardioSert technology.
• Risks associated with operations in Israel, exacerbated by the current military actions and operations.

Risks

• Substantial doubt regarding the company's ability to continue as a going concern.
• Need for additional funding and potential inability to raise capital when needed.
• Dependence on the success of the LIBERTY Endovascular Robotic Surgical System.
• Unsuccessful animal studies, clinical trials, or procedures relating to product candidates.
• Microbots technology acquired from CardioSert and part of its One & Done feature is subject to a buy-back clause which was triggered, thus causing us to lose rights to the technology.
• Reliance on third-party manufacturers.
• Failure to obtain regulatory clearances in other countries.
• Intellectual property litigation and infringement claims.
• Existing and historical risks relating to our operations in Israel are being exacerbated by the current military actions and operations, and related activities, that commenced with the surprise attack on the State of Israel on October 7, 2023.

Future Outlook

The Company currently anticipates receiving 510(k) clearance from the US Food & Drug Administration in the first half of 2025, and CE Mark approval in the second half of 2025. However, we can give no assurance that we will meet either or both of these projected milestones, if ever.

Industry Context

The document mentions the minimally invasive surgery (MIS) market is expected to grow from $24 billion in 2020 to $42 billion in 2026, representing a CAGR of 9.85%. The U.S. market growth in endoluminal robotic surgery is projected to be 15-25% by 2025. This indicates a growing market for robotic surgical systems, which Microbot Medical aims to address with its LIBERTY system.

Comparison to Industry Standards

• The document mentions Corindus Vascular Robotics (a Siemens Healthineers company) and Robocath as competitors in the endovascular robotics space.
• The CorPath GRX system by Corindus is FDA-approved and CE-marked for percutaneous coronary and vascular procedures, is CE-marked for neurovascular interventions and is pending FDA approval for neurovascular interventions.
• Robocath is CE Marked for PCI only.
• The document states that Microbot believes these systems have drawbacks, such as limited maneuverability, the requirement to exchange and use multiple expensive surgical tools, being cumbersome to set-up and operate, and requiring significant upfront capital expenditures.
• The document also mentions LN Robotics and Endoways as other technologies that are in different stages of development, including preclinical and without CE/FDA approvals.

Legal Proceedings

• As of January 26, 2024, the Company entered into a Settlement Agreement and Release with Empery Asset Master Ltd., Empery Tax Efficient, LP, Empery Tax Efficient III, LP and Hudson Bay Master Fund Ltd., which resolved and settled the below referenced litigation between the Company and Plaintiffs.
• The Company previously announced that it was a defendant in a lawsuit captioned Empery Asset Master Ltd., Empery Tax Efficient, LP, Empery Tax Efficient II, LP, Hudson Bay Master Fund Ltd., Plaintiffs, against Microbot Medical Inc., Defendant, in the Supreme Court of the State of New York, County of New York (Index No. 651182/2020) (the Lawsuit), pursuant to which the Plaintiffs alleged, among other things, that the Company breached multiple representations and warranties contained in the Securities Purchase Agreement (the SPA) related to the Companys June 8, 2017 equity financing (the Financing), of which the Plaintiffs participated, and fraudulently induced Plaintiffs into signing the SPA.
• The complaint sought rescission of the SPA and return of the Plaintiffs $6.75 million purchase price with respect to the Financing.
• Pursuant to the Settlement Agreement, the Company paid Plaintiffs an aggregate of $2,154,000 (the Total Settlement Amount), consisting of a cash payment covered by the Companys insurance carrier of $1,100,000 and 1,005,965 shares of restricted Company common stock (the Shares), which Shares represent the whole number of restricted shares of Company common stock calculated pursuant to the following formula: $1,054,000/[closing price of Company common stock on the Effective Date * 0.825].
• Additionally, the Plaintiffs and the Company each agreed to fully release the other from all claims arising out of the Financing, the SPA and/or the allegations and claims asserted in the Lawsuit, subject to customary carve-outs.
• In February 2024, the Plaintiffs filed a stipulation discontinuing the Lawsuit with prejudice.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of shares upon exercise of preferred investment options.
• The company's ability to continue as a going concern impacts all stakeholders, including employees, suppliers, and customers.
• The success of the LIBERTY system is crucial for the company's future and will impact patients and healthcare providers.

Next Steps

• Commence pivotal human clinical trial for the LIBERTY Endovascular Robotic Surgical System.
• Complete biocompatibility tests as required by the IDE application.
• Engage additional leading centers to participate in the trial.
• Commence audits for ISO 13485 certification to ensure compliance with the Quality Management System (QMS) requirements of the EU Medical Devices Regulation (MDR 2017/745) during the first half of 2024.
• Continue interaction with the FDA regarding the IDE submission process.
• Continue to seek new sources of capital to stabilize finances and provide operating runway.

Key Dates

Keywords

LIBERTY Endovascular Robotic Surgical System, preferred investment options, clinical trial, resale, common stock, Microbot Medical, registration statement, FDA, warrants, IDE