PROSPECTUS
SUMMARY
This
summary highlights information contained in other parts of this prospectus or information incorporated by reference into this
prospectus from our filings with the Securities and Exchange Commission, or SEC, listed in the section of the prospectus entitled
“Incorporation of Certain Information by Reference.” Because it is only a summary, it does not contain all of the
information that you should consider before purchasing our securities in this offering and it is qualified in its entirety by,
and should be read in conjunction with, the more detailed information appearing elsewhere or incorporated by reference into this
prospectus. You should read the entire prospectus, the registration statement of which this prospectus is a part, and the information
incorporated by reference herein in their entirety, including the “Risk Factors” and our financial statements and
the related notes incorporated by reference into this prospectus, before purchasing our securities in this offering. Unless the
context requires otherwise, references in this prospectus to “Microbot,” “we,” “us” and “our”
refer to Microbot Medical Inc. together with its wholly owned subsidiaries.
Overview
Our
Company
Microbot
is a pre-clinical medical device company specializing in the research, design and development of next generation robotic endoluminal
surgery devices targeting the minimally invasive surgery space. Microbot is primarily focused on leveraging its micro-robotic
technologies with the goal of improving surgical outcomes for patients.
Microbot’s
current technological platforms, ViRob
TM
, CardioSert
TM
and TipCAT
TM
, are comprised of proprietary
innovative technologies. Using the ViRob platform, Microbot is currently developing its first product candidate: the Self Cleaning
Shunt, or SCS
TM
, for the treatment of hydrocephalus and Normal Pressure Hydrocephalus, or NPH. Although the SCS utilizes
one of our platforms, we are focused on the development of a Multi Generation Pipeline Portfolio utilizing all three of our proprietary
technologies.
Microbot
has a patent portfolio of 30 issued/allowed patents and 21 patent applications pending worldwide.
Technological
Platforms
ViRob
The
ViRob is an autonomous crawling micro-robot which can be controlled remotely or within the body. Its miniature dimensions are
expected to allow it to navigate and crawl in different natural spaces within the human body, including blood vessels, the digestive
tract and the respiratory system as well as artificial spaces such as shunts, catheters, ports, etc. Its unique structure is expected
to give it the ability to move in tight spaces and curved passages as well as the ability to remain within the human body for
prolonged time. The SCS product was developed using the ViRob technology.
CardioSert
On
May 25, 2018, Microbot acquired a patent-protected technology from CardioSert Ltd., a privately-held medical device company based
in Israel. The CardioSert technology contemplates a combination of a guidewire and microcatheter, technologies that are broadly
used for surgery within a tubular organ or structure such as a blood vessel or duct. The CardioSert technology features a unique
guidewire delivery system with steering and stiffness control capabilities which when developed is expected to give the physician
the ability to control the tip curvature, to adjust tip load to varying degrees of stiffness in a gradually continuous manner.
The CardioSert technology was originally developed to support interventional cardiologists in crossing chronic total occlusions
(CTO) during percutaneous coronary intervention (PCI) procedures and has the potential to be used in other spaces and applications,
such as peripheral intervention, and neurosurgery. CardioSert was part of a technological incubator supported by the Israel Innovation
Authorities (formerly known as the Office of the Chief Scientist, or OCS), and a device based on the technology has successfully
completed pre-clinical testing.
TipCAT
The
TipCAT is a disposable self-propelled locomotive device that is specially designed to advance in tubular anatomies. The TipCAT
is a mechanism comprising a series of interconnected balloons at the device’s tip that provides the TipCAT with its forward
locomotion capability. The device can self-propel within natural tubular lumens such as the blood vessels, respiratory and the
urinary and GI tracts. A single channel of air/fluid supply sequentially inflates and deflates a series of balloons creating an
inchworm like forward motion. The TipCAT maintains a standard working channel for treatments. Unlike standard access devices such
as guidewires, catheters for vascular access and endoscopes, the TipCAT does not need to be pushed into the patient’s lumen
using external pressure; rather, it will gently advance itself through the organ’s anatomy. As a result, the TipCAT is designed
to be able to reach every part of the lumen under examination regardless of the topography, be less operator dependent, and greatly
reduce the likelihood of damage to lumen structure. The TipCAT thus offers functionality features equivalent to modern tubular
access devices, along with advantages associated with its physiologically adapted self-propelling mechanism, flexibility, and
design.
Industry
Overview
CSF
Management
Hydrocephalus
is a medical condition in which there is an abnormal accumulation of cerebrospinal fluid, or CSF, in the brain that can cause
increased intracranial pressure. It is estimated that one in every 500 babies are born with hydrocephalus, and over 1,000,000
people in the United States currently live with hydrocephalus.
Symptoms
of hydrocephalus vary with age, disease progression and individual tolerance to the condition, but they can include convulsion,
tunnel vision, mental disability or dementia-like symptoms and even death. NPH is a type of hydrocephalus that usually occurs
in older adults. NPH is generally treated as distinct from other types of hydrocephalus because it develops slowly over time.
In NPH, the drainage of CSF is blocked gradually and the excess fluid builds up slowly. This slow accumulation means that the
fluid pressure may not be as high as in other types of hydrocephalus. It is estimated that more than 700,000 Americans have NPH,
but less than 20% receive an appropriate diagnosis.
Hydrocephalus
is most often treated by the surgical insertion of a shunt system. The shunt system diverts the flow of CSF from the brain’s
ventricles (or the lumbar subarachnoid space) to another part of the body where the fluid can be more readily absorbed. Hydrocephalus
shunt designs have changed little since their introduction in the 1950s. A shunt system typically consists of three parts: the
distal tubing or shunt (a flexible and sturdy plastic tube), the ventricular catheter (the proximal catheter), and a valve. The
end of the shunt system with the proximal catheter is placed in the ventricles (within the CSF) and the distal catheter is placed
in the site of the body where the CSF can be drained. A valve is located along the shunt to maintain and regulate the rate of
CSF flow. Current systems can be created from separate components or bought as complete units.
The
treatment of hydrocephalus with existing shunt systems often includes complications. For example, approximately 50% of shunts
used in the pediatric population fail within two years of placement and repeated neurosurgical operations are often required.
Ventricular catheter blockage, or occlusion, is by far the most frequent event that results in shunt failure. Shunt occlusion
occurs when there is a partial or complete blockage of the shunt that causes it to function intermittently or not at all. Such
a shunt blockage can be caused by the accumulation of blood cells, tissue, or bacteria in any part of the shunt system. In the
event of shunt occlusion, CSF begins to accumulate in the brain or lumbar region again and the symptoms of untreated hydrocephalus
can reappear until a shunt replacement surgery is performed.
Although
several companies are active in the field of hydrocephalus treatment and the manufacturing of shunt systems and shunt components,
Microbot believes that the majority of those companies are focusing on the development of valves. The development of a “smart
shunt” – a shunt that could provide data to the physician on patient conditions and shunt function with sensor-based
controls, or correct the high failure rate of existing shunt systems – is for the most part at an academic and conceptual
level only. Reports of smart shunt technologies are typically focused on a subset of components with remaining factors left unspecified,
such as hardware, control algorithms or power management. Microbot does not believe that a smart shunt that can prevent functional
failures has been developed to date. Because of the limited innovation in this area, Microbot believes an opportunity exists to
provide patients suffering from hydrocephalus or NPH with a more effective instrument for treating their condition.
An
alternative, short-term solution to hydrocephalus is the implantation of an External Ventricular Drainage, or EVD, an implanted
device used in neurosurgery for the short-term treatment and monitoring of elevated intracranial pressure when the normal flow
of CSF inside the brain is obstructed. If after using an EVD, the underlying hydrocephalus does not eventually resolve, the EVD
may then be converted to a cerebral shunt, a fully internalized, long-term treatment for hydrocephalus.
EVDs
are also used in other instances when the normal flow of CSF inside the brain is obstructed, such as a result of head trauma,
intracerebral hemorrhage, brain tumors and infection. The EVD serves to divert excess fluids from the brain and allows for the
monitoring of intracranial pressure. An EVD must be placed in a center with full neurosurgical capabilities because immediate
neurosurgical intervention may be needed if a complication of EVD placement, such as bleeding, is encountered. EVD is one of the
most commonly used and most important life-saving procedures in the neurologic ICU, with more than 200,000 neuro-intensive patients
requiring EVD insertions annually.
Similar
to shunts, EVDs are also prone to occlusion, mostly due to cellular debris, such as blood clots and/or tissue fragments. Studies
have shown that approximately 1-7% of EVDs require replacement secondary to occlusion. Current solutions for EVD occlusion include
irrigation and replacement, which we believe may be ineffective (in the case of irrigation) or costly (in the case of replacement)
and in either case, put the patient at risk of unintended side effects. Microbot believes that with its portfolio of technologies,
and its initial pre-clinical results, it is well-positioned to explore and expand its offerings as an alternative solution for
EVD occlusion.
Minimally
Invasive Endovascular Neurosurgery
Minimally
Invasive Surgery, or MIS, refers to surgical procedures performed through tiny incisions instead of a single large opening. Because
the incisions are small, patients tend to have quicker recovery times and experience less trauma than with conventional surgery.
The global MIS market is expected to exceed $50 billion by 2019, with a CAGR of over 20% through 2023. MIS involves three major
category of devices: surgical, monitoring and visualization, and endoscopy. The market for surgical devices, including ablation,
electrosurgery and medical robotic systems, accounts for the largest share of revenue and is also expected to show the highest
rate of growth.
As
a subset of MIS, endovascular neurosurgery refers to surgeries performed by using devices that pass through the blood vessels
to diagnose and treat neurological diseases and conditions such as stroke, arteriovenous malformations, aneurysms and atherosclerosis,
rather than using open surgery.
The
global neurovascular device market was valued at $1.62 billion in 2015 and is expected to reach a value of $2.92 billion by 2024,
growing at a CAGR of 6.5%. Increases in the geriatric population and a rise in the number of patients suffering from neurovascular
disorders, implementation of advanced technological platforms, and favorable reimbursement policies across established markets
are expected to drive this market’s growth. On the other hand, the high cost of the endovascular devices and scarcity of
neurovascular surgeons may impede such growth.
Stroke
is a devastating condition, affecting 33 million people worldwide every year. In the United States alone, there are nearly 800,000
instances of stroke yearly, with about three in four being first-time strokes. This number is expected to increase to one million
annually in 2021. Stroke is the fifth leading cause of death in the United States and is a leading cause of long-term disability,
with related care costs estimated at $70 billion annually.
Mechanical
thrombectomy has only been approved as a first-line treatment for ischemic stroke since 2016. Prior to such approval, chemical
thrombolysis using tissue plasminogen activators was the only first-line treatment available, limiting the therapeutic window
for ischemic stroke patients to as little as 3-4 hours from the onset of symptoms. With mechanical thrombectomy, treatment can
be started within 6-24 hours of the time the patient was last known to be well. The US mechanical thrombectomy market is projected
to grow at a CAGR of 23.9% between 2014-2020, to reach a value over $350 million.
According
to the Brain Aneurysm Foundation, an estimated 6 million people in the United States have an unruptured brain aneurysm, or 1 in
50 people. The annual rate of rupture is approximately 8 – 10 per 100,000 people, or about 30,000 people in the United States
annually. Embolic coiling is the established gold-standard treatment for aneurysms, and the most established product line in the
neurovascular market – it is a strong but relatively stagnant market, projected to grow at a CAGR of 1.7% between 2014-2020,
to reach a value of over $800 million. New devices that improve treatment of complex aneurysms, such as embolization-enabling
stents, bifurcations stents, flow-diversion stents, liquid embolics and intrasaccular devices, are expected to boost market growth.
The
major companies in the field of neurovascular devices include Stryker Corporation, Medtronic Plc., Cerenovus (Johnson & Johnson),
Terumo Corporation and Penumbra, Inc. Neurovascular access devices are the means for delivering neurovascular treatment tools
and devices from an opening in the femoral or radial arteries into the brain vasculature. Such access devices include sheaths,
guidewires and microcatheters. Wires and catheters account for 18.6% of the overall neurovascular market.
Navigating
and placing access devices through tortuous and highly delicate brain arteries is a complex procedure that requires high-level
surgical skills with specialist training. In many procedures, surgeons exchange numerous access devices before reaching the target
and applying the therapeutic agent or device, increasing the risk of adverse events and the exposure of both patient and physician
to radiation. Adverse events, such as perforation of brain arteries or the release of embolies from a thrombus or atherosclerotic
lesion can have devastating or even fatal results.
Microbot
believes that with its portfolio of technologies specifically CardioSert and TipCAT,
it is well-positioned to explore and develop such technologies as neurovascular access
devices, with a focus on improving the ease and access and enhancing the safety of endovascular
neurosurgery.
Our
Product Pipeline
Self-Cleaning
Shunt
The
SCS device is designed to act as the ventricular catheter portion of a CSF shunt system that is used to relieve hydrocephalus
and NPH. It is designed to work as an alternative to any ventricular catheter options currently on the market and to connect to
all existing shunt system valves currently on the market; therefore, the successful commercialization of the SCS is not dependent
on any single shunt system. Initially, Microbot expects the SCS device to be an aftermarket purchase that would be deployed to
modify existing products by the end user. Microbot believes that the use of its SCS device will be able to reduce, and potentially
eliminate, shunt occlusions, and by doing so, Microbot believes its SCS has the potential to become the gold standard ventricular
shunt in the treatment of hydrocephalus and NPH.
The
SCS device embeds an internal robotic cleaning mechanism in the lumen, or inside space, of the ventricular catheter which prevents
cell accumulation and tissue ingrowth into the catheter. The SCS device consists of a silicone tube with a perforated titanium
tip, which connects to a standard shunt valve at its distal end. The internal cleaning mechanism is embedded in the lumen of the
titanium tip. Once activated, the cleaning mechanism keeps tissue from entering the catheter perforations while maintaining the
CSF flow in the ventricular catheter.
The
internal cleaning mechanism of the SCS device is activated by means of an induced magnetic field, which is currently designed
to be externally generated by the patient through a user-friendly headset that transmits the magnetic field at a pre-determined
frequency and operating sequence protocol. The magnetic field that is created by the headset is then captured by a flexible coil
and circuit board that is placed just under the patient’s scalp in the location where the valve is located. The circuit
board assembly converts the magnetic field into the power necessary to activate the cleaning mechanism within the proximal part
of the ventricular catheter.
Microbot
has completed the development of an SCS prototype and is currently completing the safety testing, general proof of concept testing
and performance testing for the device, which Microbot began in mid-2013. In May 2018, Microbot announced the results of two pre-clinical
studies assessing the SCS, an
in-vitro
study and a small animal study. The in-vitro study, which was performed at Wayne
State University by Dr. Carolyn Harris, supports the SCS’s potential as a viable technology for preventing occlusion in
shunts used to treat hydrocephalus. The animal study designed to assess the safety profile of the SCS, which was performed by
James Patterson McAllister, PhD, a Professor of Neurosurgery at Washington University School of Medicine in St. Louis, met the
primary goal to determine the safety of the SCS device that aims to prevent obstruction in CSF catheters. Since the completion
of these initial studies, Microbot has commenced a follow-up study to further evaluate the safety and to investigate the efficacy
of the SCS. The follow-up study is also being conducted by leading hydrocephalus experts at Washington University and Wayne State
University. The study will include a larger sample size compared to the initial studies and the primary and secondary endpoints
will seek to validate the safety and efficacy of the SCS that will be activated in both
in-vitro
(lab) and
in-vivo
(animal) models. Microbot plans to use the findings for initial regulatory submissions in the United States, Europe and other
jurisdictions, although upon the completion of animal studies, Microbot may conduct clinical trials if they are requested by the
FDA or if Microbot decides that the data from such trials would improve the marketability of the product candidate.
In
conjunction with initiating this follow-up study, Microbot also contracted with Envigo CRS Israel, a leading provider of non-clinical
contract research services, to conduct an
in-vitro
study designed to evaluate the operational performance of the SCS. The
Envigo study used human brain glioblastoma cells in order to assess the performance of the SCS in a test system with accelerated
cell growth, accumulation, and obstruction rates. The performance of a constantly activated (always-on) SCS to prevent shunt occlusion
in the laboratory study was compared with a non-operating SCS after 30 days, and the results were captured with photographs shared
by Microbot in a press release issued on January 14, 2019. While significant cell growth and accumulation was seen in the cell
cultures with a non-operating SCS, the shunt openings within the cells seeded with a constantly operating SCS remained clear,
with little to no cell attachment on the robotic brush (ViRob) and on the opening where the robotic brush (ViRob) operates after
30 days of cell culturing and growth. We believe this experiment validates the operational effectiveness of the SCS to prevent
shunt occlusion and provides additional data to support the device’s proof of concept. We believe the
in-vitro
laboratory
study further confirms that the SCS has the ability to operate after cells have accumulated on the catheter holes and the robotic
brush (ViRob) and to potentially disintegrate existing occlusions formed on the robotic brush (ViRob) and on the opening where
the robotic brush (ViRob) operates, based on the results from a third test group in which cells were allowed to grow for 4 weeks
and then exposed to an activated SCS device. The images captured by Envigo and Microbot demonstrate that the cleaning mechanism
of the SCS is powerful enough to clear accumulated cells at blocked pores, as significant improvements were observed in the degree
of shunt obstruction after only a short period of time following activation of the SCS.
Microbot
believes that the animal study results of its first generation SCS device should be available during the second half of 2019 and
we expect to submit that data to the FDA as part of a pre-submission meeting request. The proposed indication for use of the SCS
device would be for the treatment of hydrocephalus as a component of a shunt system when draining or shunting of CSF is indicated.
It continues to be possible that the FDA could require us to conduct a human clinical study to support the safety and efficacy
of the SCS and that such clinical data would need to be part of the future regulatory submission to authorize marketing of the
medical device in the U.S.
Microbot
may also conduct clinical trials for the SCS in other countries where such trials are necessary for Microbot to sell its SCS device
in such country’s market, although it has no current plans to do so.
TipCAT
A
TipCAT prototype was shown to self-propel and self-navigate in curved plastic pipes and curved ex-vivo colon. In addition, in
its first feasibility study, the prototype device was tested in a live animal experiment and successfully self-propelled through
segments of the animal’s colon, with no post-procedural damage. All tests were conducted at AMIT (Alfred Mann Institute
of Technology at the Technion), prior to the licensing of TipCAT by Microbot.
Microbot
is no longer pursuing the development of the TipCAT as a colonoscopy tool but is currently exploring the use of the TipCAT for
minimally invasive endovascular neurosurgical applications.
Risks
Associated with Our Business and this Offering
Our
business and our ability to implement our business strategy are subject to numerous risks, as more fully described in the section
of this prospectus entitled “Risk Factors” and under similarly titled headings of the documents incorporated herein
by reference. You should read these risks before you invest in our securities. We may be unable, for many reasons, including those
that are beyond our control, to implement our business strategy. In particular, risks associated with our business include:
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We
will need to raise significant additional capital to support our operations.
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We
have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for
the foreseeable future, and our future profitability is uncertain.
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Our
product candidates must undergo rigorous clinical testing, such clinical testing may fail to demonstrate safety and efficacy
and any of our product candidates could cause undesirable side effects, which would substantially delay or prevent regulatory
approval or commercialization.
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We
are dependent on patents and proprietary technology. If we fail to adequately protect this intellectual property or if we
otherwise do not have exclusivity for the marketing of our products, our ability to commercialize products could suffer.
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If
our competitors are able to develop and market products that are more effective, safer or more affordable than ours, or obtain
marketing approval before we do, our commercial opportunities may be limited.
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If
you purchase our securities in this offering, you will incur immediate and substantial dilution.
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We
will have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
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Corporate
and Other Information
We
were incorporated on August 2, 1988 in the State of Delaware under the name Cellular Transplants, Inc. The original Certificate
of Incorporation was restated on February 14, 1992 to change our name to CytoTherapeutics, Inc. On May 24, 2000, the Certificate
of Incorporation as restated was further amended to change our name to StemCells, Inc. On November 28, 2016, C&RD Israel Ltd.,
a wholly-owned subsidiary of ours, completed its merger with and into Microbot Medical Ltd., or Microbot Israel, an Israeli corporation
that then owned our assets and operated our current business, with Microbot Israel surviving as a wholly-owned subsidiary of ours.
We refer to this transaction as the Merger. On November 28, 2016, in connection with the Merger, we changed our name from “StemCells,
Inc.” to Microbot Medical Inc., and each outstanding share of Microbot Israel capital stock was converted into the right
to receive shares of our common stock. In addition, all outstanding options to purchase the ordinary shares of Microbot Israel
were assumed by us and converted into options to purchase shares of the common stock of Microbot Medical Inc. On November 29,
2016, our common stock began trading on the Nasdaq Capital Market under the symbol “MBOT”. Prior to the Merger, we
were a biopharmaceutical company that operated in one segment, the research, development, and commercialization of stem cell therapeutics
and related technologies. Substantially all of the material assets relating to the stem cell business were sold on November 29,
2016.
In
May 2016, we effected a 1-for-12 reverse split of our common stock, and in November 2016, we effected a 1-for-9 reverse split
of our common stock in connection with the Merger. In September 2018, we effected a 1-for-15 reverse split of our common stock.
The share and per share information described in this prospectus that occurred prior to these reverse splits have been adjusted
to give retrospective effect to the reverse splits.
Our
principal executive offices are located at 25 Recreation Park Drive, Unit 108, Hingham, MA 02043. The telephone number at our
principal executive office is (781) 875-3605. Our website address is
www.microbotmedical.com
. Our website and the information
contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference in, and are not
considered part of, this prospectus. You should not rely on our website or any such information in making your decision whether
to purchase our securities in this offering.
This
prospectus contains references to our trademarks and to trademarks and trade names belonging to other entities. Solely for convenience,
trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without
the ® or ™ symbols, but such references are not intended to indicate, in any way, that their respective owners will
not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’
trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Implications
of Being a Smaller Reporting Company
We
are a “smaller reporting company” as defined in the Exchange Act and have elected to take advantage of certain of
the scaled disclosures available to smaller reporting companies, including certain of the reduced disclosure obligations in the
registration statement of which this prospectus is a part. As a result, the information that we provide to our stockholders may
be different than you might receive from other public reporting companies in which you hold equity interests.
The
Offering
Common
stock offered by us in this offering
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996,016
shares
of our common stock
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Pre-funded
warrants offered by us in this offering
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We
are also offering to certain purchasers whose purchase of shares of common stock in this offering would otherwise result in
the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election
of the purchaser, 9.99%) of our outstanding common stock immediately following the consummation of this offering, the opportunity
to purchase, if such purchasers so choose, pre-funded warrants, in lieu of shares of common stock that would otherwise result
in any such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding
common stock. Each pre-funded warrant will be exercisable for one share of our common stock. The purchase price of each pre-funded
warrant will equal the price per share at which the shares of common stock are being sold to the public in this offering,
minus $0.01, and the exercise price of each pre-funded warrant will be $0.01 per share. The pre-funded warrants will be exercisable
immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. This offering also
relates to the shares of common stock issuable upon exercise of any pre-funded warrants sold in this offering. For each pre-funded
warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis.
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Option
to purchase additional shares
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The
underwriter has an option to purchase up to an additional 149,402 shares of our common stock at the public offering
price per share , less underwriting discounts and commissions, to cover over-allotments, if any. The underwriter may
exercise this option for a period of 30 days from the date of this prospectus.
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Common stock
outstanding before this offering
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4,307,666
shares
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Common
stock to be outstanding after this offering
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5,303,682
shares of common stock, assuming no sale of any pre-funded
warrants (or 5,453,084 shares of common stock if the underwriter exercises in full its option to purchase additional
shares of common stock, assuming no sale of pre-funded warrants).
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Public offering
price
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The
assumed public offering price is $10.04 per share and $10.03 per pre-funded warrant, which is based on the last reported sale
price of our common stock on The Nasdaq Capital Market on February 5, 2019. The actual offering price per share and pre-funded
warrant will be negotiated between us and the underwriter based on the trading of our common stock prior to the offering,
among other things, and may be at a discount to the current market price.
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Use
of proceeds
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We
currently intend to use the net proceeds from this offering for the continuous development
of our SCS device for the treatment of hydrocephalus and NPH; expanding and developing
the applications of our existing ViRob and SCS IP and prototypes into other areas of
CSF management, such as EVD; expanding and developing additional applications deriving
from our existing IP portfolio, including the potential addition of complementary assets
to the CardioSert portfolio either through internal development, in-license or acquisition;
and entering into collaborations to explore additional early stage projects to supplement
our existing assets and products under development. We may also use a portion of the
net proceeds from this offering to in-license, acquire, or invest in complementary businesses,
technologies, products or assets. However, we have no current commitments or obligations
to do so.
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Risk
factors
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You
should read the “Risk Factors” section of this prospectus for a discussion of certain of the factors to consider
carefully before deciding to purchase any shares of our common stock or pre-funded warrants in this offering.
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National
Securities Exchange Listing
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Our
common stock is listed on The Nasdaq Capital Market under the symbol “MBOT.” We do not intend to list the pre-funded
warrants on any securities exchange or nationally recognized trading system.
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The number of shares of our common stock to be outstanding after this offering is based on 4,307,666 shares of common stock outstanding
as of February 5, 2019, and excludes, as of February 5, 2019:
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434,108
shares of our common stock issuable upon the exercise of outstanding stock options, with exercise prices ranging from $0 to
$19.35 and having a weighted-average exercise price of $11.60 per share;
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189,609
shares of our common stock reserved for future grant under our 2017 Equity Incentive Plan;
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22,767
shares of common stock issuable upon exercise of the warrants issued to the placement agent in connection with the registered
direct offering consummated on January 15, 2019 with an exercise price of $8.125;
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29,500
shares of common stock issuable upon exercise of the warrants issued to the placement agent in connection with the registered
direct offering consummated on January 17, 2019 with an exercise price of $12.50; and
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Approximately
3,636 shares of our common stock issuable upon the exercise of other outstanding warrants, with exercise prices ranging from
approximately $40.00 to $2,725 per share and having a weighted-average exercise price of approximately $424 per share.
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Our
shares of common stock outstanding as of February 5, 2019 also exclude the following warrants issued in the private placement
and to the placement agent in connection with the registered direct offering and private placement consummated on January 25,
2019:
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250,000
shares of common stock issuable upon exercise, at an exercise price of $10.00 per share, of the warrants issued in the private
placement; and
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12,500 shares of common stock issuable upon exercise, at an exercise price of $12.50, of the
warrants issued to the placement agent as compensation.
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Unless
otherwise indicated, all information contained in this prospectus assumes no exercise by the underwriter of its over-allotment
option, no sale of any pre-funded warrants in this offering and no exercise by the underwriter of its warrants to purchase up
to 57,271 shares of our common stock (including warrants issuable to the underwriter upon exercise of the
option to purchase additional securities) at an exercise price per share which is equal to 125% of the public offering price per
share of the shares of common stock offered in this offering.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should consider carefully the additional risks described below, together
with all of the other information included or incorporated by reference in this prospectus, including the risks and uncertainties
discussed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in
our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018, before deciding whether to purchase our securities
in this offering. All of these risk factors are incorporated herein in their entirety. The risks described below and incorporated
by reference are material risks currently known, expected or reasonably foreseeable by us. However, the risks described below
or that we incorporate by reference are not the only ones that we face. Additional risks not presently known to us or that we
currently deem immaterial may also affect our business, operating results, prospects or financial condition. If any of these risks
actually materialize, our business, prospects, financial condition, and results of operations could be seriously harmed. This
could cause the trading price of our common stock and the value of the warrants to decline, resulting in a loss of all or part
of your investment.
Additional
Risks Relating to the Development and Commercialization of Microbot’s Product Candidates
Microbot’s
business depends heavily on the success of its lead product candidate, the SCS. If Microbot is unable to commercialize the SCS
or experiences significant delays in doing so, Microbot’s business will be materially harmed.
On
January 27, 2017, Microbot entered into a research agreement with Washington University in St. Louis to develop the protocol for
and to execute the necessary animal study to determine the effectiveness of the Microbot’s SCS prototype. The initial research
was completed in 2017 with a comprehensive study expected to be completed in 2019. Upon the completion of animal studies, Microbot
may conduct clinical trials if they are requested by the FDA or if Microbot decides that the data from such trials would improve
the marketability of the product candidate. After all necessary clinical and performance data supporting the safety and effectiveness
of SCS are collected, Microbot must still obtain FDA clearance or approval to market the device and those regulatory processes
can take several months to several years to be completed. Therefore, Microbot’s ability to generate product revenues will
not occur for at least the next few years, if at all, and will depend heavily on the successful commercialization of SCS in the
treatment of hydrocephalus. The success of commercializing SCS will depend on a number of factors, including the following:
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ability to obtain additional capital;
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successful
completion of animal studies and, if necessary, human clinical trials and the collection of sufficient data to demonstrate
that the device is safe and effective for its intended use;
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receipt
of marketing approvals or clearances from the FDA and other applicable regulatory authorities;
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establishing
commercial manufacturing arrangements with one or more third parties;
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obtaining
and maintaining patent and trade secret protections;
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protecting
Microbot’s rights in its intellectual property portfolio;
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establishing
sales, marketing and distribution capabilities;
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generating
commercial sales of SCS, if and when approved, whether alone or in collaboration with other entities;
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acceptance
of SCS, if and when commercially launched, by the medical community, patients and third-party payors;
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effectively
competing with existing shunt and endoscope products on the market and any new competing products that may enter the market;
and
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maintaining
quality and an acceptable safety profile of SCS following clearance or approval.
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If
Microbot does not achieve one or more of these factors in a timely manner or at all, it could experience significant delays or
an inability to successfully commercialize SCS, which would materially harm its business.
Microbot’s
ability to expand our technology platforms for other uses, including endovascular neurosurgery other than for the treatment of
hydrocephalus, may be limited.
After
spending time working with experts in the field, Microbot has recently decided to no longer pursue the use of TipCAT in colonoscopy
and has instead committed to focus on expanding all of its technology platforms for use in segments of the endovascular neurosurgery
market, including traumatic brain injury, to capitalize on its existing competencies in hydrocephalus and the market’s needs.
Microbot’s ability to expand its technology platforms for use in the endovascular neurosurgery market will be limited by
its ability to develop and/or refine the necessary technology, obtain the necessary regulatory approvals for their use on humans,
and the marketing of its products and otherwise obtaining market acceptance of its product in the United States and in other countries.
Microbot
operates in a competitive industry and if its competitors have products that are marketed more effectively or develop products,
treatments or procedures that are similar, more advanced, safer or more effective, its commercial opportunities will be reduced
or eliminated, which would materially harm its business.
Our
competitors that have developed or are developing endoluminal robotics surgical systems include Corindus Vascular Robotics, Inc.,
Hansen Medical, Inc. Auris Health, Inc., Stereotaxis, Inc., Medrobotics Corporation and others. Our competitors may develop products,
treatments or procedures that directly compete with our products and potential products and which are similar, more advanced,
safer or more effective than ours. The medical device industry is very competitive and subject to significant technological and
practice changes. Microbot expects to face competition from many different sources with respect to the SCS and products that it
is seeking to develop or commercialize with respect to its other product candidates in the future.
Competing
against large established competitors with significant resources may make establishing a market for any products that it develops
difficult which would have a material adverse effect on Microbot’s business. Microbot’s commercial opportunities could
also be reduced or eliminated if its competitors develop and commercialize products, treatments or procedures quicker, that are
safer, more effective, are more convenient or are less expensive than the SCS or any product that Microbot may develop. Many of
Microbot’s potential competitors have significantly greater financial resources and expertise in research and development,
manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products
than Microbot may have. Mergers and acquisitions in the medical device industry market may result in even more resources being
concentrated among a smaller number of Microbot’s potential competitors.
At
this time, Microbot does not know whether the FDA will require it to submit clinical data in support of its future marketing applications
for its SCS product candidate, particularly in light of recent initiatives by the FDA to enhance and modernize its approach to
medical device safety and innovation, which creates uncertainty for Microbot as well as the possibility of increased product development
costs and time to market.
Microbot
has identified a predicate device for its lead product candidate, the SCS, which it intends to use in its 510(k) application to
support a substantial equivalence determination. If the FDA agrees with the Company’s determination, the SCS will
be classified by the FDA as Class II and eligible for marketing pursuant to FDA clearance through the 510(k) application.
However, in light of recent initiatives by the FDA relating to safety and efficacy, there is no guarantee that the FDA will agree
with the Company’s determination or that the FDA would accept the predicate device that Microbot intends to submit in its
510(k). The FDA also may request additional data in response to a 510(k), or require Microbot to conduct further testing or compile
more data in support of its 510(k). Such additional data could include clinical data that must be derived from human clinical
studies that are designed appropriately to address the potential questions from the FDA regarding a proposed product’s safety
or effectiveness. It is unclear at this time whether and how various activities recently initiated or announced by the FDA to
modernize the U.S. medical device regulatory system could affect the marketing pathway or timeline for our product candidate,
given the timing and the undeveloped nature of some of the FDA’s new medical device safety and innovation initiatives. One
of the recent initiatives was announced in April 2018, when the FDA Commissioner issued a statement with the release of a Medical
Device Safety Action Plan. Among other key areas of the Medical Device Safety Action Plan, the Commissioner stated that the FDA
is “exploring what further actions we can take to spur innovation towards technologies that can make devices and their use
safer. For instance, our Breakthrough Device Program that helps address unmet medical needs can be used to facilitate patient
access to innovative new devices that have important improvements to patient safety. We’re considering developing a similar
program to support the development of safer devices that do not otherwise meet the Breakthrough Program criteria, but are clearly
intended to be safer than currently available technologies.” This type of program may negatively affect our existing development
plan for the SCS product candidate or it may benefit Microbot, but at this time those potential impacts from recent FDA medical
device initiatives are unknown and uncertain. Similarly, the FDA Commissioner announced various agency goals under a Medical Innovation
Access Plan in 2017.
If the FDA does require clinical data to be submitted as part of the SCS marketing submission, any type of clinical study
performed in humans will require the investment of substantial expense, professional resources and time. In order to conduct
a clinical investigation involving human subjects for the purpose of demonstrating the safety and effectiveness of a medical
device, a company must, among other things, apply for and obtain Institutional Review Board, or IRB, approval of the proposed
investigation. In addition, if the clinical study involves a “significant risk” (as defined by the FDA) to human
health, the sponsor of the investigation must also submit and obtain FDA approval of an Investigational Device Exemption,
or IDE, application. Microbot may not be able to obtain FDA and/or IRB approval to undertake clinical trials in the United
States for any new devices Microbot intends to market in the United States in the future. Moreover, the timing of the commencement,
continuation and completion of any future clinical trial may be subject to significant delays attributable to various causes,
including scheduling conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling
patients who meet trial eligibility criteria, failure of patients to complete the clinical trial, delay in or failure to obtain
IRB approval to conduct a clinical trial at a prospective site, and shortages of supply in the investigational device.
Thus,
the addition of one or more mandatory clinical trials to the development timeline for the SCS would significantly increase
the costs associated with developing and commercializing the product and delay the timing of U.S. regulatory authorization.
The current uncertainty regarding near-term medical device regulatory changes by the FDA could further affect our development
plans for the SCS, depending on their nature, scope and applicability. Microbot and its business, financial condition and
operating results could be materially and adversely affected as a result of any such costs, delays or uncertainty.
The
FDA may disagree with Microbot’s determination that the SCS is a Class II device or that the chosen predicate device (or
any predicate device) is appropriate for a substantial equivalence comparison to the SCS.
Although
the Company intends to submit a 501(k) application for its lead product candidate, the SCS, the FDA may determine that the SCS
is a Class III device because there is no appropriate predicate device for substantial equivalence comparison, which would require
Microbot to submit a De Novo classification request or an application for premarket approval (“PMA”). Both De Novo
requests and PMA applications require applicants to prepare information and data about device safety and efficacy in addition
to the 510(k) requirements, including a benefit-risk analysis, a discussion of proposed general and special controls to eliminate
or mitigate device risks, and additional testing data. PMA applications almost always require data from human clinical studies,
and while De Novo requests do not require human clinical study data, in most cases, such data is necessary to demonstrate that
the FDA can appropriately classify the device as Class II.
Any
type of clinical study performed in humans will require the investment of substantial expense, professional resources and time.
In order to conduct a clinical investigation involving human subjects for the purpose of demonstrating the safety and effectiveness
of a medical device, a company must, among other things, apply for and obtain Institutional Review Board, or IRB, approval of
the proposed investigation. In addition, if the clinical study involves a “significant risk” (as defined by the FDA)
to human health, the sponsor of the investigation must also submit and obtain FDA approval of an Investigational Device Exemption,
or IDE, application. Microbot may not be able to obtain FDA and/or IRB approval to undertake clinical trials in the United States
for any new devices Microbot intends to market in the United States in the future. Moreover, the timing of the commencement, continuation
and completion of any future clinical trial may be subject to significant delays attributable to various causes, including scheduling
conflicts with participating clinicians and clinical institutions, difficulties in identifying and enrolling patients who meet
trial eligibility criteria, failure of patients to complete the clinical trial, delay in or failure to obtain IRB approval to
conduct a clinical trial at a prospective site, and shortages of supply in the investigational device. Thus, the addition of one
or more mandatory clinical trials to the development timeline for the SCS would significantly increase the costs associated with
developing and commercializing the product and delay the timing of U.S. regulatory authorization.
Furthermore,
if Microbot is required to submit a De Novo request or PMA application instead of a 510(k), the FDA review process may take significantly
more time. While the FDA commits to reviewing 510(k)s in 90 days, the review period for De Novo requests and PMA applications
is 150 days and 180 days, respectively. After an initial review of our De Novo request or PMA application, the FDA may request
additional information or data which can significantly delay an ultimate decision on our submission.
Thus,
submitting a De Novo request or PMA application for the SCS would significantly increase the costs associated with developing
and commercializing the product and delay the timing of U.S. regulatory authorization. Microbot and its business, financial condition
and operating results could be materially and adversely affected as a result of any such costs or delays.
Risks
Related to this Offering
You
will experience immediate and substantial dilution if you purchase securities in this offering.
As
of September 30, 2018, our net tangible book value was approximately $6.57 million, or $2.2066 per share. You will suffer substantial
dilution with respect to the net tangible book value of the common stock or common stock issuable upon the exercise of the pre-funded
warrants you purchase in this offering. Based on the assumed public offering price of $10.04 per share of common stock
(or common stock equivalent) being sold in this offering (the last reported sale price of our common stock on The Nasdaq Capital
Market on February 5, 2019), and our net tangible book value per share as of September 30, 2018, as adjusted to reflect the consummation
of offerings of our securities consummated subsequent to such date, if you purchase shares of common stock in this offering, you
will suffer immediate and substantial dilution of $5.2834 per share. See the section entitled “Dilution” for
a more detailed discussion of the dilution you will incur if you purchase common stock in this offering. The discussion above
assumes (i) no sale of pre-funded warrants, which, if sold, would reduce the number of shares of common stock that we are offering
on a one-for-one basis until such warrants are exercised and (ii) no exercise by the underwriter of the Underwriter’s Warrants.
There
is no public market for the pre-funded warrants being offered in this offering.
There
is no established public trading market for the pre-funded warrants being offered in this offering, and we do not expect a market
to develop. In addition, we do not intend to apply to list the pre-funded warrants on any securities exchange or nationally recognized
trading system, including The Nasdaq Capital Market. Without an active market, the liquidity of the pre-funded warrants will be
limited.
We
will have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our
management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes
described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment
decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that
will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently
intended use. Our management may not apply the net proceeds from this offering in ways that ultimately increase the value of your
investment. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may
invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities or as otherwise provided
in our investment policies in effect from time to time. These investments may not yield a favorable return to our stockholders.
If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve
expected financial results, which could cause our stock price to decline.
There
may be future sales of our securities or other dilution of our equity, which may adversely affect the market price of our common
stock.
We
are generally not restricted from issuing additional common stock, including any securities that are convertible into or exchangeable
for, or that represent the right to receive, common stock. The market price of our common stock could decline as a result of sales
of common stock or securities that are convertible into or exchangeable for, or that represent the right to receive, common stock
after this offering or the perception that such sales could occur.
Holders
of pre-funded warrants purchased in this offering will have no rights as common stockholders until such holders exercise their
pre-funded warrants and acquire our common stock.
Until
holders of pre-funded warrants acquire shares of our common stock upon exercise of the pre-funded warrants, holders of pre-funded
warrants will have no rights with respect to the shares of our common stock underlying such pre-funded warrants. Upon exercise
of the pre-funded warrants, the holders will be entitled to exercise the rights of a common stockholder only as to matters for
which the record date occurs after the exercise date.
Even
if this offering is successful, we will need to raise additional capital in the future to continue operations, which may not be
available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or
terminate our product development efforts or other operations.
We
have had significant recurring losses from operations and we do not generate any cash from operations and must raise additional
funds in order to continue operating our business. We expect to continue to fund our operations in the future primarily through
equity and debt financings, grants from the Israel Innovation Authority and other sources. If additional capital is not available
to us when needed or on acceptable terms, we may not be able to continue to operate our business pursuant to our business plan
or we may have to discontinue our operations entirely. As of September 30, 2018, we had cash and cash equivalents of approximately $6.7
million. In January 2019, we raised approximately $11.3 million in gross proceeds through a series of registered direct offerings.
We estimate that we will receive net proceeds of approximately $8.9 million from the sale of the securities offered by us in this
offering, based on the assumed public offering price of $10.04 per share (the last reported sale price of our common stock
on The Nasdaq Capital Market on February 5, 2019) and after deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us, and excluding the proceeds, if any, from the exercise of the pre-funded warrants issued
pursuant to this offering. In the event of a decrease in the net proceeds to us from this offering as a result of a decrease in
the assumed public offering price or the number of shares offered by us, if the Plaintiffs succeed in the Matter or if our use
of proceeds changes from our plans as described under “Use of Proceeds”, we may need to raise additional capital sooner
than we anticipate. In addition, we cannot provide assurances that our plans will not change or that changed circumstances will
not result in the depletion of our capital resources more rapidly than we currently anticipate.
Any
additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability
to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success
of our product development activities, any clinical trials, regulatory events, our ability to identify and enter into in-licensing
or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related
to financial, economic and market conditions, many of which are beyond our control. There can be no assurances that sufficient
funds will be available to us when required or on acceptable terms, if at all.
If
we are unable to secure additional funds when needed or on acceptable terms, we may be required to defer, reduce or eliminate
significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations,
dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on
investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates,
technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material
adverse effect on our business, financial condition and results of operations. Moreover, if we are unable to obtain additional
funds on a timely basis, there will be substantial doubt about our ability to continue as a going concern and increased risk of
insolvency and up to a total loss of investment by our stockholders.
We
are subject to a lawsuit that could adversely affect our business and our use of proceeds from this offering.
We
are named as the defendant in a lawsuit, which we refer to as the Matter, captioned Sabby Healthcare Master Fund Ltd. and
Sabby Volatility Warrant Master Fund Ltd., Plaintiffs, against Microbot Medical Inc., Defendant, pending in the Supreme Court
of the State of New York, County of New York (the “Court”) (Index No. 654581/2017). The complaint alleges, among
other things, that we breached multiple representations and warranties contained in the Securities Purchase Agreement (the
“SPA”) related to our June 8, 2017 equity financing, or the Financing, of which the Plaintiffs participated. The
complaint seeks rescission of the SPA and return of the Plaintiffs’ $3,375,000 purchase price with respect to the
Financing, and damages in an amount to be determined at trial, but alleged to exceed $1 million. On August 3, 2018, both
Plaintiffs and Defendant filed motions for summary judgment. On September 27, 2018, the Court heard oral argument on the
parties’ respective summary judgment motions. After oral argument, the Court denied Plaintiffs’ motion in its
entirety from the bench. On September 28, 2018, the Court issued a decision granting our motion for summary judgment
regarding Plaintiffs’ claim for monetary damages and denying our motion for summary judgment on Plaintiffs’ claim
for rescission, finding that there were material questions of fact that would need to be resolved at trial. A trial date has
been set for February 11, 2019. On January 8, 2019, the plaintiffs filed a motion seeking to amend the complaint to also
pursue rescission on a material misrepresentation theory. On January 25, 2019, the Court denied plaintiffs’ motion to file an amended complaint but granted the motion to the extent
that the Court would conform the pleadings to the evidence actually presented at trial.
On
April 4, 2018, we entered into a Tolling and Standstill Agreement with Empery Asset Master, Ltd., Empery Tax Efficient LP, Empery
Tax Efficient II LP, and Hudson Bay Master Fund, Ltd., the other investors in the Financing, of whom we refer to as the Other
Investors. Pursuant to the Tolling Agreement, among other things, (a) the Other Investors agree not to bring any claims against
us arising out of the Matter, (b) the parties agree that if we reach an agreement to settle the claims asserted by the Sabby Funds
in the above suit, we will provide the same settlement terms on a pro rata basis to the Other Investors, and the Other Investors
will either accept same or waive all of their claims and (c) the parties froze in time the rights and privileges of each party
as of the effective date of the Tolling Agreement, until (i) an agreement to settle the suit is executed; (ii) a judgment in the
suit is obtained; or (iii) the suit is otherwise dismissed with prejudice.
We
believe that the claims are without merit and have been and intend to continue to defend the action vigorously. However, management
is unable to assess the likelihood of the claim and the amount of potential damages, if any, to be awarded. Accordingly, no assurance
can be given that any adverse outcome would not be material to our consolidated financial position. Additionally, in the event
the court holds for the Plaintiffs in the Matter and we lose our appeals, we will likely be required to use the proceeds from
this offering or available cash towards payment of damages to the Plaintiffs and the Other Investors, that we otherwise would
have used to build our business and develop our technologies into commercial products. In such event, we would be required to
raise additional capital sooner than we otherwise would, of which we can give no assurance of success.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference herein contain forward-looking statements. The forward-looking statements
are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and “Business” in this prospectus
or the documents incorporated herein by reference. These statements relate to future events or to our future financial performance
and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Forward-looking statements include, but are not limited to, statements about:
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estimates regarding anticipated operating losses, capital requirements and needs for additional funds;
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our
ability to raise additional capital when needed and to continue as a going concern;
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our
ability to manufacture, or otherwise secure the manufacture of, sufficient amounts of our product candidates for our preclinical
studies and clinical trials;
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our
ability to find and develop applications for our technologies for other neurosurgical conditions besides hydrocephalus;
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our
clinical development and other research and development plans and expectations;
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the
safety and efficacy of our product candidates;
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the
anticipated regulatory pathways for our product candidates;
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our
ability to successfully complete preclinical and clinical development of, and obtain regulatory approval of our product candidates
and commercialize any approved products on our expected timeframes or at all;
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the
content and timing of submissions to and decisions made by the U.S. Food and Drug Administration and other regulatory agencies;
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our
ability to leverage the experience of our management team;
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our
ability to attract and keep management and other key personnel;
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capacities and performance of our suppliers, manufacturers and other third parties over whom we have limited control;
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the
actions of our competitors and success of competing products that are or may become available;
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our
expectations with respect to future growth and investments in our infrastructure, and our ability to effectively manage any
such growth;
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the
size and potential growth of the markets for any of our product candidates, and our ability to capture share in or impact
the size of those markets;
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the
benefits of our product candidates;
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market
and industry trends;
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the
outcome of any litigation in which we or any of our officers or directors may be involved, including with respect to the Matter;
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the
effects of government regulation and regulatory developments, and our ability and the ability of the third parties with whom
we engage to comply with applicable regulatory requirements;
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the
accuracy of our estimates regarding future expenses, revenues, capital requirements and need for additional financing;
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our
expectations regarding future planned expenditures;
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our
ability to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act;
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our
ability to obtain, maintain and successfully enforce adequate patent and other intellectual property protection of any of
our products and product candidates;
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our
expected use of the net proceeds from this offering; and
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our
ability to operate our business without infringing the intellectual property rights of others.
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In
some cases, you can identify these statements by terms such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “will,” “would” or the negative of
those terms, and similar expressions that convey uncertainty of future events or outcomes. These forward-looking statements reflect
our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date
of this prospectus and are subject to risks and uncertainties. We discuss many of these risks in greater detail in the documents
incorporated by reference herein, usually under the heading “Risk Factors.” Moreover, we operate in a very competitive
and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements we may make. In addition, statements
that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements
are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable
basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that
we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are
inherently uncertain. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
You
should carefully read this prospectus, the documents that we incorporate by reference into this prospectus and the documents we
reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely
and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the
forward-looking statements in this prospectus by these cautionary statements.
Except
as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual
results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information,
future events or otherwise.
USE
OF PROCEEDS
We
estimate that we will receive net proceeds of approximately $8.9 million (or approximately $10.3 million if the underwriter’s
over-allotment option is exercised in full) from the sale of the securities offered by us in this offering, based on the assumed
public offering price of $10.04 per share (the last reported sale price of our common stock on The Nasdaq Capital Market on February
5, 2019), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by
us, and excluding the proceeds, if any, from the exercise of any pre-funded warrants issued pursuant to this offering.
A
$0.25 increase (decrease) in the assumed public offering price of $10.04 per share would increase (decrease) the expected net
proceeds to us from this offering by approximately $0.229 million, assuming that the number of shares offered by us, as set forth
on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions
and estimated offering expenses payable by us and excluding the proceeds, if any, from the exercise of the pre-funded warrants
issued pursuant to this offering.
Similarly,
a 500,000 share increase (decrease) in the number of shares offered by us, as set forth on the cover page of this prospectus,
would increase (decrease) the net proceeds to us by approximately $4.6 million, assuming the assumed public offering price of
$10.04 per share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering
expenses payable by us and excluding the proceeds, if any, from the exercise of the pre-funded warrants issued pursuant to this
offering
We
currently intend to use the net proceeds from this offering for the continuous development of our SCS device for the treatment
of hydrocephalus and NPH; expanding and developing the applications of our existing ViRob and SCS IP and prototypes into other
areas of CSF management, such as EVD; expanding and developing additional applications deriving from our existing IP portfolio,
including the potential addition of complementary assets to the CardioSert portfolio either through internal development, in-license
or acquisition; and entering into collaborations to explore additional early stage projects to supplement our existing assets
and products under development. We may also use a portion of the net proceeds from this offering to in-license, acquire, or invest
in complementary businesses, technologies, products or assets. However, we have no current commitments or obligations to do so.
See “Risk Factors” for a discussion of
certain risks that may affect our intended use of the net proceeds from this offering, including with respect to the Matter.
We
currently anticipate that our existing resources, together with the expected net proceeds from this offering, will be sufficient
to fund our planned operations until the first quarter of 2021 .
Our
expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition.
As of the date of this prospectus, we cannot currently allocate specific percentages of the net proceeds that we may use for the
purposes specified above, and we cannot predict with certainty all of the particular uses for the net proceeds to be received
upon the completion of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and
timing of our actual use of the net proceeds will vary depending on numerous factors, including our ability to obtain additional
financing, the progress, cost and results of our preclinical and clinical development programs and whether we are able to enter
into future licensing or collaboration arrangements. We may find it necessary or advisable to use the net proceeds for other purposes,
and our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment
regarding the application of the net proceeds from this offering.
Pending
the use of the net proceeds from this offering, we intend to invest the net proceeds in investment-grade, interest-bearing instruments.
INFORMATION
REGARDING THE MARKET IN OUR COMMON STOCK
Our
common stock is listed on The Nasdaq Capital Market under the symbol “MBOT.” On February 5, 2019 , the closing
price for our common stock as reported on The Nasdaq Capital Market was $ 10.04 per share.
As
of February 5, 2019 , there were approximately 176 holders of record of our common stock, which excludes stockholders
whose shares were held in nominee or street name by brokers. The actual number of common stockholders is greater than the number
of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and
other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other
entities.
DIVIDEND
POLICY
We
have never paid cash dividends on our common stock and we do not anticipate paying cash dividends on common stock in the foreseeable
future. The payment of dividends on our common stock will depend on earnings, financial condition, debt covenants in place, and
other business and economic factors affecting us at such time as our Board of Directors may consider relevant. If we do not pay
dividends, our common stock may be less valuable because a return on a stockholders’ investment will only occur if our stock
price appreciates.
DILUTION
If
you invest in our securities, you will experience immediate and substantial dilution to the extent of the difference between the
amount per share of common stock (or common stock equivalent) paid in this offering and the adjusted net tangible book value per
share of our common stock immediately after the offering.
Our
net tangible book value per share is determined by subtracting our total liabilities from our total tangible assets, which is
total assets less intangible assets, and dividing this amount by the number of shares of common stock outstanding. The historical
net tangible book value of our common stock as of September 30, 2018 was approximately $6,566,000, or $2.2066 per share, based
on 2,975,676 shares of our common stock outstanding at September 30, 2018.
Our
pro forma net tangible book value as of September 30, 2018, was approximately $16,143,082, or approximately $3.7797 per share,
on an adjusted basis to give effect to (i) the registered direct offering of 455,323 shares of common stock (or common
stock equivalent) at the offering price of $6.50 per share that closed on January 15, 2019, after deducting the estimated placement
agent’s fees and estimated offering expenses payable by us and assuming the exercise of the 125,323 Pre-Funded Warrants
sold in such offering, (ii) the registered direct offering of 590,000 shares of common stock at the offering price of $10.00 per
share that closed on January 17, 2019, after deducting the estimated placement agent’s fees and estimated offering expenses
payable by us and (iii) the registered direct offering of 250,000 shares of common stock at the offering price of $9.875 per share
that closed on January 25, 2019, after deducting the estimated placement agent’s fees and estimated offering expenses payable
by us.
After
giving effect to the issuance and sale in this offering of 996,016 shares of common stock at the assumed public offering price
of $10.04 per share (the last reported sale price of our common stock on The Nasdaq Capital Market on February 5, 2019), assuming
no sale of any pre-funded warrants in this offering and after deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us, our pro forma as adjusted net tangible book value on September 30, 2018, would have
been approximately $25,053,082, or $4.7566 per share. This represents an immediate increase in the pro forma net tangible
book value of $0.9769 per share attributable to this offering.
The
following table illustrates the immediate dilution to new investors:
Assumed
public offering price per share
|
|
|
|
|
$
|
10.04
|
|
|
|
|
|
|
|
|
|
Historical
net tangible book value per share on September 30, 2018
|
|
$
|
2.2066
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
forma net tangible book value per share on September 30, 2018
|
|
$
|
3.7797
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in pro forma net tangible book value per share attributable to this offering
|
|
$
|
0.9769
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
forma as adjusted net tangible book value per share as of September 30, 2018, after giving effect to this offering
|
|
|
|
|
$
|
4.7566
|
|
|
|
|
|
|
|
|
|
Dilution
per share to the investor in this offering
|
|
|
|
|
$
|
5.2834
|
|
If
the underwriter exercises in full its option to purchase up to 149,402 additional shares of common stock at the assumed public
offering price of $10.04 per share (the last reported sale price of our common stock on The Nasdaq Capital Market on February
5, 2019), and assuming no sale of any pre-funded warrants in this offering, the as adjusted net tangible book value after this
offering would be approximately $26,433,082, or $4.8802 per share, representing an increase in net tangible book value of $1.1005
per share to existing stockholders and immediate dilution in net tangible book value of $5.1598 per share to investors
purchasing our securities in this offering at the assumed public offering price.
Each
$0.25 increase (decrease) in the assumed public offering price of $10.04 per share of common stock would increase (decrease)
the as adjusted net tangible book value by $0.0435 per share of common stock and the dilution to new investors by $0.2065 per
share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same,
after deducting the estimated underwriter discount, commissions and estimated offering expenses payable by us.
We
may also increase or decrease the number of shares we are offering. An increase of 500,000 shares offered by us, as set forth
on the cover page of this prospectus, would increase our as adjusted net tangible book value by approximately $4.6 million, or
approximately $0.3884 per share of common stock, and decrease the dilution per share to investors in this offering by approximately
$0.3884 per share, assuming that the assumed public offering price per share of common stock remains the same, and after deducting
the estimated underwriter discount, commissions and estimated offering expenses payable by us. Similarly, a decrease of 500,000
shares offered by us, as set forth on the cover page of this prospectus, would decrease our as adjusted net tangible book value
by approximately $4.6 million, or approximately $0.4699 per share, and increase the dilution per share to investors in this offering
by approximately $0.4699 per share, assuming that the assumed public offering price per share of common stock remains the same,
and after deducting the estimated underwriter discount, commissions and estimated offering expenses payable by us. The information
discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares of
common stock that we offer in this offering, our actual expenses, and other terms of this offering determined at pricing.
The
foregoing discussion and table does not take into account further dilution to investors in this offering that could occur upon
the exercise of outstanding options and warrants, including the pre-funded warrants offered pursuant to this offering and the
Underwriter’s Warrants, having a per share exercise price less than the public offering price per share in this offering.
The
above discussion and table are based on 2,975,676, 4,270,999 and 5,267,015 actual, pro forma and pro forma as adjusted
shares outstanding as of September 30, 2018, respectively, and exclude, as of that date:
|
●
|
422,478
shares of our common stock issuable upon the exercise of outstanding stock options, with exercise prices ranging from $0 to
$19.35 and having a weighted-average exercise price of $11.70 per share;
|
|
|
|
|
●
|
201,238
shares of our common stock reserved for future grant under our 2017 Equity Incentive Plan;
|
|
|
|
|
●
|
Approximately
7,531 shares of our common stock issuable upon the exercise of outstanding warrants, with exercise prices ranging from approximately
$40.00 to $2,885 per share and having a weighted-average exercise price of approximately $1,967 per share;
|
|
|
|
|
●
|
An
aggregate of approximately 36,667 shares of our common stock issuable upon the conversion of 550 shares of our Series A Convertible
Preferred Stock, all of which were converted subsequent to September 30, 2018;
|
|
|
|
|
●
|
22,767
shares of common stock issuable upon exercise of the warrants issued to the placement agent in connection with the registered
direct offering consummated on January 15, 2019 with an exercise price of $8.125;
|
|
|
|
|
●
|
29,500
shares of common stock issuable upon exercise of the warrants issued to the placement agent in connection with the registered
direct offering consummated on January 17, 2019 with an exercise price of $12.50 per share;
|
|
|
|
|
●
|
250,000 shares of common stock issuable upon exercise of the warrants issued in the private
placement consummated on January 25, 2019 with an exercise price of $10.00 per share; and
|
|
|
|
|
●
|
12,500 shares of common stock issuable upon exercise of the warrants issued to the placement
agent in connection with the registered direct offering consummated on January 25, 2019 with an exercise price of $12.50 per
share.
|
The
exercise of any such securities may increase dilution to purchasers in this offering. In addition, depending on market conditions,
our capital requirements and strategic considerations, it is likely that we will need to pursue additional equity or convertible
debt financings in the near term. Also, we may issue equity or convertible debt securities for other purposes, including, among
others, stock splits, acquiring other businesses or assets or in connection with strategic alliances, attracting and retaining
employees with equity compensation, anti-takeover purposes or other transactions. To the extent we raise additional capital or
pursue any of these other purposes through the sale of equity or convertible debt securities, the issuance of these securities
could result in further dilution to our stockholders.
EXECUTIVE
COMPENSATION
The
following table sets forth information regarding each element of compensation that was paid or awarded to the named executive
officers of the Company for the periods indicated.
Name
and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards ($)
|
|
|
Option
Awards ($) (1)
|
|
|
Non-Equity
Incentive Plan Compensation ($)
|
|
|
All
Other Compensation ($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harel
Gadot
|
|
|
2018
|
|
|
|
360,000
|
|
|
|
55,000
|
(2)
|
|
|
—
|
|
|
|
580,667
|
|
|
|
—
|
|
|
|
13,800
|
(3)
|
|
|
1,009,467
|
|
Chief Executive
|
|
|
2017
|
|
|
|
389,000
|
|
|
|
158,000
|
|
|
|
—
|
|
|
|
156,219
|
|
|
|
—
|
|
|
|
15,000
|
(3)
|
|
|
718,219
|
|
Officer
|
|
|
2016
|
|
|
|
275,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
275,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hezi
Himelfarb
(7)
|
|
|
2018
|
|
|
|
280,067
|
|
|
|
12,931
|
(4)
|
|
|
—
|
|
|
|
425,101
|
|
|
|
—
|
|
|
|
13,000
|
(5)
|
|
|
718,101
|
|
Former Chief Operating Officer &
|
|
|
2017
|
|
|
|
228,653
|
(6)
|
|
|
40,625
|
|
|
|
—
|
|
|
|
92,205
|
|
|
|
—
|
|
|
|
|
(6)
|
|
|
361,483
|
|
General Manager
|
|
|
2016
|
|
|
|
16,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
Ben Naim
|
|
|
2018
|
|
|
|
70,026
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26,890
|
|
|
|
—
|
|
|
|
—
|
|
|
|
96,916
|
|
Chief Financial
|
|
|
2017
|
|
|
|
66,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
188
|
|
|
|
—
|
|
|
|
—
|
|
|
|
66,188
|
|
Officer
|
|
|
2016
|
|
|
|
6,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,000
|
|
(1)
|
Amounts
shown do not reflect cash compensation actually received by the named executive officer. Instead, the amounts shown are the
non-cash aggregate grant date fair values of stock option awards made during the periods presented as determined pursuant
to ASC Topic 718 and excludes the effect of forfeiture assumptions. The assumptions used to calculate the fair value of stock
option awards are set forth under Note 10 to the Consolidated Financial Statements of the Company included in the Company’s
Form 10-K for the fiscal year ended December 31, 2017.
|
(2)
|
Represents
the remaining portion of Mr. Gadot’s 2017 bonus, which was paid in 2018. Mr. Gadot’s bonus for the 2018 fiscal
year has not yet been determined.
|
(3)
|
All
Other Compensation includes Mr. Gadot’s monthly automobile allowance and tax gross-up.
|
(4)
|
Represents
the remaining portion of Mr. Himelfarb’s 2017 bonus, which was paid in 2018.
|
(5)
|
All
Other Compensation includes Mr. Himelfarb’s yearly automobile allowance.
|
(6)
|
The
salary includes $13,000 for Mr. Himelfarb’s yearly automobile allowance.
|
(7)
|
Effective
as of February 1, 2019,
Mr. Himelfarb, a member of the Board of Directors of the Company, and
the Company’s Chief Operating Officer, resigned from all positions with the Company. Effective as of February 1, 2019,
Mr. Himelfarb also resigned from his position as General Manager of Microbot Medical Ltd., a wholly-owned subsidiary of the
Company. Notwithstanding the foregoing, Mr. Himelfarb is expected to stay on until February 28, 2019 to assist with the transaction
of his duties.
|
Outstanding
Equity Awards at Fiscal Year-End
The
following table presents the outstanding equity awards held by each of the named executive officers as of the end of the fiscal
year ended December 31, 2018.
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
|
|
|
Option
Exercise Price
|
|
|
Option
Expiration Date
|
|
|
Number
of Shares or Units of Stock That Have Not Vested
|
|
|
Market
value of Shares of Units of Stock That Have Not Vested
|
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harel Gadot
|
|
|
77,846
|
|
|
|
–
|
|
|
$
|
4.20
|
|
|
|
9/01/2024
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
48,672
|
|
|
|
72,175
|
|
|
|
15.75
|
|
|
|
9/14/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hezi Himelfarb
|
|
|
29,003
|
|
|
|
43,505
|
|
|
|
19.35
|
|
|
|
10/15/2027
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
David Ben Naim
|
|
|
2,000
|
|
|
|
3,000
|
|
|
|
15.30
|
|
|
|
12/28/2027
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Simon Sharon
|
|
|
-
|
|
|
|
10,000
|
|
|
|
9.00
|
|
|
|
08/13/2028
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
(*)The
data in the table above reflects the number of shares adjusted to retroactively reflect the 1:15 Reverse Split effected on September
4, 2018.
Harel
Gadot Employment Agreement
The
Company entered into an employment agreement (the “Gadot Agreement”) with Harel Gadot on November 28, 2016, to serve
as the Company’s Chairman of the Board of Directors and Chief Executive Officer, on an indefinite basis subject to the termination
provisions described in the Agreement. Pursuant to the terms of the Gadot Agreement, Mr. Gadot shall receive an annual base salary
of $360,000. The salary will be reviewed on an annual basis by the Compensation Committee of the Company to determine potential
increases taking into account such performance metrics and criteria as established by the Executive and the Company.
Mr.
Gadot shall also be entitled to receive a target annual cash bonus of up to a maximum amount of 40% of base salary, which maximum
amount was paid for the 2018 fiscal year.
Mr.
Gadot shall be further entitled to a monthly automobile allowance and tax gross up on such allowance of $1,150, and shall be granted
options to purchase shares of common stock of the Company representing 5% of the issued and outstanding shares of the Company,
based on vesting and other terms to be determined by the Compensation Committee of the Board of Directors.
In
the event Mr. Gadot’s employment is terminated as a result of death, Mr. Gadot’s estate would be entitled to receive
any earned annual salary, bonus, reimbursement of business expenses and accrued vacation, if any, that is unpaid up to the date
of Mr. Gadot’s death.
In
the event Mr. Gadot’s employment is terminated as a result of disability, Mr. Gadot would be entitled to receive any earned
annual salary, bonus, reimbursement of business expenses and accrued vacation, if any, incurred up to the date of termination.
In
the event Mr. Gadot’s employment is terminated by the Company for cause, Mr. Gadot would be entitled to receive any compensation
then due and payable incurred up to the date of termination.
In
the event Mr. Gadot’s employment is terminated by the Company without cause, he would be entitled to receive (i) any earned
annual salary; (ii) 12 months’ pay and full benefits, (iii) a pro rata bonus equal to the maximum target bonus for that
calendar year; (iv) the dollar value of unused and accrued vacation days; and (v) applicable premiums (inclusive of premiums for
Mr. Gadot’s dependents) pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, for twelve (12)
months from the date of termination for any benefits plan sponsored by the Company. In addition, 100% of any unvested portion
of his stock options shall immediately vest and become exercisable.
The
agreement contains customary non-competition and non-solicitation provisions pursuant to which Mr. Gadot agrees not to compete
and solicit with the Company. Mr. Gadot also agreed to customary terms regarding confidentiality and ownership of intellectual
property.
Hezi
Himelfarb Employment Agreement
We
entered into an employment agreement (the “Himelfarb Agreement”) with Mr. Himelfarb on December 5, 2016, to serve
as our Chief Operating Office and General Manager, on an indefinite basis subject to the termination provisions described in the
Himelfarb Agreement. Pursuant to the terms of the Himelfarb Agreement, Mr. Himelfarb shall receive a base salary of 64,000 New
Israeli Shekel (NIS) per month or NIS 768,000 per year, or the equivalent of approximately $203,714 per annum based on an exchange
rate of $.265 for NIS 1.0. The salary will be reviewed on an annual basis by the Company’s Board of Directors to determine
potential salary increases.
Mr.
Himelfarb shall be entitled to grants or payments subject to the adoption by the Company at its discretion of a bonus plan or
policy.
The
bonus for 2018 has not yet been determined by the Company. Mr. Himelfarb shall also entitled participate in the Company’s
motor vehicle program and receive a motor vehicle from the Company’s vehicle pool, which shall be leased or rented by the
Company for use by Mr. Himelfarb. The Company shall pay an amount equal to 8.33% of Mr. Himelfarb’s salary, which shall
be allocated to a fund for severance pay to Mr. Himelfarb, and an additional amount equal to 6.25% of Mr. Himelfarb’s salary
(6.5% as of January 1, 2017), which shall be allocated to a pension plan, in addition to disability insurance contributions and
as otherwise may be required by applicable Israeli law from time to time. The Company shall also contribute to an educational
fund an amount equal to 7.5% of each monthly payment of Mr. Himelfarb’s full salary. Mr. Himelfarb is also entitled to options
to purchase 1,087,627 shares of the Company’s common stock, which represents 3% of the Company’s issued and outstanding
shares of common stock as of the closing of the Company’s merger transaction with the Subsidiary on November 28, 2016. Such
options have not yet been granted.
The
Himelfarb Agreement contains customary non-competition provisions pursuant to which Mr. Himelfarb agrees not to compete with the
Company. Mr. Himelfarb also agreed to customary terms regarding confidentiality and ownership of intellectual property.
Effective
as of February 1, 2019, Mr. Himelfarb, a member of the Board of Directors of the Company, and the Company’s Chief Operating
Officer, resigned from all positions with the Company. Effective as of February 1, 2019, Mr. Himelfarb also resigned from his
position as General Manager of Microbot Medical Ltd., a wholly-owned subsidiary of the Company. Notwithstanding the foregoing,
Mr. Himelfarb is expected to stay on until February 28, 2019 to assist with the transaction of his duties.
David
Ben Naim Services Agreement
We
entered into a services agreement (the “Services Agreement”) with DBN Finance Services effective October 31, 2016,
to provide outsourced CFO services. Pursuant to the terms of the Services Agreement, DBN Finance Services will provide its services
exclusively through Mr. David Ben Naim, who will serve as the principal financial and accounting officer of Microbot Israel and
the Company. Mr. Ben Naim’s engagement will continue on an indefinite basis subject to the termination provisions described
in the Agreement.
Pursuant
to the Agreement, the Company shall pay the Service Provider a fixed fee of NIS 22,000, or the equivalent of approximately $5,835
per month based on an exchange rate of $.265 for NIS1.0, plus VAT per month, and the Company shall reimburse DBN Finance Services
for reasonable and customary out of pocket expenses incurred by it or Mr. Ben Naim connection with the performance of the duties
under the Services Agreement. In addition, the Company shall maintain for the benefit of Mr. Ben Naim, a Directors and Officers
insurance policy, according to the Company’s policy for other directors and officers of the Company.
Both
the Company and DBN Finance Services shall have the right to terminate the Agreement for any reason or without reason at any time
by furnishing the other party with a 30-day notice of termination. The Company shall further be entitled to terminate the Services
Agreement for “cause” without notice, in which case neither DBN Finance Services nor Mr. Ben Naim shall be entitled
to any compensation due to such early termination.
DBN
Finance Services and Mr. Ben Naim agreed to customary provisions regarding confidentiality and intellectual property ownership.
The Services Agreement also contains customary non-competition and non-solicitation provisions pursuant to which DBN Finance Services
and Mr. Ben Naim agree not to compete and solicit with the Company during the term of the Agreement and for a period of twelve
months following the termination of the Agreement.
Indemnification
Agreements
The
Company generally enters into indemnification agreements with each of its directors and executive officers. Pursuant to the indemnification
agreements, the Company has agreed to indemnify and hold harmless these current and former directors and officers to the fullest
extent permitted by the Delaware General Corporation Law. The agreements generally cover expenses that a director or officer incurs
or amounts that a director or officer becomes obligated to pay because of any proceeding to which he is made or threatened to
be made a party or participant by reason of his service as a current or former director, officer, employee or agent of the Company,
provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company. The agreements also provide for the advancement of expenses to the directors and officers subject to specified conditions.
There are certain exceptions to the Company’s obligation to indemnify the directors and officers, and, with certain exceptions,
with respect to proceedings that he initiates.
Limits
on Liability and Indemnification
We
provide directors and officers insurance for our current directors and officers.
Our
certificate of incorporation eliminates the personal liability of our directors to the fullest extent permitted by law. The certificate
of incorporation further provides that the Company will indemnify its officers and directors to the fullest extent permitted by
law. We believe that this indemnification covers at least negligence on the part of the indemnified parties. Insofar as indemnification
for liabilities under the Securities Act may be permitted to our directors, officers, and controlling persons under the foregoing
provisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.
Director
Compensation
The
Company adopted a compensation package for the non-management members of its Board, pursuant to which each such Board member would
receive for his services $12,000 per annum, $750 per duly called Board meeting and $250 per unanimous written consent. Furthermore,
each member of the Audit Committee of the Board receives an additional $10,000 per annum, and other committee members receive
an additional $5,000 per annum. Board members are also entitled to receive equity awards. Upon joining the Board, a member would
receive an initial grant of $40,000 of stock options (calculated as the product of the exercise price on the date of grant multiplied
by the number of shares underlying the stock option award required to equal $40,000), with an additional grant of stock options
each year thereafter, to purchase such number of shares of the Company’s common stock equal to $20,000, subject to the member
of the Board having served on the Board for at least twelve continuous months, and having attended at least 80% of the Board meetings
over the prior year.
The
following table summarizes cash-based and equity compensation information for our outside directors, including annual Board and
committee retainer fees and meeting attendance fees, for the year ended December 31, 2018:
Name
|
|
Fees
earned or paid in cash
|
|
|
Stock
Awards
|
|
|
Option
Awards (1)
|
|
|
Non-Equity
Incentive Plan Compensation
|
|
|
Nonqualified
Deferred Compensation Earnings
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yoav Waizer
|
|
$
|
32,500
|
|
|
$
|
-
|
|
|
$
|
13,483
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
45,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yoseph Bornstein
|
|
|
41,250
|
|
|
|
-
|
|
|
|
13,483
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Burell
|
|
|
41,250
|
|
|
|
-
|
|
|
|
13,483
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin Madden
|
|
|
41,250
|
|
|
|
-
|
|
|
|
13,483
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prattipati Laxminarain
|
|
|
27,500
|
|
|
|
-
|
|
|
|
13,483
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40,983
|
|
(1)
|
Amounts
shown do not reflect cash compensation actually received by the director. Instead, the amounts shown are the non-cash aggregate
grant date fair values of stock option awards made during the period presented as determined pursuant to ASC Topic 718 and
excludes the effect of forfeiture assumptions. The assumptions used to calculate the fair value of stock option awards are
set forth under Note 10 to the Consolidated Financial Statements of the Company included in the Company’s Form 10-K
for the fiscal year ended December 31, 2017.
|
Messrs.
Gadot and Himelfarb received compensation for their services to the Company as set forth under the summary compensation table
above.
PRINCIPAL
STOCKHOLDERS
The
following table sets forth information regarding beneficial ownership of our capital stock, as of February 5, 2019 , by:
|
●
|
each
of our directors;
|
|
|
|
|
●
|
each
of our named executive officers;
|
|
|
|
|
●
|
all
of our current directors and executive officers as a group; and
|
|
|
|
|
●
|
all
those known by us to be to a beneficial owner of more than 5% of the Company’s common stock.
|
In
general, “beneficial ownership” refers to shares that an individual or entity has the power to vote or dispose of,
and any rights to acquire common stock that are currently exercisable or will become exercisable within 60 days of February
5, 2019. We calculated percentage ownership in accordance with the rules of the SEC. The percentage of common stock beneficially
owned is based on 4,307,666 shares outstanding as of February 5, 2019. In addition, shares issuable pursuant to
options or other convertible securities that may be acquired within 60 days of February 5, 2019 are deemed to be issued
and outstanding and have been treated as outstanding in calculating and determining the beneficial ownership and percentage ownership
of those persons possessing those securities, but not for any other persons.
This
table is based on information supplied by each prospective director, officer and principal stockholder of the Company. Except
as indicated in footnotes to this table, the Company believes that the stockholders named in this table have sole voting and investment
power with respect to all shares of Common Stock shown to be beneficially owned by them, based on information provided by such
stockholders. Unless otherwise indicated, the address for each director, executive officer and 5% or greater stockholder of the
Company listed is: c/o Microbot Medical Inc., 25 Recreation Park Drive, Unit 108, Hingham, MA 02043.
|
|
Number
of Shares
|
|
|
Percentage
of Common Stock
Beneficially Owned
|
|
Beneficial
Owner
|
|
Beneficially
Owned
|
|
|
Before
Offering
|
|
|
After
Offering(1)
|
|
Directors
and Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
Harel
Gadot
(2)
|
|
|
310,066
|
|
|
|
6.98
|
%
|
|
|
5.70
|
%
|
Yoav
Waizer
(3)
|
|
|
1,788
|
|
|
|
*
|
|
|
|
*
|
|
Yoseph
Bornstein
(4)
|
|
|
300,482
|
|
|
|
6.97
|
%
|
|
|
5.66
|
%
|
Scott
Burell
(3)
|
|
|
1,788
|
|
|
|
*
|
|
|
|
*
|
|
Martin
Madden
(3)
|
|
|
1,788
|
|
|
|
*
|
|
|
|
*
|
|
David
Ben Naim
(3)
|
|
|
2,375
|
|
|
|
*
|
|
|
|
*
|
|
Prattipati
Laxminarain
(3)
|
|
|
1,788
|
|
|
|
*
|
|
|
|
*
|
|
Yehezkel
(Hezi) Himelfarb
(3)(8)
|
|
|
34,442
|
|
|
|
*
|
|
|
|
*
|
|
All
current directors and executive officers as a group ( 7 persons)
(5)
|
|
|
620,075
|
|
|
|
13.94
|
%
|
|
|
11.38
|
%
|
Five
Percent Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
LSA
- Life Science Accelerator Ltd.
(4)
|
|
|
299,710
|
|
|
|
9.95
|
%
|
|
|
3.72
|
%
|
MEDX
Ventures Group LLC
(6)
|
|
|
254,711
|
|
|
|
5.81
|
%
|
|
|
4.73
|
%
|
Saber
Holding GmbH
(7)
|
|
|
287,134
|
|
|
|
6.67
|
%
|
|
|
5.41
|
%
|
*
|
Less
than 1%
|
(1)
|
Assumes
the sale of 996,016 shares of our common stock and common stock underlying pre-funded warrants offered by us in this
offering and does not include any shares of our common stock underlying the underwriter’s option to cover over-allotments,
or underlying the Underwriter’s Warrants.
|
(2)
|
Includes
77,864 shares of our common stock issuable upon the exercise of options granted to MEDX Ventures Group and 55,355 shares
of our common stock issuable upon the exercise of options granted to Mr. Gadot. All of such shares and 77,864 options are
held by MEDX Ventures Group LLC, which is beneficially owned by Mr. Gadot. See Note 6 below.
|
(3)
|
Represents
options to acquire shares of our common stock.
|
(4)
|
Based
on representations and other information made or provided to the Company by Mr. Bornstein, Mr. Bornstein is the CEO and Director
of LSA and of Shizim, and Mr. Bornstein is the majority equity owner of Shizim. Shizim is the majority equity owner of LSA.
Accordingly, Mr. Bornstein may be deemed to share voting and investment power over the shares beneficially owned by these
entities and has an address of 16 Iris Street, Rosh-Ha’Ayin Israel 4858022. Includes 1,788 shares of our common
stock issuable upon exercise of options.
|
(5)
|
Includes
shares of our common stock issuable upon the exercise of options as set forth in footnotes (1), (2) and (3).
|
(6)
|
Includes
77,864 shares of our common stock issuable upon the exercise of options granted to MEDX Ventures Group. Mr. Gadot is the Chief
Executive Officer, Company Group Chairman and majority equity owner of MEDX Venture Group and thus may be deemed to share
voting and investment power over the shares beneficially owned by this entity. Does not include 55,355 shares of our
common stock issuable upon the exercise of options granted to Mr. Gadot directly. See Note 1 above.
|
(7)
|
Pursuant
to a Schedule 13D/A-2 filed on June 20, 2017, Mrs. Sandra Berkson owns 100% of the equity of Saber Holding GmbH. Mr. Avram
Berkson and Mrs. Sandra Berkson have shared power with Saber to vote or direct the vote, and to dispose or direct the disposition,
of such shares. Saber’s address is Krummbaumgasse 10/20, 1020 Wein, Austria.
|
(8)
|
Effective
as of February 1, 2019,
Mr. Himelfarb, a member of the Board of Directors of the Company, and
the Company’s Chief Operating Officer, resigned from all positions with the Company. Effective as of February 1, 2019,
Mr. Himelfarb also resigned from his position as General Manager of Microbot Medical Ltd., a wholly-owned subsidiary of the
Company. Notwithstanding the foregoing, Mr. Himelfarb is expected to stay in until february 28, 2019 to assist with the transaction
of his duties.
|
DESCRIPTION
OF CAPITAL STOCK
As
of the date of this prospectus, we are authorized to issue up to 221,000,000 shares of capital stock, par value $0.01 per share,
divided into two classes designated, respectively, “common stock” and undesignated “preferred stock.”
Of such shares authorized, 220,000,000 shares are designated as common stock, and 1,000,000 shares are designated as undesignated
preferred stock.
The
following is a summary of the material terms of our capital stock and certain provisions of our restated certificate of incorporation
and amended and restated bylaws. Since the terms of our certificate of incorporation and bylaws, and Delaware law, are more detailed
than the general information provided below, you should only rely on the actual provisions of those documents and Delaware law.
If you would like to read those documents, they are on file with the SEC, as described under the heading “Where You Can
Find Additional Information” below. The summary below is also qualified by provisions of applicable law.
On
September 4, 2018, we filed a Certificate of Amendment (the “Amendment”) to our Restated Certificate of Incorporation
to implement a 1-for-15 reverse split of our common stock (the “Reverse Stock Split”). As a result of the Reverse
Stock Split, each fifteen shares of our issued and outstanding common stock were automatically combined and converted into one
issued and outstanding share of common stock. The Reverse Stock Split affected all issued and outstanding shares of the Company’s
common stock and preferred stock, as well as common stock underlying stock options, preferred stock and warrants outstanding immediately
prior to the effectiveness of the Reverse Stock Split. The Amendment did not decrease the number of authorized shares of the Company’s
common stock, nor did it alter the par value of common stock, which remained at $0.01 per share, or modify any voting rights or
other terms of our common stock or preferred stock. Unless otherwise indicated, all information set forth in this prospectus gives
effect to the Reverse Stock Split.
As
of February 5, 2019, there were 4,307,666 shares of common stock outstanding that were held of record by approximately
176 stockholders, although we believe that there is a significantly larger number of beneficial owners of our common stock.
Common
Stock
Holders
of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have
cumulative voting rights. Holders of common stock are entitled to receive proportionately any dividends as may be declared by
our board of directors, out of funds that we may legally use to pay dividends, subject to any preferential dividend rights of
any outstanding series of preferred stock or series of preferred stock that we may designate and issue in the future. All shares
of common stock outstanding as of the date of this prospectus and, upon issuance and sale, all shares of common stock that we
may offer pursuant to this prospectus, will be fully paid and nonassessable.
In
the event of our liquidation or dissolution, the holders of common stock are entitled to receive proportionately our net assets
available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights
of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights.
There are no redemption or sinking fund provisions applicable to the common stock.
Preferred
Stock
General
We
have authority to issue up to 1,000,000 shares of preferred stock, par value $0.01 per share. There are currently no shares of
preferred stock issued or outstanding.
Our
board of directors is authorized, without stockholder approval, from time to time, to issue shares of preferred stock in series
and may, at the time of issuance, subject to Delaware law and our certificate of incorporation and by-laws, determine the rights,
preferences and limitations of each series, including voting rights, dividend rights and redemption and liquidation preferences.
Satisfaction of any dividend preferences of outstanding shares of preferred stock would reduce the amount of funds available for
the payment of dividends on shares of our common stock. Holders of shares of preferred stock may be entitled to receive a preference
payment in the event of any liquidation, dissolution or winding-up of our company before any payment is made to the holders of
shares of our common stock. In some circumstances, the issuance of shares of preferred stock may render more difficult or tend
to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities
or the removal of incumbent management. Upon the affirmative vote of our board of directors, without stockholder approval, we
may issue shares of preferred stock with voting and conversion rights which could adversely affect the holders of shares of our
common stock.
If
we issue a specific series of preferred stock, we will file a copy of the certificate establishing the terms of the preferred
stock with the Secretary of State of the State of Delaware and with the SEC. To the extent required, this description will include:
|
●
|
the
title and stated value;
|
|
|
|
|
●
|
the
number of shares offered, the liquidation preference per share and the purchase price;
|
|
|
|
|
●
|
the
dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends;
|
|
|
|
|
●
|
whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
|
|
|
|
|
●
|
the
procedures for any auction and remarketing, if any;
|
|
|
|
|
●
|
the
provisions for a sinking fund, if any;
|
|
|
|
|
●
|
the
provisions for redemption, if applicable;
|
|
|
|
|
●
|
any
listing of the preferred stock on any securities exchange or market;
|
|
|
|
|
●
|
whether
the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it will be
calculated) and conversion period;
|
|
|
|
|
●
|
whether
the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will be calculated)
and exchange period;
|
|
|
|
|
●
|
voting
rights, if any, of the preferred stock;
|
|
|
|
|
●
|
a
discussion of any material and/or special U.S. federal income tax considerations applicable to the preferred stock;
|
|
|
|
|
●
|
the
relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company; and
|
|
|
|
|
●
|
any
material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series
of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of the Company.
|
Outstanding
Warrants
As
of September 30, 2018, we had outstanding:
|
●
|
warrants
to purchase approximately 2,770 shares of our common stock at an exercise price of approximately $40.00 per share, which are
exercisable through March 14, 2022, and which are subject to “full ratchet” price-based anti-dilution adjustments;
|
|
|
|
|
●
|
warrants
to purchase approximately 683 shares of our common stock at an exercise price of approximately $1,363 per share, which are
exercisable through April 30, 2020; and
|
|
|
|
|
●
|
warrants
to purchase approximately 183 shares of our common stock at an exercise price of approximately $2,725 per share, which are
exercisable through April 9, 2023.
|
Nasdaq
Capital Market
Our
common stock is listed on The Nasdaq Capital Market under the symbol “MBOT.”
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare Trust Company, N.A. The transfer agent and registrar’s
address is Meidinger Tower, 462 South 4
th
Street, Louisville, KY 40202.
DESCRIPTION
OF SECURITIES WE ARE OFFERING
We
are offering 996,016 shares of our common stock or pre-funded warrants to purchase one share of our common stock.
For each pre-funded warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one
basis . We are also registering the shares of common stock issuable from time to time upon exercise of the pre-funded warrants
offered hereby.
Common
Stock
The
material terms and provisions of our common stock and each other class of our securities which qualifies or limits our common
stock are described under the caption “Description of Capital Stock” in this prospectus.
Pre-Funded
Warrants
The
following summary of certain terms and provisions of pre-funded warrants that are being offered hereby is not complete and is
subject to, and qualified in its entirety by, the provisions of the pre-funded warrant, the form of which is filed as an exhibit
to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and
provisions of the form of pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants.
Duration
and Exercise Price.
Each pre-funded warrant offered hereby will have an initial exercise price per share equal to $0.01. The
pre-funded warrants will be immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised
in full. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in
the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise price.
Exercisability.
The pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly
executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise
(except in the case of a cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion
of the pre-funded warrant to the extent that the holder would own more than 4.99% of the outstanding common stock immediately
after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount
of ownership of outstanding stock after exercising the holder’s pre-funded warrants up to 9.99% of the number of shares
of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in
accordance with the terms of the pre-funded warrants. Purchasers of pre-funded warrants in this offering may also elect prior
to the issuance of the pre-funded warrants to have the initial exercise limitation set at 9.99% of our outstanding common stock.
No fractional shares of common stock will be issued in connection with the exercise of a pre-funded warrant. In lieu of fractional
shares, we will either pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price or round
up to the next whole share.
Cashless
Exercise.
If, at the time a holder exercises its pre-funded warrants, a registration statement registering the issuance of
the shares of common stock underlying the pre-funded warrants under the Securities Act is not then effective or available, then
in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise
price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common
stock determined according to a formula set forth in the pre-funded warrants.
Transferability.
Subject to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded
warrant to us together with the appropriate instruments of transfer.
Exchange
Listing.
There is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized
trading system. We do not intend to list the pre-funded warrants on any securities exchange or nationally recognized trading system.
Right
as a Stockholder.
Except as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of
shares of our common stock, the holders of the pre-funded warrants do not have the rights or privileges of holders of our common
stock, including any voting rights, until they exercise their pre-funded warrants.
Fundamental
Transaction
. In the event of a fundamental transaction, as described in the pre-funded warrants and generally including any
reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially
all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of
our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our
outstanding common stock, the holders of the pre-funded warrants will be entitled to receive upon exercise of the pre-funded warrants
the kind and amount of securities, cash or other property that the holders would have received had they exercised the pre-funded
warrants immediately prior to such fundamental transaction.
UNDERWRITING
We
have entered into an underwriting agreement dated , 2019
with H.C. Wainwright & Co., LLC, as underwriter, with respect to the securities being offered hereby. Subject to the terms
and conditions of the underwriting agreement, we have agreed to sell to the underwriter and the underwriter has agreed to purchase
from us, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus,
shares of our common stock and pre-funded warrants.
Pursuant
to the terms and subject to the conditions contained in the underwriting agreement, we have agreed to sell to the underwriter
named below, and the underwriter has agreed to purchase from us, the respective number of shares of common stock and pre-funded
warrants set forth opposite its name below:
Underwriter
|
|
|
Number
of Shares of Common
Stock
|
|
|
Number
of Pre-funded Warrants
|
|
H.C.
Wainwright & Co., LLC
|
|
|
|
The
underwriting agreement provides that the obligation of the underwriter to purchase the shares of common stock and/or pre-funded
warrants offered by this prospectus is subject to certain conditions. The underwriter is obligated to purchase all of the shares
of common stock and/or pre-funded warrants if any of the securities are purchased, other than those shares covered by the option
to purchase additional securities described below. Delivery of the shares of common stock and any pre-funded warrants to purchasers
is expected on or about , 2019 , subject to certain
customary closing conditions.
The
underwriter proposes to offer the shares of common stock and/or pre-funded warrants purchased pursuant to the underwriting agreement
to the public at the public offering price set forth on the cover page of this prospectus and to certain dealers at that price
less a concession not in excess of $ per share or per pre-funded
warrant. After this offering, the public offering price and concession may be changed by the underwriter. No such change shall
change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.
In
connection with the sale of the common stock and/or pre-funded warrants to be purchased by the underwriter, the underwriter will
be deemed to have received compensation in the form of underwriting commissions and discounts. The underwriter’s commissions
and discounts will be 7% of the gross proceeds of this offering, or $
per share of common stock or per pre-funded warrant.
Underwriting
Discounts, Commissions and Expenses
The
following table shows the public offering price, underwriting discounts and commissions and proceeds, before expenses to us. These
amounts are shown assuming both no exercise and full exercise of the underwriter’s option to purchase additional shares
of common stock.
|
|
Per
Share
|
|
|
Per
Pre-
funded
Warrants
|
|
|
Total
Without
Option
|
|
|
Total
With
Option
|
|
Public
offering price
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Underwriting
discounts and commissions
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Proceeds
before expenses
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
We
have also agreed to pay to the underwriter a management fee equal to 1% of the aggregate gross proceeds raised in this offering.
We estimate the total expenses payable by us for this offering, excluding the underwriting discounts and commissions and the
1% management fee , to be approximately $ 290,000 , which includes (i) a $ 35,000 non-accountable expense allowance
payable to the underwriter, (ii) reimbursement of the accountable expenses of the underwriter up to $ 125,000 , including
the legal fees of the underwriter, (iii) if applicable, reimbursement of documented costs of clearing agent settlement up to $ 10,000
and (iv) other estimated expenses, which include legal, accounting, printing costs and various fees associated with the registration
and listing of our securities sold in this offering in a total estimated amount of $ 120,000 .
We
have also agreed to pay the underwriter a tail fee equal to the cash and warrant compensation in this offering if any investor
which the underwriter contacted or introduced us to during the term of the underwriter’s engagement (other than investors
who have a pre-existing relationship with us) provides us with further capital in a public or private offering or capital raising
transaction and such offering or transaction is consummated during the six-month period following termination or expiration of
that certain engagement letter, dated October 12, 2018, as amended, entered into between us and the underwriter.
In
addition, we have agreed to issue to the underwriter warrants (the “Underwriter’s Warrants”) to purchase a
number of shares of our common stock equal to 5% of the aggregate number of shares of common stock sold in
this offering (including the shares of common stock issued pursuant to the underwriter’s exercise of its over-allotment
option and issuable upon the exercise of the pre-funded warrants ), at an exercise price of $
per share (representing 125% of the public offering price per share of common stock to be sold in this offering). The Underwriter’s
Warrants will have a term of 3.5 years and are not exercisable for a period of six months following their issuance . Pursuant
to FINRA Rule 5110(g), the Underwriter’s Warrants and any shares issued upon exercise of the Underwriter’s Warrants
shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the effective economic disposition of the securities by any person for a period of
180 days immediately following the date of effectiveness or commencement of sales of this offering, except the transfer of any
security: (i) by operation of law or by reason of our reorganization; (ii) to any FINRA member firm participating in the offering
and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction set forth above
for the remainder of the time period; (iii) if the aggregate amount of our securities held by the underwriter or related persons
do not exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of
an investment fund, provided that no participating member manages or otherwise directs investments by the fund and the participating
members in the aggregate do not own more than 10% of the equity in the fund; or (v) the exercise or conversion of any security,
if all securities remain subject to the lock-up restriction set forth above for the remainder of the time period.
Option
to Purchase Additional Securities
We
have granted to the underwriter an option, exercisable not later than 30 days after the date of this prospectus, to purchase up
to an additional 149,402 shares of common stock at the public offering price per share , less the underwriting discounts
and commissions, set forth on the cover page of this prospectus. If any additional shares of common stock are purchased pursuant
to such option, the underwriter will offer these securities on the same terms as those on which the securities are being offered
hereby.
Right
of First Refusal
We
have also granted the underwriter a right of first refusal for a period of twelve months following the closing of this offering
to act as sole book-running manager, sole underwriter or sole placement agent for each and every future public offering or private
placement of equity or debt securities by us or any of our subsidiaries.
Lock-up
Agreements
Our
Section 16 (under the Exchange Act) officers and directors have agreed with the underwriter to be subject to a lock-up period
of 21 days following the date of this prospectus . This means that during the applicable lock-up period, such persons may
not offer for sale, contract to sell, sell, distribute, grant any option, right or warrant to purchase, pledge, hypothecate or
otherwise dispose of, directly or indirectly, any of our shares of common stock or any securities convertible into, or exercisable
or exchangeable for, shares of common stock. Certain limited transfers are permitted during the lock-up period if the transferee
agrees to these lock-up restrictions.
We
have also agreed, in the underwriting agreement, to similar lock-up restrictions on the issuance and sale of our shares of common
stock, or any securities convertible into, or exercisable or exchangeable for, shares of common stock, for 90 days following the
closing of this offering, subject to certain exceptions.
The
underwriter may, in its sole discretion and without notice, waive the terms of any of these lock-up agreements.
Stabilization,
Short Positions and Penalty Bids
The
underwriter may engage in syndicate covering transactions, stabilizing transactions and penalty bids or purchases for the purpose
of pegging, fixing or maintaining the price of our common stock:
|
●
|
Syndicate
covering transactions involve purchases of securities in the open market after the distribution has been completed in order
to cover syndicate short positions. Such a naked short position would be closed out by buying securities in the open market.
A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure
on the price of the securities in the open market after pricing that could adversely affect investors who purchase in the
offering.
|
|
|
|
|
●
|
Stabilizing
transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specific maximum.
|
|
|
|
|
●
|
Penalty
bids permit the underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by
the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
|
These
syndicate covering transactions, stabilizing transactions and penalty bids may have the effect of raising or maintaining the market
prices of our securities or preventing or retarding a decline in the market prices of our securities. As a result, the price of
our common stock may be higher than the price that might otherwise exist in the open market. Neither we nor the underwriter make
any representation or prediction as to the effect that the transactions described above may have on the price of our common stock.
These transactions may be effected on the Nasdaq Capital Market, in the over-the-counter market or on any other trading market
and, if commenced, may be discontinued at any time.
In
connection with this offering, the underwriter also may engage in passive market making transactions in our common stock in accordance
with Regulation M during a period before the commencement of offers or sales of our securities in this offering and extending
through the completion of the distribution. In general, a passive market maker must display its bid at a price not in excess of
the highest independent bid for that security. However, if all independent bids are lowered below the passive market maker’s
bid that bid must then be lowered when specific purchase limits are exceeded. Passive market making may stabilize the market price
of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued
at any time.
Neither
we nor the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of our securities. In addition, neither we nor the underwriter make any representation
that the underwriter will engage in these transactions or that any transactions, once commenced, will not be discontinued without
notice.
Indemnification
We
have agreed to indemnify the underwriter against certain liabilities, including certain liabilities arising under the Securities
Act, or to contribute to payments that the underwriter may be required to make for these liabilities.
Determination
of Offering Price
The
actual offering price of the securities we are offering will be negotiated between us and the underwriter based on the trading
of our common stock prior to the offering, among other things, and may be at a discount to the current market price.
Electronic
Offer, Sale and Distribution of Securities
A
prospectus in electronic format may be made available on the websites maintained by the underwriter, if any, participating in
this offering and the underwriter may distribute prospectuses electronically. Other than the prospectus in electronic format,
the information on these websites is not part of this prospectus or the registration statement of which this prospectus form a
part, has not been approved or endorsed by us or the underwriter, and should not be relied upon by investors.
Other
Relationships
The
underwriter and its respective affiliates may in the future engage in investment banking and other commercial dealings in the
ordinary course of business with us or our affiliates.
The
underwriter acted as our placement agent in connection with (i) our registered direct offering that was consummated on January
15, 2019, for which it received compensation, including a cash fee equal to 7.0% of the gross proceeds received by the Company
from the sale of securities in such offering, a management fee equal to 1.0% of such gross proceeds, a non-accountable expense
allowance of $25,000 for such offering, $75,000 for fees and expenses of legal counsel for such offering and warrants to purchase
up to 22,767 shares of our common stock with an exercise price of $8.125 per share; (ii) our registered direct offering that was
consummated on January 17, 2019, for which it received compensation, including a cash fee equal to 7.0% of the gross proceeds
received by the Company from the sale of securities in such offering, a management fee equal to 1.0% of such gross proceeds, a
non-accountable expense allowance of $20,000 for such offering, $50,000 for fees and expenses of legal counsel for such offering
and warrants to purchase up to 29,500 shares of our common stock with an exercise price of $12.50 per share; (iii) our registered
direct offering that was consummated on January 25, 2019, for which it received compensation, including a cash fee equal to 7.0%
of the gross proceeds received by the Company from the sale of securities in such offering, a management fee equal to 1.0% of
such gross proceeds, a non-accountable expense allowance of $70,000 and warrants to purchase up to 12,500 shares of our common
stock with an exercise price of $12.50 per share, and (iv) the private placement of warrants that was consummated on January 25,
2019, for which it received compensation, including a cash fee equal to 7.0% of the gross proceeds received by the Company from
the sale of securities in such offering and a management fee equal to 1.0% of such gross proceeds.
Listing
Our
common stock is listed on The Nasdaq Capital Market under the symbol “MBOT.” We do not plan to list the pre-funded
warrants or the Underwriter’s Warrants on The Nasdaq Capital Market or any other securities exchange or trading market.
Notice
To Investors
Belgium
The
offering is exclusively conducted under applicable private placement exemptions and therefore it has not been and will not be
notified to, and this document or any other offering material relating to the securities has not been and will not be approved
by, the Belgian Banking, Finance and Insurance Commission (“Commission bancaire, financière et des assurances/Commissie
voor het Bank, Financie en Assurantiewezen”). Any representation to the contrary is unlawful.
The
underwriter has undertaken not to offer sell, resell, transfer or deliver directly or indirectly, any units, or to take any steps
relating/ancillary thereto, and not to distribute or publish this document or any other material relating to the units or to the
offering in a manner which would be construed as: (a) a public offering under the Belgian Royal Decree of 7 July 1999 on the public
character of financial transactions; or (b) an offering of securities to the public under Directive 2003/71/EC which triggers
an obligation to publish a prospectus in Belgium. Any action contrary to these restrictions will cause the recipient and the Company
to be in violation of the Belgian securities laws.
France
Neither
this prospectus nor any other offering material relating to the securities has been submitted to the clearance procedures of the
Autorité des marchés financiers in France. The securities have not been offered or sold and will not be offered
or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to
the securities has been or will be: (a) released, issued, distributed or caused to be released, issued or distributed to the public
in France; or (b) used in connection with any offer for subscription or sale of the securities to the public in France. Such offers,
sales and distributions will be made in France only: (i) to qualified investors (investisseurs qualifiés) and/or to a restricted
circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in
and in accordance with Articles L.411-2, D.411-1, D.411-2, D.734-1,D.744-1, D.754-1 and D.764-1 of the French Code monétaire
et financier; (ii) to investment services providers authorised to engage in portfolio management on behalf of third parties; or
(iii) in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire
et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des
marchés financiers, does not constitute a public offer (appel public à l’épargne). Such securities
may be resold only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire
et financier.
United
Kingdom/Germany/Norway/The Netherlands
In
relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant
Member State”) an offer to the public of any securities which are the subject of the offering contemplated by this prospectus
may not be made in that Relevant Member State other than the offers contemplated in this prospectus in name(s) of Member State(s)
where prospectus will be approved or passported for the purposes of a non-exempt offer once this prospectus has been approved
by the competent authority in such Member State and published and passported in accordance with the Prospectus Directive as implemented
in name(s) of relevant Member State(s) except that an offer to the public in that Relevant Member State of any security may be
made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant
Member State:
(a)
|
to
legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated,
whose corporate purpose is solely to invest in securities;
|
|
|
(b)
|
to
any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total
balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its
last annual or consolidated accounts;
|
|
|
(c)
|
by
the representative to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus
Directive); or
|
|
|
(d)
|
in
any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of units shall
result in a requirement for the publication by the company or any underwriter of a prospectus pursuant to Article 3 of the
Prospectus Directive.
|
For
the purposes of this provision, the expression an “offer to the public” in relation to any units in any Relevant Member
State means the communication in any form and by any means of sufficient information on the terms of the offer and any units to
be offered so as to enable an investor to decide to purchase any units, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means
Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
The
underwriter has represented, warranted and agreed that:
(a)
|
it
has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000
(the FSMA)) received by it in connection with the issue or sale of any units in circumstances in which section 21(1) of the
FSMA does not apply to the company; and
|
|
|
(b)
|
it
has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation
to the securities in, from or otherwise involving the United Kingdom.
|
Israel
This
prospectus does not constitute a prospectus under the Israeli Securities Law, 5728-1968, and has not been filed with or approved
by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, investors
listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust
funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange,
underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,”
each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors, in
each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are
qualified investors. Qualified investors will be required to submit written confirmation that they fall within the scope of the
Addendum.
Italy
The
offering of the securities offered hereby in Italy has not been registered with the Commissione Nazionale per la Società
e la Borsa (“CONSOB”) pursuant to Italian securities legislation and, accordingly, the securities offered hereby cannot
be offered, sold or delivered in the Republic of Italy (“Italy”) nor may any copy of this prospectus or any other
document relating to the securities offered hereby be distributed in Italy other than to professional investors (operatori qualificati)
as defined in Article 31, second paragraph, of CONSOB Regulation No. 11522 of 1 July, 1998 as subsequently amended. Any offer,
sale or delivery of the securities offered hereby or distribution of copies of this prospectus or any other document relating
to the securities offered hereby in Italy must be made:
(a)
|
by
an investment firm, bank or intermediary permitted to conduct such activities in Italy in accordance with Legislative Decree
No. 58 of 24 February 1998 and Legislative Decree No. 385 of 1 September 1993 (the “Banking Act”);
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|
|
(b)
|
in
compliance with Article 129 of the Banking Act and the implementing guidelines of the Bank of Italy; and
|
|
|
(c)
|
in
compliance with any other applicable laws and regulations and other possible requirements or limitations which may be imposed
by Italian authorities.
|
Sweden
This
prospectus has not been nor will it be registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority).
Accordingly, this prospectus may not be made available, nor may the securities offered hereunder be marketed and offered for sale
in Sweden, other than under circumstances which are deemed not to require a prospectus under the Financial Instruments Trading
Act (1991: 980).
Switzerland
The
securities offered pursuant to this prospectus will not be offered, directly or indirectly, to the public in Switzerland and this
prospectus does not constitute a public offering prospectus as that term is understood pursuant to art. 652a or art. 1156 of the
Swiss Federal Code of Obligations. The company has not applied for a listing of the securities being offered pursuant to this
prospectus on the SWX Swiss Exchange or on any other regulated securities market, and consequently, the information presented
in this prospectus does not necessarily comply with the information standards set out in the relevant listing rules. The securities
being offered pursuant to this prospectus have not been registered with the Swiss Federal Banking Commission as foreign investment
funds, and the investor protection afforded to acquirers of investment fund certificates does not extend to acquirers of securities.
Investors
are advised to contact their legal, financial or tax advisers to obtain an independent assessment of the financial and tax consequences
of an investment in securities.
LEGAL
MATTERS
The
validity of the securities being offered by this prospectus will be passed upon for us by Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo P.C., Boston, Massachusetts. The underwriter is being represented by Lowenstein Sandler, LLP, New York, New York.
EXPERTS
The
consolidated financial statements of Microbot Medical Inc. appearing it its Annual Report on Form 10-K for the year ended December
31, 2017, have been audited by
Brightman Almagor Zohar & Co., a Member of Deloitte Touche
Tohmatsu Limited,
independent registered public accounting firm, as set forth in their report thereon, included therein,
and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance
upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the securities being offered
by this prospectus. This prospectus does not contain all of the information in the registration statement and its exhibits. For
further information with respect to us and the securities offered by this prospectus, we refer you to the registration statement
and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to
are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit
to the registration statement. Each of these statements is qualified in all respects by this reference.
You
can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
We
are subject to the information and periodic reporting requirements of the Exchange Act, and we file periodic reports, proxy statements
and other information with the SEC. These periodic reports, proxy statements and other information are available for inspection
and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.microbotmedical.com.
You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website
as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The information
contained in, or that can be accessed through, our website is not incorporated by reference in, and is not part of, this prospectus.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information from other documents that we file with it, which means that
we can disclose important information to you by referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. Information in this prospectus supersedes information incorporated by reference that
we filed with the SEC prior to the date of this prospectus.
We
incorporate by reference into this prospectus and the registration statement of which this prospectus is a part the information
or documents listed below that we have filed with the SEC (Commission File No. 001-19871):
|
●
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our
annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC on April 2, 2018;
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|
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|
●
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our
quarterly reports on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018, filed with the
SEC on May 15, 2018, August 14, 2018, and November 14, 2018 respectively;
|
|
|
|
|
●
|
our
Definitive Proxy Statement on Schedule 14A, filed with the SEC on July 27, 2018;
|
|
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|
|
●
|
our
current reports on Form 8-K and any amendments thereto on Form 8-K/A, filed with the SEC on January 8, 2018; January 31, 2018;
March 28, 2018; April 5, 2018; April 16, 2018; September 4, 2018, October 1, 2018, November 19, 2018, November 30, 2018 ;
December 12, 2018 ; January 14, 2019; January 16, 2019; January 17, 2019; January 25, 2019; and February 5, 2019 (in
each case, except for information contained therein which is furnished rather than filed); and
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|
|
|
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●
|
the
description of our common stock contained in our registration statement on Form 8-A, filed with the SEC on August 3, 1998,
including all amendments and reports filed for the purpose of updating such description.
|
In
addition, all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to
the termination of the offering (excluding any information furnished rather than filed) shall be deemed to be incorporated by
reference into this prospectus.
We
will provide to each person, including any beneficial owners, to whom a prospectus is delivered, a copy of any or all of the reports
or documents that have been incorporated by reference in the prospectus contained in the registration statement but not delivered
with the prospectus. We will provide these reports or documents upon written or oral request at no cost to the requester. You
should direct any written requests for documents to Microbot Medical Inc. Attn: Chief Financial Officer, 25 Recreation Park Drive,
Unit 108, Hingham, Massachusetts 02043. You may also telephone us at (781) 875-3605.
In
accordance with Rule 412 of the Securities Act, any statement contained in a document incorporated by reference herein shall be
deemed modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.
MICROBOT
MEDICAL INC.
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets as of December 31, 2017, and 2016
|
F-3
|
Consolidated
Statements of Comprehensive Loss for the years ended December 31, 2017 and 2016
|
F-4
|
Consolidated
Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 2017 and 2016
|
F-5
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2017 and 2016
|
F-6
|
Notes
to the Consolidated Financial Statements
|
F-8
|
|
|
Interim
Consolidated Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017
|
F-29
|
Interim
Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2018 (unaudited)
|
F-30
|
Interim
Consolidated Statements of Shareholders’ Equity for the year ended December 31, 2018 and the nine months ended September
30, 2018 (unaudited)
|
F-31
|
Interim
Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2018 and 2017 (unaudited)
|
F-32
|
Notes
to the Interim Consolidated Financial Statements
|
F-33
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Stockholders of
MICROBOT
MEDICAL, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Microbot Medical, Inc. and its subsidiary (the “Company”)
as of December 31, 2017 and 2016 and the related consolidated statements of comprehensive loss, stockholders’ equity and
cash flows for each of the two years in the period ended December 31, 2017, and the related notes (collectively referred to as
the “financial statements”).
In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended December
31, 2017, in conformity with accounting principles generally accepted in the United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.
/s/
Brightman Almagor Zohar & Co.
|
|
Certified
Public Accountants
|
|
Member
of Deloitte Touche Tohmatsu Limited
|
|
Tel
Aviv, Israel
April
2, 2018, except Note 1D, as to which the date is November 8, 2018
We
have served as the Company’s auditor since 2014.
MICROBOT
MEDICAL INC.
Consolidated
Balance Sheets
U.S.
dollars in thousands
(Except
share data)
|
|
|
|
|
As
of December 31,
|
|
|
|
Note
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
|
|
|
$
|
10,787
|
|
|
$
|
2,709
|
|
Restricted
cash
|
|
|
|
|
|
|
27
|
|
|
|
-
|
|
Other
current assets
|
|
|
3
|
|
|
|
116
|
|
|
|
606
|
|
|
|
|
|
|
|
|
10,930
|
|
|
|
3,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
assets, net
|
|
|
4
|
|
|
|
90
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
|
|
|
$
|
11,020
|
|
|
$
|
3,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
|
|
|
$
|
78
|
|
|
$
|
512
|
|
Accrued
liabilities
|
|
|
5
|
|
|
|
450
|
|
|
|
271
|
|
Total
current liabilities
|
|
|
|
|
|
|
528
|
|
|
|
783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
notes
|
|
|
6
|
|
|
|
-
|
|
|
|
76
|
|
Derivative
warrant liability
|
|
|
7
|
|
|
|
28
|
|
|
|
313
|
|
|
|
|
|
|
|
|
28
|
|
|
|
389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
|
|
|
|
556
|
|
|
|
1,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary
equity:
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Common
stock of $0.01 par value; issued and outstanding: 721,107 shares as of December 31, 2017 and 2016
|
|
|
|
|
|
|
500
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock of $0.01 par value; Authorized: 1,000,000 shares as of December 31, 2017 and 2016;issued and outstanding: 4,001 and
9,736 shares as of December 31, 2017 and 2016, respectively
|
|
|
9
|
|
|
|
(*)
|
|
|
|
(*)
|
|
Common
stock of $0.01 par value; Authorized: 220,000,000 as of December 31, 2017 and 2016; issued and outstanding (**): 2,013,193
and 1,067,777 shares as of December 31, 2017, and December 31, 2016, respectively
|
|
|
|
|
|
|
27
|
|
|
|
18
|
|
Additional
paid-in capital
|
|
|
|
|
|
|
30,561
|
|
|
|
14,713
|
|
Accumulated
deficit
|
|
|
|
|
|
|
(20,624
|
)
|
|
|
(13,035
|
)
|
|
|
|
|
|
|
|
9,964
|
|
|
|
1,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,020
|
|
|
$
|
3,368
|
|
(*)
Less than 1
(**)
December 31 2017 and 2016 share data represents the number of shares adjusted to retroactively reflect the 1:15 reverse Stock
Split effected on September 4, 2018, as discussed in Note 1.
The
accompanying notes are an integral part of these consolidated financial statements.
MICROBOT
MEDICAL INC.
Consolidated
Statements of Comprehensive Loss
U.S.
dollars in thousands
(Except
share data)
|
|
|
|
|
Years
ended
|
|
|
|
|
|
|
December
31,
|
|
|
|
Note
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expenses, net
|
|
|
11
|
|
|
$
|
1,100
|
|
|
$
|
901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
|
|
12
|
|
|
|
4,167
|
|
|
|
8,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
|
|
|
|
(5,267
|
)
|
|
|
(9,635
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
expenses, net
|
|
|
13
|
|
|
|
2,322
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
$
|
(7,589
|
)
|
|
$
|
(9,663
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share, basic and diluted(*)
|
|
|
10
|
|
|
$
|
(2.67
|
)
|
|
$
|
(5.94
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding, basic and diluted (*)
|
|
|
|
|
|
|
2,201,992
|
|
|
|
963,047
|
|
(*)
December 31 2017 and 2016 share data represents the number of shares adjusted to retroactively reflect the 1:15 reverse Stock
Split effected on September 4, 2018, as discussed in Note 1.
The
accompanying notes are an integral part of these consolidated financial statements.
MICROBOT
MEDICAL INC.
Consolidated
Statements of Shareholder’s Equity
U.S.
dollars in thousands
(Except
share data)
|
|
Preferred
A Shares – Microbot Medical Ltd.
(Pre
- merger) *
|
|
|
Preferred
A Shares – Microbot Medical Inc.
(Post
- merger) *
|
|
|
Common
Stock (***)
|
|
|
Additional
paid-in
|
|
|
Accumulated
|
|
|
Total
shareholders’
|
|
|
Temporary
|
|
|
|
Number
|
|
|
Amount
|
|
|
Number
|
|
|
Amount
|
|
|
Number
|
|
|
Amount
|
|
|
capital
|
|
|
deficit
|
|
|
equity
|
|
|
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2015
|
|
|
8,708,132
|
|
|
$
|
87
|
|
|
|
-
|
|
|
|
-
|
|
|
|
888,188
|
|
|
$
|
9
|
|
|
$
|
3,212
|
|
|
$
|
(3,372
|
)
|
|
$
|
(64
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
of convertible notes and exercise of warrants issued upon conversion
|
|
|
4,746,237
|
|
|
|
48
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,803
|
|
|
|
-
|
|
|
|
1,851
|
|
|
|
-
|
|
Effect
of reverse recapitalization
|
|
|
(13,454,369
|
)
|
|
|
(135
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,030,957
|
|
|
|
10
|
|
|
|
597
|
|
|
|
-
|
|
|
|
472
|
|
|
|
-
|
|
Common
Stock classified as temporary equity
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(500
|
)
|
|
|
-
|
|
|
|
(500
|
)
|
|
|
500
|
|
Beneficial
Conversion Feature recorded on convertible debt acquired in reverse recapitalization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,029
|
|
|
|
-
|
|
|
|
2,029
|
|
|
|
-
|
|
Transaction
costs incurred in reverse recapitalization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
525,706
|
|
|
|
5
|
|
|
|
6,890
|
|
|
|
-
|
|
|
|
6,895
|
|
|
|
-
|
|
Cancellation
of ordinary shares and issuance of preferred shares
|
|
|
-
|
|
|
|
-
|
|
|
|
9,736
|
|
|
|
(*)
|
|
|
|
(655,967
|
)
|
|
|
(6
|
)
|
|
|
6
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
Share
based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
676
|
|
|
|
-
|
|
|
|
676
|
|
|
|
-
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,663
|
)
|
|
|
(9,663
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
December 31, 2016
|
|
|
-
|
|
|
|
-
|
|
|
|
9,736
|
|
|
|
(*)
|
|
|
|
(**)1,788,884
|
|
|
|
18
|
|
|
|
14,713
|
|
|
|
(13,035
|
)
|
|
|
1,696
|
|
|
|
500
|
|
Issuance
of common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
299,815
|
|
|
|
3
|
|
|
|
12,699
|
|
|
|
-
|
|
|
|
12,702
|
|
|
|
-
|
|
Share-based
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,085
|
|
|
|
(*)
|
|
|
|
479
|
|
|
|
-
|
|
|
|
479
|
|
|
|
-
|
|
Exercise
of options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,787
|
|
|
|
(*)
|
|
|
|
(*)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cashless
exercise of warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24
|
|
|
|
(*)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(*)
|
|
|
|
-
|
|
Extinguishment
of convertible notes and issuance of preferred A shares
|
|
|
-
|
|
|
|
-
|
|
|
|
3,255
|
|
|
|
(*)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,676
|
|
|
|
-
|
|
|
|
2,676
|
|
|
|
-
|
|
Conversion
of preferred A shares to common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,990
|
)
|
|
|
(*)
|
|
|
|
605,705
|
|
|
|
6
|
|
|
|
(6
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,589
|
)
|
|
|
(7,589
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
December 31, 2017
|
|
|
-
|
|
|
|
-
|
|
|
|
4,001
|
|
|
$
|
(*)
|
|
|
|
**2,734,300
|
|
|
$
|
27
|
|
|
$
|
30,561
|
|
|
$
|
(20,624
|
)
|
|
$
|
9,964
|
|
|
$
|
500
|
|
(*)
Less than 1
*
Share data for periods prior to the reverse recapitalization represents the legal equity structure of Microbot Ltd. with the number
of shares adjusted to retroactively reflect the one-to-nine Reverse Stock Split effected on November 28, 2016 as well as the reverse
recapitalization consummated on November 28, 2016.
**
Includes 721,107 common stock classified as temporary equity.
(***)
December 31 2017, 2016 and 2015 share data represent the number of shares adjusted to retroactively reflect the 1:15 reverse Stock
Split effected on September 4, 2018, as discussed in Note 1.
The
accompanying notes are an integral part of these consolidated financial statements.
MICROBOT
MEDICAL INC.
Consolidated
Statements of Cash Flows
U.S.
dollars in thousands
(Except
share data)
|
|
Years
ended
|
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(7,589
|
)
|
|
$
|
(9,663
|
)
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
21
|
|
|
|
10
|
|
Interest
and amortization of discount on convertible notes
|
|
|
237
|
|
|
|
333
|
|
Share-based
transaction costs incurred in reverse recapitalization
|
|
|
-
|
|
|
|
7,258
|
|
Financing
loss on debt extinguishment
|
|
|
2,364
|
|
|
|
-
|
|
Changes
in fair value of derivative warrant liability
|
|
|
(285
|
)
|
|
|
(262
|
)
|
Share-based
compensation expense
|
|
|
479
|
|
|
|
676
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
Other
receivables
|
|
|
(14
|
)
|
|
|
538
|
|
Other
payables and accrued liabilities
|
|
|
(69
|
)
|
|
|
324
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(4,856
|
)
|
|
|
(786
|
)
|
|
|
|
|
|
|
|
|
|
INVESTMENT
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in restricted cash
|
|
|
(27
|
)
|
|
|
-
|
|
Purchase
of property and equipment
|
|
|
(58
|
)
|
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
(85
|
)
|
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
of a subsidiary in connection with reverse recapitalization
|
|
|
-
|
|
|
|
269
|
|
Transaction
costs incurred in reverse recapitalization
|
|
|
-
|
|
|
|
(347
|
)
|
Inflows
in connection with current assets and liabilities acquired in reverse recapitalization, net
|
|
|
317
|
|
|
|
2,002
|
|
Exercise
of warrants issued upon conversion of notes
|
|
|
-
|
|
|
|
409
|
|
Issuance
of common stock, net of issuance costs
|
|
|
12,702
|
|
|
|
-
|
|
Issuance
of convertible notes
|
|
|
-
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
13,019
|
|
|
|
3,083
|
|
|
|
|
|
|
|
|
|
|
Increase
in cash and cash equivalents
|
|
|
8,078
|
|
|
|
2,272
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at the beginning of the year
|
|
|
2,709
|
|
|
|
437
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at the end of the year
|
|
$
|
10,787
|
|
|
$
|
2,709
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Non-cash
financing transactions:
|
|
|
|
|
|
|
|
|
Cashless
exercise of warrants
|
|
$
|
(*)
|
|
|
$
|
-
|
|
Conversion
of preferred A shares into common shares
|
|
$
|
90
|
|
|
$
|
-
|
|
Extinguishment
of convertible notes in exchange for preferred A shares
|
|
$
|
2,083
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these consolidated financial statements.
MICROBOT
MEDICAL INC.
Consolidated
Statements of Cash Flows
U.S.
dollars in thousands
(Except
share data)
Assets
acquired (liabilities assumed):
|
|
As
of
|
|
|
|
November
28,
|
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
Current
assets excluding cash and cash equivalents
|
|
$
|
(3,618
|
)
|
Current
liabilities
|
|
|
811
|
|
Derivative
warrant liability
|
|
|
575
|
|
Convertible
note
|
|
|
2,029
|
|
Reverse
recapitalization effect on equity
|
|
|
472
|
|
|
|
|
|
|
Cash
acquired in connection with reverse recapitalization
|
|
$
|
269
|
|
The
accompanying notes are an integral part of these consolidated financial statements.
NOTE
1 - GENERAL
|
A.
|
Description
of business:
|
Microbot
Medical Inc. (the “Company”) is a pre-clinical medical device company specializing in the research, design and development
of next generation micro-robotics assisted medical technologies targeting the minimally invasive surgery space. The Company is
primarily focused on leveraging its micro-robotic technologies with the goal of improving surgical outcomes for patients.
It
was incorporated on August 2, 1988 in the State of Delaware under the name Cellular Transplants, Inc. The original Certificate
of Incorporation was restated on February 14, 1992 to change the name of the Company to Cyto Therapeutics, Inc. On May 24, 2000,
the Certificate of Incorporation as restated was further amended to change the name of the Company to StemCells, Inc.
On
November 28, 2016, the Company consummated a transaction pursuant to an Agreement and Plan of Merger, dated August 15, 2016, with
Microbot Medical Ltd., a private medical device company organized under the laws of the State of Israel (“Microbot Israel”),
and C&RD Israel Ltd. (“Merger Sub”), an Israeli corporation and wholly-owned subsidiary of the Company, whereby
Merger Sub merged with and into Microbot Israel and Microbot Israel surviving as a wholly-owned subsidiary of the Company (the
“Merger”). Pursuant to the terms of the Merger, at the effective time of the Merger, each outstanding ordinary share
of Microbot Israel capital stock was converted into the right to receive approximately 0.2 shares (2.9 shares before the Reverse
Split described below) of the Company’s common stock, par value $0.01 per share, after giving effect to a one for nine reverse
stock splits of the date of the merger, for an aggregate of 1,788,884 shares (26,550,974 shares before the Reverse Split) of Company’s
common Stock issued to the former Microbot Israel shareholders. In addition, all outstanding options to purchase the ordinary
shares of Microbot Israel were assumed by the Company and converted into options to purchase an aggregate of 176,181 shares (2,614,916
shares before the Reverse Split) of the Company’s common stock. Additionally, the Company issued an aggregate of 525,706
restricted shares (7,802,639 restricted shares before the Reverse Split) of its common stock or rights to receive the Company’s
common stock, to certain advisers. On the same day and in connection with the Merger, the Company changed its name from StemCells,
Inc. to Microbot Medical Inc. On November 29, 2016, the Company’s common stock began trading on the Nasdaq Capital Market
under the symbol “MBOT”.
As
a result of the Merger, Microbot Israel became a wholly owned subsidiary of the Company. The transaction between the Company and
Microbot Israel was accounted for as a reverse recapitalization. As the shareholders of Microbot Israel received the largest ownership
interest in the Company, Microbot Israel was determined to be the “accounting acquirer” in the reverse recapitalization.
As a result, the historical financial statements of the Company were replaced with the historical financial statements of Microbot
Israel. Unless indicated otherwise, pre-acquisition share, options and warrants data included in these financial statements is
retroactively adjusted to reflect the Reverse Stock Split and the Merger.
Prior
to the Merger, the Company was a biopharmaceutical company that conducts research, development, and commercialization of stem
cell therapeutics and related technologies. Substantially the sale of all material assets relating to the stem cell business were
completed on November 29, 2016.
The
Company and its subsidiaries are collectively referred to as the “Company”. “StemCells” or “StemCells,
Inc.” refers to the Company prior to the Merger.
To
date, the Company has not generated revenues from its operations. As of the date of issuance of these financial statements, the
Company has cash and cash equivalent balance of $9.5 million, which management believes is sufficient to fund its operations for
more than 12 months from the date of issuance of these financial statements and sufficient to fund its operations necessary to
continue development activities of its current proposed products. Due to continuing research and development activities, the Company
expects to continue to incur net losses into the foreseeable future. The Company plans to continue to fund its current operations
as well as other development activities relating to additional product candidates, through future issuances of either debt and/or
equity securities and possibly additional grants from the Israeli Innovation Authority. The Company’s ability to raise additional
capital in the equity and debt markets is dependent on a number of factors, including, but not limited to, the market demand for
the Company’s stock, which itself is subject to a number of development and business risks and uncertainties, as well as
the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are favorable to the
Company.
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions pertaining
to transactions and matters whose ultimate effect on the financial statements cannot precisely be determined at the time of financial
statements preparation. Although these estimates are based on management’s best judgment, actual results may differ from
these estimates.
On
September 4, 2018, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation with the Secretary
of State of the State of Delaware to affect a one-for-15 reverse stock split of the Company’s common stock (the “Reverse
Split”). As a result of the Reverse Split, every 15 shares of the Company’s old common stock will be converted into
one share of the Company’s new common stock. Fractional shares resulting from the Reverse Split will be rounded up to the
nearest whole number. The Reverse Split automatically and proportionately adjusted, based on the one-for-fifteen split ratio,
all issued and outstanding shares of the Company’s common stock, as well as common stock underlying convertible preferred
stock, stock options, warrants and other derivative securities outstanding at the time of the effectiveness of the reverse stock
split. The exercise price on outstanding equity based-grants was proportionately increased, while the number of shares available
under the Company’s equity-based plans was also proportionately reduced. Share and per share data (except par value) for
the periods presented reflect the effects of this Reverse Split. References to numbers of shares of common stock and per share
data in the accompanying financial statements and notes thereto have been adjusted to reflect the Reverse Split on a retroactive
basis.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
significant accounting policies applied in the preparation of the financial statements are as follows:
|
A.
|
Basis
of presentation:
|
The
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America
(“US GAAP”).
|
B.
|
Financial
statement in U.S. dollars:
|
The
functional currency of the Company is the U.S. dollar (“dollar”) since the dollar is the currency of the primary economic
environment in which the Company has operated and expects to continue to operate in the foreseeable future.
Transactions
and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign
currencies have been re-measured to dollars in accordance with the provisions of ASC 830-10, “Foreign Currency Translation”.
All
transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected
in the statement of operations as financial income or expenses, as appropriate.
|
C.
|
Cash
and cash equivalents:
|
Cash
and cash equivalents consist of cash and demand deposits in banks, and other short-term liquid investments (primarily interest-bearing
time deposits) with original maturities of less than three months.
|
D.
|
Fair
value of financial instruments:
|
The
carrying values of cash and cash equivalents, other receivable and other accounts payable and accrued liabilities approximate
their fair value due to the short-term maturity of these instruments.
The
Company measures the fair value of certain of its financial instruments (such as the derivative warrant liabilities) on a recurring
basis. The method of determining the fair value of derivative warrant liabilities is discussed in Note 8.
A
fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets
and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
Level
1
- Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level
2
- Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar
assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can
be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level
3
- Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets or liabilities.
Fixed
assets are presented at costs less accumulated depreciation. Depreciation is calculated based on the straight-line method over
the estimated useful lives of the assets, as the following annual rates:
|
|
%
|
|
|
|
|
|
|
Research
equipment and software
|
|
|
25-33
|
|
Furniture
and office equipment
|
|
|
7
|
|
|
F.
|
Liabilities
due to termination of employment agreements
|
Under
Israeli employment laws, employees of Microbot Israel are included under Article 14 of the Severance Compensation Act, 1963 (“Article
14”). According to Article 14, these employees are entitled to monthly deposits made by Microbot Israel on their behalf
with insurance companies.
Payments
in accordance with Article 14 release Microbot Israel from any future severance payments (under the Israeli Severance Compensation
Act, 1963) with respect of those employees. The aforementioned deposits are not recorded as an asset in the Company’s balance
sheet,
|
G.
|
Basic
and diluted net loss per share
|
Basic
net loss per share is computed by dividing net loss, as adjusted to include s by the weighted average number of common shares
outstanding during the year. Common shares and preferred shares contingently issuable for little or no cash are included in basic
net loss per share on an as issued basis.
Diluted
net loss per share is computed by dividing net loss, as adjusted to include preferred shares dividend participation rights of
preferred shares outstanding during the year as well as of preferred shares that would have been outstanding if all potentially
dilutive preferred shares had been issued, by the weighted average number of common shares outstanding during the year, plus the
number of common shares that would have been outstanding if all potentially dilutive common shares had been issued, using the
treasury stock method, in accordance with ASC 260-10 “Earnings per Share”.
All
outstanding stock options and warrants have been excluded from the calculation of the diluted loss per share for the years ended
December 31, 2017 and December 31, 2016, since all such securities have an anti-dilutive effect.
The
weighted average number of shares outstanding has been retroactively restated for the equivalent number of shares received by
the accounting acquirer as a result of the reverse recapitalization as if these shares had been outstanding as of the beginning
of the earliest period presented.
|
H.
|
Research
and development expenses, net:
|
Research
and development expenses are charged to the statement of operations as incurred. Grants for funding of approved research and development
projects are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred and applied as
a deduction from the research and development expenses.
Proceeds
from the sale of debt securities with a conversion feature are allocated to equity based on the intrinsic value of such conversion
feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”, with a corresponding discount on the
debt instrument recorded in liabilities which is amortized in finance expense over the term of the notes.
Convertible
notes with characteristics of both liabilities and equity are classified as either debt or equity based on the characteristics
of its monetary value, with convertible notes classified as debt being measured at fair value, in accordance with ASC 480-10,
“Accounting for Certain Financial instruments with Characteristics of both Liabilities and Equity”.
|
J.
|
Share-based
compensation:
|
The
Company applies ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation
expenses for all share-based payment awards made to employees and directors including stock options under the Company’s
stock plans based on estimated fair values.
ASC
718-10 requires companies to estimate the fair value of stock options using an option-pricing model. The value of the portion
of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s
statement of operations.
The
Company accounts for stock-based compensation awards to non-employees in accordance with FASB ASC 505-50, “Equity-Based
Payments to Non-Employees” (“FASB ASC 505-50”). Under FASB ASC 505-50, the Company determines the fair value
of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair
value of the equity instruments issued, whichever is more reliably measurable.
The
Company estimates the fair value of stock options granted as share-based payment awards using a Black-Scholes options pricing
model. The option-pricing model requires a number of assumptions, of which the most significant are expected volatility and the
expected option term (the time from the grant date until the options are exercised or expire). Expected volatility is estimated
based on volatility of similar companies in the technology sector for equity awards granted prior to the Merger and on the Company’s
trading share price for equity awards granted subsequent to the Merger. The Company has historically not paid dividends and has
no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds
with an equivalent term. The expected stock option term is calculated for stock options granted to employees and directors using
the “simplified” method. Grants to non-employees are based on the contractual term. Changes in the determination of
each of the inputs can affect the fair value of the stock options granted and the results of operations of the Company.
Certain
prior year amounts have been reclassified to conform to the current year presentation.
Transaction
costs incurred in the Merger were charged directly to equity to the extent of cash and net other current assets acquired. Transaction
costs in excess of cash acquired were charged to general and administrative expenses.
The
Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based
on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these
differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available
evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2017,
and 2016, the Company had a full valuation allowance against deferred tax assets.
|
N.
|
Recent
Accounting Standards:
|
In
May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” to provide a single comprehensive model
for entities to use in accounting for revenue arising from contracts with customers. The ASU supersedes most current revenue recognition
guidance, including industry-specific guidance. The FASB subsequently issued ASU 2015-14, ASU 2016-08 and ASU 2016-12, which clarified
the guidance, provided scope improvements and amended the effective date of ASU 2014-09. As a result, ASU 2014-09 becomes effective
for the Company in the first quarter of 2018, with early adoption permitted. The Company has not yet generated revenues to date,
and does not yet know the impact the standard may have on its consolidated financial statements.
In
February 2016, the FASB issued ASU 2016-02 “Leases” to increase transparency and comparability among organizations
by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.
For operating leases, the ASU requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at
the present value of the lease payments, on its balance sheet. The ASU retains the current accounting for lessors and does not
make significant changes to the recognition, measurement, and presentation of expenses and cash flows by a lessee. This ASU is
effective for the Company in the first quarter of 2019, with early adoption permitted. The Company continues to evaluate the effect
of the adoption of this ASU and expects the adoption will result in an increase in the assets and liabilities on the consolidated
balance sheets for operating leases (refer to Note 9) and will likely have an insignificant impact on the consolidated statements
of comprehensive loss.
In
June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses” to improve information on credit
losses for financial assets and net investment in leases that are not accounted for at fair value through net income. The ASU
replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This ASU is
effective for the Company in the first quarter of 2020, with early adoption permitted. The Company is currently evaluating the
effect the adoption of this ASU will have on its consolidated financial statements.
In
November 2016, the FASB issued ASU 2016-18 “Restricted Cash” to provide guidance on the presentation of restricted
cash in the statement of cash flows. Currently, the statement of cash flows explained the change in cash and cash equivalents
for the period. The ASU requires that the statement of cash flows explain the change in cash, cash equivalents and restricted
cash for the period. The ASU is effective for the Company in the first quarter of 2018, with early adoption permitted. The Company
does not expect the adoption to have a material effect on the statements of cash flows as the Company’s restricted cash
is not expected to be material.
In
May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting,” which clarifies when
a change to terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires
modification accounting if the vesting condition, fair value or the award classification is not the same both before and after
a change to the terms and conditions of the award. The new guidance is effective for the Company on a prospective basis beginning
on January 1, 2018 and early adoption is permitted. The Company does not expect to change terms or conditions of share-based payment
awards, and therefore, does not expect the adoption of this standard to have a material impact on its consolidated financial statements.
In
July 2017, the FASB issued ASU 2017-11, which includes Part I “Accounting for Certain Financial Instruments with Down Round
Features” and Part II “Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of
Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception”. The ASU
makes limited changes to the Board’s guidance on classifying certain financial instruments as either liabilities or equity.
The ASU’s objective is to improve (1) the accounting for instruments with “down-round” provisions and (2) the
readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain
pending content with scope exceptions. The ASU is effective for the Company in the first quarter of 2019, with early adoption
permitted. The Company has derivative warranty liabilities as discussed in Note 8 which upon adoption of the new standard are
expected to be classified as equity.
NOTE
3 - OTHER CURRENT ASSETS
|
|
As
of December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Deposit
in escrow account (*)
|
|
$
|
-
|
|
|
$
|
400
|
|
Government
institutions
|
|
|
35
|
|
|
|
15
|
|
Prepaid
expenses and others
|
|
|
81
|
|
|
|
191
|
|
|
|
$
|
116
|
|
|
$
|
606
|
|
(*)
Purchase Agreement with BOCO
On
November 11, 2016, the Company, together with two of its wholly-owned subsidiaries, Stem Cell Sciences Holdings Limited and StemCells
California, Inc. (collectively, with the Company, the “Sellers”), entered into an Asset Purchase Agreement (the “Asset
Purchase Agreement”) with BOCO Silicon Valley, Inc., a California corporation and wholly-owned subsidiary of Bright Oceans
Corporation (“BOCO US”).
Pursuant
to the terms and subject to the conditions set forth in the Asset Purchase Agreement, the Sellers sold to BOCO US certain stem
and progenitor cell lines that have been researched, studied or manufactured by the Company since 2007 (the “Cell Lines”)
and certain other tangible and intangible assets, including intellectual property and books and records, related to the foregoing
(together with the Cell Lines, the “Assets”) in exchange for $4 million in cash (the “Asset Consideration”).
Of
the Asset Consideration, $300 was provided to the Company prior to November 11, 2016 in exchange for the Sellers’ agreement
not to solicit or reach any agreement with any third party pertaining to the sale of the Assets, and $400 will remain in a twelve-month
escrow for the benefit of BOCO US to satisfy certain indemnification obligations of the Sellers which may arise and which, subject
to any valid indemnification claims of BOCO US, will be released to the Company at the end of such 12-month period. In addition,
sixteen former employees of the Company received, in the aggregate, $495 in accordance with their June 2016 agreements with the
Company under which each accepted a more than 50% reduction in his or her severance award otherwise payable.
The
Asset Purchase Agreement contains certain covenants prohibiting the Sellers from, during the four-year period immediately following
the completion of the Asset Sale, (a) engaging in or having certain financial interests in a business that is engaged in the research,
development or commercialization of the Cell Lines, or (b) soliciting for employment employees of BOCO US.
On
November 29, 2016, the Sellers completed the sale of the Assets.
As
of December 31, 2017, the Company received $320 from the escrow account and paid $80 to certain consultant relating to BOCO transaction.
The
opening balance sheet as of the Merger date included a receivable balance with respect to sale of the Assets of $3.5 which fully
collected as of December 31 2017.
NOTE
4 - FIXED ASSETS, NET
|
|
As
of December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
Research
equipment and software
|
|
$
|
76
|
|
|
$
|
54
|
|
Furniture
and office equipment
|
|
|
92
|
|
|
|
56
|
|
|
|
|
168
|
|
|
|
110
|
|
Accumulated
Depreciation:
|
|
|
|
|
|
|
|
|
Research
equipment and software
|
|
|
42
|
|
|
|
29
|
|
Furniture
and office equipment
|
|
|
36
|
|
|
|
28
|
|
|
|
|
78
|
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
90
|
|
|
$
|
53
|
|
NOTE
5 - ACCRUED LIABILITIES
|
|
As
of December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Employees
|
|
$
|
64
|
|
|
$
|
102
|
|
Government
institution
|
|
|
56
|
|
|
|
24
|
|
Other
current liabilities
|
|
|
330
|
|
|
|
145
|
|
|
|
$
|
450
|
|
|
$
|
271
|
|
NOTE
6 - CONVERTIBLE LOAN FROM SHAREHOLDERS
On
October 8, 2015, Microbot Israel entered into a convertible loan agreement with several investors who were also existing shareholders.
According to the loan agreement, Microbot Israel received an amount of $419. The loan bore interest of 10% and was converted to
both equity shares and preferred shares warrants of Microbot Israel on the nine-month anniversary of the loan. The Company concluded
the conversion feature is not a Beneficial Conversion Feature pursuant to the provisions of ASC 470-20, “Debt with Conversion
and Other Options”. Accordingly, the proceeds were recorded in liabilities in their entirety at the date of issuance.
On
July 7, 2016, the outstanding principal and accrued interest were converted into 1,315,023 Series A preferred shares, of Microbot
Israel (the “Series A Preferred Shares”) and 1,188,275 warrants to purchase the Series A Preferred Shares, at an exercise
price of $1.00 per share. The preferred shares warrants were exercised in full in September 2016 for total gross proceeds to Microbot
Israel of $410.
On
May 11, 2016, Microbot Israel entered into a convertible loan agreement with several investors who were also existing shareholders.
The loan bore interest at a fixed rate of 10% per annum beginning on the issuance date.
At
maturity, all of the outstanding principal and accrued interest was converted into Microbot Israel’s ordinary shares subject
to the conversion or default events specified in the loan agreement, based on a conversion price that represents a 20% discount
on Microbot Israel’s valuation upon such default events.
On
November 28, 2016, upon the consummation of the Merger, the loan was converted into an aggregate of 151,119 shares (2,242,939
shares before the Reverse Split) of Company’s common stock.
The
Company concluded the value of the loan is predominantly based on a fixed monetary amount known at the date of issuance as represented
by the 20% discount on the Company’s valuation. Accordingly, the loan was classified as debt and was measured at its fair
value
, pursuant to the provisions of ASC 480-10, “Accounting
for Certain Financial instruments with Characteristics of both Liabilities and Equity”.
The
fair value of the loan was measured based on observable inputs as the fixed monetary value of the variable number of shares to
be issued upon conversion (level 2 measurement).
Secured
note to Alpha Capital Anstalt:
On
August 15, 2016, concurrent with the execution of the Agreement and Plan of Merger (see Note 1A), StemCells Inc. issued a 6.0%
secured note (the “Note”) to Alpha Capital Anstalt (“Alpha Capital”), in the principal amount of $2,000,
for value received, payable upon the earlier of (i) 30 days following the consummation of the Merger and (ii) December 31, 2016.
Proceeds from the Note were used for the payment of costs and expenses in connection with the Merger and operational expenses
leading to such Closing.
The
Note bears interest at 6% per annum, payable monthly in arrears on the first of the month, beginning on January 1, 2017 until
the principal amount is paid in full. In addition, the Note is secured by a first priority security interest in all of the Company’s
intellectual property and certain other general assets pursuant to a Security Agreement
Securities
Exchange Agreement with Alpha Capital:
As
of the effective time of the Merger, the Company entered into a Securities Exchange Agreement (the “Exchange Agreement”)
with Alpha Capital, providing for the issuance to Alpha Capital of a convertible promissory note by the Company (the “Convertible
Note”) in a principal amount of $2,029, which is equal to the principal and accrued interest under the Note, in exchange
for (a) the full satisfaction, termination and cancellation of the Note and (b) the release and termination of the Security Agreement
and the first priority security interest granted thereunder.
The
Convertible Note was convertible into the Company’s Common Stock any time after November 28, 2017 and until the maturity
date of November 28, 2019, based on a conversion price of $9.60 ($0.64 before the Reverse Split), subject to adjustments as provided
in the Exchange Agreement.
Pursuant
to the terms of the Convertible Note, the Company was obligated to pay interest on the outstanding principal amount owed under
the Convertible Note at a fixed rate per annum of 6.0%, payable at maturity or earlier upon conversion. The Exchange Agreement
contains customary representations and warranties and usual and customary affirmative and negative covenants. The Convertible
Note also contained certain customary events of default.
As
the Exchange Agreement represented the consummation of the original intent of the Company and Alpha Capital, as of the date of
execution of the Merger Agreement (August 2016), to enter into a $2 million convertible note sale transaction, upon the consummation
of the Merger, the Company accounted for the convertible note in accordance with such economic substance, as if it had been issued
for a cash consideration equal to the principal and accrued interest on the Note, as of the effective date of the Merger, in the
amount of $2,029 (the “Assumed Consideration”), which is equal to the principal amount of the Convertible Note as
determined in the Exchange Agreement.
The
Company concluded the conversion feature of the Convertible Note, based on the commitment date of November 28 2016 (the Exchange
Agreement date), is a Beneficial Conversion Feature pursuant to the provisions of ASC 470-20, “Debt with Conversion and
Other Options”. Accordingly, $2,029 of the Assumed Consideration was recorded in equity with a corresponding discount on
the Convertible Note, to be amortized over its term through maturity.
See
also Note 10 – Securities Exchange Agreements with Alpha Capital.
The
carrying value of the Convertible Note as of the periods below was calculated as follow:
|
|
As
of December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Convertible
note
|
|
$
|
-
|
|
|
$
|
2,029
|
|
Unamortized
discount
|
|
|
-
|
|
|
|
(1,963
|
)
|
Accrued
interest
|
|
|
-
|
|
|
|
10
|
|
|
|
$
|
-
|
|
|
$
|
76
|
|
NOTE
7 - DERIVATIVE WARRANT LIABILITIES
As
part of StemCell’s obligations under the Merger Agreement, in August 2016, StemCells negotiated with certain institutional
holders of its 2016 Series A and Series B Warrants, issued by prior to the Merger, to have such holders surrender their 2016 Series
B Warrants in exchange for a reduced exercise price of $4.45 ($0.30 before the Reverse Split) per share on their existing 2016
Series A Warrants and the elimination of the anti-dilution price protection in the 2016 Series A Warrants. As a result, the exercise
price for all outstanding 2011 Series A Warrants and 2016 Series A and Series B Warrants was reset to of $4.45 ($0.30 before the
Reverse Split) per share. Subsequent to the reset of the exercise price, an aggregate of 35,831 (531,814 before the Reverse Split)
(from an outstanding aggregate of 38,948 (578,081 before the Reverse Split)) 2011 Series A Warrants were exercised. For the exercise
of these warrants, the Company issued 35,831 shares (531,814 shares before the Reverse Split) of its common stock prior to the
Merger.
The
remaining outstanding warrants and terms as of December 31, 2017 and 2016 is as follows:
|
|
Outstanding
as
of
December
31, 2016(*)
|
|
|
Outstanding
as
of
December
31, 2017(*)
|
|
|
|
|
|
Exercisable
as
of
December
31, 2017(*)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
A (2011)
|
|
|
4,327
|
|
|
|
-
|
|
|
$
|
2,244
|
|
|
|
-
|
|
|
December
2016
|
Series
A (2013)
|
|
|
3,895
|
|
|
|
3,895
|
|
|
$
|
2,885
|
|
|
|
3,895
|
|
|
October
2018
|
Series
A (2013)
|
|
|
183
|
|
|
|
183
|
|
|
$
|
2,725
|
|
|
|
183
|
|
|
April
2023
|
Series
A (2015)
|
|
|
683
|
|
|
|
683
|
|
|
$
|
1,363
|
|
|
|
683
|
|
|
April
2020
|
Series
A (2016)(a)
|
|
|
677
|
|
|
|
625
|
|
|
$
|
40
|
|
|
|
625
|
|
|
March
2018
|
Series
B (2016)(a)
|
|
|
2,770
|
|
|
|
2,770
|
|
|
$
|
40
|
|
|
|
2,770
|
|
|
March
2022
|
|
(*)
|
December
31 2017 and 2016 warrants data represents the number of shares adjusted to retroactively
reflect the 1:15 Reverse Split effected on September 4, 2018.
|
|
a)
|
These
warrants contain a full ratchet anti-dilution price protection so that, in most situations
upon the issuance of any common stock or securities convertible into common stock at
a price below the then-existing exercise price of the outstanding warrants, the warrant
exercise price will be reset to the lower common stock sales price. As such anti-dilution
price protection does not meet the specific conditions for equity classification, the
Company is required to classify the fair value of these warrants as a liability, with
changes in fair value to be recorded as income (loss) due to change in fair value of
warrant liability. The estimated fair value of our warrant liability at December 31,
2017 and December 31, 2016, was approximately $28 and $313, respectively.
|
As
quoted prices in active markets for identical or similar warrants are not available, the Company uses directly observable inputs
in the valuation of its derivative warrant liabilities (level 2 measurement).
The
Company uses the Black-Scholes valuation model to estimate fair value of these warrants. In using this model, the Company makes
certain assumptions about risk-free interest rates, dividend yields, volatility, expected term of the warrants and other assumptions.
Risk-free interest rates are derived from the yield on U.S. Treasury debt securities. Dividend yields are based on our historical
dividend payments, which have been zero to date. Volatility is estimated from the historical volatility of our common stock as
traded on NASDAQ. The expected term of the warrants is based on the time to expiration of the warrants from the date of measurement.
|
b)
|
In
March 2017, an institutional holder executed a cashless exercise of 51 warrants (768
before the Reverse Split) and 24 shares (359 shares before the Reverse Split) of Common
Stock were issued in connection therewith.
|
The
following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities as of December 31,
2017 and December 31, 2016 (in thousands)(**):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
A
(2016)
|
|
|
Series
B
(2016)
|
|
|
Total
|
|
|
|
(in
thousands)
|
|
Balances
at December 31, 2016
|
|
$
|
-
|
|
|
$
|
12
|
|
|
$
|
9
|
|
|
$
|
22
|
|
|
$
|
43
|
|
|
$
|
227
|
|
|
$
|
313
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Changes
in fair value
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
(9
|
)
|
|
|
(22
|
)
|
|
|
(43
|
)
|
|
|
(199
|
)
|
|
|
(285
|
)
|
Balances
at December 31, 2017
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
(*)
|
|
|
$
|
28
|
|
|
$
|
28
|
|
|
(*)
|
Less
than 1
|
|
(**)
|
Share
data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse
Split effected on September 4, 2018.
|
The
following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities as of December 31,
2017 and December 31, 2016:
|
|
As
of
December
31, 2017(*)
|
|
|
As
of
December
31, 2016(*)
|
|
|
|
Series
A (2016)
|
|
|
Series
B (2016)
|
|
|
Series
A (2016)
|
|
|
Series
B (2016)
|
|
Share
price
|
|
$
|
15.1
|
|
|
$
|
15.1
|
|
|
$
|
90.5
|
|
|
$
|
90.5
|
|
Exercise
price
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
40
|
|
Expected
volatility
|
|
|
60
|
%
|
|
|
119
|
%
|
|
|
380
|
%
|
|
|
380
|
%
|
Risk-free
interest
|
|
|
1.24
|
%
|
|
|
1.89
|
%
|
|
|
0.85
|
%
|
|
|
1.93
|
%
|
Dividend
yield
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Expected
life of up to (years)
|
|
|
0.25
|
|
|
|
4.25
|
|
|
|
1.2
|
|
|
|
5.2
|
|
|
(*)
|
December
31 2017 and 2016 options data represents the number of shares adjusted to retroactively
reflect the 1:15 Reverse Split effected on September 4, 2018.
|
Activity
in such liabilities measured on a recurring basis is as follows:
|
|
Derivative
warrant liabilities
|
|
|
|
(in
thousands)
|
|
As
of December 31, 2016
|
|
$
|
313
|
|
Revaluation
of warrants
|
|
|
(285
|
)
|
Exercise
warrants
|
|
|
(*
|
)
|
As
of December 31, 2017
|
|
$
|
28
|
|
(*)
Less than 1
|
|
Derivative
warrant liabilities
|
|
|
|
(in
thousands)
|
|
As
of November 30, 2016
|
|
$
|
575
|
|
Revaluation
of warrants
|
|
|
(262
|
)
|
Exercise
warrants
|
|
|
(*
|
)
|
As
of December 31, 2016
|
|
$
|
313
|
|
(*)
Less than 1
In
accordance with ASC-820-10-50-2(g), the Company has performed a sensitivity analysis of the derivative warrant liabilities of
the Company which are classified as level 3 financial instruments. The Company recalculated the value of warrants by applying
a +/- 5% changes to the input variables in the Black-Scholes model that vary overtime, namely, the volatility and the risk-free
rate. A 5.0% decrease in volatility would decrease the value of the warrants to $27; a 5.0% increase in volatility would increase
the value of the warrants to $29. A 5.0% decrease or increase in the risk-free rate would not have materially changed the value
of the warrants; the value of the warrants is not strongly correlated with small changes in interest rates.
NOTE
8 - COMMITMENTS AND CONTIGENCIES
Microbot
Israel obtained from the Israeli Innovation Authority (“IIA”) grants for participation in research and development
for the years 2013 through December 31, 2017 in the total amount of approximately $1,183 and, in return, Microbot Israel is obligated
to pay royalties amounting to 3% of its future sales up to the amount of the grant. The grant is linked to the exchange rate of
the dollar to the New Israeli Shekel and bears interest of Libor per annum.
The
repayment of the grants is contingent upon the successful completion of the Company’s research and development programs
and generating sales. The Company has no obligation to repay these grants, if the project fails, is unsuccessful or aborted or
if no sales are generated. The financial risk is assumed completely by the Government of Israel. The grants are received from
the Government on a project-by-project basis.
Microbot
Israel signed an agreement with the Technion Research and Development Foundation (“TRDF”) in June 2012 by which TRDF
transferred to Microbot Israel a global, exclusive, royalty-bearing license. As partial consideration for the license, Microbot
Israel shall pay TRDF royalties on net sales (between 1.5%-3%) and on sublicense income as detailed in the agreement.
Lease
Agreements:
In
June 2016, the Company entered into an office lease agreement, with a term ending on February 28, 2018. According to the lease
agreement, the monthly office lease payment is approximately $3.
In
December 2016, the Company entered into a cars lease agreement, which will end on December 31, 2019. According to the lease agreement,
the monthly car lease payment is approximately $2.5.
In
May 2017, the Company entered into an office lease agreement effective from February 1, 2018, with a term ending on December 31,
2020. According to the lease agreement, the monthly office lease payment is approximately $14
Compensation
liability
The
Company incurred compensation commitments of approximately $400 to a former executive that management estimates as remote that
this amount will ever be paid out and therefore is not reflected in these consolidated financial statements.
Contract
Research Agreement
On
January 27, 2017, the Company entered into a Contract Research Agreement (the “Research Agreement”) with The Washington
University (“Washington U.”), pursuant to which the parties will collaborate to determine the effectiveness of the
Company’s self-cleaning shunt.
The
study in WU includes several phases. The first phase (initial research) was completed. The parties are in the final stage of planning
the next phase, including the related various costs.
Pursuant
to the Research Agreement, all rights, title and interest in the data, information and results obtained or arrived at by Washington
U. in the performance of its services under the Research Agreement, as well as any patentable inventions obtained or arrived at
in the performance of such services, will be jointly owned by the Company and Washington U., and each will have full right to
practice and grant licenses in joint inventions. Additionally, Washington U. granted to the Company: (a) a non-exclusive, worldwide,
royalty-free, fully paid-up, perpetual and irrevocable license to use and practice patentable inventions (other than joint inventions
and improvements to Washington U.’s animal models) obtained or arrived at by Washington U. in the provision of its services
under the Research Agreement (“University Inventions”) with respect to the self-cleaning shunt; and (b) an exclusive
option to obtain an exclusive worldwide license in University Inventions, on terms to be negotiated between the parties.
Litigation
The
Company is named as the defendant in a lawsuit, captioned Sabby Healthcare Master Fund Ltd. and Sabby Volatility Warrant Master
Fund Ltd., Plaintiffs, against Microbot Medical Inc., Defendant, pending in the Supreme Court of the State of New York, County
of New York. The complaint alleges, among other things, that the Company breached multiple representations and warranties contained
in the Securities Purchase Agreement (the “SPA”) related to the June 8, 2017 equity financing of the Company (the
“Financing”), of which the Plaintiffs participated. The complaint seeks rescission of the SPA and return of the Plaintiffs’
$3,375 purchase price with respect to the Financing, and damages in an amount to be determined at trial, but alleged to exceed
$1 million. The parties presently are engaged in discovery.
Management
is unable to assess the likelihood of the claim and the amount of potential damages, if any, to be awarded. Management believes
that the claims made against it are without merit and intends to vigorously defend itself against these claims.
See
Note 16 – Subsequent Events, below.
NOTE
9 - SHARE CAPITAL
Each
share of the Series A Convertible Preferred Stock, par value $0.01 per share, issued by the Company in December 2016 and in May
2017 (the “Series A Convertible Preferred Stock”), is convertible, at the option of the holder, into 67 shares ( 1,000
shares before the Reverse Split) of Common Stock, and confer upon the holder dividend rights on an as converted basis.
Exercise
of Warrants
On
March 2017, an institutional holder exercised, in a cashless transaction, of 52 warrants ( 768 before the Reverse Split) and 24
shares ( 359 shares before the Reverse Split) of Common Stock were issued in connection therewith.
Share
capital developments:
The
authorized capital stock consists of 221,000,000 shares of capital stock, which consists of 220,000,000 shares of Common Stock
and 1,000,000 shares of undesignated preferred stock, par value $0.01 (the “Preferred Stock”). As of December 31,
2017, the Company had 2,734,300 shares (40,583,127 shares before the Reverse Split) of Common Stock issued and outstanding, and
4,001 shares of Series A Convertible Preferred Stock issued and outstanding.
On
November 28, 2016, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation, as amended, with
the Secretary of State of the State of Delaware to (i) effect the Reverse Stock Split, (ii) change its name from “StemCells,
Inc.” to “Microbot Medical Inc.” and (iii) increase the number of authorized shares of the Common Stock from
200,000,000 to 220,000,000 shares (the “Certificate of Amendment”).
As
a result of the Reverse Stock Split, the number of issued and outstanding shares of the Common Stock immediately prior to the
Reverse Stock Split were reduced into a smaller number of shares, such that every nine shares of the Common Stock held by a stockholder
immediately prior to the Reverse Stock Split were combined and reclassified into one share of the Common Stock.
Immediately
following the Reverse Stock Split and the Merger, there were 2,442,646 shares (36,254,240 shares before the Reverse Split) of
the Common Stock issued and outstanding, which included certain rights to receive shares of Common Stock or equivalent securities
but excludes shares underlying outstanding stock options and warrants and the Convertible Note.
On
December 27, 2016, the Company exchanged 655,962 shares (9,735,925 shares before the Reverse Split) or rights to acquire shares
of its Common Stock, for 9,736 shares of a newly designated class of Series A Convertible Preferred Stock. See “- Securities
Exchange Agreement with Alpha Capital” below. See also Note 6 – Securities Exchange Agreement with Alpha Capital,
above.
On
January 5, 2017, the Company entered into a definitive securities purchase agreement with an institutional investor (the “Purchaser”)
for the purchase and sale of an aggregate of 47,163 shares (700,000 shares before the Reverse Split) of Common Stock in a registered
direct offering for $74 ($5.00 per share before the Reverse Split) or gross proceeds of $3,500. The Company paid the placement
agent a fee of $210 plus reimbursement of out-of-pocket expenses, as well as other offering-related expenses.
On
June 5, 2017, the Company entered into a Securities Purchase Agreement with certain institutional investors (the “Investors”)
providing for the issuance and sale by the Company to the Investors of an aggregate of 252,658 shares (3,750,000 shares before
the Reverse Split) of Common Stock, at a purchase price per share of $40 ($2.70 per share before the Reverse Split). The gross
proceeds to the Company was $10,125,000 before deducting placement agent fees and offering expenses of $922.
Employee
stock option grant:
In
September 2014, Microbot Israel’s board of directors approved a grant of 26,906 (403,592 stock options before the Reverse
Split) (77,846 stock options as retroactively adjusted to reflect the Merger and the Reverse Split) to its CEO, through MEDX Venture
Group LLC. Each option was exercisable into an ordinary share, at an exercise price of $12 ($0.8 before the Reverse Split) ($4.2
as retroactively adjusted to reflect the Merger and the Reverse Split). The stock options were fully vested at the date of grant.
On
May 2, 2016, Microbot Israel’s board of directors approved a grant of 33,333 stock options (500,000 stock options before
the Reverse Split) (96,482 as retroactively adjusted to reflect the Merger and the Reverse Split) to certain of its employees
and directors. Each stock option was exercisable into an ordinary share, NIS 0.001 par value, of Microbot Israel, at an exercise
price equal to the ordinary share’s par value. The stock options were fully vested at the date of grant. As a result, the
Company recognized compensation expenses in the amount of $675 included in general and administrative expenses. As the exercise
price of the stock options is nominal, Microbot Ltd estimated the fair value of the options as equal to the Company’s share
price of $20.25 ($1.35 before the Reverse Split) ($7.05 as retroactively adjusted to reflect the Merger and the Reverse Split)
at the date of grant.
On
September 12, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”), which Plan authorizes, among
other things, the grant of options to purchase shares of Common Stock to directors, officers and employees of the Company and
to other individuals.
On
September 14, 2017, the board of directors approved a grant of stock options to purchase an aggregate of up to 120,847 shares
(1,812,712 shares before the Reverse Split) of Common Stock to Mr. Harel Gadot, the Company’s Chairman of the Board, President
and CEO, at an exercise price per share of $15.75 ($1.05 before the Reverse Split). The stock options vest over a period of 3-5
years as outlined in the option agreements. As a result, the Company recognized compensation expenses in the amount of $156 included
in general and administrative expenses for the period ended December 31, 2017.
On
September 14, 2017, the board of directors approved a grant of stock options to purchase an aggregate of up to 72,508 shares (1,087,627
shares before the Reverse Split) of Common Stock to Mr. Hezi Himelfarb, the company’s General Manager, COO and a member
of the Board, at an exercise price per share of $19.35 ($1.29 before the Reverse Split). The grant was subject to the Israeli
Tax Authority’s approval of the plan which occurred on October 14, 2017. In accordance with the option agreement, the options
vest for period of 3 years starting from the grand date. As a result, the Company recognized compensation expenses in the amount
of $92 included in general and administrative expenses for the period ended December 31, 2017.
On
December 6, 2017, the board of directors approved a grant of 12,698 stock options (190,475 stock options before the Reverse Split)
to purchase an aggregate of up to 12,698 shares (190,475 shares before the Reverse Split) of Common Stock to certain of its directors,
at an exercise price per share of $15.75 ($1.05 before the Reverse Split). The stock options vest over a period of 3 years as
outlined in the option agreements. As a result, the Company recognized compensation expenses in the amount of $4 included in general
and administrative expenses for the period ended December 31, 2017.
On
December 28, 2017, the board of directors approved a grant of 66,036 stock options (990,543 stock options before the Reverse Split)
to purchase an aggregate of up to 66,036 shares (990,543 shares before the Reverse Split) of Common Stock to certain of its employees,
at an exercise price per share of $15.3 ($1.02 before the Reverse Split). The stock options vest over a period of 3 years as outlined
in the option agreements. As a result, the Company recognized compensation expenses in the amount of $95 included in general and
administrative expenses for the period ended December 31, 2017.
On
November, 2017, certain employees and consultant exercised 31,453 options (471,794 options before the Reverse Split) to 31,453
ordinary shares (471,794 ordinary shares before the Reverse Split) at exercise price of 0.001 NIS.
A
summary of the Company’s option activity related to options to employees and directors, and related information is as follows:
|
|
For
the year ended
December
31, 2017(**)
|
|
|
|
Number
of stock options
|
|
|
Weighted
average exercise price
|
|
|
Aggregate
intrinsic value
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at beginning of period
|
|
|
174,328
|
|
|
$
|
1.95
|
|
|
$
|
3,739
|
|
Granted
|
|
|
272,090
|
|
|
|
16.5
|
|
|
|
-
|
|
Exercised
|
|
|
(31,453
|
)
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
414,965
|
|
|
$
|
11.7
|
|
|
$
|
1,859
|
|
Outstanding
at end of period
|
|
|
142,875
|
|
|
$
|
1.95
|
|
|
$
|
1,375
|
|
Vested
and expected-to-vest at end of period
|
|
|
174,328
|
|
|
$
|
1.95
|
|
|
$
|
3,739
|
|
|
|
For
the year ended
December
31, 2016(**)
|
|
|
|
Number
of stock options
|
|
|
Weighted
average exercise price
|
|
|
Aggregate
intrinsic value
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at beginning of period
|
|
|
77,846
|
|
|
$
|
4.2
|
|
|
|
-
|
|
Granted
|
|
|
96,482
|
|
|
|
(*)
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at end of period
|
|
|
174,328
|
|
|
$
|
1.95
|
|
|
$
|
15,624
|
|
Vested
and expected-to-vest at end of period
|
|
|
174,328
|
|
|
$
|
1.95
|
|
|
$
|
15,624
|
|
(*)
Less than 1
(**)
December 31 2017 and 2016 options data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split
effected on September 4, 2018
.
The
aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value
of the Common Stock and the exercise price, multiplied by the number of in-the-money stock options on those dates that would have
been received by the stock option holders had all stock option holders exercised their stock options on those dates.) as of December
31, 2017 and December 31, 2016 respectively,
The
stock options outstanding as of December 31, 2017 and December 31, 2016, separated by exercise prices, are as follows:
Exercise
price
|
|
|
Stock
options outstanding
as
of December 31, (**)
|
|
|
Weighted
average remaining contractual life – years as of
December
31, (**)
|
|
|
Stock
options exercisable as of December 31, (**)
|
|
$
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
|
|
77,846
|
|
|
|
77,846
|
|
|
|
8.0
|
|
|
|
8.0
|
|
|
|
77,846
|
|
|
|
77,846
|
|
|
15.75
|
|
|
|
133,546
|
|
|
|
-
|
|
|
|
9.75
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
19.35
|
|
|
|
72,508
|
|
|
|
-
|
|
|
|
9.75
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
15.3
|
|
|
|
66,036
|
|
|
|
-
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(*
|
)
|
|
|
65,029
|
|
|
|
96,482
|
|
|
|
8.75
|
|
|
|
9.5
|
|
|
|
65,029
|
|
|
|
96,482
|
|
|
|
|
|
|
414,965
|
|
|
|
174,328
|
|
|
|
-
|
|
|
|
-
|
|
|
|
142,875
|
|
|
|
174,328
|
|
(*)
Less than 1
(**)
December 31 2017 and 2016 options data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split
effected on September 4, 2018.
Compensation
expense recorded by the Company in respect of its stock-based employee compensation awards in accordance with ASC 718-10 for the
year ended December 31, 2017 and 2016 was $ 254 and $ 675, respectively.
The
fair value of the stock options is estimated at the date of grant using Black-Scholes options pricing model with the following
weighted-average assumptions:
|
|
Years
ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Expected
volatility
|
|
|
122.5
|
%
|
|
|
77.3
|
%
|
Risk-free
interest
|
|
|
1.64
|
%
|
|
|
0.6
|
%
|
Dividend
yield
|
|
|
0
|
%
|
|
|
0
|
%
|
Expected
life of up to (years)
|
|
|
6.25
|
|
|
|
5.0
|
|
Shares
issued to service provider
In
connection with the Merger, the Company issued an aggregate of 525,706 restricted shares (7,802,639 restricted shares before the
Reverse Split) of its Common Stock to certain advisors. The fair value of the award of approximately $10,000 was estimated based
on the share price of the Common Stock of $19.2 ($1.28 before the Reverse Split) as of the date of grant. The portion of the expense
in excess of the cash and other current assets acquired in the Merger, in the amount of $7,300 was included in general and administrative
expenses in the Statements of Comprehensive Loss.
During
2017 the Company issued an aggregate of 8, 085 nonrefundable shares (120,000 nonrefundable shares before the Reverse Split) of
Common Stock to a consultant as part of investor relations services. The Company recorded expenses of approximately $225 with
respect to the issuance of these shares included in general and administrative expenses.
Securities
Exchange Agreement with Alpha Capital
On
December 16, 2016, the Company entered into a Securities Exchange Agreement with Alpha Capital, pursuant to which Alpha Capital
exchanged 655,967 shares (9,736,000 shares before the Reverse Split) of common stock or rights to acquire shares of the common
stock held by it, for 9,736 shares of a newly designated class of Series A Convertible Preferred Stock, par value $0.01 per share
(the “Preferred Stock”). The common stock and common stock underlying the rights to acquire common stock include all
of the shares of common stock issued or issuable to Alpha Capital pursuant to the Merger. The 655,967 shares (9,735,925 shares
before the Reverse Split) of common stock and the rights to acquire common stock were cancelled and the Company’s issued
and outstanding shares of Common Stock were reduced to 1,786,684 (26,518,315 before the Reverse Split).
On
May 9, 2017, the Company entered into a Securities Exchange Agreement with Alpha Capital pursuant to which the Company agreed
to issue 3,254 shares of the Series A Convertible Preferred Stock, in exchange for the full satisfaction, termination and cancellation
of the outstanding 6% convertible promissory note of the Company in the principal amount of approximately $2,029 issued on November
28, 2016 and held by Alpha Capital. The Series A Convertible Preferred Stock is the same series of securities as the Company’s
existing Series A Convertible Preferred Stock issued in December 2016. As a result of the extinguishment of the convertible note
and issuance of the preferred shares, the Company recorded a financial loss in the amount of $2,360
.
During
the year 2017, the holder of the Series A Convertible Preferred Stock converted 8,990 shares of the Series A Convertible Preferred
Stock for 605,705 shares (8,990,000 shares before the Reverse Split) of Common Stock, pursuant to the terms of conversion of the
Series A Convertible Preferred Stock.
Repurchase
of Shares
The
Company intends to enter into a definitive agreement with up to three Israeli shareholders, some of whom are directors of the
Company, that were former shareholders of Microbot Israel, pursuant to which the Company would repurchase, at a discount on the
fair value of the share at the date of repurchase, up to $500 of Common Stock held by them, in the aggregate, if and to the extent
such shareholders are unable to sell enough of their shares to cover certain of their Israeli tax liabilities resulting from the
Merger. Such repurchase(s), if any, would occur only after the two-year anniversary of the Merger. The transaction is subject
to negotiating final terms and entering into definitive agreements with such shareholders.
The
Company evaluated whether an embedded derivative that requires bifurcation exists within such shares that may be subject to repurchase.
The Company concluded the fair value of such derivative instrument would be nominal and, in any case, would represent an asset
to the Company as (a) the settlement requires acquiring the shares at a discount on the fair market value of the share at the
time of re purchase and in no circumstances the acquisition price will be higher than approximately one dollar per share (representing
25% discount on the fair market value of the share at the merger closing date) and (b) it is assumed that the selling shareholders
would use such right as last resort as such repurchase at a discount on the fair market value of such shares results in a loss
to be incurred by the selling shareholders.
In
accordance with ASC 480-10-S99-3A (formerly EITF D-98), the Company classified the maximum amount it may be required to pay in
the event the repurchase right is exercised ($500) as temporary equity.
NOTE
10
-
BASIC AND DILUTED NET LOSS PER SHARE
The
basic and diluted net loss per share and weighted average number of common shares used in the calculation of basic and diluted
net loss per share are as follows (in thousands, except share and per share data):
|
|
Year
Ended
December 31,
|
|
|
|
2017(*)
|
|
|
2016(*)
|
|
Net
loss attributable to shareholders of the Company
|
|
$
|
7,589
|
|
|
$
|
9,663
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to shareholders of preferred shares
|
|
|
1,582
|
|
|
|
3,954
|
|
|
|
|
|
|
|
|
|
|
Net
loss used in the calculation of basic net loss per share
|
|
$
|
6,007
|
|
|
$
|
5,709
|
|
Net
loss per share
|
|
$
|
(2.67
|
)
|
|
$
|
(5.94
|
)
|
Weighted
average number of common shares
|
|
|
2,201,992
|
|
|
|
963,047
|
|
(*)
December 31 2017 and 2016 shares data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split
effected on September 4, 2018
.
As
the inclusion of common share equivalents in the calculation would be anti-dilutive for all periods presented, diluted net loss
per share is the same as basic net loss per share.
The
weighted average number of common shares outstanding has been retroactively restated for the equivalent number of common shares
received by the accounting acquirer as a result of the reverse recapitalization and reverse stock split as if these common shares
had been outstanding as of the beginning of the earliest period presented.
NOTE
11 -
RESEARCH AND DEVELOPMENT
EXPENSES, NET
|
|
Years
ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Payroll
and related expenses
|
|
$
|
634
|
|
|
$
|
491
|
|
Share-based
compensation
|
|
|
1
|
|
|
|
-
|
|
Materials
|
|
|
266
|
|
|
|
155
|
|
Patents
|
|
|
66
|
|
|
|
75
|
|
Office
and maintenance expenses
|
|
|
27
|
|
|
|
21
|
|
Rent
|
|
|
34
|
|
|
|
36
|
|
Professional
services
|
|
|
174
|
|
|
|
253
|
|
Depreciation
|
|
|
12
|
|
|
|
7
|
|
Other
|
|
|
65
|
|
|
|
76
|
|
Less:
Grants received from IIA
|
|
|
(179
|
)
|
|
|
(213
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,100
|
|
|
$
|
901
|
|
NOTE
12 -
GENERAL AND ADMINISTRATIVE
EXPENSES
|
|
Years
ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Payroll
and related expenses
|
|
$
|
1,213
|
|
|
$
|
45
|
|
Share-based
compensation
|
|
|
253
|
|
|
|
676
|
|
Professional
services
|
|
|
1,217
|
|
|
|
528
|
|
Common
shares issued for services
|
|
|
-
|
|
|
|
7,258
|
|
Travel
|
|
|
284
|
|
|
|
180
|
|
Marketing
expenses
|
|
|
26
|
|
|
|
-
|
|
Office
and maintenance expenses
|
|
|
121
|
|
|
|
-
|
|
Depreciation
|
|
|
9
|
|
|
|
-
|
|
Public
and Investor Relations
|
|
|
515
|
|
|
|
-
|
|
Insurance
|
|
|
226
|
|
|
|
-
|
|
Governmental
Fees
|
|
|
251
|
|
|
|
|
|
Other
|
|
|
52
|
|
|
|
47
|
|
|
|
$
|
4,167
|
|
|
$
|
8,734
|
|
NOTE
13 - FINANCE EXPENSES, NET
|
|
Years
ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Bank
fees and interest
|
|
$
|
1
|
|
|
$
|
1
|
|
Change
in fair value of derivative warrant liability
|
|
|
(285
|
)
|
|
|
(262
|
)
|
Financing
loss on debt extinguishment
|
|
|
2,364
|
|
|
|
-
|
|
Exchange
rate differences
|
|
|
5
|
|
|
|
(44
|
)
|
Revaluation
and interest on convertible loans
|
|
|
237
|
|
|
|
333
|
|
|
|
$
|
2,322
|
|
|
$
|
28
|
|
NOTE
14 - TRANSACTIONS AND BALANCES WITH INTERESTED AND RELATED PARTIES
|
|
Year
ended
|
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Payroll
and related expenses
|
|
$
|
851
|
|
|
$
|
-
|
|
Directors
fees and insurance
|
|
|
463
|
|
|
|
58
|
|
Subcontracted
work and consulting
|
|
|
67
|
|
|
|
253
|
|
|
|
$
|
1,381
|
|
|
$
|
311
|
|
|
|
As
of
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Other
accounts payable
|
|
$
|
46
|
|
|
|
-
|
|
|
|
$
|
46
|
|
|
|
-
|
|
NOTE
15 - TAXES ON INCOME
The
Company is subject to income taxes under the Israeli and U.S. tax laws:
Corporate
tax rates
The
Company is subject to Israeli corporate tax rate of 25% in the year 2016, 24% in 2017 and 23% from 2018. The Company is subject
to a blended U.S. tax rate (Federal as well as state corporate tax) of 35%.
On
December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law in the United States. The Tax Act,
among other provisions, introduces changes in the U.S corporate tax rate, business related exclusions and deductions and credits,
and has internationally tax consequences for companies that operate international. Most of the changes introduced in the Tax Act
are effective beginning on January 1, 2018. The Tax Act introduces a reduced federal tax rate of 21% from January 1, 2018 and
onward.
|
A.
|
As
of December 31, 2017, the Company generated net operating losses in Israel of approximately
$5,267 which may be carried forward and offset against taxable income in the future for
an indefinite period.
|
As
of December 31, 2017, the Company generated net operating losses in the U.S. of approximately $2,987. Net operating losses in
the United States are available through 2035. Utilization of U.S. net operating losses may be subject to substantial annual limitation
due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The
annual limitation may result in the expiration of net operating losses before utilization.
|
B.
|
The
Company is still in its development stage and has not yet generated revenues, therefore,
it is more likely than not that sufficient taxable income will not be available for the
tax losses to be utilized in the future. Therefore, a valuation allowance was recorded
to reduce the deferred tax assets to its recoverable amounts.
|
|
|
As
of December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
Net
operating loss carry-forward
|
|
$
|
488,603
|
|
|
$
|
481,052
|
|
|
|
|
|
|
|
|
|
|
Total
deferred tax assets
|
|
|
117,265
|
|
|
|
120,263
|
|
Valuation
allowance
|
|
|
(117,265
|
)
|
|
|
(120,263
|
)
|
Net
deferred tax assets
|
|
$
|
-
|
|
|
$
|
-
|
|
Reconciliation
of Income Taxes:
The
following is a reconciliation of the taxes on income assuming that all income is taxed at the ordinary statutory corporate tax
rate in Israel and the effective income tax rate:
|
|
As
of December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(in
thousands)
|
|
Net
loss as reported in the statements of operations
|
|
$
|
7,589
|
|
|
$
|
9,663
|
|
Statutory
tax rate
|
|
|
24
|
%
|
|
|
25
|
%
|
Income
Tax under statutory tax rate
|
|
|
1,821
|
|
|
|
2,416
|
|
Change
in valuation allowance
|
|
|
(1,821
|
)
|
|
|
(2,416
|
)
|
Actual
income tax
|
|
$
|
-
|
|
|
$
|
-
|
|
NOTE
16 - SUBSEQUENT EVENTS
On
January 4, 2018, Microbot Medical Ltd. entered into an agreement with CardioSert Ltd. to acquire certain patent-protected technology
owned by CardioSert. With the closing of the acquisition in April 2018, CardioSert’s issued U.S. patent and three patent
applications pending worldwide were added to Microbot’s patent portfolio and Microbot now has a patent portfolio of 29 issued/allowed
patents and 19 patent applications pending worldwide.
Pursuant
to the Agreement, Microbot Medical Ltd made an initial payment of $50 to CardioSert and has 90-days to complete the acquisition.
At the end of the 90-day period, at Microbot’s sole option, CardioSert shall assign and transfer the Technology to Microbot
Medical Ltd and Microbot Medical Ltd shall pay to CardioSert additional amounts and options as determined in the agreements.
The
Agreement may be terminated by Microbot at any time during the 90-day pre-closing period, and otherwise for convenience upon 90-days’
notice. The Agreement may be terminated by CardioSert in case the first commercial sale does not occur by the third anniversary
of the date of signing of the Agreement except in the event that Microbot has invested more than $2,000 in certain development
stages, or the first commercial sale does not occur within 50 months. In each of the above termination events, or in case of breach
by Microbot, CardioSert shall have the right to buy back the Technology from Microbot for $1.00, upon 60 days prior written notice,
but only 1 year after such termination. Additionally, the Agreement may be terminated by either party upon breach of the other
(subject to cure).
CardioSert
agreed to assist Microbot in the development of the Technology for a minimum of one year, for a monthly consultation fee of NIS40,000
covering up to 60 consulting hours per month.
Share
Capital Developments
In
2018, through March 30, 2018, the Company issued an aggregate of 101,063 shares (1,500,000 shares before the Reverse Split) of
its Common Stock upon the conversion of an aggregate of 1,500 shares of its Series A Convertible Preferred Stock.
Tolling
Agreement
On
April 2, 2018, the Company entered into a Tolling and Standstill Agreement (the “Tolling Agreement”) with Empery Asset
Master, Ltd., Empery Tax Efficient LP, Empery Tax Efficient II LP, and Hudson Bay Master Fund, Ltd., the other investors in the
Financing (the “Other Investors”). Pursuant to the Tolling Agreement, among other things, (a) the Other Investors
agree not to bring any claims against the Company arising out of the Matter, (b) the parties agree that if the Company reaches
an agreement to settle the claims asserted by the Sabby Funds in the above suit, the Company will provide the same settlement
terms on a pro rata basis to the Other Investors, and the Other Investors will either accept same or waive all of their claims
and (c) the parties froze in time the rights and privileges of each party as of the effective date of the Tolling Agreement, until
(i) an agreement to settle the suit is executed; (ii) a judgment in the suit is obtained; or (iii) the suit is otherwise dismissed
with prejudice.
MICROBOT
MEDICAL INC.
Interim
Consolidated Balance Sheets
U.S.
dollars in thousands
(Except
share data)
|
|
Note
|
|
|
As
of
September 30, 2018
|
|
|
As
of
December 31, 2017
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
|
|
$
|
6,673
|
|
|
$
|
10,787
|
|
Restricted
cash
|
|
|
|
|
|
27
|
|
|
|
27
|
|
Other
current assets
|
|
|
|
|
|
148
|
|
|
|
116
|
|
|
|
|
|
|
|
6,848
|
|
|
|
10,930
|
|
Fixed
assets, net
|
|
|
|
|
|
280
|
|
|
|
90
|
|
Total
assets
|
|
|
|
|
$
|
7,128
|
|
|
$
|
11,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
|
|
|
$
|
194
|
|
|
$
|
78
|
|
Accrued
liabilities
|
|
|
|
|
|
363
|
|
|
|
450
|
|
Total
current liabilities
|
|
|
|
|
|
557
|
|
|
|
528
|
|
Derivative
warrant liability
|
|
3
|
|
|
|
5
|
|
|
|
28
|
|
Total
liabilities
|
|
|
|
|
|
562
|
|
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary
equity:
|
|
5
|
|
|
|
|
|
|
|
|
|
Common
stock of $0.01 par value; issued and outstanding: 721,107 shares as of September 30, 2018 and December 31, 2017
|
|
|
|
|
|
500
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity:
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock of $0.01 par value; Authorized: 1,000,000 shares as of September 30, 2018 and December 31, 2017; issued and outstanding:
550 and 4,001 shares as of September 30, 2018 and December 31, 2017, respectively
|
|
5
|
|
|
|
(*
|
)
|
|
|
(*
|
)
|
Common
stock of $0.01 par value; Authorized: 220,000,000 as of September 30, 2018 and December 31, 2017; issued and outstanding (**):
2,254,569 and 2,013,193 shares as of September 30, 2018, and December 31, 2017, respectively
|
|
|
|
|
|
30
|
|
|
|
27
|
|
Additional
paid-in capital
|
|
|
|
|
|
31,771
|
|
|
|
30,561
|
|
Accumulated
deficit
|
|
|
|
|
|
(25,735
|
)
|
|
|
(20,624
|
)
|
|
|
|
|
|
|
6,066
|
|
|
|
9,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,128
|
|
|
$
|
11,020
|
|
|
(*)
|
Less
than 1
|
|
(**)
|
December
31, 2017 share data represents the number of shares adjusted to retroactively reflect the 1:15 reverse stock split effected
on September 4, 2018.
|
The
accompanying notes are an integral part of these interim consolidated financial statements.
MICROBOT
MEDICAL INC.
Interim
Consolidated Statements of Comprehensive Loss
U.S.
dollars in thousands
(Except
share data)
|
|
|
|
|
Three
months ended September 30,
|
|
|
Nine
months ended September 30,
|
|
|
|
Note
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expenses, net
|
|
|
|
|
$
|
623
|
|
|
$
|
339
|
|
|
$
|
1,753
|
|
|
$
|
900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
|
|
|
|
|
1,130
|
|
|
|
896
|
|
|
|
3,407
|
|
|
|
2,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
|
|
|
(1,753
|
)
|
|
|
(1,235
|
)
|
|
|
(5,160
|
)
|
|
|
(3,730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
income (expenses), net
|
|
|
|
|
|
4
|
|
|
|
48
|
|
|
|
49
|
|
|
|
(2,272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
$
|
(1,749
|
)
|
|
$
|
(1,187
|
)
|
|
$
|
(5,111
|
)
|
|
$
|
(6,002
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share, basic and diluted(*)
|
|
6
|
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.69
|
)
|
|
$
|
(2.25
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding, basic and diluted (*)
|
|
|
|
|
|
2,947,633
|
|
|
|
2,383,327
|
|
|
|
2,876,020
|
|
|
|
2,061,331
|
|
|
(*)
|
September
30, 2017 share data represents the number of shares adjusted to retroactively reflect the 1:15 reverse stock split effected
on September 4, 2018.
|
The
accompanying notes are an integral part of these interim consolidated financial statements.
MICROBOT
MEDICAL INC.
Interim
Consolidated Statements of Shareholder’s Equity
U.S.
dollars in thousands
(Except
share data)
|
|
Preferred
A Shares
|
|
|
Common
Stock(***)
|
|
|
Additional
Paid-In
|
|
|
Accumulated
|
|
|
Total
Shareholders’
|
|
|
Temporary
|
|
|
|
Number
|
|
|
Amount
|
|
|
Number
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2016
|
|
|
9,736
|
|
|
$
|
(*
|
)
|
|
|
**1,788,884
|
|
|
$
|
18
|
|
|
$
|
14,713
|
|
|
$
|
(13,035
|
)
|
|
$
|
1,696
|
|
|
$
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of Common Stock
|
|
|
-
|
|
|
|
-
|
|
|
|
299,815
|
|
|
|
3
|
|
|
|
12,699
|
|
|
|
-
|
|
|
|
12,702
|
|
|
|
-
|
|
Share-based
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
8,085
|
|
|
|
(*
|
)
|
|
|
479
|
|
|
|
-
|
|
|
|
479
|
|
|
|
-
|
|
Exercise
of options
|
|
|
-
|
|
|
|
-
|
|
|
|
31,787
|
|
|
|
(*
|
)
|
|
|
(*
|
)
|
|
|
-
|
|
|
|
(*
|
)
|
|
|
-
|
|
Cashless
exercise of warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
24
|
|
|
|
(*
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(*
|
)
|
|
|
-
|
|
Extinguishment
of convertible notes and issuance of preferred A shares
|
|
|
3,255
|
|
|
|
(*
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
2,676
|
|
|
|
-
|
|
|
|
2,676
|
|
|
|
-
|
|
Conversion
of preferred A shares to common stock
|
|
|
(8,990
|
)
|
|
|
(*
|
)
|
|
|
605,705
|
|
|
|
6
|
|
|
|
(6
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,589
|
)
|
|
|
(7,589
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
December 31, 2017
|
|
|
4,001
|
|
|
$
|
(*
|
)
|
|
|
**
2,734,300
|
|
|
$
|
27
|
|
|
$
|
30,561
|
|
|
$
|
(20,624
|
)
|
|
$
|
9,964
|
|
|
$
|
500
|
|
Share-based
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
1,139
|
|
|
|
-
|
|
|
|
1,139
|
|
|
|
-
|
|
Shares
issued as consideration-vendor
|
|
|
|
|
|
|
|
|
|
|
6,738
|
|
|
|
1
|
|
|
|
73
|
|
|
|
-
|
|
|
|
74
|
|
|
|
-
|
|
Exercise
of options
|
|
|
-
|
|
|
|
-
|
|
|
|
2,487
|
|
|
|
(*
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Conversion
of preferred A shares to common stock
|
|
|
(3,451
|
)
|
|
|
(*)
|
|
|
|
232,151
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,111
|
)
|
|
|
(5,111
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances,
September 30, 2018
|
|
|
550
|
|
|
$
|
(*
|
)
|
|
|
**
2,975,676
|
|
|
$
|
30
|
|
|
$
|
31,771
|
|
|
$
|
(25,735
|
)
|
|
$
|
6,066
|
|
|
$
|
500
|
|
(*)
|
Less
than 1
|
(**)
|
Includes
721,107 common stock classified as temporary equity.
|
(***)
|
December
31, 2017 and 2016 share data represents the number of shares adjusted to retroactively reflect the 1:15 reverse stock split
effected on September 4, 2018.
|
The
accompanying notes are an integral part of these interim consolidated financial statements.
MICROBOT
MEDICAL INC.
Interim
Consolidated Statements of Cash Flows
U.S.
dollars in thousands
(Except
share data)
|
|
Nine
months ended September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(5,111
|
)
|
|
$
|
(6,002
|
)
|
|
|
|
|
|
|
|
|
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
49
|
|
|
|
15
|
|
Interest
and revaluation of convertible notes, net
|
|
|
-
|
|
|
|
237
|
|
Financing
loss on debt extinguishment
|
|
|
-
|
|
|
|
2,364
|
|
Changes
in fair value of derivative warrant liability
|
|
|
(23
|
)
|
|
|
(274
|
)
|
Shares
issued as consideration-vendor
|
|
|
74
|
|
|
|
-
|
|
Share-based
compensation expense
|
|
|
1,139
|
|
|
|
176
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
Other
receivables
|
|
|
(32
|
)
|
|
|
29
|
|
Other
payables and accrued liabilities
|
|
|
29
|
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(3,875
|
)
|
|
|
(3,547
|
)
|
|
|
|
|
|
|
|
|
|
INVESTMENT
ACTIVITIES
|
|
|
|
|
|
|
|
|
Increase
in restricted cash
|
|
|
-
|
|
|
|
-
|
|
Purchase
of property and equipment
|
|
|
(239
|
)
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
(239
|
)
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outflow
(inflow) in connection with current assets and liabilities acquired in reverse recapitalization, net
|
|
|
-
|
|
|
|
(82
|
)
|
Issuance
of common stock, net of issuance costs
|
|
|
-
|
|
|
|
12,704
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
-
|
|
|
|
12,622
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents and restricted cash
|
|
|
(4,114
|
)
|
|
|
9,047
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents and restricted cash at the beginning of the period
|
|
|
10,814
|
|
|
|
2,709
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents and restricted cash at the end of the period
|
|
$
|
6,700
|
|
|
$
|
11,756
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Non-cash
financing transactions:
|
|
|
|
|
|
|
|
|
Cashless
exercise of warrants
|
|
$
|
-
|
|
|
$
|
(*
|
)
|
Conversion
of preferred A shares into common shares
|
|
$
|
(*
|
)
|
|
$
|
(*
|
)
|
Extinguishment
of convertible notes in exchange for preferred A shares
|
|
$
|
-
|
|
|
$
|
2,083
|
|
The
accompanying notes are an integral part of these interim consolidated financial statements.
NOTE
1 - GENERAL
|
A.
|
Description
of Business
|
Microbot
Medical Inc. (the “Company”) is a pre-clinical medical device company specializing in the research, design and development
of next generation micro-robotics assisted medical technologies targeting the minimally invasive surgery space. The Company is
primarily focused on leveraging its micro-robotic technologies with the goal of improving surgical outcomes for patients.
It
was incorporated on August 2, 1988 in the State of Delaware under the name Cellular Transplants, Inc. The original Certificate
of Incorporation was restated on February 14, 1992 to change the name of the Company to Cyto Therapeutics, Inc. On May 24, 2000,
the Certificate of Incorporation as restated was further amended to change the name of the Company to StemCells, Inc.
On
November 28, 2016, the Company consummated a transaction pursuant to an Agreement and Plan of Merger, dated August 15, 2016, with
Microbot Medical Ltd., a private medical device company organized under the laws of the State of Israel (“Microbot Israel”).
On the same day and in connection with the Merger, the Company changed its name from StemCells, Inc. to Microbot Medical Inc.
On November 29, 2016, the Company’s common stock began trading on the Nasdaq Capital Market under the symbol “MBOT”.
Prior
to the Merger, the Company was a biopharmaceutical company that conducted research, development, and commercialization of stem
cell therapeutics and related technologies. The sale of substantially all material assets relating to the stem cell business were
completed on November 29, 2016.
The
Company and its subsidiaries are collectively referred to as the “Company”. “StemCells” or “StemCells,
Inc.” refers to the Company prior to the Merger.
To
date, the Company has not generated revenues from its operations. As of September 30, 2018, the Company had cash and cash equivalent
balance of approximately $6,673, which management believes is sufficient to fund its operations for more than 12 months from the
date of issuance of these financial statements and sufficient to fund its operations necessary to continue development activities
of its current proposed products. Due to continuing research and development activities, the Company expects to continue to incur
net losses into the foreseeable future. The Company plans to continue to fund its current operations as well as other development
activities relating to additional product candidates, through future issuances of either debt and/or equity securities and possibly
additional grants from the Israeli Innovation Authority and others. The Company’s ability to raise additional capital in
the equity and debt markets is dependent on a number of factors, including, but not limited to, the market demand for the Company’s
stock, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that
the Company would be able to raise such additional capital at a price or on terms that are favorable to the Company.
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions pertaining
to transactions and matters whose ultimate effect on the financial statements cannot precisely be determined at the time of financial
statements preparation. Although these estimates are based on management’s best judgment, actual results may differ from
these estimates.
On
September 4, 2018, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation with the Secretary
of State of the State of Delaware to affect a one-for-15 reverse stock split of the Company’s common stock (the “Reverse
Split”). As a result of the Reverse Split, every 15 shares of the Company’s old common stock was converted into one
share of the Company’s new common stock. Fractional shares resulting from the Reverse Split were rounded up to the nearest
whole number. The Reverse Split automatically and proportionately adjusted, based on the one-for-fifteen split ratio, all issued
and outstanding shares of the Company’s common stock, as well as common stock underlying convertible preferred stock, stock
options, warrants and other derivative securities outstanding at the time of the effectiveness of the Reverse Split. The exercise
price on outstanding equity based-grants was proportionately increased, while the number of shares available under the Company’s
equity-based plans was also proportionately reduced. Share and per share data (except par value) for the periods presented reflect
the effects of the Reverse Split. References to numbers of shares of common stock and per share data in the accompanying financial
statements and notes thereto for periods ended prior to September 4, 2018 have been adjusted to reflect the Reverse Split on a
retroactive basis.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
significant accounting policies applied in the preparation of the financial statements are as follows:
Unaudited
Interim Financial Statements
The
accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for
interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission
(“SEC”) regulations. Accordingly, they do not include all the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included
(consisting only of normal recurring adjustments except as otherwise discussed).
Operating
results for the nine-month period ended September 30, 2018, are not necessarily indicative of the results that may be expected
for the year ended December 31, 2018.
Significant
Accounting Policies
The
significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements
are identical to those applied in the preparation of the latest annual audited financial statements.
Recent
Accounting Standards
In
May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” to provide a single comprehensive model
for entities to use in accounting for revenue arising from contracts with customers. The ASU supersedes most current revenue recognition
guidance, including industry-specific guidance. The FASB subsequently issued ASU 2015-14, ASU 2016-08 and ASU 2016-12, which clarified
the guidance, provided scope improvements and amended the effective date of ASU 2014-09. As a result, ASU 2014-09 becomes effective
for the Company in the first quarter of 2018, with early adoption permitted. The adoption of this standard did not have a material
impact on our interim consolidated statements of comprehensive loss since the Company has not yet generated revenues to date.
In
June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based
Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently
only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services.
Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes
Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for the Company during the first quarter
of 2019. The Company is assessing ASU 2018-07 and does not expect it to have a material impact on its consolidated financial statements.
In
February 2016, the FASB issued ASU 2016-02 “Leases” to increase transparency and comparability among organizations
by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.
For operating leases, the ASU requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at
the present value of the lease payments, on its balance sheet. The ASU retains the current accounting for lessors and does not
make significant changes to the recognition, measurement, and presentation of expenses and cash flows by a lessee.
In
July 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements - Leases (Topic 842).” This update provides an
optional transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting
the prior periods presented. If elected, an entity would recognize a cumulative-effect adjustment to the opening balance of retained
earnings in the period of adoption. This ASU is effective for the Company in the first quarter of 2019, with early adoption permitted.
The Company continues to evaluate the effect of the adoption of this ASU and expects the adoption will result in an increase in
the assets and liabilities on the consolidated balance sheets for operating leases (refer to Note 4) and will likely have an insignificant
impact on the consolidated statements of comprehensive loss.
In
June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses” to improve information on credit
losses for financial assets and net investment in leases that are not accounted for at fair value through net income. The ASU
replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This ASU is
effective for the Company in the first quarter of 2020, with early adoption permitted. The Company is currently evaluating the
effect the adoption of this ASU will have on its consolidated financial statements.
In
July 2017, the FASB issued ASU 2017-11, which includes Part I “Accounting for Certain Financial Instruments with Down Round
Features” and Part II “Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of
Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception”. The ASU
makes limited changes to the Board’s guidance on classifying certain financial instruments as either liabilities or equity.
The ASU’s objective is to improve (1) the accounting for instruments with “down-round” provisions and (2) the
readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain
pending content with scope exceptions. The ASU is effective for the Company in the first quarter of 2019, with early adoption
permitted. The Company has derivative warranty liabilities as discussed in Note 4 which upon adoption of the new standard are
expected to be classified as equity.
NOTE
3 - DERIVATIVE WARRANT LIABILITIES
The
remaining outstanding warrants and terms as of September 30, 2018 and December 31, 2017 after the split is as follows: (*)
Issuance
date
|
|
Outstanding
as of December 31, 2017
|
|
|
Outstanding
as of September 30, 2018
|
|
|
Exercise
Price
|
|
|
Exercisable
as of September 30, 2018
|
|
|
Exercisable
Through
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
A (2013)
|
|
|
3,895
|
|
|
|
3,895
|
|
|
$
|
2,885
|
|
|
|
3,895
|
|
|
October
2018
|
Series
A (2013)
|
|
|
183
|
|
|
|
183
|
|
|
$
|
2,725
|
|
|
|
183
|
|
|
April
2023
|
Series
A (2015)
|
|
|
683
|
|
|
|
683
|
|
|
$
|
1,363
|
|
|
|
683
|
|
|
April
2020
|
Series
A (2016) (a)
|
|
|
625
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
March
2018
|
Series
B (2016) (a)
|
|
|
2,770
|
|
|
|
2,770
|
|
|
$
|
40
|
|
|
|
2,770
|
|
|
March
2022
|
|
(*)
|
December
31, 2017 warrants data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split effected on
September 4, 2018
|
|
a)
|
These
warrants contain a full ratchet anti-dilution price protection so that, in most situations upon the issuance of any common
stock or securities convertible into common stock at a price below the then-existing exercise price of the outstanding warrants,
the warrant exercise price will be reset to the lower common stock sales price. As such anti-dilution price protection does
not meet the specific conditions for equity classification, the Company is required to classify the fair value of these warrants
as a liability, with changes in fair value to be recorded as income (loss) due to change in fair value of warrant liability.
The estimated fair value of our warrant liability at September 30, 2018 and December 31, 2017, was approximately $5 and $28,
respectively.
|
As
quoted prices in active markets for identical or similar warrants are not available, the Company uses directly observable inputs
in the valuation of its derivative warrant liabilities (level 3 measurement).
The
Company uses the Black-Scholes valuation model to estimate fair value of these warrants. In using this model, the Company makes
certain assumptions about risk-free interest rates, dividend yields, volatility, expected term of the warrants and other assumptions.
Risk-free interest rates are derived from the yield on U.S. Treasury debt securities. Dividend yields are based on our historical
dividend payments, which have been zero to date. Volatility is estimated from the historical volatility of our common stock as
traded on NASDAQ. The expected term of the warrants is based on the time to expiration of the warrants from the date of measurement.
In
March 2017, an institutional holder executed a cashless exercise of 51 warrants and 24 shares of Common Stock were issued in connection
therewith.
The
following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities as of September 30,
2018 and December 31, 2017:
|
|
Series
A
(2011)
|
|
|
Series
A (2013)
|
|
|
Series
A (2013)
|
|
|
Series
A (2015)
|
|
|
Series
A
(2016)
|
|
|
Series
B
(2016)
|
|
|
Total
|
|
Balances
at December 31, 2017
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(*
|
)
|
|
$
|
28
|
|
|
$
|
28
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
expiration
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(*
|
)
|
|
|
-
|
|
|
|
(*
|
)
|
Changes
in fair value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
Balances
at September 30, 2018
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
5
|
|
|
$
|
5
|
|
The
following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities as of September 30,
2018 and December 31, 2017:
|
|
As
of September 30, 2018
|
|
|
As
of December 31, 2017
|
|
|
|
Series
A (2016)
|
|
|
Series
B (2016)
|
|
|
Series
A (2016)
|
|
|
Series
B (2016)
|
|
Share
price
|
|
|
—
|
|
|
$
|
7.52
|
|
|
$
|
15.1
|
|
|
$
|
15.1
|
|
Exercise
price
|
|
|
—
|
|
|
$
|
40.07
|
|
|
$
|
40.07
|
|
|
$
|
40.07
|
|
Expected
volatility
|
|
|
—
|
|
|
|
84.9%
|
|
|
|
60%
|
|
|
|
119%
|
|
Risk-free
interest
|
|
|
—
|
|
|
|
2.39%
|
|
|
|
1.24%
|
|
|
|
1.89%
|
|
Dividend
yield
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Expected
life of up to (years)
|
|
|
—
|
|
|
|
3.50
|
|
|
|
0.25
|
|
|
|
4.25
|
|
Activity
in such liabilities measured on a recurring basis is as follows:
|
|
Derivative
Warrant Liabilities
|
|
As
of December 31, 2017
|
|
$
|
28
|
|
Revaluation
of warrants
|
|
|
(23)
|
|
As
of September 30, 2018
|
|
$
|
5
|
|
|
|
Derivative
Warrant Liabilities
|
|
As
of December 31, 2016
|
|
$
|
313
|
|
Revaluation
of warrants
|
|
|
(285)
|
|
Exercise
warrants
|
|
|
(*)
|
|
As
of December 31, 2017
|
|
$
|
28
|
|
In
accordance with ASC-820-10-50-2(g), the Company has performed a sensitivity analysis of the derivative warrant liabilities of
the Company which are classified as level 3 financial instruments. The Company recalculated the value of warrants by applying
a +/- 5% changes to the input variables in the Black-Scholes model that vary overtime, namely, the volatility and the risk-free
rate. A 5.0% decrease or ‘increase in volatility would not have materially changed the value of the warrants. A 5.0% decrease
or increase in the risk-free rate would not have materially changed the value of the warrants; the value of the warrants is not
strongly correlated with small changes in interest rates.
NOTE
4 - COMMITMENTS AND CONTINGENCIES
Microbot
Israel obtained from the Israeli Innovation Authority (“IIA”) grants for participation in research and development
for the years 2013 through September 30, 2018 in the total amount of approximately $1,310 and, in return, Microbot Israel is obligated
to pay royalties amounting to 3% of its future sales up to the amount of the grant. The grant is linked to the exchange rate of
the dollar to the New Israeli Shekel and bears interest of Libor per annum.
The
repayment of the grants is contingent upon the successful completion of the Company’s research and development programs
and generating sales. The Company has no obligation to repay these grants, if the project fails, is unsuccessful or aborted or
if no sales are generated. The financial risk is assumed completely by the Government of Israel. The grants are received from
the Government on a project-by-project basis.
Microbot
Israel signed an agreement with the Technion Research and Development Foundation (“TRDF”) in June 2012 by which TRDF
transferred to Microbot Israel a global, exclusive, royalty-bearing license. As partial consideration for the license, Microbot
Israel shall pay TRDF royalties on net sales (between 1.5%-3%) and on sublicense income as detailed in the agreement.
Lease
Agreements
In
December 2016, the Company entered into car lease agreements, which will end on December 31, 2019. According to the lease agreement,
the monthly car lease payment is approximately $2.5.
In
January 2018, the Company entered into an office lease agreement in the U.S., with a term ending on December 31, 2021. According
to the lease agreement, the monthly office lease payment is approximately $4.
In
May 2017, the Company entered into an office lease agreement IN Israel effective from February 1, 2018, with a term ending on
December 31, 2020. According to the lease agreement, the monthly office lease payment is approximately $14.
Compensation
Liability
The
Company incurred compensation commitments of approximately $400 to a former executive that management estimates as remote that
this amount will ever be paid out and therefore is not reflected in these consolidated financial statements.
Contract
Research Agreement
On
January 27, 2017, the Company entered into a Contract Research Agreement (the “Research Agreement”) with The Washington
University (“Washington U.”), pursuant to which the parties are collaborating to determine the effectiveness of the
Company’s self-cleaning shunt.
The
study in Washington U. includes several phases. The first phase (initial research) was completed. The parties are in the final
stage of planning the next phase, including the related various costs.
Pursuant
to the Research Agreement, all rights, title and interest in the data, information and results obtained or arrived at by Washington
U. in the performance of its services under the Research Agreement, as well as any patentable inventions obtained or arrived at
in the performance of such services, will be jointly owned by the Company and Washington U., and each will have full right to
practice and grant licenses in joint inventions. Additionally, Washington U. granted to the Company: (a) a non-exclusive, worldwide,
royalty-free, fully paid-up, perpetual and irrevocable license to use and practice patentable inventions (other than joint inventions
and improvements to Washington U.’s animal models) obtained or arrived at by Washington U. in the provision of its services
under the Research Agreement (“University Inventions”) with respect to the self-cleaning shunt; and (b) an exclusive
option to obtain an exclusive worldwide license in University Inventions, on terms to be negotiated between the parties.
Litigation
The
Company is named as the defendant in a lawsuit, captioned Sabby Healthcare Master Fund Ltd. and Sabby Volatility Warrant Master
Fund Ltd., Plaintiffs, against Microbot Medical Inc., Defendant, pending in the Supreme Court of the State of New York, County
of New York. The complaint alleges, among other things, that the Company breached multiple representations and warranties contained
in the Securities Purchase Agreement (the “SPA”) related to the June 8, 2017 equity financing of the Company (the
“Financing”), of which the Plaintiffs participated. The complaint seeks rescission of the SPA and return of the Plaintiffs’
$3,375 purchase price with respect to the Financing, and damages in an amount to be determined at trial, but alleged to exceed
$1 million. On August 3, 2018, both Plaintiffs and the Company filed motions for summary judgment. On September 27, 2018, the
Court heard oral argument on the parties’ respective summary judgment motions. After oral argument, the Court denied Plaintiffs’
motion in its entirety from the bench. On September 28, 2018, the Court issued a decision granting the Company’s motion
for summary judgment regarding Plaintiffs’ claim for monetary damages and denying the Company’s motion for summary
judgment on Plaintiffs’ claim for rescission, finding that there were material questions of fact that would need to be resolved
at trial. A trial date has not been set.
Management
is unable to assess the likelihood of the claim and the amount of potential damages, if any, to be awarded. Management believes
that the claims made against it are without merit and intends to vigorously defend itself against these claims.
Tolling
and Standstill Agreement
On
April 4, 2018, the Company entered into a Tolling and Standstill Agreement (the “Tolling Agreement”) with Empery Asset
Master, Ltd., Empery Tax Efficient LP, Empery Tax Efficient II LP, and Hudson Bay Master Fund, Ltd., the other investors in the
Financing (the “Other Investors”). Pursuant to the Tolling Agreement, among other things, (a) the Other Investors
agree not to bring any claims against the Company arising out of the Matter, (b) the parties agree that if the Company reaches
an agreement to settle the claims asserted by the Sabby Funds in the above suit, the Company will provide the same settlement
terms on a pro rata basis to the Other Investors, and the Other Investors will either accept same or waive all of their claims
and (c) the parties froze in time the rights and privileges of each party as of the effective date of the Tolling Agreement, until
(i) an agreement to settle the suit is executed; (ii) a judgment in the suit is obtained; or (iii) the suit is otherwise dismissed
with prejudice.
Agreement
with CardioSert Ltd.
On
January 4, 2018, Microbot Israel entered into an agreement with CardioSert Ltd. (“CardioSert”) to acquire certain
patent-protected technology owned by CardioSert (the “Technology”).
Pursuant
to the Agreement, Microbot Israel made an initial payment of $50 to CardioSert and has 90-days to elect to complete the acquisition.
At the end of the 90-day period, at Microbot Israel’s sole option, CardioSert shall assign and transfer the Technology to
Microbot Israel and Microbot Israel shall pay to CardioSert additional amounts and securities as determined in the agreement.
On
April 10, 2018, Microbot delivered an Exercise Notice to CardioSert Ltd., notifying it that Microbot elected to exercise the option
to acquire the Technology owned by CardioSert and therefore made an additional cash payment of $250 and 6,738 (100,000 common
shares before the Reverse Split) common shares estimated of $74. (see note 5).
The
agreement may be terminated by Microbot Israel at any time for convenience upon 90-days’ notice. The agreement may be terminated
by CardioSert in case the first commercial sale does not occur by the third anniversary of the date of signing of the agreement
except if Microbot Israel has invested more than $2,000 in certain development stages, or the first commercial sale does not occur
within 50 months. In each of the above termination events, or in case of breach by Microbot Israel, CardioSert shall have the
right to buy back the Technology from Microbot Israel for $1.00, upon 60 days prior written notice, but only 1 year after such
termination. Additionally, the agreement may be terminated by either party upon breach of the other (subject to cure).
CardioSert
agreed to assist Microbot Israel in the development of the Technology for a minimum of one year, for a monthly consultation fee
of NIS 40,000 covering up to 60 consulting hours per month.
Agreement
with Simon Sharon
Effective
as of April 1, 2018, the Company hired Simon Sharon to replace its former Vice President of R&D. Pursuant to the terms thereof,
among other things, Mr. Sharon is entitled to options to purchase 10,000 shares (150,000 shares before the Reverse Split) of the
Company’s common stock, subject and pursuant to the Company’s 2017 Equity Incentive Plan.
NOTE
5 - SHARE CAPITAL
Each
share of the Series A Convertible Preferred Stock, par value $0.01 per share, issued by the Company in December 2016 and in May
2017 (the “Series A Convertible Preferred Stock”), is convertible, at the option of the holder, into 67 shares of
Common Stock (1,000 shares of Common Stock before the Reverse Split), and confer upon the holder dividend rights on an as converted
basis.
Exercise
of Warrants
On
March 2017, an institutional holder exercised, in a cashless transaction, 52 warrants (768 warrants before the Reverse Split)
and 24 shares (359 shares before the Reverse Split) of Common Stock were issued in connection therewith.
Share
Capital Developments
The
authorized capital stock consists of 221,000,000 shares of capital stock, which consists of 220,000,000 shares of Common Stock
and 1,000,000 shares of undesignated preferred stock, par value $0.01 (the “Preferred Stock”). As of March 31, 2018,
the Company had 2,837,863 shares (42,120,127 shares before the Reverse Split) of Common Stock issued and outstanding, and 2,464
shares of Series A Convertible Preferred Stock issued and outstanding.
On
December 27, 2016, the Company exchanged 655,962 shares (9,735,925 shares before the Reverse Split) or rights to acquire shares
of its Common Stock, for 9,736 shares of a newly designated class of Series A Convertible Preferred Stock.
On
January 5, 2017, the Company entered into a definitive securities purchase agreement with an institutional investor (the “Purchaser”)
for the purchase and sale of an aggregate of 47,163 shares (700,000 shares before the Reverse Split) of Common Stock in a registered
direct offering for $74 per share ($5.00 per share before the Reverse Split) or gross proceeds of $3,500. The Company paid the
placement agent a fee of $210 plus reimbursement of out-of-pocket expenses, as well as other offering-related expenses.
On
June 5, 2017, the Company entered into a Securities Purchase Agreement with certain institutional investors (the “Investors”)
providing for the issuance and sale by the Company to the Investors of an aggregate of 252,658 shares (3,750,000 shares before
the Reverse Split) of Common Stock, at a purchase price per share of $40 ($2.70 before the Reverse Split). The gross proceeds
to the Company was $10,125 before deducting placement agent fees and offering expenses of $922.
Employee
Stock Option Grant
In
September 2014, Microbot Israel’s board of directors approved a grant of 26,906 stock options (403,592 stock options before
the Reverse Split) (77,846 stock options as retroactively adjusted to reflect the Merger) to its CEO, through MEDX Venture Group
LLC. Each option was exercisable into an ordinary share, at an exercise price of $12 ($0.8 before the Reverse Split) ($4.2 as
retroactively adjusted to reflect the Merger). The stock options were fully vested at the date of grant.
On
May 2, 2016, Microbot Israel’s board of directors approved a grant of 33,333 stock options (500,000 stock options before
the Reverse Split) (96,482 as retroactively adjusted to reflect the Merger) to certain of its employees and directors. Each stock
option was exercisable into an ordinary share, NIS 0.001 par value, of Microbot Israel, at an exercise price equal to the ordinary
share’s par value. The stock options were fully vested at the date of grant. As a result, the Company recognized compensation
expenses in the amount of $675 included in general and administrative expenses. As the exercise price of the stock options is
nominal, Microbot Israel estimated the fair value of the options as equal to the Company’s share price of $20.25 ($1.35
before the Reverse Split) ($7.05 as retroactively adjusted to reflect the Merger) at the date of grant.
On
September 12, 2017, the Company adopted the 2017 Equity Incentive Plan (the “Plan”), which Plan authorizes, among
other things, the grant of options to purchase shares of Common Stock to directors, officers and employees of the Company and
to other individuals.
On
September 14, 2017, the board of directors approved a grant of stock options to purchase an aggregate of up to 120,848 shares
(1,812,712 shares before the Reverse Split) of Common Stock to Mr. Harel Gadot, the Company’s Chairman of the Board, President
and CEO, at an exercise price per share of $15.75 ($1.05 before the Reverse Split). The stock options vest over a period of 3-5
years as outlined in the option agreements. As a result, the Company recognized compensation expenses in the amount of $460 and
$0 included in general and administrative expenses for the nine months ended September 30, 2018 and 2017 respectively.
On
September 14, 2017, the board of directors approved a grant of stock options to purchase an aggregate of up to 72,508 shares (1,087,627
shares before the Reverse Split) of Common Stock to Mr. Hezi Himelfarb, the company’s General Manager, COO and a member
of the Board, at an exercise price per share of $19.35 ($1.29 before the Reverse Split). The grant was subject to the Israeli
Tax Authority’s approval of the plan which occurred on October 14, 2017. In accordance with the option agreement, the options
vest for period of 3 years starting from the grand date As a result, the Company recognized compensation expenses in the amount
of $329 and $0 included in general and administrative expenses for the nine months ended September 30, 2018 and 2017 respectively.
On
December 6, 2017, the board of directors approved a grant of 12,698 stock options (190,475 stock options before the Reverse Split)
to purchase an aggregate of up to 12,698 shares of Common Stock to certain of its directors, at an exercise price per share of
$15.75 ($1.05 before the Reverse Split). The stock options vest over a period of 3 years as outlined in the option agreements.
As a result, the Company recognized compensation expenses in the amount of $55 and $0 included in general and administrative expenses
for the nine months ended September 30, 2018 and 2017 respectively.
On
December 28, 2017, the board of directors approved a grant of 66,036 stock options (990,543 stock options before the Reverse Split)
to purchase an aggregate of up to 66,036 shares of Common Stock to certain of its employees, at an exercise price per share of
$15.3 ($1.02 before the Reverse Split). The stock options vest over a period of 3 years as outlined in the option agreements.
As a result, the Company recognized compensation expenses in the amount of $273 and $0 included in general and administrative
expenses and research and development expenses for the nine months ended September 30, 2018 and 2017 respectively.
On
November 2017, certain employees and consultant exercised 31,453 options (471,794 options before the Reverse Split) to 31,453
ordinary shares at exercise price of 0.001 NIS.
In
February 2018, an employee exercised options to purchase 2,487 shares (37,300 shares of common stock before the Reverse Split)
at an exercise price of $0.001 per share
On
August 13, 2018, the board of directors approved a grant of stock options to purchase an aggregate of up to 10,000 shares (150,000
shares before the Reverse Split) of Common Stock to Mr. Simon Sharon, the company’s CTO, at an exercise price per share
of $9 ($0.6 before the Reverse Split). The grant was subject to the Israeli Tax Authority’s approval of the plan which occurred
on October 14, 2017. In accordance with the option agreement, the options vest for period of 3 years starting from the grand date
As a result, the Company recognized compensation expenses in the amount of $22 and $0 included in general and administrative expenses
for the nine months ended September 30, 2018 and 2017 respectively.
A
summary of the Company’s option activity related to options to employees and directors, and related information is as follows:
|
|
For
the nine months ended September 30, 2018
|
|
|
|
Number
of
stock
options
|
|
|
Weighted
average exercise price
|
|
|
Aggregate
intrinsic
value
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
at beginning of period
|
|
|
414,965
|
|
|
$
|
11.70
|
|
|
$
|
1,859
|
|
Granted
|
|
|
10,000
|
|
|
|
9
|
|
|
|
-
|
|
Exercised
|
|
|
(2,487)
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding
at end of period
|
|
|
422,478
|
|
|
$
|
11.70
|
|
|
$
|
729
|
|
Vested
and expected-to-vest at end of period
|
|
|
228,758
|
|
|
$
|
7.80
|
|
|
$
|
729
|
|
|
|
For
the year ended December 31, 2017(*)
|
|
|
|
Number
of stock options
|
|
|
Weighted
average exercise price
|
|
|
Aggregate
intrinsic value
|
|
Outstanding
at beginning of period
|
|
|
174,328
|
|
|
$
|
1.95
|
|
|
$
|
3,739
|
|
Granted
|
|
|
272,090
|
|
|
|
16.50
|
|
|
|
-
|
|
Exercised
|
|
|
(31,453)
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding
at end of period
|
|
|
414,965
|
|
|
$
|
11.70
|
|
|
$
|
1,859
|
|
Vested
and expected-to-vest at end of period
|
|
|
142,875
|
|
|
$
|
1.95
|
|
|
$
|
1,375
|
|
(*)
|
December
31, 2017 options data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split effected on
September 4, 2018.
|
The
aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value
of the Common Stock and the exercise price, multiplied by the number of in-the-money stock options on those dates that would have
been received by the stock option holders had all stock option holders exercised their stock options on those dates.) as of September
30, 2018 and December 31, 2017 respectively.
The
stock options outstanding as of September 30, 2018 and December 31, 2017, separated by exercise prices, are as follows:
|
|
|
Stock
options outstanding as of September 30, 2018
|
|
|
Stock
options outstanding as of December 31, 2017(**)
|
|
|
Weighted
average remaining contractual life – years as of September 30, 2018
|
|
|
Weighted
average remaining contractual life – years as of December 31, 2017(**)
|
|
|
Stock
options exercisable as of September 30, 2018
|
|
|
Stock
options exercisable as of December 31, 2017(**)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.20
|
|
|
|
77,846
|
|
|
|
77,846
|
|
|
|
7.25
|
|
|
|
8.00
|
|
|
|
77,846
|
|
|
|
77,846
|
|
|
15.75
|
|
|
|
133,546
|
|
|
|
133,546
|
|
|
|
9.00
|
|
|
|
9.75
|
|
|
|
46,117
|
|
|
|
-
|
|
|
9.00
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
10.00
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
19.35
|
|
|
|
72,508
|
|
|
|
72,508
|
|
|
|
9.00
|
|
|
|
9.75
|
|
|
|
23,565
|
|
|
|
-
|
|
|
15.30
|
|
|
|
66,036
|
|
|
|
66,036
|
|
|
|
9.25
|
|
|
|
10.00
|
|
|
|
18,688
|
|
|
|
-
|
|
|
(*)
|
|
|
|
62,542
|
|
|
|
65,029
|
|
|
|
8.00
|
|
|
|
8.75
|
|
|
|
62,542
|
|
|
|
65,029
|
|
|
|
|
|
|
422,478
|
|
|
|
414,965
|
|
|
|
8.55
|
|
|
|
9.3
|
|
|
|
228,758
|
|
|
|
142,875
|
|
|
(*)
|
Less
than $0.01.
|
|
(**)
|
December
31, 2017 options data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split effected on
September 4, 2018.
|
Compensation
expense recorded by the Company in respect of its stock-based employee compensation awards in accordance with ASC 718-10 for the
nine-month ended September 30, 2018 and 2017 was $ 1,139 and $196, respectively.
The
fair value of the stock options is estimated at the date of grant using Black-Scholes options pricing model with the following
weighted-average assumptions:
|
|
Nine
months ended September 30, 2018
|
|
|
Year
ended
December 31, 2017
|
|
Expected
volatility
|
|
|
99.4%
|
|
|
|
122.5%
|
|
Risk-free
interest
|
|
|
2.39%
|
|
|
|
1.64%
|
|
Dividend
yield
|
|
|
0%
|
|
|
|
0%
|
|
Expected
life of up to (years)
|
|
|
5.24
|
|
|
|
6.25
|
|
Shares
issued to service provider
In
connection with the Merger, the Company issued an aggregate of 525,706 restricted shares (7,802,639 restricted shares before the
Reverse Split) of its Common Stock to certain advisors. The fair value of the award of approximately $10,000 was estimated based
on the share price of the Common Stock of $19.2 ($1.28 before the Reverse Split) as of the date of grant. The portion of the expense
in excess of the cash and other current assets acquired in the Merger, in the amount of $7,300 was included in general and administrative
expenses in the Statements of Comprehensive Loss.
During
2017, the Company issued an aggregate of 8,085 nonrefundable shares (120,000 nonrefundable shares before the Reverse Split) of
Common Stock to a consultant as part of investor relations services. The Company recorded expenses of approximately $225 with
respect to the issuance of these shares included in general and administrative expenses
On
May 24, 2018 the Company issued an aggregate of 6,738 nonrefundable shares (100,000 nonrefundable shares before the Reverse Split)
of Common Stock to CardioSert as part of certain patent acquisition. The Company recorded expenses of approximately $74 with respect
to the issuance of these shares included in research and development expenses.
Securities
Exchange Agreement with Alpha Capital
On
December 16, 2016, the Company entered into a Securities Exchange Agreement with Alpha Capital, pursuant to which Alpha Capital
exchanged 655,967 shares (9,736,000 shares before the Reverse Split) of common stock or rights to acquire shares of the common
stock held by it, for 9,736 shares of a newly designated class of Series A Convertible Preferred Stock, par value $0.01 per share
(the “Preferred Stock”). The common stock and common stock underlying the rights to acquire common stock include all
of the shares of common stock issued or issuable to Alpha Capital pursuant to the Merger. The 655,967 shares (9,735,925 shares
before the Reverse Split) of common stock and the rights to acquire common stock were cancelled and the Company’s issued
and outstanding shares of Common Stock were reduced to 1,786,684 (26,518,315 before the Reverse Split).
On
May 9, 2017, the Company entered into a Securities Exchange Agreement with Alpha Capital pursuant to which the Company agreed
to issue 3,254 shares of the Series A Convertible Preferred Stock, in exchange for the full satisfaction, termination and cancellation
of the outstanding 6% convertible promissory note of the Company in the principal amount of approximately $2,029 issued on November
28, 2016 and held by Alpha Capital. The Series A Convertible Preferred Stock is the same series of securities as the Company’s
existing Series A Convertible Preferred Stock issued in December 2016. As a result of the extinguishment of the convertible note
and issuance of the preferred shares, the Company recorded a financial loss in the amount of $2,360
.
During
the year 2017, the holder of the Series A Convertible Preferred Stock converted 8,990 shares of the Series A Convertible Preferred
Stock for 605,705 shares (8,990,000 shares before the Reverse Split) of Common Stock, pursuant to the terms of conversion of the
Series A Convertible Preferred Stock.
For
the nine-month ended September 30, 2018, the holder of the Series A Convertible Preferred Stock converted 3,451 shares of the
Series A Convertible Preferred Stock for 232,151 shares (3,445,266 shares before the Reverse Split) of Common Stock, pursuant
to the terms of conversion of the Series A Convertible Preferred Stock.
Repurchase
of Shares
The
Company intends to enter into a definitive agreement with up to three Israeli shareholders, one of which is a director of the
Company, that were former shareholders of Microbot Israel, pursuant to which the Company would repurchase, at a discount on the
fair value of the share at the date of repurchase, up to $500 of Common Stock held by them, in the aggregate, if and to the extent
such shareholders are unable to sell enough of their shares to cover certain of their Israeli tax liabilities resulting from the
Merger. Such repurchase(s), if any, would occur only after the two-year anniversary of the Merger. The transaction is subject
to negotiating final terms and entering into definitive agreements with such shareholders.
The
Company evaluated whether an embedded derivative that requires bifurcation exists within such shares that may be subject to repurchase.
The Company concluded the fair value of such derivative instrument would be nominal and, in any case, would represent an asset
to the Company as (a) the settlement requires acquiring the shares at a discount on the fair market value of the share at the
time of repurchase and in no circumstances the acquisition price will be higher than approximately one dollar per share (representing
25% discount on the fair market value of the share at the merger closing date) and (b) it is assumed that the selling shareholders
would use such right as last resort as such repurchase at a discount on the fair market value of such shares results in a loss
to be incurred by the selling shareholders.
In
accordance with ASC 480-10-S99-3A (formerly EITF D-98), the Company classified the maximum amount it may be required to pay in
the event the repurchase right is exercised ($500) as temporary equity.
NOTE
6 - BASIC AND DILUTED NET LOSS PER SHARE
The
basic and diluted net loss per share and weighted average number of common shares used in the calculation of basic and diluted
net loss per share are as follows (in thousands, except share and per share data):
|
|
Nine
months ended September 30,
|
|
|
|
2018
|
|
|
2017(*)
|
|
Net
loss attributable to shareholders of the Company
|
|
$
|
(5,111)
|
|
|
$
|
(6,002)
|
|
Net
loss attributable to shareholders of preferred shares
|
|
|
(226)
|
|
|
|
(1,442)
|
|
Net
loss used in the calculation of basic net loss per share
|
|
$
|
(4,885)
|
|
|
$
|
(4,560)
|
|
Net
loss per share
|
|
$
|
(1.69)
|
|
|
$
|
(2.25)
|
|
Weighted
average number of common shares
|
|
|
2,876,020
|
|
|
|
2,061,331
|
|
|
(*)
|
September
30, 2017 shares data represents the number of shares adjusted to retroactively reflect the 1:15 Reverse Split effected on
September 4, 2018.
|
As
the inclusion of common share equivalents in the calculation would be anti-dilutive for all periods presented, diluted net loss
per share is the same as basic net loss per share.
Up
to 996,016
Shares of Common Stock
Up
to 996,016
Pre-Funded Warrants to Purchase Shares of
Common Stock and
996,016
Shares of Common Stock Underlying the Pre-Funded Warrants
PROSPECTUS
Sole
Book-Running Manager
H.C.
Wainwright & Co.
,
2019
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth all costs and expenses, other than underwriting discounts and commissions, paid or payable by Microbot
Medical Inc. (the “Company” or the “Registrant”) in connection with the sale of the securities being registered
under this registration statement. All amounts shown are estimates except for the Securities and Exchange Commission, or SEC,
registration fee and the FINRA filing fee.
|
|
Amount
|
|
SEC
registration fee
|
|
$
|
1,393.80
|
|
FINRA
filing fee
|
|
|
2,225.00
|
|
Legal
fees and expenses
|
|
|
125,000
|
|
Accounting
fees and expenses
|
|
|
25,000
|
|
Transfer
agent and registrar fees and expenses
|
|
|
5,000
|
|
Miscellaneous
expenses
|
|
|
131,381.20
|
|
Total
|
|
$
|
290,000
|
|
Item
14. Indemnification of Directors and Officers.
Section
145 of the Delaware General Corporation Law (“DGCL”) permits, in general, a Delaware corporation, to indemnify any
person who was or is a party to any proceeding (other than an action by, or in the right of, the corporation) by reason of the
fact that or she is or was a director, or officer, of the corporation, or served another business enterprise in any capacity at
the request of the corporation, against liability incurred in connection with such proceeding, including the expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection
with such proceeding if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation and, in criminal actions or proceedings, additionally had no reasonable cause to believe
that his or her conduct was unlawful. A Delaware corporation’s power to indemnify applies to actions brought by or in the
right of the corporation, but only to the extent of expenses (including attorneys’ fees) actually and reasonably incurred
by the person in connection with the defense or settlement of the action or suit, provided that no indemnification shall be provided
in such actions in the event of any adjudication of negligence or misconduct in the performance of such person’s duties
to the corporation, unless a court believes that in light of all the circumstances indemnification should apply. Section 145 of
the DGCL also permits, in general, a Delaware corporation to purchase and maintain insurance on behalf of any person who is or
was a director or officer of the corporation, or served another entity in any capacity at the request of the corporation, against
liability incurred by such person in such capacity, whether or not the corporation would have the power to indemnify such person
against such liability.
Section
102(b)(7) of the DGCL permits a corporation to include in its certificate of incorporation a provision eliminating or limiting
the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty
as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the
director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction
from which the director derived an improper personal benefit.
The
Company’s restated certificate of incorporation provides that the Company’s directors shall not be liable to the Company
or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent that exculpation from
liabilities is not permitted under the DGCL as in effect at the time such liability is determined. The Company’s restated
certificate of incorporation further provides that the Company shall indemnify its directors and officers to the fullest extent
permitted by the DGCL.
We
maintain a directors’ and officers’ insurance policy pursuant to which our directors and officers are insured against
liability for actions taken in their capacities as directors and officers. We believe that these indemnification provisions and
insurance are necessary to attract and retain qualified directors and officers.
Indemnification
Agreements
The
Company has entered into indemnification agreements with each of its directors and executive officers. These indemnification agreements
may require the Company, among other things, to indemnify its directors and officers for some expenses, including attorneys’
fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his
or her service as one of the Company’s directors or officers, or any of its subsidiaries or any other company or enterprise
to which the person provides services at our request.
In
any underwriting agreement we enter into in connection with the sale of common stock being registered hereby, the underwriter
will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning
of the Securities Act of 1933, as amended, against certain liabilities.
Item
15. Recent Sales of Unregistered Securities.
Set
forth below is information regarding securities issued and options granted by the Company within the past three years that were
not registered under the Securities Act of 1933, as amended, and the rules promulgated thereunder (the “Securities Act”).
Also included is the consideration, if any, received by the Registrant, for such securities and options and information relating
to the Securities Act, or rule of the SEC, under which exemption from registration was claimed. Except with respect to issuances
subsequent to September 4, 2018, the below descriptions of such issuances, including any conversion ratios, do not reflect the
Company’s September 4, 2018 1-for-15 reverse stock split.
In
connection with a registered direct offering consummated on January 15, 2019, we issued warrants to the placement agent to purchase
22,767 shares of common stock at $8.125 per share. In connection with a registered direct offering consummated on January 17.
2019, we issued warrants to the placement agent to purchase 29,500 shares of common stock at $12.50 per share. In connection with
a registered direct offering and concurrent private placement consummated on January 25, 2019, we issued (i) warrants to investors
in the offering to purchase up to 250,000 shares of common stock at $10.00 per share and (ii) warrants to the placement agent
to purchase 12,500 shares of common stock at $12.50 per share. The offer and issuance of the securities described in each of the
foregoing registered direct offerings were deemed to be exempt from registration under the Securities Act in reliance on Section
4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) as issuances of securities to accredited investors not
involving a public offering. The recipients of the securities in each of these transaction acquired the securities for investment
only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the
securities issued in these transactions. Each of the recipients of securities in these transactions was either an accredited investor
within the meaning of Rule 501 of Regulation D under the Securities Act or had adequate access, through business or other relationships
with us to information about us.
On
November 26, 2018, the holder of the Series A Convertible Preferred Stock, par value $0.01 per share (the “Preferred Stock”),
of the Company, converted an aggregate of 550 shares of the Preferred Stock for an aggregate of 36,667 shares of the Company’s
common stock. Pursuant to the terms of conversion of the Preferred Stock, each such share is convertible, upon request and for
no additional consideration, into 66.667 shares of the common stock of the Company. The issuances of the 36,667 shares of common
stock were exempt from registration under Section 4(a)(2) under the Securities Act of 1933, as amended and the rules promulgated
thereunder (the “Securities Act”) as transactions not involving a public offering to a single existing stockholder
who is an accredited investor, and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by
an existing security holder and no commission or other remuneration was paid. All shares of Preferred Stock that had been issued
have now been converted into shares of the Company’s common stock. Accordingly, there are currently no shares of Preferred
Stock issued or outstanding.
On
September 24, 2018, the holder of the Series A Convertible Preferred Stock, par value $0.01 per share, of the Company, converted
450 shares of the Preferred Stock for 30,000 shares of the Company’s common stock. Pursuant to the terms of conversion of
the Preferred Stock, each such share is convertible, upon request and for no additional consideration, into 66.667 shares of the
common stock of the Company. The issuances of the 30,000 shares of common stock were exempt from registration under Section 4(a)(2)
under the Securities Act as transactions not involving a public offering to a single existing stockholder who is an accredited
investor, and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by an existing security
holder and no commission or other remuneration was paid.
On
May 31, 2018, the holder of the Preferred Stock converted 700 shares of the Preferred Stock for 700,000 shares of the Company’s
common stock. Pursuant to the terms of conversion of the Preferred Stock, each such share is convertible, upon request and for
no additional consideration, into 1,000 shares of the common stock of the Company. The issuances of the 700,000 shares of common
stock were exempt from registration under Section 4(a)(2) under the Securities Act as transactions not involving a public offering
to a single existing stockholder who is an accredited investor, and/or 3(a)(9) under the Securities Act as the Preferred Stock
was exchanged for common stock by an existing security holder and no commission or other remuneration was paid.
On
May 24, 2018, the Company issued 100,000 shares of common stock to CardioSert Ltd. as partial consideration for the acquisition
of certain intellectual property assets from CardioSert. The issuance was exempt from registration under Section 4(a)(2) under
the Securities Act as a transaction not involving a public offering to a single stockholder as part of a negotiated transaction.
On
March 7, 2018, the holder of the Preferred Stock converted an aggregate of 500 shares of the Preferred Stock for an aggregate
of 500,000 shares of the Company’s common stock. Pursuant to the terms of conversion of the Preferred Stock, each such share
is convertible, upon request and for no additional consideration, into 1,000 shares of the common stock of the Registrant. The
issuances of the 500,000 shares of common stock were exempt from registration under Section 4(a)(2) under the Securities Act as
transactions not involving a public offering to a single existing stockholder who is an accredited investor, and/or 3(a)(9) under
the Securities Act as the Preferred Stock was exchanged for common stock by an existing security holder and no commission or other
remuneration was paid.
On
May 11, 2018, the holder of the Preferred Stock converted 800 shares of the Preferred Stock for 800,000 shares of the Company’s
common stock, pursuant to the terms of conversion of the Preferred Stock. The issuance of the 800,000 shares of common stock was
exempt from registration under Section 4(a)(2) under the Securities Act as transactions not involving a public offering to a single
existing stockholder who is an accredited investor, and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged
for common stock by an existing security holder and no commission or other remuneration was paid.
From
November 22, 2017 through January 25, 2018, the holder of the Preferred Stock converted an aggregate of 2,436 shares of the Preferred
Stock for an aggregate of 2,436,000 shares of the Registrant’s common stock. Pursuant to the terms of conversion of the
Preferred Stock, each such share is convertible, upon request and for no additional consideration, into 1,000 shares of the common
stock of the Registrant. The issuances of the 2,436,000 shares of common stock were exempt from registration under Section 4(a)(2)
under the Securities Act as transactions not involving a public offering to a single existing stockholder who is an accredited
investor, and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by an existing security
holder and no commission or other remuneration was paid.
On
December 11, 2017, the Registrant issued an aggregate of 70,000 shares of the Registrant’s common stock to a consultant
as consideration for services. The issuance of the shares was exempt from registration under Section 4(a)(2) under the Securities
Act as a transaction not involving a public offering, as the issuance thereof was made to a limited number of persons or entities
as compensation for services rendered.
From
October 4, 2017 through October 25, 2017, the holder of the Preferred Stock converted an aggregate of 1,600 shares of the Preferred
Stock for an aggregate of 1,600,000 shares of the Company’s common stock. Pursuant to the terms of conversion of the Preferred
Stock, each such share is convertible, upon request and for no additional consideration, into 1,000 shares of the common stock
of the Registrant. The issuances of the 1,600,000 shares of common stock were exempt from registration under Section 4(a)(2) under
the Securities Act as transactions not involving a public offering to a single existing stockholder who is an accredited investor,
and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by an existing security holder and
no commission or other remuneration was paid.
From
August 7, 2017 through September 19, 2017, the holder of the Preferred Stock converted an aggregate of 2,200 shares of the Preferred
Stock for an aggregate of 2,200,000 shares of the Registrant’s common stock. Pursuant to the terms of conversion of the
Preferred Stock, each such share is convertible, upon request and for no additional consideration, into 1,000 shares of the common
stock of the Registrant. The issuances of the 2,200,000 shares of common stock were exempt from registration under Section 4(a)(2)
under the Securities Act as transactions not involving a public offering to a single existing stockholder who is an accredited
investor, and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by an existing security
holder and no commission or other remuneration was paid.
Between
June 19, 2017 and August 7, 2017, the holder of the Preferred Stock converted an aggregate of 2,029 shares of the Preferred Stock
for an aggregate of 2,029,000 shares of the Company’s common stock. Pursuant to the terms of conversion of the Preferred
Stock, each such share is convertible, upon request and for no additional consideration, into 1,000 shares of the common stock
of the Company. The issuances of the 2,029,000 shares of common stock were exempt from registration under Section 4(a)(2) under
the Securities Act as transactions not involving a public offering to a single existing stockholder who is an accredited investor,
and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by an existing security holder and
no commission or other remuneration was paid.
Between
May 18, 2017 and June 12, 2017, the holder of the Preferred Stock converted an aggregate of 1,525 shares of the Preferred Stock
for an aggregate of 1,525,000 shares of the Company’s common stock. Pursuant to the terms of conversion of the Preferred
Stock, each such share is convertible, upon request and for no additional consideration, into 1,000 shares of the common stock
of the Company. The issuances of the 1,525,000 shares of common stock were exempt from registration under Section 4(a)(2) under
the Securities Act as transactions not involving a public offering to a single existing stockholder who is an accredited investor,
and/or 3(a)(9) under the Securities Act as the Preferred Stock was exchanged for common stock by an existing security holder and
no commission or other remuneration was paid.
On
May 26, 2017, the Company issued an aggregate of 50,000 shares of common stock to a consultant. The issuance of the shares was
exempt from registration under Section 4(a)(2) under the Securities Act as a transaction not involving a public offering, as the
issuance thereof was made to a limited number of persons or entities as compensation for services rendered.
On
May 10, 2017, the Company entered into a Securities Exchange Agreement (the “Exchange Agreement”) with Alpha Capital
Anstalt (“Alpha Capital”), pursuant to which the Company agreed to issue 3,255 shares of Series A Convertible Preferred
Stock, par value $0.01 per share (the “Preferred Stock”), in exchange for the full satisfaction, termination and cancellation
of that outstanding 6% convertible promissory note of the Company in the principal amount of $2,028,767, issued on November 28,
2016 and held by Alpha Capital (the “Convertible Note”). Effective as of May 10, 2017, the Company issued 3,255 shares
of Preferred Stock to Alpha Capital pursuant to the Exchange Agreement. The issuance of the 3,255 shares of Preferred Stock was
exempt from registration under Section 4(a)(2) and/or 3(a)(9) under the Securities Act.
In
March 2017, an institutional holder exercised, in a cashless transaction, 768 warrants and 359 shares of common stock were issued
in connection therewith. The issuance of the 359 share of common stock was exempt from registration under Section 4(a)(2) and/or
3(a)(9) under the Securities Act.
Effective
as of December 27, 2016, the Company closed on the exchange (the “Exchange”) of approximately 9,735,925 shares or
rights to acquire shares of its common stock held by Alpha Capital Anstalt, for 9,736 shares of Preferred Stock. The issuance
of the 9,736 shares of Preferred Stock was exempt from registration under Section 4(a)(2) and/or 3(a)(9) under the Securities
Act.
The
Company issued 26,644,979 shares of common stock to the existing shareholders of Microbot Israel Ltd. (“Microbot Israel”)
and assumed options to purchase an aggregate of 2,614,916 shares of common stock of the existing optionholders of Microbot Israel.
Additionally, the Company issued an aggregate of 7,802,639 restricted shares of its common stock or rights to receive common stock
to certain advisors. Such sales were exempt from registration under Section 4(a)(2) and Regulation D under the Securities Act.
Item
16. Exhibits and financial statement schedules.
(a)
Exhibits.
See
the Exhibit Index immediately preceding the signature page to this registration statement, which is incorporated by reference
herein.
(b)
Financial statement schedules.
No
financial statement schedules are provided because the information called for is not required or is shown either in the financial
statements or the notes thereto.
Item
17. Undertakings.
The
undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each
investor.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
The
undersigned Registrant hereby undertakes:
|
(1)
|
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities Act;
|
|
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement;
|
|
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
|
|
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
|
|
|
|
|
(4)
|
That,
for the purpose of determining liability under the Securities Act to any purchaser in the initial distribution of the securities,
the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this
registration statement, regardless of the method used to sell the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant
to Rule 424 (§230.424 of this chapter);
|
|
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred
to by the undersigned Registrant;
|
|
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned
Registrant or its securities provided by or on behalf of the undersigned Registrant; and
|
|
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
|
|
(5)
|
The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing
of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934,
as amended, or the Exchange Act, (and, where applicable, each filing of an employee benefit plan’s annual report pursuant
to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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|
|
|
|
(6)
|
For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
|
|
|
|
|
(7)
|
For
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
|
EXHIBIT
INDEX
Exhibit
Number
|
|
Description
of Document
|
1.1†
|
|
Form
of Underwriting Agreement.
|
|
|
|
2.1
|
|
Agreement
and Plan of Merger and Reorganization, dated as of August 15, 2016, by and among StemCells, Inc., C&RD Israel Ltd. and
Microbot Medical Ltd. (incorporated by reference to the Company’s Current Report on Form 8-K filed on August 15, 2016).
|
|
|
|
3.1
|
|
Restated
Certificate of Incorporation of the Company (incorporated by reference to the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2006 and filed on March 15, 2007).
|
|
|
|
3.2
|
|
Certificate
of Amendment to the Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s
Current Report on Form 8-K filed on November 29, 2016).
|
|
|
|
3.3
|
|
Certificate
of Amendment to the Restated Certificate of Incorporation (incorporated by reference to the Company’s Current Report
on Form 8-K filed on September 4, 2018).
|
|
|
|
3.4
|
|
Certificate
of Designations of Preferences, Rights and Limitations of the Series A Convertible Preferred
Stock
(incorporated by reference to the Registrant’s
Current Report on Form 8-K filed on December 16, 2016).
|
|
|
|
3.5
|
|
Certificate
of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred
Stock (incorporated by reference to the Registrant’s Current Report on Form 8-K
filed on May 11, 2017).
|
|
|
|
3.6
|
|
Amended
and Restated By-Laws of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on
May 3, 2016).
|
|
|
|
4.1
|
|
Form
of Series A Warrant (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on December 16,
2016).
|
|
|
|
4.2
|
|
Form
of Series B Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed on December 16, 2016).
|
|
|
|
4.3†
|
|
Form
of Pre-Funded Warrant.
|
|
|
|
4.4†
|
|
Form
of Underwriter’s Warrant.
|
|
|
|
4.5
|
|
Form
of Pre-Funded Warrant (incorporated by reference to the Registrant's Current Report on Form 8-K filed on January 16, 2019)
|
|
|
|
4.6
|
|
Form
of Wainwright Warrant (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on January 16,
2019)
|
|
|
|
4.7
|
|
Form
of Wainwright Warrant (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on January 17,
2019).
|
|
|
|
4.8
|
|
Form
of Warrant (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on January 25, 2019).
|
|
|
|
4.9
|
|
Form
of Wainwright Warrant (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on January 25,
2019).
|
|
|
|
5.1†
|
|
Opinion
of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.
|
|
|
|
10.1
|
|
Letter
Agreement between the Company and Alpha Capital Anstalt (incorporated by reference from the Current Report on Form 8-K filed
with the Securities and Exchange Commission on December 23, 2016).
|
|
|
|
10.2
|
|
Securities
Exchange Agreement between the Company and Alpha Capital Anstalt (incorporated by reference to the Company’s Current
Report on Form 8-K filed on November 29, 2016).
|
|
|
|
10.3
|
|
Convertible
Promissory Note in favor of Alpha Capital Anstalt (incorporated by reference to the Company’s Current Report on Form
8-K filed on November 29, 2016).
|
|
|
|
10.4
|
|
Form
of Indemnification Agreement, between the Company and Each of its Directors and Officers (incorporated by reference to the
Company’s Current Report on Form 8-K filed on November 29, 2016).
|
|
|
|
10.5
|
|
Employment
Agreement with Harel Gadot (incorporated by reference to the Company’s Current Report on Form 8-K filed on November
29, 2016).
|
|
|
|
10.6
|
|
Services
Agreement with DBN Finance Services Ltd. (incorporated by reference to the Company’s Current Report on Form 8-K filed
on November 29, 2016).
|
|
|
|
10.7
|
|
Employment
Agreement with Yehezkel Himelfarb (incorporated by reference to the Company’s Current Report on Form 8-K filed on December
8, 2016).
|
|
|
|
10.8
|
|
Securities
Exchange Agreement, dated December 16, 2016, by and between StemCells, Inc. and Alpha Capital Anstalt (incorporated by reference
to the Company’s Current Report on Form 8-K filed on December 16, 2016).
|
|
|
|
10.9
|
|
Form
of Securities Purchase Agreement, dated January 5, 2017 (incorporated by reference to the Company’s Current Report on
Form 8-K filed on January 5, 2017).
|
|
|
|
10.10
|
|
Placement
Agreement, dated January 4, 2017 (incorporated by reference to the Company’s Current Report on Form 8-K filed on January
5, 2017).
|
|
|
|
10.11
|
|
Asset
Purchase Agreement, dated November 11, 2016, by and among StemCells, Inc., Stem Cell Sciences Holdings Limited, Stemcells
California, Inc., and Boco Silicon Valley, Inc. (incorporated by reference to the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2016 and filed on March 21, 2017).
|
|
|
|
10.12
|
|
Escrow
Agreement, dated as of November 11, 2016, by and among BOCO Silicon Valley, Inc., StemCells, Inc., Continental Stock Transfer
& Trust Company, Kenneth B. Stratton and Alpha Capital Anstalt (incorporated by reference to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2016 and filed on March 21, 2017).
|
Exhibit
Number
|
|
Description
of Document
|
10.13
|
|
Contract
Research Agreement, dated January 27, 2017, with The Washington University (incorporated by reference to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and filed on March 21, 2017).
|
|
|
|
10.14
|
|
License
Agreement, dated June 20, 2012, by and between Technion Research and Development Foundation, and Microbot Medical Ltd. (incorporated
by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and filed on March
21, 2017).
|
|
|
|
10.15
|
|
Microbot
Medical Inc. 2017 Equity Incentive Plan (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for
the Quarter ended September 30, 2017, filed on November 14, 2017).
|
|
|
|
10.16
|
|
Letter
Agreement, by and between the Company and Martin McGlynn, dated January 10, 2016 (incorporated by reference to the Company’s
Quarterly Report on Form 10-Q for the Quarter ended March 31, 2016, filed on May 10, 2016).
|
|
|
|
10.17
|
|
Severance
Buy-Out Agreement, Compromise and Release, by and between StemCells, Inc. and Ken Stratton, dated June 6, 2016 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15,
2016).
|
|
|
|
10.18
|
|
Severance
Buy-Out Agreement, Compromise and Release, by and between StemCells, Inc. and Gregory Schiffman, dated June 6, 2016 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15,
2016).
|
|
|
|
10.19
|
|
Severance
Buy-Out Agreement, Compromise and Release, by and between StemCells, Inc. and Ian Massey, dated June 6, 2016 (incorporated
by reference to the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15,
2016).
|
|
|
|
10.20
|
|
Cooperation
and Consulting Agreement, by and between StemCells, Inc. and Ken Stratton, dated June 6, 2016 (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15, 2016).
|
|
|
|
10.21
|
|
Cooperation
and Consulting Agreement, by and between StemCells, Inc. and Gregory Schiffman, dated June 6, 2016 (incorporated by reference
to the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15, 2016).
|
|
|
|
10.22
|
|
Cooperation
and Consulting Agreement, by and between StemCells, Inc. and Ian Massey, dated June 6, 2016 (incorporated by reference to
the Company’s Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15, 2016).
|
|
|
|
10.23
|
|
Trust
Agreement, by and between StemCells, Inc. and David A. Bradlow, dated June 16, 2016 (incorporated by reference to the Company’s
Quarterly Report on Form 10-Q for the Quarter ended June 30, 2016, filed on August 15, 2016).
|
|
|
|
10.24
|
|
Securities
Exchange Agreement, dated May 10, 2017, by and between the Company and Capital Anstalt (incorporated by reference to the Company’s
Current Report on Form 8-K filed on January 8, 2018).
|
|
|
|
10.25
|
|
Asset
Purchase Agreement, dated July 13, 2016, by and between StemCells, Inc. and Miltenyi Biotec, Inc. (incorporated by reference
to the Company’s Current Report on Form 8-K filed on August 15, 2016).
|
|
|
|
10.26
|
|
Settlement
Agreement, dated as of July 29, 2016, by and between BMR-Pacific Research Center LP and StemCells, Inc. (incorporated by reference
to the Company’s Current Report on Form 8-K filed on August 15, 2016).
|
|
|
|
10.27
|
|
Agreement,
dated January 4, 2018, by and between CardioSert Ltd. and Microbot Medical Ltd. (incorporated by reference to the Company’s
Current Report on Form 8-K filed on January 8, 2018).
|
|
|
|
10.29^
|
|
Tolling
and Standstill Agreement, dated as of April 2, 2018, by and among (a) Schulte Roth & Zabel LLP, on behalf of Empery Asset
Master, Ltd., Empery Tax Efficient LP, Empery Tax Efficient II LP, and Hudson Bay Master Fund, Ltd. and (b) Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., on behalf of the Company.
|
|
|
|
10.30
|
|
Engagement
Letter, dated as of October 12, 2018, by and between Microbot Medical Inc. and H.C. Wainwright & Co., LLC (incorporated
by reference to the Registrant’s Current Report on Form 8-K filed on January 16, 2019)
|
|
|
|
10.31
|
|
Form
of Securities Purchase Agreement, dated as of January 14, 2019, by and among Microbot Medical Inc., and the Purchaser (incorporated
by reference to the Registrant’s Current Report on Form 8-K filed on January 16, 2019)
|
|
|
|
10.32
|
|
Form
of Securities Purchase Agreement, dated as of January 15, 2019, by and among Microbot Medical Inc., and the Purchaser (incorporated
by reference to the Registrant’s Current Report on Form 8-K filed on January 17, 2019)
|
|
|
|
10.33
|
|
Form
of Securities Purchase Agreement, dated as of January 23, 2019, by and among Microbot Medical Inc., and the Purchaser (incorporated
by reference to the Registrant’s Current Report on Form 8-K filed on January 25, 2019)
|
|
|
|
21.1
|
|
Subsidiaries
of the Company (incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2016 and filed on March 21, 2017).
|
|
|
|
23.1†
|
|
Consent
of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Reference is made to Exhibit 5.1.
|
|
|
|
23.2
†
|
|
Consent
of Independent Registered Public Accounting Firm.
|
|
|
|
24.1^
|
|
Power
of Attorney.
|
|
|
|
101.INS
|
|
XBRL
Instance.
|
|
|
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema.
|
|
|
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation.
|
|
|
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition.
|
|
|
|
101.LAB
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XBRL
Taxonomy Extension Labels.
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101.PRE
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XBRL
Taxonomy Extension Presentation.
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†
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Filed
herewith.
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^
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Previously
filed.
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SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 4 to registration
statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Hingham, Commonwealth
of Massachusetts, on February 7, 2019 .
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MICROBOT
MEDICAL INC.
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/s/
Harel Gadot
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Harel
Gadot
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President,
Chief Executive Officer and Chairman
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Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Name
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Title
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Date
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/s/
Harel Gadot
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Harel
Gadot
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Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
|
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February
7, 2019
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/s/
David Ben Naim
|
|
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David
Ben Naim
|
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Chief
Financial Officer
(Principal
Financial and Accounting Officer)
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February
7, 2019
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|
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*
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Yoav
Waizer
|
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Director
|
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February
7, 2019
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|
|
|
|
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*
|
|
|
|
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Yoseph
Bornstein
|
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Director
|
|
February
7, 2019
|
|
|
|
|
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*
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|
|
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Pratipatti
Laxminarain
|
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Director
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February
7, 2019
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|
|
|
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*
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|
|
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Scott
Burell
|
|
Director
|
|
February
7, 2019
|
|
|
|
|
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*
|
|
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Martin
Madden
|
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Director
|
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February
7, 2019
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*By:
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/s/
Harel Gadot
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Attorney-in-fact
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