Microbot Medical (MBOT) risk factors, FY2024 10-K

Risks Relating to Microbot’s Financial Position and Need for Additional Capital

1. 01Microbot has had no revenue and has incurred significant operating losses since inception and is expected to continue to incur significant operating losses for the foreseeable future. The Company may never become profitable or, if achieved, be able to sustain profitability
2. 02Microbot has a limited operating history outside of being a research and development-stage company, which may make it difficult to evaluate the prospects for the Company’s future viability
3. 03Microbot will need additional funding. If Microbot is unable to raise capital when needed, it could be forced to delay, reduce or eliminate its product development programs or commercialization efforts

Risks Relating to the Development and Commercialization of Microbot’s Product Candidates

1. 04Unsuccessful studies, trials or procedures relating to product candidates under development or that we may develop, or applications for such candidates, could have a material adverse effect on our prospects
2. 05The results of Microbot’s research and development efforts are uncertain and there can be no assurance of the commercial success of Microbot’s product candidates
3. 06Microbot may not meet its development and commercialization objectives in a timely manner or at all
4. 07Microbot’s ability to expand its technology platforms for other uses may be limited
5. 08Microbot will depend upon the ability of third parties, including contract research organizations, collaborative academic groups, future clinical trial sites and investigators, to conduct or to assist the Company in conducting clinical trials for its product candidates, if such trials become necessary
6. 09If the size of the commercial opportunities in any of Microbot’s target markets is smaller than it anticipates, Microbot may not be able to achieve profitability and growth. It is difficult to predict the penetration, future growth rate or size of the market for Microbot’s product candidate
7. 10Customers will be unlikely to buy the LIBERTY® Endovascular Robotic Surgical System or any other product candidates unless Microbot can demonstrate that they can be produced for sale to consumers at attractive prices
8. 11Microbot has relied on, and intends to continue to rely on, third-party manufacturers to produce its product candidates
9. 12If Microbot’s product candidates are not considered to be a safe and effective alternative to existing technologies, Microbot will not be commercially successful
10. 13Microbot may be subject to penalties and may be precluded from marketing its product candidates if Microbot fails to comply with extensive governmental regulations
11. 14If Microbot is not able to both obtain and maintain adequate levels of third-party reimbursement for procedures involving its product candidates after they are approved for marketing and launched commercially, it would have a material adverse effect on Microbot’s business
12. 15Microbot’s business plan with respect to the LIBERTY® Endovascular Robotic Surgical System relies on the broad adoption by doctors of the product for its planned applications
13. 16Microbot products may in the future be subject to mandatory product recalls that could harm its reputation, business and financial results
14. 17If Microbot’s future commercialized products cause or contribute to a death or a serious injury, Microbot will be subject to Medical Device Reporting regulations, which can result in voluntary corrective actions or agency enforcement actions
15. 18Microbot could be exposed to significant liability claims if Microbot is unable to obtain insurance at acceptable costs and adequate levels or otherwise protect itself against potential product liability claims
16. 19If Microbot fails to retain certain of its key personnel and attract and retain additional qualified personnel, Microbot might not be able to pursue its growth strategy effectively

Risks Relating to International Business

1. 20In order for Microbot to market its product candidates in countries other than the United States, it must comply with the safety and quality regulations in such countries
2. 21Microbot operations in international markets involve inherent risks that Microbot may not be able to control
3. 22Microbot’s financial results may be affected by fluctuations in exchange rates and Microbot’s current currency hedging strategy may not be sufficient to counter such fluctuations

Risks Relating to Microbot’s Intellectual Property

1. 23Intellectual property litigation and infringement claims could cause Microbot to incur significant expenses or prevent Microbot from selling certain of its product candidates
2. 24If Microbot or TRDF are unable to protect the patents or other proprietary rights relating to Microbot’s product candidates, or if Microbot infringes on the patents or other proprietary rights of others, Microbot’s competitiveness and business prospects may be materially damaged
3. 25Dependence on patent and other proprietary rights and failing to protect such rights or to be successful in litigation related to such rights may result in Microbot’s payment of significant monetary damages or impact offerings in its product portfolios

Risks Relating to Operations in Israel

1. 26Existing and historical risks relating to our operations in Israel are being exacerbated by the current military actions and operations, and related activities, that commenced with the surprise attack on the State of Israel on October 7, 2023
2. 27Microbot has facilities located in Israel, and therefore, political conditions in Israel may affect Microbot’s operations and results
3. 28Political relations could limit Microbot’s ability to sell or buy internationally
4. 29Israel’s economy may become unstable
5. 30Exchange rate fluctuations between the U.S. dollar and the NIS currencies may negatively affect Microbot’s operating costs
6. 31Funding and other benefits provided by Israeli government programs may be terminated or reduced in the future and the terms of such funding may have a significant impact on future corporate decisions
7. 32In addition, as a result of our 2022 agreement with Nitiloop, we took over the liability to repay Nitiloop’s IIA grants in the amount of approximately $925,000
8. 33Some of Microbot’s employees are obligated to perform military reserve duty in Israel
9. 34It may be difficult to enforce a non-Israeli judgment against Microbot or its officers and directors

Risks Relating to Microbot’s Securities, Governance and Other Matters

1. 35If we fail to comply with the continued listing requirements of The Nasdaq Capital Market, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted
2. 36Anti-takeover provisions in the Company’s charter and bylaws under Delaware law may prevent or frustrate attempts by stockholders to change the board of directors or current management and could make a third-party acquisition of the Company difficult

General Risks

1. 37Political, social and geopolitical conditions can adversely affect our business
2. 38Political uncertainty may have an adverse impact on our operating performance and results of operations
3. 39Raising additional capital may cause dilution to the Company’s investors, restrict its operations or require it to relinquish rights to its technologies or product candidates
4. 40Information technology failures and data security breaches could harm our business
5. 41Our business strategy in part relies on identifying, acquiring and developing complementary technologies and products, which entails risks which could negatively affect our business, operations and financial condition
6. 42The market price for our common stock may be volatile
7. 43The issuance of shares upon exercise of outstanding warrants and options could cause immediate and substantial dilution to existing stockholders