Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

The following discussion should be read in conjunction with our unaudited financial statements and related notes included in Item 1, "Financial Statements," of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Certain information contained in this MD&A includes "forward-looking statements." Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including many assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including those risks described in detail in the section entitled "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words "may," "should," "would," "will," "could," "scheduled," "expect," "anticipate," "estimate," "believe," "intend," "seek," or "project" or the negative of these words or other variations on these words or comparable terminology.

In light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance that the forward-looking statements contained in this section and elsewhere in this Quarterly Report on Form 10-Q will in fact occur. Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

Overview

Microbot is a 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 robotic technologies with the goal of redefining surgical robotics while improving surgical outcomes for patients.

Using our LIBERTY^® technological platform, we have developed the first-ever fully disposable robot for various endovascular interventional procedures. The LIBERTY^® Endovascular Robotic Surgical System is designed to maneuver guidewires and over-the-wire devices (such as microcatheters) within the body's vasculature. It is intended for the remote delivery and manipulation of guidewires and catheters, and remote manipulation of guide catheters to facilitate navigation to anatomical targets, with the current intention to focus in the peripheral vasculature market. It is designed to eliminate the need for extensive capital equipment requiring dedicated Cath-lab rooms as well as dedicated staff.

Technological Platforms

LIBERTY^® Endovascular Robotic Surgical System

The FDA-cleared LIBERTY^® Endovascular Robotic Surgical System features a unique compact, single-use design with the capability to be operated remotely, reduce radiation exposure and physical strain to the physician, as well as the potential to reduce the use of consumables.

The LIBERTY^® Endovascular Robotic Surgical System is designed to maneuver guidewires and over-the-wire devices (such as microcatheters) within the body's vasculature. It eliminates the need for extensive capital equipment requiring dedicated Cath-lab rooms as well as dedicated staff, when compared to other robotic systems.

We believe the addressable markets for the LIBERTY^® Endovascular Robotic Surgical System in its current version includes the peripheral interventional radiology market, with future versions expected to include the Interventional Cardiology and Interventional Neuroradiology markets.

The unique characteristics of the LIBERTY^® Endovascular Robotic Surgical System - compact, mobile, disposable and remotely controlled - also may open the opportunity of expanding telerobotic interventions to patients with limited access to life-saving procedures.

The LIBERTY^® Endovascular Robotic Surgical System has been designed to have the following attributes:

	●	Compact size - Eliminates the need for large capital equipment in dedicated cath-lab rooms with dedicated staff.
	●	Fully disposable - To our knowledge, the first fully disposable robotic system for endovascular procedures.
	●	One & Done® - Has the potential to be compatible with our NovaCross® products or possibly other instruments that combine guidewire and microcatheter into a single device. We are currently evaluating this combination in different applications.
	●	State of the art maneuverability - Provides linear and rotational control of its guidewire, as well as linear and rotational control of a guide catheter, and the linear motion for an additional microcatheter ("over-the-wire") device.
	●	Compatibility with a wide range of commercially-available guidewires, microcatheters and guide-catheters.
	●	Enhanced operator safety and comfort - Aims to reduce exposure to ionizing radiation and reduce physical strain due to the need for heavy lead vests otherwise to be worn during procedures.
	●	Ease of use - A remote control designed to be intuitive aims to simplify advanced procedures while shortening the physician's learning curve.
	●	Telemedicine capability - May serve as a platform for supporting tele-catheterization, carried out remotely by highly trained specialists. Our research collaboration with Corewell Health™ has demonstrated the feasibility of using the LIBERTY® Endovascular Robotic System between separate and remote facilities in a coronary simulation model. The project assesses the feasibility of using LIBERTY® to perform simulated cardiovascular interventional procedures across two sites within the Corewell Health™ system located 5 miles apart. The telesurgery feature of LIBERTY® is still being evaluated and is not covered under the Company's 510(k) clearance with the FDA.

On August 13, 2024, we announced that we received ISO 13485:2016 certification for our quality management system. Receiving ISO 13485 certification indicates that a company has developed and implemented robust policies and procedures for the development and manufacture of regulated medical products. This is a certification ensuring compliance with the Quality Management System (QMS) requirements of the EU Medical Devices Regulation (MDR 2017/745) and supporting our future CE Mark approval, and ultimately allowing us to market the LIBERTY^® Endovascular Robotic Surgical System in Europe as well as other regions who accept the CE Mark. We anticipate CE Mark approval in the second half of 2026. However, we can give no assurance that we will meet this or any other projected milestones, if ever. In addition, in view of the recent revision published by the FDA regarding the quality system management regulation and its incorporation by reference of the ISO 13485 standard, we believe it will help streamline our transition into this revised FDA regulation.

The Company entered into an agreement with Emory University, which will allow the parties to evaluate and explore the potential for a future collaboration in connection with autonomous robotics in endovascular procedures. Under the terms of the agreement, Emory University will assume the responsibility of exploring the feasibility of integrating the LIBERTY^® Endovascular Robotic Surgical System with an imaging system to create an autonomous robotic system for endovascular procedures.

On September 8, 2025, we announced that the FDA has granted 510(k) clearance for the LIBERTY^® Endovascular Robotic Surgical System.

NovaCross^®

On October 6, 2022, we purchased substantially all of the assets, including intellectual property, devices, components and product related materials of Nitiloop Ltd., an Israeli limited liability company. The assets include intellectual property and technology in the field of intraluminal revascularization devices with anchoring mechanism and integrated microcatheter, and the products or potential products incorporating the technology owned by Nitiloop and designated by Nitiloop as "NovaCross", "NovaCross Xtreme" and "NovaCross BTK" and any enhancements, modifications and improvements.

Israel-Hamas War

On October 7, 2023, the State of Israel, where our research and development and other operations are primarily based, suffered a surprise attack by hostile forces from Gaza, which led to Israeli military operation at first in Gaza and then in Lebanon. These military operations and related activities, such as the recent collapse of the Assad regime in Syria and Israel's subsequent military operations in Syria, and the escalation of military operations by and against the Houthis in Yemen and the Iranian regime, are on-going as of the issuance date of these financial statements, although there have been cease fires and lulls in military operations from time to time, including the most recent cease-fire with Hamas on October 10, 2025.

We have considered various ongoing risks relating to the military operations and related matters, including:

●	That some of our Israeli subcontractors, vendors, suppliers and other companies in which the Company relies, may not be fully active and operational, as instructed by the relevant authorities;
●	A slowdown in the number of international flights in and out of Israel;
●	The decreasing international regard for Israeli-based companies in certain quarters, including as a result of the Israeli government's policies in Gaza and the West Bank; and
●	Possible and actual boycotts of Israel and Israeli-based companies, which may adversely affect our ability to do business in certain jurisdictions or with certain industry groups or potential customers, among others.

We are closely monitoring how the military operations and related activities could adversely affect our anticipated milestones and our Israel-based activities to support future clinical and regulatory milestones, including our ability to import materials that are required to construct our devices and to ship them outside of Israel. As of the issuance date of this Quarterly Report on Form 10-Q, we have determined that there have not been any materially adverse effects on its business or operations, but we continue to monitor the situation, as any collapse of a cease-fire with any nation or group hostile to Israel from time to time, or any future escalation or change could result in a material adverse effect on the ability of our Israeli office to support our clinical and regulatory activities. We do not have any specific contingency plans in the event of any such escalation or change.

Financial Operations Overview

Research and Development Expenses, net

Research and development expenses consist primarily of salaries and related expenses and overhead for Microbot's research, development and engineering personnel, prototype materials and research studies, obtaining and maintaining Microbot's patent portfolio, net of government grants. Microbot expenses its research and development costs as incurred .

Sales, General and Administrative Expenses

Sales, general and administrative expenses consist primarily of the costs associated with management salaries and benefits, professional fees for accounting, auditing, consulting, legal services, and insurance expenses.

Microbot expects that its sales, general and administrative expenses will increase over the long-term, as it expands its operating activities, maintains compliance with exchange listing and SEC requirements. Microbot expects these potential increases will likely include management costs, legal fees, accounting fees, directors' and officers' liability insurance premiums and expenses associated with investor relations.

Income Taxes

Microbot has incurred net losses and has not recorded any income tax benefits for the losses. It 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 fully utilized in the future.

Critical Accounting Policies and Significant Judgments and Estimates

Management's discussion and analysis of Microbot's financial condition and results of operations are based on its condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these condensed consolidated financial statements requires Microbot to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. Microbot bases its estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

While Microbot's significant accounting policies are described in more detail in the notes to its consolidated financial statements, Microbot believes the following accounting policies are the most critical for fully understanding and evaluating its consolidated financial condition and results of operations.

Contingencies

Management records and discloses legal contingencies in accordance with Accounting Standards Codification ("ASC") Topic 450 Contingencies. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company monitors the stage of progress of its litigation matters to determine if any adjustments are required.

Fair Value of Financial Instruments

The Company measures the fair value of certain of its financial instruments on a recurring basis.

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.

Results of Operations

Comparison of Three and Nine Months Ended September 30, 2025 and 2024

The following table sets forth the key components of Microbot's results of operations for the three and nine month periods ended September 30, 2025 and 2024 (in thousands):

		Three Months Ended September 30,												Nine Months Ended September 30,
		2025				2024				Change				2025				2024				Change
Research and development, net		$	(1,171	)		$	(2,060	)		$	889			$	(4,741	)		$	(4,646	)		$	(95	)
Sales, General and administrative			(2,690	)			(1,240	)			(1,450	)			(5,864	)			(3,549	)			(2,315	)
Other income			-				-				-				316				-				316
Financing income, net			284				85				199				611				144				467

Research and Development Expenses, net. The decrease for the three months ended September 30, 2025, compared to the same periods in 2024, was primarily due to the recognition of the new IIA grant in the third quarter of 2025 and reversal of provision related to clinical trial costs following a revised lower charge, the decrease is offset by increase in costs associated with outsourcing the manufacturing of the Company's LIBERTY product and increase in payroll and related expenses due to salary adjustments and bonuses during 2025 periods.

The Increase for the nine months ended September 30, 2025, compared to the same periods in 2024, was primarily due to increased payroll and bonuses and higher costs associated with outsourcing the manufacturing of the Company's LIBERTY product, offset by the recognition of the new IIA grant.

Sales, General and Administrative Expenses. The increase in sales, general and administrative expenses for the three and nine months ended September 30, 2025, compared to the same periods in 2024, was primarily due to higher payroll expenses resulting from new hires to support commercialization readiness, as well as salary increases and bonuses. Additional contributing factors included higher recruitment fees, conference expenses, and costs related to marketing materials.

Financing Income, net. The increase in financing income, net, for the three and nine months ended September 30, 2025, compared to same periods in 2024, was primarily due to interest income earned on marketable securities, following the investments of capital raised during the 2025 periods.

Liquidity and Capital Resources

To date, Microbot has not generated revenues from operations. Microbot has incurred losses since inception and negative cash flows from operating activities for all periods presented. As of September 30, 2025, Microbot had a net working capital of approximately $77.9 million, consisting primarily of cash and cash equivalents and marketable securities. This compares to net working capital of approximately $3.4 million as of December 31, 2024. Microbot anticipates that it will continue to incur net losses for the foreseeable future as it continues increasing its commercialization capabilities, continues research and development efforts for future versions or applications of its primary product candidate, and continues to incur costs associated with being a public company.

Microbot has funded its operations through the issuance of capital stock, grants from the Israeli Innovation Authority, and convertible debt. Since inception (November 2010) through September 30, 2025, Microbot has raised cash proceeds of approximately $165.2 million and incurred a total cumulative loss of approximately $100.6 million . In addition, subsequent to the balance sheet date in October 2025, Microbot raised an additional approximately $2.8 million in cash proceeds.

Since January 1, 2025, we have raised the following amounts :

	●	An aggregate of approximately $1.1 million in January 2025, before fees and expenses of $65,452, through our ATM Agreement;
	●	In January 2025, an aggregate of approximately $15.6 million in gross proceeds, before fees and expenses of approximately $1.4 million, from institutional investors;
	●	In January 2025, approximately $916,000 in gross proceeds from the exercise of certain outstanding Series E preferred investment options, before fees and expenses of $64,164;
	●	In February 2025, an aggregate of approximately $13.0 million in gross proceeds, before fees and expenses of approximately $1.2 million, from institutional investors;

	●	In April 2025, approximately $2.3 million in gross proceeds from the exercise of outstanding Series E and Series F preferred investment options, before fees and expenses of approximately $161,000;
	●	In May 2025, approximately $1.4 million in gross proceeds from the exercise of outstanding Series F preferred investment options, before fees and expenses of approximately $98,000;
	●	In June 2025, approximately $1.3 million in gross proceeds from the exercise of outstanding Series E, F and G preferred investment options, before fees and expenses of approximately $93,000;
	●	In July 2025, approximately $12.2 million in gross proceeds from the exercise of outstanding Series F and G preferred investment options, before fees and expenses of approximately $706,000;
	●	In August 2025, approximately $15.2 million in gross proceeds from the exercise of outstanding Series E, G, H, I preferred investment options, before fees and expenses of approximately $1.1 million;
	●	In September 2025, approximately $472,500 in gross proceeds from the exercise of outstanding Series H preferred investment options, before fees and expenses of $33,075;
	●	In September 2025, approximately $895,744 in gross proceeds from the exercise of placement agent options;
	●	In September 2025, an aggregate of approximately $26.5 million in gross proceeds from the inducement transaction exercise of outstanding preferred investment options, before fees and expenses of approximately $2.2 million, from institutional investors; and
	●	In October 2025, an aggregate of approximately $2.8 million in gross proceeds from the inducement transaction exercise of outstanding preferred investment options, before fees and expenses of approximately $223,000, from institutional investors.

Microbot Israel obtained from the Israeli Innovation Authority ("IIA") grants for participation in research and development for the years 2013 through September 30, 2025, in the total amount of approximately $2.2 million. In July 2025 the IIA approved a new grant in the amount of approximately NIS 2.2 million (approximately $630,000) to further finance the development of the manufacturing process of the LIBERTY^® Endovascular Robotic Surgical System. On October 6, 2022, Microbot Israel entered into an agreement with Nitiloop Ltd. to acquire substantially all of its assets. Nitiloop received grants from the IIA in the aggregate amount of approximately $925,000 and Microbot Israel took over the liability to repay such grants.

Microbot Israel is obligated to pay royalties amounting to 3%-5% of its future sales up to the amount of the grants. The grants are linked to the exchange rate of the dollar to the New Israeli Shekel and bears interest at an annual rate of SOFR, a benchmark interest rate which replaced LIBOR. Under the terms of the grants and applicable law, Microbot is restricted from transferring any technologies, know-how, manufacturing or manufacturing rights developed using the grant outside of Israel without the prior approval of the Israel Innovation Authority. Microbot has no obligation to repay the grants, if the applicable project fails, is unsuccessful or aborted before any sales are generated. The financial risk is assumed completely by the IIA.

As of September 30, 2025, Microbot Israel received a grant from the Ministry of Economy, in the amount of approximately $50,000 for participation in expenses related to the LIBERTY^® Endovascular Robotic Surgical System in the U.S. market.

In relation to the Ministry of Economy grant, the Company is obligated to pay royalties amounting to 3% of future sales of the LIBERTY^® Endovascular Robotic Surgical System up to the grant amount plus interest.

To the extent available, Microbot may continue to raise capital through future public and private issuances of debt and/or equity securities, including pursuant to a possible At-the-Market offering and upon the cash exercise of its outstanding investment options, to further fund its commercial activities and working capital and general business purposes. The capital raises from issuances of equity securities or equity-linked securities could result in additional dilution to Microbot's shareholders. In addition, to the extent Microbot determines to incur indebtedness, Microbot's incurrence of debt could result in debt service obligations and operating and financing covenants that would restrict its operations. Microbot can provide no assurance that financing will be available in the amounts it may need, at the times it needs it or on terms acceptable to it, if at all.

As of the filing date of this Quarterly Report on Form 10-Q, management believes we have sufficient funds for our operations for in excess of one year.

Cash Flows

The following table provides a summary of the net cash flow activity for each of the periods presented (in thousands):

		Nine Months Ended September 30,
		2025				2024
Net cash used in operating activities		$	(9,288	)		$	(7,136	)
Net cash flows (used in) provided by investing activities			(70,851	)			42
Net cash provided by financing activities			83,734				5,104
Increase (decrease) in cash, cash equivalents and restricted cash		$	3,595			$	(1,990	)

The increase in net cash flows used in operating activities in 2025 compared with 2024 was primarily from an increase in research and development expenses relating to the LIBERTY^® Endovascular Robotic Surgical System as we shift to commercialization of the product and due to an increase in salary and bonus expenses.

The decrease in net cash flows provided (used) in investing activities in 2025 compared with 2024 was mainly due to an increase in the purchases of marketable securities.

The increase in 2025 in net cash flows provided by financing activities in 2025 compared with 2024 was due to increased capital raising activities.