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SHARE CAPITAL
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
SHARE CAPITAL

NOTE 10 - SHARE CAPITAL

 

Share Capital Developments

 

As of December 31, 2022, and 2021, the Company has 7,890,628 and 7,108,133 shares of common stock issued and outstanding, respectively.

 

On October 21, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (the “Investor”), pursuant to which the Company issued and sold, in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market (the “Registered Offering”), (i) an aggregate of 782,495 shares of Common Stock, at an offering price of $4.89 per share and (ii) pre-funded warrants exercisable for up to 240,000 shares of Common Stock (the “Pre-Funded Warrants”) to the Investor at an offering price of $4.8899 per Pre-Funded Warrant, for aggregate gross proceeds from the Offerings (as defined below) of approximately $5,000 before deducting the placement agent fee (as described below) and related offering expenses.

 

Each Pre-Funded Warrant represents the right to purchase one share of Common Stock at an exercise price of $0.0001 per share. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full.

 

In a concurrent private placement (the “Private Placement” and, together with the Registered Offering, the “Offerings”), the Company issued to the Investor (i) Series A preferred investment options to purchase up to 1,022,495 shares of Common Stock (the “Series A Warrants”) at an exercise price of $4.64 per share and (ii) Series B preferred investment options to purchase up to 1,022,495 shares of Common Stock (the “Series B Warrants”) at an exercise price of $4.64 per share. Each Series A Warrant is exercisable immediately and will expire five years from the initial exercise date. Each Series B Warrant is exercisable immediately and will expire two years from the initial exercise date.

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 and FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under FASB ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

The Company analyzed the accounting treatment for the Pre-funded Warrants and for the Common Warrants. The Common Stocks of the Company are recognized as equity under the requirements of Accounting Standard Codification Topic 505 Equity (ASC 505). Based on the Company’s analysis the Warrants were classified as equity.

 

On October 3, 2022 and in connection with the Offerings, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright agreed to serve as the exclusive placement agent for the issuance and sale of securities of the Company pursuant to the Purchase Agreement. As compensation for such placement agent services, the Company paid Wainwright aggregate cash fees and reimbursed Wainwright for its expenses aggregating approximately $565. The Company also issued to Wainwright or its designees warrants to purchase 51,125 shares of Common Stock (the “Wainwright Warrants”). The Wainwright Warrants have a term of five years from the commencement of sales in the Offerings, and have an exercise price of $6.11 per share. Upon any exercise for cash of any preferred investment options issued to investors in the offering, the Company obligate to pay 7% percent of the aggregate gross exercise price of the warrants issued in the Offering and shall issue to Wainwright (or its designees), within five (5) business days of the Company’s receipt of the exercise price, warrants to purchase that number of shares of common stock of the Company equal to five (5.0%) percent of the aggregate number of such shares of common stock underlying the preferred investment options that have been so exercised.

 

 

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

 

The Company analyzed the accounting treatment for the Wainwright Warrants issued to Wainwright. Since the Company did not identify any features causing liability classification of the Wainwright Warrants according to ASC 718, it concluded that the Wainwright Warrants are equity-classified awards.

 

Employee Stock Option Grants

 

During the year ended December 31, 2021, the Company granted to Mr. Harel Gadot, the Company’s Chairman of the Board, President and CEO, options to purchase an aggregate of 190,000 shares of the Company’s common stock, at an exercise price per share of $8.48. The stock options vest over a period of 2 years as outlined in the option agreements evidencing such grants. As a result, the Company recognized compensation expenses for the year ended December 31, 2021, in the total amount of $646.

 

During the year ended December 31, 2021, the Company granted to certain employees and consultants and directors, options to purchase an aggregate of 231,426 shares of the Company’s common stock, at an exercise price per share of $6.72 - $7.26. The stock options vest over a period of 3 years as outlined in the option agreements evidencing such grants. As a result, the Company recognized compensation expenses for the year ended December 31, 2021, in the total amount of $740.

 

During the year ended December 31, 2022, the Company granted to Mr. Harel Gadot, the Company’s Chairman of the Board, President and CEO, options to purchase an aggregate of 260,000 shares of the Common Stock, at an exercise price per share of $3.73-$6.48. The stock options vest over a period of three years as outlined in the option agreements evidencing such grants.

 

During the year ended December 31, 2022, the Company granted to certain employees, consultants and directors, options to purchase an aggregate of 270,822 shares of the Common Stock, at an exercise price per share of $3.73-$6.48. The stock options vest over a period of three years as outlined in the option agreements evidencing such grants.

 

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, 2022 
   Number of stock options   Weighted average exercise price 
         
Outstanding as of December 31, 2021   997,148   $8.48 
Granted   530,822    5.14 
Cancelled   (20,833)   8.16 
Outstanding as of December 31, 2022   1,507,137   $7.31 
           
Vested as of December 31, 2022   899,609   $8.52 

 

   For the Year Ended December 31, 2021 
   Number of stock options   Weighted average exercise price 
         
Outstanding as of December 31, 2020   575,722   $9.14 
Granted   421,426    7.60 
Outstanding as of December 31, 2021   997,148   $8.48 
           
Vested as of December 31, 2021   568,053   $9.08 

 

 

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

 

The Company recognizes forfeitures of outstanding options as they occur.

 

The intrinsic value is calculated as 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, 2022 and December 31, 2021, respectively.

 

As of December 31, 2022, and 2021, the aggregate intrinsic value of the outstanding options is $185 and $974 respectively, and the aggregate intrinsic value of the exercisable options is $185 and $815, respectively.

 

As of December 31, 2022, there were approximately $2,036 of total unrecognized compensation costs related to unvested share-based compensation awards granted under the Share Incentive Plan. The costs are expected to be recognized over a weighted average period of 2.039 years

 

The stock options outstanding as of December 31, 2022 and December 31, 2021, summarized by exercise prices, are as follows:

 

Exercise price $  Stock options outstanding as of December 31, 2022   Stock options outstanding as of December 31, 2021   Weighted average remaining contractual life – years as of December 31, 2022   Weighted average remaining contractual life – years as of December 31, 2021  Stock options exercisable as of December 31, 2022   Stock options exercisable as of December 31, 2021 
3.73   211,000    -    10    -    -    - 
4.20   77,846    77,846    2.0    3.0    77,846    77,846 
4.80   32,500    -    9.6    -    -    - 
5.06   15,808    15,808    6.8    7.8    15,808    11,064 
5.71   99,823    -    9.7    -    -    - 
5.95   17,503    17,503    6.6    7.6    17,503    13,564 
6.16   31,492    31,492    7.5    8.5    26,282    16,834 
6.48   182,500    -    9.1    -    59,312    - 
6.72   117,500    125,000    8.4    9.4    64,624    31,249 
7.00   81,426    81,426    8.8    9.8    38,676    - 
7.22   11,084    11,084    7.9    8.9    7,756    4,432 
7.26   20,000    25,000    8.8    9.8    8,000    - 
8.16   4,902    4,902    7.6    8.6    3,799    2,328 
8.48   190,000    190,000    8.1    9.1    166,250    - 
8.60   9,304    9,304    6.1    7.1    9,304    9,304 
9.00   10,000    10,000    5.6    6.6    10,000    10,000 
9.64   166,666    166,666    7.2    8.2    166,666    166,666 
15.30   35,199    38,533    5.0    6.0    35,199    38,533 
15.75   131,007    131,007      4.7      5.7    131,007    124,656 
(*)    61,577    61,577    3.3    4.3    61,577    61,577 
    1,507,137    997,148    7.6    7.6    899,609    568,053 

 

(*) Less than $0.01.

 

Compensation expense recorded by the Company for its stock-based employee compensation awards in accordance with ASC 718-10 for the years ended December 31, 2022 and 2021 was $1,752 and $1,386, respectively.

 

 

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

 

Employee Stock Option Grants

 

The grant date fair values of stock options granted in the years ended December 31, 2022 and 2021 were estimated using the Black-Scholes valuation model with the following: 

 

   For the Years Ended December 31, 
   2022   2021 
Expected volatility   

111.2%-161.7%

    118.3%-134.3% 
Risk-free interest   1.7%- 3.7%    0.4%-1.2% 
Dividend yield   -%   -%
Expected terms (years)   6.2    5.3 

 

Warrants

 

The remaining outstanding warrants and terms as of December 31, 2022 and 2021 are as follows:

 

Issuance date  Outstanding and exercisable as of December 31, 2022   Outstanding and exercisable as of December 31, 2021   Exercise Price   Exercisable Through
Series A (2013)   183    183   $2,754.00   April 9, 2023
Series B (2016)   -    2,770   $40.50   March 14, 2022
Warrant to underwriters 1.2019   -    8,082   $8.13   July 14, 2022
Warrant to underwriters 1.2019   -    29,500   $12.50   July 15, 2022
Warrant to underwriters 12.2019   45,643    45,643   $13.13   June 25, 2023
Warrant to underwriters 12.2019   47,619    47,619   $13.13   June 27, 2023
Warrant to underwriters 12.2019   45,045    45,045   $13.88   June 30, 2023
Series A 10.2022   1,022,495    -   $4.64   October 25, 2027
Series B 10.2022   1,022,495    -   $4.64   October 25, 2024
Warrant to underwriters 10.2022   51,125    -   $6.11   October 21, 2027