NOTE 11 - SHARE CAPITAL

A. Preferred investment options inducement

On December 29, 2023, the Company entered into a preferred investment option exercise inducement offer letter with certain holders of existing (i) Series A preferred investment options to purchase 1,022,495 shares of the Company’s common stock at an exercise price of $2.20 per share, issued on October 25, 2022, as amended on May 24, 2023, (ii) Series C preferred investment options to purchase 350,878 shares of the Company’s common stock at an exercise price of $2.075 per share, issued on June 6, 2023, and (iii) Series D preferred investment options to purchase 312,309 shares of the Company’s common stock at an exercise price of $3.19 per share issued on June 26, 2023, pursuant to which the holders agreed to exercise for cash such preferred investment options to purchase an aggregate of 1,685,682 shares of the Company’s common stock, at a reduced exercised price of $1.62 per share, in consideration for the Company’s agreement to issue new series E preferred investment options having terms to purchase up to 1,685,682 shares of the Company’s common stock (the “Inducement Investment Options”). Each Inducement Investment Option has an exercise price equal to $1.50 per share, and is exercisable from the date of the issuance until five and one-half (5.5) years following the date of the issuance. The estimated fair value of the Inducement Investment Options using a Black-Scholes options pricing model is approximately $1,853. At the closing on January 3, 2024, the Company received aggregate gross proceeds of approximately $2,730 from the exercise of such preferred investment options by the holders and the sale of the Inducement Investment Options, before deducting placement agent fees and other offering expenses of approximately $333. The Company also issued to Wainwright or its designees preferred investment options to purchase up to 84,284 shares of common stock which have the same terms as the Inducement Investment Options except for an exercise price equal to $2.025 per share. The estimated fair value of the preferred investment options using a Black-Scholes options pricing model is approximately $89.

B. Registered direct and private placement offerings:

On June 3, 2024, the Company entered into Securities Purchase Agreements with institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market, an aggregate of 1,566,669 shares of the Company’s common stock, par value $0.01 per share, at an offering price of $1.50 per share, for aggregate gross proceeds of approximately $2,350 before deducting the placement agent fee and related offering expenses of approximately $328. In a concurrent private placement, the Company agreed to issue to the investors series F preferred investment options to purchase up to 3,133,338 shares of common stock at an exercise price of $1.50 per share. Each Series F preferred investment option is exercisable immediately and will expire two years from the initial exercise date.

The Company also issued to Wainwright or its designees preferred investment options to purchase up to 78,333 shares of common stock which have the same terms as investors’ preferred investment options except for an exercise price equal to $1.875 per share.

On January 6, 2025, the Company entered into Securities Purchase Agreements with institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of the Nasdaq Stock Market, an aggregate of 4,000,001 shares of the Company’s common stock, par value $0.01 per share, at an offering price of $1.75 per share, for aggregate gross proceeds from the offerings of approximately $7,000 before deducting the placement agent fee and related offering expenses of approximately $690. In a concurrent private placement, the Company agreed to issue to the investors series G preferred investment options to purchase up to 8,000,002 shares of common stock at an exercise price of $1.75 per share. Each Series G preferred investment option is exercisable immediately and will expire two years from the initial exercise date. The Company also issued to Wainwright or its designees preferred investment options to purchase up to 200,000 shares of common stock which have the same terms as investors’ preferred investment options except for an exercise price equal to $2.1875 per share.

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

NOTE 11 - SHARE CAPITAL

On January 7, 2025, the Company entered into Securities Purchase Agreements with institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of the Nasdaq Stock Market, an aggregate of 3,788,550 shares of the Company’s common stock, par value $0.01 per share, at an offering price of $2.27 per share, for aggregate gross proceeds from the offerings of approximately $8,600 before deducting the placement agent fee and related offering expenses of approximately $818. In a concurrent private placement, the Company agreed to issue to the investors series H preferred investment options to purchase up to 7,577,100 shares of common stock at an exercise price of $2.10 per share. Each Series H preferred investment option is exercisable immediately and will expire two years from the initial exercise date. The Company also issued to Wainwright or its designees preferred investment options to purchase up to 189,428 shares of common stock which have the same terms as investors’ preferred investment options except for an exercise price equal to $2.8375 per share.

On February 9, 2025, the Company entered into Securities Purchase Agreements with institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of the Nasdaq Stock Market, an aggregate of 6,103,289 shares of the Company’s common stock, par value $0.01 per share, at an offering price of $2.13 per share, for aggregate gross proceeds from the offerings of approximately $13,000 before deducting the placement agent fee and related offering expenses of approximately $1,175. In a concurrent private placement, the Company agreed to issue to the investors series I preferred investment options to purchase up to 12,206,578 shares of common stock at an exercise price of $2.13 per share. Each Series I preferred investment option is exercisable on the later of (i) the date on which the amendment to the Company’s articles of incorporation that increases the number of authorized shares of common stock to an amount of shares of common stock sufficient for the exercise in full of the series I preferred investment options is filed and accepted with the State of Delaware law (such date, the “Authorized Share Increase Date”) and (ii) the date on which approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market (or any successor entity) from the stockholders of the Company with respect to the issuance of all the series I preferred investment options and the shares of common stock issuable upon the exercise thereof, is received and deemed effective under Delaware law (the “Initial exercise date”), and will expire two years from the initial exercise date. Net cash settlements are not permitted under any event under the Securities Purchase Agreements.

The Company also issued to Wainwright or its designees preferred investment options to purchase up to 305,164 shares of common stock which have the same terms as investors’ preferred investment options except for an exercise price equal to $2.6625 per share.

On June 10, 2025, at the Company’s annual meeting of stockholders, an amendment to the Company’s articles of incorporation was approved, increasing the number of authorized shares of common stock to 120,000,000. The amendment was subsequently filed with and accepted by the State of Delaware law and became effective on that date. Refer to Note 11F.

As a result, the Series I preferred investment options to purchase up to 12,206,578 shares of common stock at an exercise price of $2.13 per share, and the placement agent preferred investment options to purchase up to 305,164 shares of common stock at an exercise price of $2.6625 per share, each of which was issued on February 11, 2025, became immediately exercisable until their two year anniversary.

C. Equity Classification:

The common stock of the Company is classified as equity under the requirements of ASC Topic 505 Equity.

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

NOTE 11 - SHARE CAPITAL

Pursuant to the guidance of ASC 480 and ASC 815 the warrants were classified as equity instruments.

The Company analyzed the accounting treatment for all of the outstanding preferred investment options issued to Wainwright and all such preferred investment options are equity-classified awards.

D. At-the-market offerings:

On July 1, 2024, the Company filed with the SEC a prospectus supplement relating to the offer, issuance and sale of up to $4,820 of the Company’s shares of common stock pursuant to the ATM Agreement. During the fiscal year ended December 31, 2024, the Company issued 3,433,880 shares of the Company’s common stock pursuant to the ATM Agreement, for total gross proceeds of approximately $3,756 before deducting sales agent commissions and other offering expenses of $239.

In January 2025, the Company issued 842,606 shares of the Company’s common stock pursuant to the ATM Agreement, for total gross proceeds of approximately $1,062 before deducting sales agent commissions and other offering expenses of $65. The Company is no longer selling its securities pursuant to the ATM Agreement and has not as of the filing of these financial statements entered into a new or replacement ATM agreement.

E. Exercise of Investment Options

During the year ended December 31, 2025, the Company raised approximately $33,855 in gross proceeds from the exercise of an aggregate of 18,613,585 outstanding Series E, Series F, Series G, Series H and Series I preferred investment options. As a result of these exercises, and in accordance with the Company’s engagement letters with its placement agent, as mentioned in Note 10D, the Company incurred placement agent cash fees of approximately $2,370. Additionally, the Company issued an aggregate of 930,680 placement agent options in accordance with such engagement letter.

Additionally, during the year ended December 31, 2025, the Company received gross proceeds of approximately $895 from the exercise of an aggregate of 374,167 outstanding placement agent options.

F. Increase in Authorized Share

Following the 2025 annual meeting of stockholders of the Company held on June 10, 2025, the Company filed with the State of Delaware a certificate of amendment to the Company’s restated certificate of incorporation, as amended, which increased the total number of shares of common stock authorized for issuance to 120,000,000 shares, with a corresponding increase in the total authorized shares from 61,000,000 to 121,000,000. Immediately thereafter, the Company had 121,000,000 shares of authorized stock, consisting of (i) 120,000,000 shares of common stock, and (ii) 1,000,000 shares of undesignated preferred stock.

G. Investment Inducement Transaction

On September 14, 2025, the Company entered into an inducement agreement (the “Letter Agreement”) with certain holders (the “Holders”) of existing (i) series F preferred investment options to purchase 207,224 shares of Company’s common stock at an exercise price of $1.50 per share, (ii) series G preferred investment options to purchase 628,571 shares of Company’s common stock at an exercise price of $1.75 per share, (iii) series H preferred investment options to purchase 4,702,612 shares of Company’s common stock at an exercise price of $2.10 per share, and (iv) series I preferred investment options to purchase 8,450,708 shares of Company’s common stock at an exercise price of $2.13 per share (collectively, the “Existing Preferred Investment Options”). Pursuant to the Letter Agreement, the Holders exercised for cash their Existing Preferred Investment Options to purchase an aggregate of 13,989,115 shares of Company’s common stock, at exercise prices ranging from $1.50 to $2.13 per share, in consideration for the Company’s agreement to issue new series J preferred investment options (the “New Preferred Investment Options”) to purchase up to an aggregate of 13,989,115 shares of Company’s common stock at an exercise price of $4.50 per share (collectively, the “Inducement Transaction”). The New Preferred Investment Options are exercisable beginning six months after issuance and will expire two years thereafter.

At the first closing of the Inducement Transaction, which occurred on September 16, 2025, certain Holders exercised Existing Preferred Investment Options to purchase up to an aggregate of 12,064,627 shares of Company’s common stock for cash and received New Preferred Investment Options to purchase up to an aggregate of 12,064,627 shares of Company’s common stock. At the second closing of the Inducement Transaction on September 29, 2025, a certain Holder exercised Existing Preferred Investment Options to purchase 600,000 shares of Company’s common stock for cash and received New Preferred Investment Options to purchase up to 600,000 shares of Company’s common stock. At the third closing of the Inducement Transaction, which occurred on October 6, 2025, certain Holders exercised Existing Preferred Investment Options to purchase up to an aggregate of 1,324,488 shares of Company’s common stock for cash and received New Preferred Investment Options to purchase up to an aggregate of 1,324,488 shares of Company’s common stock.

The Company received aggregate gross proceeds of approximately $29,286 from the exercise of the Existing Preferred Investment Options at the closings, before deducting placement agent fees and other offering expenses of approximately $2,472, of which $101 had not been paid as of December 31, 2025. Additionally, as a result of the Inducement Transaction, and in accordance with the Company’s engagement letters with its placement agent, as mentioned in Note 10D, the Company issued an aggregate of 699,456 placement agent options.

The inducement occurred concurrently with a fund raising. Pursuant to the guidance of ASC 480 and ASC 815 the warrants were classified as equity instruments before and after the warrant modification. In accordance with ASC Topic 815 guidance on equity classified warrant modifications, the incremental change in fair value of the warrants was accounted as an equity issuance cost, which was recorded to additional paid-in capital.

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

NOTE 11 - SHARE CAPITAL

H. Employee Stock Option Grants and Exercises:

During the year ended December 31, 2024:

With respect to the CEO’s 2023 annual bonus, during February 2024, the Company paid 25% of the CEO’s total 2023 bonus – amounting to approximately $99, through the grant of fully vested options to purchase an aggregate of 79,567 shares of the Company’s common stock with an exercise price per share of $1.25.

In February 2025, the Company determined that 35,625 out of 132,500 performance-based options granted in February 2024 had met their milestones and been vested, while the remainder 96,875 options which did not meet their milestones had been forfeited.

On June 10, 2025, at the Company’s annual meeting of stockholders, an amendment to the Company’s 2020 Omnibus Performance Award Plan (as amended) was approved. This amendment increased the number of shares of common stock authorized and reserved for issuance under the plan by 2,591,019 shares.

During the year ended December 31, 2025, the Company granted the CEO, other executives and certain employees, and certain board members 228,000, 483,875 and 70,000 options, respectively.

In August 2025, a former advisor of the Company exercised 47,218 vested options at an exercise price of NIS 0.01 per option. As a result of this exercise, the Company received total consideration of approximately $1.

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:

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

NOTE 11 - SHARE CAPITAL

H. Employee Stock Option Grants and Exercises:

SUMMARY OF STOCK OPTION ACTIVITY  

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, 2025 and 2024, respectively.

As of December 31, 2025, and 2024, the aggregate intrinsic value of the outstanding options is $726 and $75, respectively, and the aggregate intrinsic value of the exercisable options is $558 and $69, respectively.

The weighted average grant date fair value of options granted during the years ended December 31, 2025 and 2024 was $1.65 and $0.99, respectively.

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

NOTE 11 - SHARE CAPITAL

H. Employee Stock Option Grants and Exercises:

As of December 31, 2025, there were approximately $1,109 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 years.

The stock options outstanding as of December 31, 2025 and 2024, summarized by exercise prices, are as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING  

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)

NOTE 11 - SHARE CAPITAL

H. Employee Stock Option Grants and Exercises:

The grant date fair values of employee stock options granted in the years ended December 31, 2025 and 2024 were estimated using the Black-Scholes valuation model with the following:

SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS  

I. Warrants:

The remaining outstanding warrants and terms as of December 31, 2025 and 2024 are as follows:

 SCHEDULE OF WARRANTS OUTSTANDING 

MICROBOT MEDICAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

(Except share and per share data)