Executive Summary

Q4 2015 delivered narrower GAAP net loss of $8.96M ($0.08 EPS) on minimal revenue ($0.03M), with operating expenses down versus Q4 2014 as the company refocused on spinal cord injury (SCI) .
Non-GAAP net loss improved year over year to $8.12M ($0.07 EPS), excluding stock-based compensation, depreciation/amortization, impairment and warrant liability fair value changes .
Management announced a strategic realignment to prioritize SCI, targeting ~$20M cash need reduction over two years, completion of Phase II enrollment/transplants in 2016, and final Pathway Study data in 2H 2017; spending planned at ~$50M over 2016–2017 (60% in 2016) .
Near-term catalysts: 12‑month Cohort 1 data by end-Q2 2016, blinded interim analysis for Cohort 2 in H2 2016, partnering efforts for AMD and gene-modified neural stem cell assets; management expressed “laser-like focus” and “increasingly confident” tone on execution .

What Went Well and What Went Wrong

What Went Well

Strategic focus sharpened: suspension of AMD Phase II and workforce reduction (~25%) to concentrate resources on SCI, expected to cut cash needs by ~$20M over two years .
Cohort 1 six‑month interim results in cervical SCI showed motor improvements: muscle strength gains in 5/6 patients, dexterity improvements in 4/5 with strength gains, and spinal injury level upgrades in 4/6, without cell-attributed adverse events .
CEO tone on execution and value creation: “laser-like focus on spinal cord injury” and confidence in delivering statistically meaningful Phase II data in 2017; sees transformative potential if Cohort 2 confirms efficacy .

What Went Wrong

Revenue remained de minimis ($0.03M in Q4) and fell sharply YoY due to absence of prior-year milestone/licensing payments (Reneuron ~$0.5M; Takara ~$0.4M) .
Full-year operating expenses rose 15% YoY to $36.8M on expanded clinical activity; year-end GAAP stockholders’ equity turned slightly negative ($-0.334M) .
Capital markets remained challenging; company requires ~$28M additional cash to complete Pathway Study despite recent $8M financing; reliance on partnering and potential warrant exercises noted .

Financial Results

Quarterly Trend – Q2 to Q4 2015

Metric	Q2 2015	Q3 2015	Q4 2015
Revenue ($USD Millions)	$0.03	$0.04	$0.03
Total Operating Expenses ($USD Millions)	$9.30	$10.03	$8.53
Research & Development ($USD Millions)	$7.24	$7.72	$5.86
Selling, General & Administrative ($USD Millions)	$2.06	$2.31	$2.28
Wind-down Expenses ($USD Millions)	N/A	N/A	$0.39
Loss from Operations ($USD Millions)	$(9.27)	$(9.99)	$(8.50)
Other Income (Expense), Net ($USD Millions)	$0.81	$0.35	$(0.46)
GAAP Net Loss ($USD Millions)	$(8.46)	$(9.64)	$(8.96)
GAAP Diluted EPS ($USD)	$(0.09)	$(0.09)	$(0.08)
Non-GAAP Net Loss ($USD Millions)	$(7.82)	$(8.35)	$(8.12)
Non-GAAP Diluted EPS ($USD)	$(0.08)	$(0.08)	$(0.07)

Notes: Non-GAAP excludes stock-based comp, depreciation/amortization, impairment, and changes in fair value of warrant liability .

Q4 Year-over-Year Comparison

Metric	Q4 2014	Q4 2015
Revenue ($USD Millions)	$0.88	$0.03
Total Operating Expenses ($USD Millions)	$10.61	$8.53
GAAP Net Loss ($USD Millions)	$(10.25)	$(8.96)
GAAP Diluted EPS ($USD)	$(0.15)	$(0.08)
Non-GAAP Net Loss ($USD Millions)	$(9.33)	$(8.12)
Non-GAAP Diluted EPS ($USD)	$(0.14)	$(0.07)

Balance Sheet Highlights (Quarter-End)

Metric	12/31/2014	12/31/2015
Cash & Cash Equivalents ($USD Millions)	$24.99	$12.11
Restricted Cash ($USD Millions)	$0.00	$2.42
Total Assets ($USD Millions)	$32.43	$21.22
Loan Payable (Current, $USD Millions)	$4.69	$1.42
Loan Payable (Non-Current, $USD Millions)	$10.33	$8.92
Warrant Liability (Fair Value, $USD Millions)	$1.69	$0.77
Stockholders’ Equity ($USD Millions)	$5.87	$(0.33)

Operating Cash Flow and Cash Burn (Full Year Context)

Metric	FY 2014	FY 2015
Cash Used in Operations ($USD Millions)	$27.35	$30.68
Year-End Cash, Cash Equivalents & Restricted ($USD Millions)	N/A	$14.53
CFO Commentary on Net Cash Usage (Excluding Financing/Licensing)	N/A	~~$37M (~~$3M/month)

KPI context: CFO noted pro forma YE cash including March financing at ~$22M; expects ~$50M spend over 2016–2017 (60/40 split) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Phase II Pathway Study Enrollment/Transplant Completion	FY 2016	Not previously specified	Complete enrollment and transplant all patients by end of Q3 2016; complete transplants in 2016	Raised specificity/timing
Cohort 1 12‑Month Data Readout	Q2 2016	Not previously specified	12‑month data by end of Q2 2016	New timing provided
Cohort 2 Blinded Interim Analysis	H2 2016	Not previously specified	Interim analysis in second half of 2016 (superiority threshold)	New timing provided
Final Pathway Study Data	H2 2017	Prior target 2017 (implied)	Final data in second half of 2017	Reaffirmed timing
Total R&D/OpEx Spend (SCI focus)	2016–2017	Not previously quantified	~$50M total; ~60% ($30M) in 2016, ~40% ($20M) in 2017	New quantified spend plan
Cash Needs Reduction (Strategic Realignment)	2016–2017	N/A	~$20M cash reduction over two years	New savings plan
AMD Phase II (Radiant)	2016 onward	Actively enrolling (Q2/Q3 2015)	Enrollment suspended; seek partner; continue follow-up of treated patients	Lowered/suspended

Earnings Call Themes & Trends

Topic	Q-2 (Q2 2015)	Q-1 (Q3 2015)	Current (Q4 2015)	Trend
R&D execution (SCI Pathway)	Cohort 1 completed; Cohort 2 enrollment initiated; expansion to Canada	Q3 interim update planned for Cohort 1; active enrollment at 12 sites	13 sites enrolling; ~half of 40 Cohort 2 patients enrolled; 12‑month Cohort 1 data by end-Q2 2016; interim analysis H2 2016; final data 2H 2017	Accelerating enrollment and defined milestones
Clinical efficacy signals (SCI)	Phase I/II thoracic: sustained sensory gains in 7/12 at 12 months	Anticipated interim motor function data	Cohort 1 six‑month data: strength/dexterity improvements; injury level upgrades; no cell-attributed AEs	Positive signals emerging
AMD program	Phase II Radiant initiated; first transplant July	Active at 3 sites	Enrollment suspended; pursuing partnerships; favorable long-term follow-up and mechanistic insights (RPE proliferation)	Deprioritized; partner-dependent
Manufacturing/process development	Increased spend to support clinical and manufacturing activities	Continued support for trials	Focus on scalable process for Phase III readiness	Process scaling emphasis
Regulatory interactions	N/A	N/A	Planning near-term FDA interactions re Phase III endpoints and pivotal strategy	Preparing for pivotal dialogue
Capital markets/funding	Strengthened balance sheet via April 2015 financing	N/A	$8M March 2016 financing; needs ~$28M more; aiming for non-dilutive capital and warrants exercise potential	Funding path articulated

Management Commentary

“Given our growing clinical data, our recent operational changes and our laser like focus on spinal cord injury, we feel increasingly confident in our ability to execute our plan between now and release of statistically meaningful Phase II data in 2017.” — Ian Massey, CEO .
“We believe strongly the statistical significant data from Cohort 2 of Pathway... would be transformative for the company in the field of spinal cord injury.” — Management prepared remarks .
“By doing this we expect to reduce our cash requirements to achieve this key value inflection point by $20 million.” — CEO on strategic realignment .
“Spending will be higher in 2016... We would expect to see the expenses split about 60% or $30 million in 2016 and 40% or $20 million in 2017.” — CFO guidance .

Q&A Highlights

Regulatory pathway: Management planning FDA interactions to define Phase III pivotal design and applicable endpoints, leveraging emerging Phase II data .
Business development: Active discussions with U.S./ex‑U.S. companies on AMD partnering; exploring gene-modified neural stem cell partnering .
Expense cadence and mix: CFO confirmed spend concentration in 2016 given enrollment/transplant completion; SG&A to be “predominantly in the R&D” context .
Enrollment pace/sites: Targeting 13–15 North American sites; enrollment tracking close to projections for cervical AIS‑B population; Canadian site activation near .
Share count/warrants: Analyst requested update; management to follow up offline (not provided on call) .

Estimates Context

Wall Street consensus from S&P Global (EPS, revenue, EBITDA) for Q4 2015 was unavailable at time of request due to data access limits; as a result, we cannot quantify beats/misses versus Street for Q4 2015. We recommend revisiting S&P Global consensus once accessible to benchmark EPS/revenue versus reported GAAP/non‑GAAP figures (S&P Global estimates unavailable).

Key Takeaways for Investors

Execution momentum: Defined clinical milestones (Cohort 1 12‑month by end-Q2 2016; Cohort 2 interim H2 2016; final 2H 2017) provide multiple data catalysts that can re-rate the stock if signals persist .
Focused capital allocation: Strategic realignment reduces cash needs by ~~$20M over two years and concentrates spend (~~$50M over 2016–2017) on SCI, increasing probability of reaching a value inflection point .
Clinical signals de‑risking: Cohort 1 motor improvements and prior thoracic sensory gains support biological activity; confirmation in randomized Cohort 2 would be transformative .
Funding path: With ~$22M pro forma cash after March financing and ~$28M additional need, partnering (AMD, gene-modified cells) and potential warrant exercises are key to reducing dilution risk .
Expense trajectory: Expect higher R&D in 2016 due to enrollment/transplants, then lower in 2017 with follow-up costs; SG&A stable to down as focus tightens .
Revenue immaterial: Operating metrics (OpEx, cash burn, clinical progress) are the primary drivers; margin analysis vs revenue is not meaningful given de minimis revenue .
Risk factors: Execution/funding, regulatory alignment for Phase III, and capital markets conditions remain core risks; management’s proactive guidance and site footprint mitigate some operational risk .

Additional Relevant Press Releases (Q4 context)

Strategic Realignment to prioritize SCI: suspension of AMD Phase II, ~$20M cash need reduction, ~25% workforce reduction with ~$0.4M restructuring in Q1 2016 .
Interim Cohort 1 motor improvements (six months): strength/dexterity gains, injury level upgrades; no cell-attributed AEs .

Microbot Medical Inc. (MBOT)·Q4 2015 Earnings Summary