MBOT US Equity☆

Item 1A. Risk Factors 13

Item 1B. Unresolved Staff Comments 28

Item 1C Cybersecurity 28

Item 2. Description of Property 28

Item 3. Legal Proceedings 28

Item 4. Mine Safety Disclosures 28

PART II

Item 6. [Reserved] 29

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 33

Item 8. Financial Statements and Supplementary Data 33

Item 9A. Controls and Procedures 34

Item 9B. Other Information 34

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 34

PART III

Item 10. Directors, Executive Officers and Corporate Governance 35

Item 11. Executive Compensation 39

Item 14. Principal Accountant Fees and Services 45

PART IV

Item 15. Exhibits and Financial Statement Schedules 46

i

NOTE

REGARDING REFERENCES TO OUR COMPANY

Throughout

this Form 10-K, the words “we,” “us,” “our,” the “Company” and “Microbot”

refer to Microbot Medical Inc., including our directly and indirectly wholly owned subsidiary. Unless the context otherwise requires,

the historical business, financial statements and operations of Microbot include Microbot Medical Ltd., an Israeli corporation (“Microbot

Israel”) which became a wholly owned subsidiary of the Company on November 28, 2016. The capitalized term “Merger” refers to the November 28, 2016

merger of C&RD Israel Ltd, a then wholly owned subsidiary of the Company, with and into Microbot Israel, with Microbot Israel surviving

as a wholly owned subsidiary of the Company.

Risk

Factors Summary

The

following is a summary of the principal risks that could adversely affect our business, operations, and financial results. A more thorough

discussion of these and other risks are listed under the section entitled “Risk Factors” commencing on page 13.

Risks

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

Risks

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

ii

Risks

Relating to International Business

Risks

Relating to Microbot’s Intellectual Property

Risks

Relating to Operations in Israel

● Israel’s economy may become unstable.

General

Risks

iii

PART

I

Item

1. Description of Business.

Overview

Microbot

is a preclinical 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® Endovascular Robotic Surgical System, we are developing the first ever fully disposable robot for various

endovascular interventional procedures.

Technological

Platforms

LIBERTY®

Endovascular Robotic Surgical System

On

January 13, 2020, Microbot unveiled what it believes is the world’s first fully disposable robotic system for use in endovascular

interventional procedures, such as cardiovascular, peripheral and neurovascular. The LIBERTY® Endovascular Robotic Surgical

System features a unique compact design with the capability to be operated remotely, reduce radiation exposure and physical strain to

the physician, reduce the risk of cross contamination, as well as the potential to eliminate the use of multiple consumables when used

with its NovaCross® platform or possibly other guidewire/microcatheter technologies.

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.

We

believe the addressable markets for the LIBERTY® Endovascular Robotic Surgical System are the Interventional Cardiology,

Interventional Radiology and Interventional Neuroradiology markets.

The unique characteristics of the LIBERTY® Endovascular

Robotic Surgical System - compact, mobile, disposable and remotely controlled - open the opportunity of expanding telerobotic interventions

to patients with limited access to life-saving procedures, such as mechanical thrombectomy in ischemic stroke.

The LIBERTY® Endovascular Robotic Surgical System is being

designed to have the following attributes:

On

August 17, 2020, Microbot announced the successful conclusion of its feasibility animal study using the LIBERTY® Endovascular

Robotic Surgical System. The study met all of its end points with no intraoperative adverse events, which supports Microbot’s objectives

to allow physicians to conduct a catheter-based procedure from outside the catheterization laboratory (cath-lab), avoiding radiation

exposure, physical strain and the risk of cross contamination. The study was performed by two leading physicians in the neuro vascular

and peripheral vascular intervention spaces, and the results demonstrated robust navigation capabilities, intuitive usability and accurate

deployment of embolic agents, most of which was conducted remotely from the cath-lab’s control room.

On

May 3, 2023, we announced that the LIBERTY® Endovascular Robotic Surgical System has surpassed its 100th catheterization

during multiple preclinical studies, with a 95% success rate of reaching pre-determined vascular targets, such as distal branches of

hepatic, gastric, splenic, mesenteric, renal and hypogastric arteries. Moreover, all of the procedures were completed without notable

signs of intraoperative injury.

On

June 29, 2023, we announced the successful completion of a two-day preclinical study held by leading key opinion leaders at a New York-based

research lab, where they performed dozens of catheterizations, including the utilization of the LIBERTY® Endovascular

Robotic Surgical System’s remote operation capabilities, to pre-determined vascular targets, with a 100% success rate of reaching

the intended target with no observable on-site complications.

In

October 2023, we announced the successful initial outcomes from our pivotal preclinical study with the LIBERTY® Endovascular Robotic

Surgical System. The pivotal study was conducted by three leading interventional radiologists that utilized the LIBERTY® Endovascular

Robotic Surgical System to reach a total of 48 animal targets. A total of 6 LIBERTY® Endovascular Robotic Surgical Systems

were used in the study. All 6 LIBERTY® Endovascular Robotic Surgical Systems performed flawlessly, with 100% usability

and technical success. No acute adverse events or complications were visually observed intra-operative. In December 2023, we announced

that the final histopathology and lab report supplements our previous findings, and that the results of the study will support our IDE

submission to the FDA to commence human clinical study. On January 29, 2024, the Company submitted an Investigational Device Exemption

(IDE) application with the U.S. Food and Drug Administration, in order to commence its pivotal clinical trial in humans, and as of the

filing date of this Annual Report on Form 10-K, we are continuing our interaction with the FDA regarding our IDE submission process.

See “–Government Regulation–U.S. Regulation–Description of the IDE process” below.

On

October 24, 2023, we announced that we received confirmation for the commencement of the process to support our future CE Mark approval,

and to ultimately allow us to market the LIBERTY® Endovascular Robotic Surgical System in Europe as well as other regions who accept

the CE Mark. According to the confirmation, we will commence audits for ISO 13485 certification to ensure compliance with the Quality

Management System (QMS) requirements of the EU Medical Devices Regulation (MDR 2017/745), during the first half of 2024. We had previously

taken the first step to advance our European program by engaging with a leading Notified Body, who recently confirmed dates for conducting

the required audits.

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. This technology is also expected to be incorporated

in our One & Done® feature.

Other

Technologies and Platforms

During

the second and third quarters of 2023, as a result of our core-business focus program and our cost reduction plan, described below, we

ceased research and development activities relating to the technology we acquired from CardioSert, and with respect to our SCS and TipCat

platforms. As a result, we terminated the Company’s agreement with CardioSert for that technology, ceased maintaining the intellectual

property with respect to that technology, and are returning the acquired intellectual property to CardioSert, and returned intellectual

property relating to the SCS (ViRob) and TipCat to Technion Research and Development Foundation.

Recent

Developments

Settlement

of Lawsuit

As

of January 26, 2024 (the “Effective Date”), we entered into a Settlement Agreement and Release (the “Settlement Agreement”)

with Empery Asset Master Ltd., Empery Tax Efficient, LP, Empery Tax Efficient III, LP and Hudson Bay Master Fund Ltd. (collectively,

“Plaintiffs”), which resolved and settled the below referenced litigation between the Company and Plaintiffs. The Company

previously announced that it was a defendant in a lawsuit captioned Empery Asset Master Ltd., Empery Tax Efficient, LP, Empery Tax Efficient

II, LP, Hudson Bay Master Fund Ltd., Plaintiffs, against Microbot Medical Inc., Defendant, in the Supreme Court of the State of New York,

County of New York (Index No. 651182/2020) (the “Lawsuit”), pursuant to which the Plaintiffs alleged, among other things,

that the Company breached multiple representations and warranties contained in the Securities Purchase Agreement (the “SPA”)

related to the Company’s June 8, 2017 equity financing (the “Financing”), of which the Plaintiffs participated, and

fraudulently induced Plaintiffs into signing the SPA. The complaint sought rescission of the SPA and return of the Plaintiffs’

$6.75 million purchase price with respect to the Financing.

Pursuant

to the Settlement Agreement, the Company paid Plaintiffs an aggregate of $2,154,000 (the “Total Settlement Amount”), consisting

of a cash payment covered by the Company’s insurance carrier of $1,100,000 and 1,005,965 shares of restricted Company common stock

(the “Shares”), which Shares represent the whole number of restricted shares of Company common stock calculated pursuant

to the following formula: $1,054,000/[closing price of Company common stock on the Effective Date * 0.825]. Additionally, the Plaintiffs

and the Company each agreed to fully release the other from all claims arising out of the Financing, the SPA and/or the allegations and

claims asserted in the Lawsuit, subject to customary carve-outs.

In

February 2024, the Plaintiffs filed a stipulation discontinuing the Lawsuit with prejudice.

We

also agreed, pursuant to a Registration Rights Agreement (the “Registration Rights Agreement”), to file a registration statement

on Form S-1 or Form S-3 covering the resale of the Shares (the “Resale Registration Statement”), within 30 calendar days

following the Effective Date, and to use reasonable best efforts to have such Resale Registration Statement declared effective by the

SEC within 60 days (or, in the event of a “full review” by the Securities and Exchange Commission, within 90 days) following

the Effective Date. We shall be required to make cash payments to the Plaintiffs in the event we fail to register the Shares and keep

the Resale Registration Statement effective pursuant to the terms of the Registration Rights Agreement, and if we fail to remove the

restrictions on the Shares pursuant to the terms of the Settlement Agreement.

Preferred

Investment Option Inducement Transaction

The Company entered into a Preferred Investment Option Exercise and Inducement

Letter on December 29, 2023 (the “Inducement Letter”) with certain selling stockholders (the “Stockholders”),

the registered holders of existing (i) Series A preferred investment options to purchase 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 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 shares of the Company’s common stock at an exercise price of $3.19 per share issued on

June 26, 2023 (the “Existing Investment Options”), pursuant to which the Stockholders agreed to exercise for cash their Existing

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 preferred investment options (the “Inducement Investment

Options”) to purchase up to an aggregate of 1,685,682 shares of the Company’s common stock at an exercise price of $1.50 per

share. The closings of the transactions contemplated by the Inducement Letter occurred on January 3, 2024. The Inducement Investment Options

are immediately exercisable from the date of issuance until five and one-half (5.5) years following the date of issuance. No other changes

to the Existing Investment Options were made.

Core-Business

Focus Program

On

May 15, 2023, the Board of Directors of the Company authorized, and the Company commenced, a core-business focus program while the

Company seeks to raise additional capital to continue development of the LIBERTY® Endovascular Robotic Surgical

System. This core-business focus program includes the cessation of research and development activities not related to the

LIBERTY® Endovascular Robotic Surgical System, including terminating the Company’s agreement with CardioSert

for, and returning and ceasing the maintenance of, that technology, and returning intellectual property relating to the SCS (ViRob) and TipCat to Technion

Research and Development Foundation.

Cost

Reduction Plan

In

addition to the core-business focus program described above, the Board of Directors of the Company authorized, and the Company commenced,

a cost reduction plan while the Company seeks to raise additional capital to continue development of the LIBERTY® Endovascular

Robotic Surgical System.

In May and June 2023 and in January 2024, we raised sufficient capital

that, together with the savings from the cost reduction plan, enabled us to continue our operations, including completion of the V&V

study, perform the GLP study and submit the IDE to the U.S. Food & Drug Administration. We also, as of November 1, 2023, recommenced

paying Rachel Vaknin, our CFO, and Simon Sharon, our CTO and General Manager, their regular salaries and benefits that were previously

reduced as a result of the cost reduction plan, and as of January 1, 2024, recommenced paying Harel Gadot, our CEO, and the independent

directors of our Board their regular salaries and benefits, or fees as the case may be, that were previously reduced as a result of the

cost reduction plan. We continue to seek new sources of capital to stabilize our finances and provide operating runway. In the event the

Company is not successful in raising additional capital, or if the results of the V&V study and first-in-human trials are not promising,

the Company may be forced to take more drastic actions to conserve capital or shut down operations entirely.

First-In-Human

Clinical Cases

On

January 29, 2024, we submitted an Investigational Device Exemption (IDE) application with the U.S. Food and Drug Administration, in

order to commence our pivotal clinical trial in humans, and as of the filing date of this Annual Report on Form 10-K, we are

continuing our interaction with the FDA regarding our IDE submission process. See “–Government Regulation–U.S.

Regulation–Description of the IDE process” below.

Israel-Hamas

War

On

October 7, 2023, the State of Israel, where the Company’s research and development and other operations are primarily based, suffered

a surprise attack by hostile forces from Gaza, which led to the declaration by Israel of the “Iron Swords” military operation.

This military operation and related activities are on-going as of the filing date of this Annual Report on Form 10-K.

The

Company has considered various ongoing risks relating to the military operation and related matters, including:

● A slowdown in the number of international flights in and out of Israel.

The

Company is closely monitoring how the military operation and related activities could adversely effect its anticipated milestones and

its Israel-based activities to support future clinical and regulatory milestones, including the Company’s ability to import materials

that are required to construct the Company’s devices and to ship them outside of Israel. As of the filing date of this Annual Report

on Form 10-K, the Company has determined that there have not been any materially adverse effects on its business or operations, but it

continues to monitor the situation, as any future escalation or change could result in a material adverse effect on the ability of the

Company’s Israeli office to support the Company’s clinical and regulatory activities. The Company does not have any specific

contingency plans in the event of any such escalation or change.

Industry

Overview

Minimally

Invasive Robot-Assisted Endovascular Interventions

Minimally

Invasive Surgery, or MIS, refers to surgical procedures performed through tiny incisions instead of a single large opening. Because the

incisions are small, patients tend to have quicker recovery times and experience less trauma than with conventional surgery. The global

MIS surgery is expected to grow from $24 billion in 2020 to $42 billion in 2026, representing a CAGR of 9.85%. MIS involves three major

categories of devices: surgical, monitoring and visualization, and endoscopy. The market for surgical devices, including ablation, electrosurgery

and medical robotic systems, accounts for the largest share of revenue and is also expected to show the highest rate of growth. According

to the Society of Robotic Surgery, the U.S. market growth in endoluminal robotic surgery is projected to be 15-25% by 2025.

Vascular

disease is the most common precursor to ischemic heart disease and stroke, which are two of the leading causes of death worldwide. Advances

in endovascular intervention in recent years have transformed patient survival rates and post-surgical quality of life. It is estimated

that more than three million percutaneous coronary interventions (PCI) and over two million of peripheral vascular interventions are

performed annually worldwide. The incidence of stroke in the U.S. alone is estimated at 900,000 cases annually. Compared to open surgery,

it has the advantages of faster recovery, reduced need for general anesthesia, reduced blood loss and significantly lower mortality.

However, the current practice of endovascular procedures, which virtually has remained unchanged since the introduction of Intervention

four decades ago, is limited by a number of factors, including physical strain and exposure to X-Ray radiation of the operator, and involves

complex maneuvering of intervention tools, such as guidewires and catheters, to reach target areas in the vasculature. Despite recent

advancements in technology and devices, manual procedures are still highly dependent on the technical skills and training of the operator,

what makes the access to expert medical centers and advanced emergent treatments, such as endovascular thrombectomy for acute ischemic

stroke, geographically limited. In addition, we believe that demand for physicians continues to grow faster than supply.

Endovascular

robotic systems are aimed to increase the stability and precision of guidewires and catheters, protecting the physicians from ionizing

radiation and physical strain by removing them from the radiation source, helping in closing shortages of skilled physicians and skill

gaps and enable tele-interventions (e.g. the Hub & Spoke hospital model).

Today,

there are only a few commercially available robotic systems for endovascular interventions. We believe these systems have major drawbacks,

such as limited maneuverability, the requirement to exchange and use multiple expensive surgical tools, being cumbersome to set-up and

operate, and requiring significant up-front capital expenditures.

Microbot believes that with the LIBERTY® Endovascular Robotic

Surgical System, coupled with its own NovaCross® products and other off-the-shelf products, it is well-positioned to deliver

a value-added endovascular robotic system, with a focus on improving the ease and access and enhancing the safety of endovascular interventions.

Strategy

Microbot’s

goal is to generate sales of its products, once they have received regulatory approval, by establishing the LIBERTY® Endovascular

Robotic Surgical System as the standard-of-care in the eyes of medical practitioners, patients and medical facilities, as well as getting

the support of payors and insurance companies. Microbot believes that it can achieve this objective by working with health care providers

and systems to demonstrate the key benefits of its products. Microbot’s strategy includes the following key elements:

Competition

LIBERTY®

Competitive Landscape

We believe the main competitor to the LIBERTY® Endovascular

Robotic Surgical System is the CorPath GRX vascular robotics system by Corindus Vascular Robotics, a Siemens Healthineers company. To

our knowledge, CorPath GRX system is FDA-approved and CE-marked for percutaneous coronary and vascular procedures, is CE-marked for neurovascular

interventions and is pending FDA approval for neurovascular interventions. Another competitor is Robocath (CE Marked for PCI only). We

believe these systems have drawbacks, such as limited maneuverability, the requirement to exchange and use multiple expensive surgical

tools, being cumbersome to set-up and operate, and requiring significant upfront capital expenditures. We also expect that we could be

competing with other technologies that are in different stages of development, including preclinical and without CE/FDA approvals, such

as LN Robotics and Endoways, of which additional competitive data will be required to better explore their respective positioning in the

competitive landscape.

Microbot’s

existing and planned products could also be rendered obsolete or uneconomical by technological advances developed in the future by existing

or new competitors. Some of Microbot’s competitors currently have significantly greater resources than Microbot does; have established

relationships with healthcare professionals, customers and third-party payors; and have long-term contracts with group purchasing organizations

in the United States. In addition, some of Microbot’s competitors have established distributor networks, greater resources for

product development, sales and marketing, additional lines of products and the ability to offer financial incentives such as rebates,

bundled products or discounts on other product lines that Microbot cannot provide.

Intellectual

Property

General

The

LIBERTY® Endovascular Robotic Surgical System’s core technology is co-owned by Microbot and The Technion

Research and Development Foundation Ltd., or TRDF. The NovaCross® device is based on technologies acquired by

Microbot from Nitiloop Ltd. Microbot may develop other medical-robotic solutions through internal research and development, to

strengthen its intellectual property position, and to continue exploring strategic collaborations and accretive acquisition

opportunities. Microbot currently holds an intellectual property portfolio of 12 patents issued/allowed and 47 patent applications

pending worldwide. Microbot also holds 10 design patents issued/allowed and 5 design patents pending worldwide. It also has

registered trademarks in Israel, Europe, UK and the U.S. relating to the LIBERTY® Endovascular Robotic Surgical

System, and also has trademarks relating to its proprietary Microbot Medical wordmark and logo registered in Israel, Europe, and UK,

and pending in the U.S. and China, in addition to having registered trademarks for the “One & Done” wordmark in

Israel, Europe, the U.S., UK, and Japan. Microbot also has a registered trademark in the U.S. for the NovaCross

trademark.

Microbot

relies or intends to rely on intellectual property licensed or developed, including patents, trade secrets, trademarks, technical innovations,

laws of unfair competition and various licensing agreements, to provide its future growth, to build its competitive position and to protect

its technology. As Microbot continues to expand its intellectual property portfolio, it is critical for Microbot to continue to invest

in filing patent applications to protect its technology, inventions, and improvements.

Microbot

requires its employees and consultants to execute confidentiality agreements in connection with their employment or consulting relationships

with Microbot. Microbot also requires its employees and consultants who work on its product candidates to agree to disclose and assign

to Microbot all inventions conceived during the term of their service, while using Microbot property, or which relate to Microbot’s

business.

Patent

applications in the United States and in foreign countries are maintained in secrecy for a period of time after filing, which results

in a delay between the filing date of the patent applications and the time when they are published. Patents issued and patent applications

filed relating to medical devices are numerous, and there can be no assurance that current and potential competitors and other third

parties have not filed or in the future will not file applications for, or have not received or in the future will not receive, patents

or obtain additional proprietary rights relating to product candidates, products, devices or processes used or proposed to be used by

Microbot. Microbot believes that the technologies it employs in its products and systems do not infringe the valid claims of any third-party

patents. There can be no assurance, however, that third parties will not seek to assert that Microbot devices and systems infringe their

patents or seek to expand their patent claims to cover aspects of Microbot’s products and systems.

The

medical device industry in general has been characterized by substantial litigation regarding patents and other intellectual property

rights. Any such claims, regardless of their merit, could be time-consuming and expensive to respond to and could divert Microbot’s

technical and management personnel. Microbot may be involved in litigation to defend against claims of infringement by other patent holders,

to enforce patents issued to Microbot, or to protect Microbot’s trade secrets. If any relevant claims of third-party patents are

upheld as valid and enforceable in any litigation or administrative proceeding, Microbot could be prevented from practicing the subject

matter claimed in such patents, or would be required to obtain licenses from the patent owners of each such patent, or to redesign Microbot’s

products, devices or processes to avoid infringement. There can be no assurance that such licenses would be available or, if available,

would be available on terms acceptable to Microbot or that Microbot would be successful in any attempt to redesign products or processes

to avoid infringement. Accordingly, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary

licenses, could potentially prevent Microbot from manufacturing and selling its products.

Microbot’s

issued U.S. patents, which cover Microbot’s product candidates, will expire between 2032 and 2040, not including any patent term

adjustments that may be available. Issued patents outside of the United States directed to Microbot’s product candidates will expire

between 2032 and 2040.

License

Agreement with the Technion

In

June 2012, Microbot entered into a license agreement with TRDF, the technology transfer subsidiary of The Technion Institute of Technology,

pursuant to which it obtained an exclusive, worldwide, royalty-bearing, sub-licensable license to certain patents and inventions relating

to the SCS and TipCAT technology platforms invented by Professor Moshe Shoham, a former director of and an advisor to the Company, and

in certain circumstances other TRDF-related persons. During the second and third quarters of 2023, as a result of our core-business focus

program and our cost reduction plan, we ceased research and development activities relating to the SCS and TipCat platforms. As a result,

we returned intellectual property relating to the SCS (ViRob) and TipCat to TRDF.

The LIBERTY® Endovascular Robotic Surgical System, which

was invented by employees of Microbot together with Professor Moshe Shoham of the Technion, in his capacity as a consultant to Microbot,

is co-owned by Microbot and TRDF, and the parties established the LIBERTY® Endovascular Robotic Surgical System as a “Joint

Invention” in accordance with the terms of the License Agreement. Once the Joint Invention is established, Microbot will have to

pay TRDF royalties of between 1.5% and 3.0% of net sales of products covered by this Joint Invention.

Research

and Development

Microbot’s

research and development programs are generally pursued by engineers and scientists employed by Microbot in its offices in Israel on

a full-time basis or as consultants, or through partnerships with industry leaders in manufacturing and design and researchers in academia.

Microbot is also working with subcontractors in developing specific components of its technologies.

The

primary objectives of Microbot’s research and development efforts are to continue to introduce incremental enhancements to the

capabilities of its candidate products and to advance the development of proposed products.

Microbot Israel has received grants from the Israeli Innovation Authority

(“IIA”) for participation in research and development since 2013 through December 31, 2023 totaling approximately $1.8 million.

This amount includes amounts received in 2023 of approximately $304,000, which are a portion of an additional grant from the IIA in the

amount of approximately NIS 1.6 million (approximately $447,000) approved by the IIA on June 1, 2023, to further finance the development

of the manufacturing process of the LIBERTY® Endovascular Robotic Surgical System.

In

addition, as a result of the agreement with CardioSert on January 4, 2018, Microbot Israel took over the liability to repay CardioSert’s

IIA grants in the aggregate amount of approximately $530,000, which liability will remain for so long as the Company continues to own

the CardioSert assets. As a result of CardioSert’s recent exercise to have the assets returned, we expect that this will cease

to be a liability upon return.

As

a result of the agreement with Nitiloop, on October 6, 2022, Microbot Israel took over the liability to repay Nitiloop’s IIA grants

in the aggregate amount of approximately $925,000.

In

relation to the IIA grants described above, the Company is obligated to pay royalties amounting to 3%-5% of its future sales of the products

relating to such grants.

The

grants are linked to the exchange rate of the dollar to the New Israeli Shekel and bears interest of SOFR per year (SOFR is a benchmark interest rate which replaced LIBOR).

The

repayment of the grants is contingent upon the successful completion of the Company’s research and development programs and generating

sales. The Company has no obligation to repay these grants, if the project fails, is unsuccessful or aborted or if no sales are generated.

The financial risk is assumed completely by the Government of Israel. The grants are received from the Government on a project-by-project

basis.

On December 11, 2022, the Company received approval for a grant from the

Ministry of Economy, in the amount of NIS 300,000 (approximately $83,000), for participation in expenses related to the LIBERTY®

Endovascular Robotic Surgical System in the U.S. market. As of December 31, 2023, the Company received approximately $27,000 of such amount.

In relation with 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.

Microbot

expects to continue to access government funding in the future.

For

the fiscal years ended December 31, 2022 and 2023, respectively, Microbot incurred research and development expenses of approximately

$7,736,000 and $5,724,000.

Strategic

collaboration agreement with Stryker

On

December 22, 2021, the Company entered into a strategic collaboration agreement for technology co-development with Stryker Corporation,

acting through its Neurovascular Division. Pursuant to the agreement, the collaborative development program between the Company and Stryker

aims to integrate certain of Stryker’s instruments with the Company’s LIBERTY® Endovascular Robotic Surgical System to address certain

neurovascular procedures. The parties conducted discussions in the past to define the development plan; however, due to other strategic priorities, the collaboration is not

moving forward.

Manufacturing

Microbot

does not have any manufacturing facilities or manufacturing personnel. Microbot currently relies, and expects to continue to rely, on

third parties for the manufacturing of its product candidates for preclinical and clinical testing, as well as for commercial manufacturing

if its product candidates receive marketing approval.

During

2022 Microbot initiated the transfer to production by means of designing and building molds for plastic injection of parts which is a

more cost-effective method for producing high quantities compared to conventional machined production of these parts. Some molds are

already operative while others are being designed and built. We expect completing the molds during 2024.

On

August 4, 2023, we signed a Turn-Key Manufacturing Agreement with a subcontractor that is suited to assemble and test our products under

applicable regulatory requirements and regulations. As of the filing date of this Annual Report on Form 10-K, we are working with the

subcontractor to transfer the production to the subcontractor.

Commercialization

Microbot

has not yet established a sales, marketing or product distribution infrastructure for the LIBERTY® Endovascular Robotic

Surgical System or any other product candidate, which are still in development stages. Microbot plans to access the U.S. markets with

its initial device offerings through direct sales, distributors, as well as strategic partnerships. Microbot has not yet developed a

commercial strategy outside of the United States, but it most likely would utilize distributors and strategic partnerships.

Government

Regulation

General

Microbot’s

medical technology products and operations are subject to extensive regulation in the United States and other countries. Most notably,

if Microbot seeks to sell its products in the United States, its products will be subject to the Federal Food, Drug, and Cosmetic Act

(FDCA) as implemented and enforced by the U.S. Food and Drug Administration (FDA). The FDA regulates the development, bench and clinical

testing, manufacturing, labeling, storage, record-keeping, promotion, marketing, sales, distribution and post-market support and reporting

of medical devices in the United States to ensure that medical products distributed domestically are safe and effective for their intended

uses. Regulatory policy affecting its products can change at any time.

Advertising

and promotion of medical devices in the United States, in addition to being regulated by the FDA, are also regulated by the Federal Trade

Commission and by state regulatory and enforcement authorities. Recently, promotional activities for FDA-regulated products of other

companies have been the subject of enforcement action brought under healthcare reimbursement laws and consumer protection statutes. In

addition, under the federal Lanham Act and similar state laws, competitors and others can initiate litigation relating to advertising

claims.

Foreign

countries where Microbot wishes to sell its products may require similar or more onerous approvals to manufacture or market its products.

Government agencies in those countries also enforce laws and regulations that govern the development, testing, manufacturing, labeling,

advertising, marketing and distribution, and market surveillance of medical device products. These regulatory requirements can change

rapidly with relatively short notice.

Other

regulations Microbot encounters in the United States and in other jurisdictions are the regulations that are common to all businesses,

such as employment legislation, implied warranty laws, and environmental, health and safety standards, to the extent applicable. In the

future, Microbot will also encounter industry-specific government regulations that would govern its products, if and when they are developed

for commercial use.

U.S.

Regulation

The

FDA governs the following activities that Microbot performs, will perform, upon the clearance or approval of its product candidates,

or that are performed on its behalf, to ensure that medical products distributed domestically or exported internationally are safe and

effective for their intended uses:

● product design, and development;

● product safety, testing, labeling and storage;

● record keeping procedures; and

● product marketing.

There

are numerous FDA regulatory requirements governing the approval or clearance and subsequent commercial marketing of Microbot’s

products. These include:

● notices of correction or removal and recall regulations.

Unless

an exemption applies, before Microbot can commercially distribute medical devices in the United States, Microbot must obtain, depending

on the classification of the device, either prior 510(k) clearance, 510(k) de-novo clearance or premarket approval (PMA), from the FDA.

The FDA classifies medical devices into one of three classes based on the degree of risk associated with each medical device and the

extent of regulatory controls needed to ensure the device’s safety and effectiveness:

Microbot

expects the medical products in its pipeline currently to be classified as Class II. Class II devices are those for which general controls

alone are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish special

controls. Special controls can include performance standards, post-market surveillance, patient histories and FDA guidance documents.

Premarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) or 510(k) de-novo premarket

notification process. As part of the 510(k) or 510(k) de-novo notification process, FDA may require the following:

● Development of comprehensive product description and indications for use;

Clinical

trials involve use of the medical device on human subjects under the supervision of qualified investigators in accordance with current

Good Clinical Practices (GCPs), including the requirement that all research subjects provide informed consent for their participation

in the clinical study. A written protocol with predefined end points, an appropriate sample size and pre-determined patient inclusion

and exclusion criteria, is required before initiating and conducting a clinical trial. All clinical investigations of devices to determine

safety and effectiveness must be conducted in accordance with the FDA’s Investigational device Exemption, or IDE, regulations that

among other things, govern investigational device labeling, prohibit promotion of the investigational device, and specify recordkeeping,

reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk,”

as defined by the FDA, the agency requires the device sponsor to submit an IDE application, which must become effective prior to commencing

human clinical trials.

Description

of the IDE process. The IDE will become effective 30 days after receipt by the FDA, unless

the FDA otherwise informs the sponsor prior to the 30-day period that the IDE is approved, approved with conditions, or disapproved. If

the FDA determines that additional information is required, the FDA may permit a clinical trial to proceed under a conditional approval.

In case of disapproval, the Company can continue its existing IDE process interaction with the FDA, and supply FDA with additional information

to obtain approval or conditional approval. In addition, the study must be approved by, and conducted under the oversight of, an Institutional

Review Board (IRB) for each clinical site. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical

trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but it must still follow abbreviated

IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping

requirements.

510(k) clearance typically involves the following:

To

obtain 510(k) clearance, Microbot must submit a notification to the FDA demonstrating that its proposed device is substantially equivalent

to a predicate device (i.e., a device that was in commercial distribution before May 28, 1976, a device that has been reclassified from

Class III to Class I or Class II, or a 510(k)-cleared device). The FDA’s 510(k) clearance process generally takes from three to

12 months from the date the application is submitted but also can take significantly longer. If the FDA determines that the device or

its intended use is not substantially equivalent to a predicate device, the device is automatically placed into Class III, requiring

the submission of a PMA.

There

is no guarantee that the FDA will grant Microbot 510(k) clearance for its pipeline medical device products, and failure to obtain the

necessary clearances for its products would adversely affect Microbot’s ability to grow its business. Delays in receipt or failure

to receive the necessary clearances, or the failure to comply with existing or future regulatory requirements, could reduce its business

prospects.

Devices

that cannot be cleared through the 510(k) process due to lack of a predicate device but would be considered low or moderate risk may

be eligible for the 510(k) de-novo process. In 1997, the Food and Drug Administration Modernization Act, or FDAMA added the de novo classification

pathway now codified in section 513(f)(2) of the FD&C Act. This law established an alternate pathway to classify new devices into

Class I or II that had automatically been placed in Class III after receiving a Not Substantially Equivalent, or NSE, determination in

response to a 510(k) submission. Through this regulatory process, a sponsor who receives an NSE determination may, within 30 days of

receipt, request FDA to make a risk-based classification of the device through what is called a “de novo request.” In 2012,

section 513(f)(2) of the FD&C Act was amended by section 607 of the Food and Drug Administration Safety and Innovation Act (FDASIA),

in order to provide a second option for de novo classification. Under this second pathway, a sponsor who determines that there is no

legally marketed device upon which to base a determination of substantial equivalence can submit a de novo request to FDA without first

submitting a 510(k).

In

the event that Microbot receives a Not Substantially Equivalent determination for either of its device candidates in response to a 510(k)

submission, the Microbot device may still be eligible for the 510(k) de-novo classification process.

Devices

that cannot be cleared through the 510(k) or 510(k) de-novo classification process require the submission of a PMA. The PMA process is

much more time consuming and demanding than the 510(k) notification process. A PMA must be supported by extensive data, including but

not limited to data obtained from preclinical and/or clinical studies and data relating to manufacturing and labeling, to demonstrate

to the FDA’s satisfaction the safety and effectiveness of the device. After a PMA application is submitted, the FDA’s in-depth

review of the information generally takes between one and three years and may take significantly longer. If the FDA does not grant 510(k)

clearance to its products, there is no guarantee that Microbot will submit a PMA or that if Microbot does, that the FDA would grant a

PMA approval of Microbot’s products, either of which would adversely affect Microbot’s business.

Foreign

Regulation

In

addition to regulations in the United States, Microbot will be subject to a variety of foreign regulations governing clinical trials,

marketing authorization and commercial sales and distribution of its products in foreign countries. The approval process varies from

country to country, and the time may be longer or shorter than that required for FDA approval or clearance. The requirements governing

the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from country to country.

International

sales of medical devices are subject to foreign governmental regulations which vary substantially from country to country. Whether or

not Microbot obtains FDA approval or clearance for its products, Microbot will be required to make new regulatory submissions to the

comparable regulatory authorities of foreign countries before Microbot can commence clinical trials or marketing of the product in such

countries. The time required to obtain certification or approval by a foreign country may be longer or shorter than that required for

FDA clearance or approval, and the requirements may differ. Below are summaries of the regulatory systems for medical devices in Europe

and Israel, where Microbot currently anticipates marketing its products. However, its products may also be marketed in other countries

that have different systems or minimal requirements for medical devices.

Europe.

The primary regulatory body in Europe is the European Union, or E.U., which consists of 27 member states and has a coordinated system

for the authorization of medical devices.

The

E.U. has adopted legislation, in the form of directives to be implemented in each member state, concerning the regulation of medical

devices within the European Union. The directives include, among others, the Medical Device Regulation, or MDR, that establishes certain

requirements with which medical devices must comply before they can be commercialized in the European Economic Area, or EEA (which comprises

the member states of the E.U. plus Norway, Liechtenstein and Iceland). Under the MDR, medical devices are classified into four Classes,

I, IIa, IIb, and III, with Class I being the lowest risk and Class III being the highest risk.

In

order to commercialize medical devices in the European Union, a CE Mark certificate is needed. This certification verifies that a device

meets all regulatory requirements for medical devices under the new Medical Devices Regulation (MDR 2017/745). The CE approval process

in Europe is summarized below:

1.

To obtain CE Marking certification, comply with European Commission Regulation (EU) No. 2017/745, commonly known as the Medical Device

Regulation (MDR).

2.

Appoint a Person Responsible for Regulatory Compliance (PRRC). Determine classification of device - Class I (self-certified); Class I

(sterile, measuring or reusable surgical instrument); Class IIa, Class IIb, or Class III.

3.

For all devices, implement a Quality Management System (QMS) in accordance with the MDR. Companies usually apply the EN ISO 13485 standard

to achieve compliance. The QMS must include Clinical Evaluation, Post-Market Surveillance (PMS) and Post Market Clinical Follow-up (PMCF)

plans. Make arrangements with suppliers about unannounced Notified Body audits. For Class I (self-certified), implement a QMS though

Notified Body intervention is not required.

4.

Prepare a CE Technical Documentation or Design Dossier (Class III) providing information about the device and its intended use plus testing

reports, Clinical Evaluation Report (CER), risk management file, Instruction For Use (IFU), labeling and more. Obtain a Unique Device

Identifier (UDI) for the device. All devices, even legacy products in use for decades, will require clinical data. Most of these data

should refer to the subject device. Clinical studies are generally required for implantable and Class III devices. Existing clinical

data may be acceptable. Clinical trials in Europe must be pre-approved by a European Competent Authority.

5.

If the company does not have a location in Europe, appoint an Authorized Representative (EC REP) located in the EU who is qualified to

handle regulatory issues. Place the EC REP name and address on device label. Obtain a Single Registration Number from the regulators.

6.

For all devices except Class I (self-certified), the QMS and Technical Documentation or Design Dossier must be audited by a Notified

Body, a third-party accredited by European authorities to audit medical device companies and products.

7.

For all devices except Class I (self-certified), the company will be issued a European CE Marking Certificate for the device and an ISO

13485 certificate for the company’s facility following successful completion of the Notified Body audit. ISO 13485 certification

must be renewed every year. CE Marking certificates are typically valid for a maximum of 5 years, but are typically reviewed during the

annual surveillance audit.

8.

Prepare a Declaration of Conformity, a legally binding document prepared by the manufacturer stating that the device is in compliance

with the applicable European requirements. At this time, the CE Marking may be affixed.

9.

Register the device and its Unique Device Identifier (UDI) in the EUDAMED database. UDI must be on label and associated with the regulatory

documents.

10.

For Class I (self-certified), annual NB audits are not required. However, CER, Technical File, and PMS activities must be kept updated.

For all other classes, the company will be audited each year by a Notified Body to ensure ongoing compliance with the MDR. Failure to

pass the audit will invalidate the CE Marking certificate. The company must perform Clinical Evaluation, PMS, and PMCF.

Microbot

intends to apply for the CE Mark for each of its medical device products. There is no guarantee that Microbot will be granted a CE Mark

for all or any of its pipeline products and failure to obtain the CE Mark would adversely affect its ability to grow its business.

On

October 24, 2023, we announced that we received confirmation for the commencement of the process to support our future CE Mark approval,

and to ultimately allow us to market the LIBERTY® Endovascular Robotic Surgical System in Europe as well as other regions

who accept the CE Mark. According to the confirmation, we will commence audits for ISO 13485 certification to ensure compliance with